1.1 A bill for an act
1.2 relating to higher education; establishing a statewide children's savings account
1.3 program for higher education; establishing local partner design and implementation
1.4 grants; requiring a report; requiring rulemaking; appropriating money; amending
1.5 Minnesota Statutes 2024, section 136G.03, subdivision 1, by adding subdivisions;
1.6 proposing coding for new law in Minnesota Statutes, chapter 136G.
1.7BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.8 Section 1. Minnesota Statutes 2024, section 136G.03, subdivision 1, is amended to read:
1.9 Subdivision 1.General.For purposes of sections 136G.01 to 136G.14 136G.16, the
1.10following terms have the meanings given.
1.11 Sec. 2. Minnesota Statutes 2024, section 136G.03, is amended by adding a subdivision to
1.12read:
1.13 Subd. 6a.Children's higher education investment account."Children's higher education
1.14investment account" means the account established in the special revenue fund under section
1.15136G.15, subdivision 7.
1.16 Sec. 3. Minnesota Statutes 2024, section 136G.03, is amended by adding a subdivision to
1.17read:
1.18 Subd. 12a.Eligible child."Eligible child" means a current Minnesota resident under 18
1.19years of age, born on or after July 1, 2026.
1Sec. 3.
25-04410 as introduced03/21/25 REVISOR VH/VJ
SENATE
STATE OF MINNESOTA
S.F. No. 3120NINETY-FOURTH SESSION
(SENATE AUTHORS: PUTNAM and Kupec)
OFFICIAL STATUSD-PGDATE
Introduction and first reading04/01/2025
Referred to Higher Education 2.1 Sec. 4. Minnesota Statutes 2024, section 136G.03, is amended by adding a subdivision to
2.2read:
2.3 Subd. 17a.Low-income households."Low-income households" means households
2.4where children or households are identified by the commissioner or by other means as
2.5low-income for purposes of the program.
2.6 Sec. 5. Minnesota Statutes 2024, section 136G.03, is amended by adding a subdivision to
2.7read:
2.8 Subd. 21b.MinneKIDS account."MinneKIDS account" means an account created by
2.9the commissioner in which designated money for an eligible child is held.
2.10 Sec. 6. Minnesota Statutes 2024, section 136G.03, is amended by adding a subdivision to
2.11read:
2.12 Subd. 21c.MinneKIDS affiliate."MinneKIDS affiliate" means an entity designated
2.13by the commissioner to receive grant money under section 136G.16 or contribute to
2.14MinneKIDS accounts under section 136G.15.
2.15 Sec. 7. Minnesota Statutes 2024, section 136G.03, is amended by adding a subdivision to
2.16read:
2.17 Subd. 32a.Seed deposit."Seed deposit" means a financial contribution into a MinneKIDS
2.18account of an eligible child under section 136G.15, subdivision 3, paragraphs (a) and (b).
2.19 Sec. 8. [136G.15] MINNESOTA KIDS INVESTMENT AND DEVELOPMENT
2.20SCHOLARSHIP PROGRAM.
2.21 Subdivision 1.MinneKIDS accounts.(a) The commissioner must create a MinneKIDS
2.22account on behalf of an eligible child no more than 90 days after:
2.23 (1) receiving birth data for an eligible child from the Department of Health pursuant to
2.24subdivision 4; or
2.25 (2) receiving a request from a parent or guardian of an eligible child that does not have
2.26a MinneKIDS account.
2.27 (b) The commissioner must provide the parent or guardian a simple process for opting
2.28the parent or guardian's eligible child out of the MinneKIDS account program. Within 30
2.29days of receiving a request to opt an eligible child out of the MinneKIDS account program,
2Sec. 8.
25-04410 as introduced03/21/25 REVISOR VH/VJ 3.1the commissioner must close the eligible child's MinneKIDS account and return any money
3.2in the account to the children's higher education investment account.
3.3 (c) Only the commissioner, the plan administrator, a MinneKIDS affiliate, or other entity,
3.4individual, or government approved by the commissioner may contribute money to an
3.5eligible child's MinneKIDS account.
3.6 (d) Money deposited in a MinneKIDS account must be invested pursuant to section
3.7136G.07.
3.8 (e) A MinneKIDS account established pursuant to this section, any seed deposit or
3.9additional deposits, and any investment earnings will remain assets of and be owned by the
3.10state until used for the payment of qualified higher education expenses at an eligible education
3.11institution.
3.12 (f) The commissioner may accept for deposit into the children's higher education
3.13investment account gifts, grants, awards, matching contributions, interest income, and
3.14appropriations from individuals, businesses, state and local governmental entities, and
3.15nonstate and third-party sources for the program on terms the commissioner deems advisable.
3.16 Subd. 2.Parent or guardian notification.(a) No more than 30 days after creating a
3.17MinneKIDS account for an eligible child pursuant to subdivision 1, and then at least once
3.18in each subsequent year until the MinneKIDS account is closed, the commissioner must
3.19notify at least one parent or legal guardian of the eligible child about the program. The
3.20notification must include information regarding all of the following:
3.21 (1) how the parent or legal guardian may opt the eligible child out of the program;
3.22 (2) how the parent or legal guardian may apply to be considered for the additional seed
3.23deposit provided in subdivision 3, paragraph (b);
3.24 (3) the MinneKIDS account opened for the eligible child pursuant to paragraph (a), and
3.25any deposit provided pursuant to subdivision 3;
3.26 (4) how the parent or legal guardian may view the balance of the eligible child's
3.27MinneKIDS account;
3.28 (5) how the parent or legal guardian may establish and contribute to a separate Minnesota
3.29college savings plan account;
3.30 (6) how the parent or legal guardian may link a MinneKIDS account to a separate
3.31Minnesota college savings plan account;
3.32 (7) how the eligible child may qualify for additional deposits, as applicable;
3Sec. 8.
25-04410 as introduced03/21/25 REVISOR VH/VJ 4.1 (8) limitations on contributions to the MinneKIDS account pursuant to subdivision 1;
4.2and
4.3 (9) ownership status of money held in a MinneKIDS account described in subdivision
4.41 and that the money in the account will be forfeited and returned to the program if the
4.5eligible child does not use it before reaching 26 years of age.
4.6 (b) The commissioner must translate notifications and information regarding the program
4.7established in this section into common languages spoken throughout Minnesota.
4.8 Subd. 3.Seed deposits; incentive deposits.(a) The commissioner must make a seed
4.9deposit of $50 from the children's higher education investment account in each MinneKIDS
4.10account created under subdivision 1.
4.11 (b) The commissioner must make an additional seed deposit of $50 from the children's
4.12higher education investment account in each MinneKIDS account created under subdivision
4.131 on behalf of an eligible child that the commissioner identifies as being from a low-income
4.14household.
4.15 (c) Subject to available money in the children's higher education investment account,
4.16the commissioner may make additional deposits from the children's higher education
4.17investment account into specific MinneKIDS accounts to encourage college saving and
4.18participation in the program, including if a parent or guardian of an eligible child:
4.19 (1) engages with the MinneKIDS account by verifying receipt of information provided
4.20under subdivision 2;
4.21 (2) links the MinneKIDS account with a separate Minnesota college plan savings account;
4.22or
4.23 (3) engages with the MinneKIDS account or Minnesota college plan savings account
4.24by other means approved by the commissioner.
4.25 Subd. 4.Provision of birth data.(a) No later than 90 days after a birth is registered
4.26under section 144.215 for an eligible child, