1.1                          A bill for an act 
  1.2             relating to education; modifying powers and duties of 
  1.3             the higher education services office; amending 
  1.4             Minnesota Statutes 1996, sections 126.56, subdivisions 
  1.5             2, 4a, and 7; 136A.01, subdivision 2, and by adding a 
  1.6             subdivision; 136A.03; 136A.121, subdivisions 5, 7, 9a, 
  1.7             and by adding a subdivision; 136A.125, subdivision 4; 
  1.8             136A.136, subdivision 2; 136A.15, by adding a 
  1.9             subdivision; 136A.16, subdivisions 1, 2, 8, and by 
  1.10            adding subdivisions; 136A.171; 136A.173, subdivisions 
  1.11            1, 3, and 5; 136A.174; and 136A.175, subdivisions 1 
  1.12            and 2; proposing coding for new law in Minnesota 
  1.13            Statutes, chapter 136A. 
  1.14  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.15     Section 1.  Minnesota Statutes 1996, section 126.56, 
  1.16  subdivision 2, is amended to read: 
  1.17     Subd. 2.  [ELIGIBLE STUDENT.] To be eligible for a 
  1.18  scholarship, a student shall: 
  1.19     (1) be a United States citizen or permanent resident of the 
  1.20  United States; 
  1.21     (2) be a resident of Minnesota; 
  1.22     (3) attend an eligible program; 
  1.23     (4) have completed at least one year of secondary school 
  1.24  but not have graduated from high school; 
  1.25     (5) have earned at least a B average or its equivalent 
  1.26  during the semester or quarter prior to application, or have 
  1.27  earned at least a B average or its equivalent during the 
  1.28  semester or quarter prior to application in the academic subject 
  1.29  area applicable to the summer program the student wishes to 
  2.1   attend; and 
  2.2      (6) demonstrate need for financial assistance; and 
  2.3      (7) be 19 years of age or younger. 
  2.4      Sec. 2.  Minnesota Statutes 1996, section 126.56, 
  2.5   subdivision 4a, is amended to read: 
  2.6      Subd. 4a.  [ELIGIBLE PROGRAMS.] A scholarship may be used 
  2.7   only for an eligible program.  To be eligible, a program must: 
  2.8      (1) provide, as its primary purpose, academic instruction 
  2.9   for student enrichment in curricular areas including, but not 
  2.10  limited to, communications, humanities, social studies, social 
  2.11  science, science, mathematics, art, or foreign languages; 
  2.12     (2) not be offered for credit to post-secondary students; 
  2.13     (3) not provide remedial instruction; 
  2.14     (4) meet any other program requirements established by the 
  2.15  state board of education and the higher education services 
  2.16  office; and 
  2.17     (5) be approved by the commissioner director of the higher 
  2.18  education services office.  
  2.19     Sec. 3.  Minnesota Statutes 1996, section 126.56, 
  2.20  subdivision 7, is amended to read: 
  2.21     Subd. 7.  [ADMINISTRATION.] The higher education services 
  2.22  office and commissioner shall determine the time and manner for 
  2.23  scholarship applications, awards, and program approval. 
  2.24     Sec. 4.  Minnesota Statutes 1996, section 136A.01, 
  2.25  subdivision 2, is amended to read: 
  2.26     Subd. 2.  [RESPONSIBILITIES.] The higher education services 
  2.27  office is responsible for: 
  2.28     (1) necessary state level administration of financial aid 
  2.29  programs, including accounting, auditing, and disbursing state 
  2.30  and federal financial aid funds, and reporting on financial aid 
  2.31  programs to the governor and the legislature; 
  2.32     (2) approval, registration, licensing, and financial aid 
  2.33  eligibility of private collegiate and career schools, under 
  2.34  sections 136A.61 to 136A.71 and chapter 141; 
  2.35     (3) administering the telecommunications council under Laws 
  2.36  1993, First Special Session chapter 2, article 5, section 2, the 
  3.1   Learning Network of Minnesota, and the statewide library task 
  3.2   force; 
  3.3      (4) negotiating and administering reciprocity agreements; 
  3.4      (5) publishing and distributing financial aid information 
  3.5   and materials, and other information and materials under section 
  3.6   136A.87, to students and parents; 
  3.7      (6) collecting and maintaining student enrollment and 
  3.8   financial aid data; 
  3.9      (7) administering the federal programs that affect students 
  3.10  and institutions on a statewide basis; and 
  3.11     (8) issuing revenue bonds, debt, notes, revenue refunding 
  3.12  bonds, and other obligations under sections 136A.01 to 136A.1791 
  3.13  to provide funds to make loans to students attending 
  3.14  post-secondary institutions; and 
  3.15     (9) prescribing policies, procedures, and rules under 
  3.16  chapter 14 necessary to administer the programs under its 
  3.17  supervision. 
  3.18     Sec. 5.  Minnesota Statutes 1996, section 136A.01, is 
  3.19  amended by adding a subdivision to read: 
  3.20     Subd. 3.  [SUCCESSOR STATUS.] The office is the legal 
  3.21  successor in all respects of the Minnesota higher education 
  3.22  coordinating board established by Laws 1965, chapter 809, 
  3.23  article 32, and all bonds, resolutions, contracts, and 
  3.24  liabilities of the Minnesota higher education coordinating board 
  3.25  are the bonds, resolutions, contracts, and liabilities of the 
  3.26  office. 
  3.27     Sec. 6.  Minnesota Statutes 1996, section 136A.03, is 
  3.28  amended to read: 
  3.29     136A.03 [EXECUTIVE OFFICERS; EMPLOYEES.] 
  3.30     The director of the higher education services office shall 
  3.31  possess the powers and perform the duties as prescribed by the 
  3.32  higher education services council and shall serve in the 
  3.33  unclassified service of the state civil service.  The director, 
  3.34  or the director's designated representative, on behalf of the 
  3.35  office is authorized to sign contracts and execute all 
  3.36  instruments necessary or appropriate to carry out the purposes 
  4.1   of sections 136A.01 to 136A.1791 for the office.  The salary of 
  4.2   the director shall be established by the higher education 
  4.3   services council according to section 15A.081, subdivision 1.  
  4.4   The director shall be a person qualified by training or 
  4.5   experience in the field of higher education or in financial aid 
  4.6   administration.  The director may appoint other professional 
  4.7   employees who shall serve in the unclassified service of the 
  4.8   state civil service.  All other employees shall be in the 
  4.9   classified civil service.  
  4.10     An officer or professional employee in the unclassified 
  4.11  service as provided in this section is a person who has studied 
  4.12  higher education or a related field at the graduate level or has 
  4.13  similar experience and who is qualified for a career in 
  4.14  financial aid and other aspects of higher education and for 
  4.15  activities in keeping with the planning and administrative 
  4.16  responsibilities of the office and who is appointed to assume 
  4.17  responsibility for administration of educational programs or 
  4.18  research in matters of higher education. 
  4.19     Sec. 7.  Minnesota Statutes 1996, section 136A.121, 
  4.20  subdivision 5, is amended to read: 
  4.21     Subd. 5.  [GRANT STIPENDS.] The grant stipend shall be 
  4.22  based on a sharing of responsibility for covering the recognized 
  4.23  cost of attendance by the applicant, the applicant's family, and 
  4.24  the government.  The amount of a financial stipend must not 
  4.25  exceed a grant applicant's recognized cost of attendance, as 
  4.26  defined in subdivision 6, after deducting the following:  
  4.27     (1) the assigned student responsibility of at least 50 48 
  4.28  percent in fiscal year 1998 and 45 percent in fiscal year 1999 
  4.29  of the cost of attending the institution of the applicant's 
  4.30  choosing; 
  4.31     (2) the assigned family responsibility, as determined by 
  4.32  the federal need analysis, which except that an allowance for 
  4.33  post-secondary education savings, specified in law, shall be 
  4.34  subtracted from the net worth calculation in the federal need 
  4.35  analysis.  For (i) dependent students, the assigned family 
  4.36  responsibility is the parental contribution as calculated by the 
  5.1   federal need analysis, and for (ii) independent students, the 
  5.2   assigned family responsibility is the student contribution as 
  5.3   determined by the federal need analysis; and 
  5.4      (3) the amount of a federal Pell grant award for which the 
  5.5   grant applicant is eligible.  
  5.6      The minimum financial stipend is $300 per academic year.  
  5.7      Sec. 8.  Minnesota Statutes 1996, section 136A.121, 
  5.8   subdivision 7, is amended to read: 
  5.9      Subd. 7.  [INSUFFICIENT APPROPRIATION.] If the amount 
  5.10  appropriated is determined by the office to be insufficient to 
  5.11  make full awards to applicants under subdivision 5, before any 
  5.12  award for that year has been disbursed, awards must be reduced 
  5.13  by: 
  5.14     (1) adding a surcharge to the contribution of the 
  5.15  applicant's parents, assigned family responsibility in 
  5.16  subdivision 5, clause (2); and then 
  5.17     (2) adding a percentage increase in the applicant's 
  5.18  contribution assigned student responsibility in subdivision 5, 
  5.19  clause (1).  
  5.20     Sec. 9.  Minnesota Statutes 1996, section 136A.121, is 
  5.21  amended by adding a subdivision to read: 
  5.22     Subd. 7a.  [EXCESSIVE APPROPRIATION.] If the office 
  5.23  projects that the amount appropriated exceeds the amount 
  5.24  necessary to make full awards to applicants under subdivision 5, 
  5.25  before any award for that year has been disbursed, awards must 
  5.26  be increased by: 
  5.27     (1) reducing the assigned family responsibility in 
  5.28  subdivision 5, clause (2); and then 
  5.29     (2) reducing the assigned student responsibility in 
  5.30  subdivision 5, clause (1). 
  5.31     Sec. 10.  Minnesota Statutes 1996, section 136A.121, 
  5.32  subdivision 9a, is amended to read: 
  5.33     Subd. 9a.  [FULL-YEAR GRANTS.] Students may receive state 
  5.34  grants for four consecutive quarters or three consecutive 
  5.35  semesters during the course of a single fiscal year.  In 
  5.36  calculating a state grant for the fourth quarter or third 
  6.1   semester, the office must use the same calculation as it would 
  6.2   for any other term, except that the calculation must subtract 
  6.3   any Pell grant for which a student would be eligible even if the 
  6.4   student has exhausted the Pell grant for that fiscal year. 
  6.5      Sec. 11.  Minnesota Statutes 1996, section 136A.125, 
  6.6   subdivision 4, is amended to read: 
  6.7      Subd. 4.  [AMOUNT AND LENGTH OF GRANTS.] The amount of a 
  6.8   child care grant must be based on: 
  6.9      (1) the income of the applicant and the applicant's spouse, 
  6.10  if any; 
  6.11     (2) the number in the applicant's family, as defined by the 
  6.12  office; and 
  6.13     (3) the number of eligible children in the applicant's 
  6.14  family.  
  6.15     The maximum award to the applicant shall be $1,700 $2,000 
  6.16  for each eligible child per academic year.  The office shall 
  6.17  prepare a chart to show the amount of a grant that will be 
  6.18  awarded per child based on the factors in this subdivision.  The 
  6.19  chart shall include a range of income and family size. 
  6.20     Sec. 12.  Minnesota Statutes 1996, section 136A.136, 
  6.21  subdivision 2, is amended to read: 
  6.22     Subd. 2.  [RESPONSIBILITY OF METROPOLITAN HEALTHCARE 
  6.23  FOUNDATION'S PROJECT LINC.] The metropolitan healthcare 
  6.24  foundation's project LINC shall administer the grant program and 
  6.25  award grants to eligible health care facility employees.  To be 
  6.26  eligible to receive a grant, a person must be: 
  6.27     (1) an employee of a health care facility located in 
  6.28  Minnesota, whom the facility has recommended to the metropolitan 
  6.29  healthcare foundation's project LINC for consideration; 
  6.30     (2) working part time, up to 32 less hours than their 
  6.31  regular schedule per pay period, for the health care 
  6.32  facility organization, while maintaining full salary and their 
  6.33  original benefits and a salary greater than the number of hours 
  6.34  worked; 
  6.35     (3) enrolled full time in a Minnesota school or college of 
  6.36  nursing to complete a baccalaureate or master's degree in 
  7.1   nursing; and 
  7.2      (4) a resident of the state of Minnesota. 
  7.3      The grant must be awarded for one academic year for a 
  7.4   maximum of $3,500 for bachelor of arts and bachelor of science 
  7.5   nursing students and $4,000 for master of arts and master of 
  7.6   science nursing students but is renewable for a maximum of six 
  7.7   semesters or nine quarters of full-time study, or their 
  7.8   equivalent.  The grant must be used for tuition, fees, and 
  7.9   books.  Priority in awarding grants shall be given to persons 
  7.10  with the greatest financial need.  The health care facility may 
  7.11  require its employee to commit to a reasonable postprogram 
  7.12  completion of employment at the health care facility as a 
  7.13  condition for the financial support the facility provides. 
  7.14     Sec. 13.  Minnesota Statutes 1996, section 136A.15, is 
  7.15  amended by adding a subdivision to read: 
  7.16     Subd. 2a.  "Council" means the higher education services 
  7.17  council under section 136A.011. 
  7.18     Sec. 14.  Minnesota Statutes 1996, section 136A.16, 
  7.19  subdivision 1, is amended to read: 
  7.20     Subdivision 1.  Notwithstanding chapter 16B, the Minnesota 
  7.21  higher education services office is designated as the 
  7.22  administrative agency for carrying out the purposes and terms of 
  7.23  sections 136A.15 136A.01 to 136A.1702 136A.1791.  The office may 
  7.24  establish one or more loan programs. 
  7.25     Sec. 15.  Minnesota Statutes 1996, section 136A.16, 
  7.26  subdivision 2, is amended to read: 
  7.27     Subd. 2.  The office shall adopt policies and prescribe 
  7.28  appropriate rules to carry out the purposes of sections 136A.15 
  7.29  136A.01 to 136A.1702 136A.1791.  The policies and rules except 
  7.30  as they relate to loans under section 136A.1701 must be 
  7.31  compatible with the provisions of the National Vocational 
  7.32  Student Loan Insurance Act of 1965 and the provisions of title 
  7.33  IV of the Higher Education Act of 1965, and any amendments 
  7.34  thereof. 
  7.35     Sec. 16.  Minnesota Statutes 1996, section 136A.16, 
  7.36  subdivision 8, is amended to read: 
  8.1      Subd. 8.  Money made available to the office that is not 
  8.2   immediately needed for the purposes of sections 136A.15 136A.01 
  8.3   to 136A.1702 136A.1791 may be invested by the office.  The money 
  8.4   must be invested in bonds, certificates of indebtedness, and 
  8.5   other fixed income securities, except preferred stocks, which 
  8.6   are legal investments for the permanent school fund.  The money 
  8.7   may also be invested in prime quality commercial paper that is 
  8.8   eligible for investment in the state employees retirement fund.  
  8.9   All interest and profits from such investments inure to the 
  8.10  benefit of the office or may be pledged for security of bonds 
  8.11  issued by the office or its predecessor, the Minnesota higher 
  8.12  education coordinating board. 
  8.13     Sec. 17.  Minnesota Statutes 1996, section 136A.16, is 
  8.14  amended by adding a subdivision to read: 
  8.15     Subd. 13.  The office may sue and be sued. 
  8.16     Sec. 18.  Minnesota Statutes 1996, section 136A.16, is 
  8.17  amended by adding a subdivision to read: 
  8.18     Subd. 14.  The office may sell at public or private sale, 
  8.19  at the price or prices determined by the office, any note or 
  8.20  other instrument or obligation evidencing or securing a loan 
  8.21  made by the office or its predecessor, the Minnesota higher 
  8.22  education coordinating board. 
  8.23     Sec. 19.  Minnesota Statutes 1996, section 136A.16, is 
  8.24  amended by adding a subdivision to read: 
  8.25     Subd. 15.  The office may obtain municipal bond insurance, 
  8.26  letters of credit, surety obligations, or similar agreements 
  8.27  from financial institutions. 
  8.28     Sec. 20.  Minnesota Statutes 1996, section 136A.171, is 
  8.29  amended to read: 
  8.30     136A.171 [REVENUE BONDS; ISSUANCE; PROCEEDS.] 
  8.31     The higher education services office may issue revenue 
  8.32  bonds to obtain funds for loans made in accordance with the 
  8.33  provisions of this chapter.  The aggregate amount of revenue 
  8.34  bonds, issued directly by the office, outstanding at any one 
  8.35  time, not including refunded bonds or otherwise defeased or 
  8.36  discharged bonds, shall not exceed $550,000,000.  Proceeds from 
  9.1   the issuance of bonds may be held and invested by the office 
  9.2   pending disbursement in the form of loans.  All interest and 
  9.3   profits from the investments shall inure to the benefit of the 
  9.4   office and shall be available to the board office for the same 
  9.5   purposes as the proceeds from the sale of revenue bonds 
  9.6   including, but not limited to, costs incurred in administering 
  9.7   loans under this chapter and loan reserve funds. 
  9.8      Sec. 21.  Minnesota Statutes 1996, section 136A.173, 
  9.9   subdivision 1, is amended to read: 
  9.10     Subdivision 1.  The office may from time to time issue 
  9.11  revenue bonds for purposes of sections 136A.15 to 136A.179 
  9.12  136A.1791 and all such revenue bonds, notes, bond anticipation 
  9.13  notes, or other obligations of the office issued pursuant to 
  9.14  sections 136A.15 to 136A.179 136A.1791 shall be and are hereby 
  9.15  declared to be negotiable for all purposes notwithstanding their 
  9.16  payment from a limited source and without regard to any other 
  9.17  law or laws.  In anticipation of the sale of such revenue bonds, 
  9.18  the office may issue negotiable bond anticipation notes and may 
  9.19  renew the same from time to time, but the maximum maturity of 
  9.20  any such note, including renewals thereof, shall not exceed five 
  9.21  years from the date of issue of the original note.  Such notes 
  9.22  shall be paid from any revenues of the office available therefor 
  9.23  and not otherwise pledged, or from the proceeds of sale of the 
  9.24  revenue bonds of the office in anticipation of which they were 
  9.25  issued.  The notes shall be issued in the same manner as the 
  9.26  revenue bonds.  Such notes and the resolution or resolutions 
  9.27  authorizing the same may contain any provisions, conditions, or 
  9.28  limitations which a bond resolution or of the office council may 
  9.29  contain. 
  9.30     Sec. 22.  Minnesota Statutes 1996, section 136A.173, 
  9.31  subdivision 3, is amended to read: 
  9.32     Subd. 3.  The revenue bonds may be issued as serial bonds 
  9.33  or as term bonds, or the office, in its discretion, may issue 
  9.34  bonds of both types.  The revenue bonds shall be authorized by 
  9.35  resolution of the members of the office council and shall bear 
  9.36  such date or dates, mature at such time or times, not exceeding 
 10.1   50 years from their respective dates, bear interest at such rate 
 10.2   or rates, payable at such time or times, be in denominations, be 
 10.3   in such form, either coupon or registered, carry such 
 10.4   registration privileges, be executed in such manner, be payable 
 10.5   in lawful money of the United States of America at such place or 
 10.6   places, and be subject to such terms of redemption, as such 
 10.7   resolution or resolutions may provide.  The revenue bonds or 
 10.8   notes may be sold at public or private sale for such price or 
 10.9   prices as the office council shall determine.  Pending 
 10.10  preparation of the definitive bonds, the office may issue 
 10.11  interim receipts or certificates which shall be exchanged for 
 10.12  such definite bonds. 
 10.13     Sec. 23.  Minnesota Statutes 1996, section 136A.173, 
 10.14  subdivision 5, is amended to read: 
 10.15     Subd. 5.  Neither the members of the council, the office, 
 10.16  nor any person executing the revenue bonds or notes shall be 
 10.17  liable personally on the revenue bonds or notes or be subject to 
 10.18  any personal liability or accountability by reason of the 
 10.19  issuance thereof. 
 10.20     Sec. 24.  Minnesota Statutes 1996, section 136A.174, is 
 10.21  amended to read: 
 10.22     136A.174 [SECURITY FOR BONDS.] 
 10.23     In the discretion of the office any revenue bonds issued 
 10.24  under the provisions of sections 136A.15 to 136A.179 136A.1791 
 10.25  may be secured by a trust agreement by and between the office 
 10.26  and a corporate trustee or trustees, which may be any trust 
 10.27  company or bank having the powers of a trust company within the 
 10.28  state.  Such trust agreement or the resolution providing for the 
 10.29  issuance of such revenue bonds may pledge or assign the revenues 
 10.30  to be received or proceeds of any contract or contracts pledged 
 10.31  or any portion thereof.  Such trust agreement or resolution 
 10.32  providing for the issuance of such revenue bonds may contain 
 10.33  such provisions for protecting and enforcing the rights and 
 10.34  remedies of the bondholders as may be reasonable and proper and 
 10.35  not in violation of laws, including particularly such provisions 
 10.36  as have hereinabove been specifically authorized to be included 
 11.1   in any resolution or resolutions of the office council 
 11.2   authorizing revenue bonds thereof.  Any bank or trust company 
 11.3   incorporated under the laws of the state which may act as 
 11.4   depository of the proceeds of bonds or of revenues or other 
 11.5   moneys may furnish such indemnifying bonds or pledges such 
 11.6   securities as may be required by the office.  Any such trust 
 11.7   agreement may set forth the rights and remedies of the 
 11.8   bondholders and of the trustee or trustees and may restrict the 
 11.9   individual right of action by bondholders.  In addition to the 
 11.10  foregoing, any such trust agreement or resolution may contain 
 11.11  such other provisions as the office may deem reasonable and 
 11.12  proper for the security of the bondholders. 
 11.13     Sec. 25.  Minnesota Statutes 1996, section 136A.175, 
 11.14  subdivision 1, is amended to read: 
 11.15     Subdivision 1.  The office is hereby authorized to provide 
 11.16  for the issuance of revenue bonds of the office for the purpose 
 11.17  of refunding any revenue bonds of the office or its predecessor, 
 11.18  the Minnesota higher education coordinating board, then 
 11.19  outstanding, including the payment of any redemption premium 
 11.20  thereon and any interest accrued or to accrue to the earliest or 
 11.21  any subsequent date of redemption, purchase or maturity of such 
 11.22  revenue bonds. 
 11.23     Sec. 26.  Minnesota Statutes 1996, section 136A.175, 
 11.24  subdivision 2, is amended to read: 
 11.25     Subd. 2.  The proceeds of any such revenue bonds issued for 
 11.26  the purpose of refunding outstanding revenue bonds may, in the 
 11.27  discretion of the office, be applied to the purchase or 
 11.28  retirement at maturity or redemption of such outstanding revenue 
 11.29  bonds of the office or its predecessor, the Minnesota higher 
 11.30  education coordinating board, either on their earliest or any 
 11.31  subsequent redemption date or upon the purchase or at the 
 11.32  maturity thereof and may, pending such application be placed in 
 11.33  escrow to such purchase or retirement at maturity or redemption 
 11.34  on such date as may be determined by the office. 
 11.35     Sec. 27.  [136A.1791] [PUBLIC PURPOSE; TAX FREE STATUS.] 
 11.36     The exercise of the powers granted under sections 136A.15 
 12.1   to 136A.1791 will be in all respects for the benefit of the 
 12.2   people of this state, for the increase of their commerce, 
 12.3   welfare, and prosperity, and for the improvement of their health 
 12.4   and living conditions, and as providing loans by the office or 
 12.5   its agent will constitute the performance of an essential public 
 12.6   function.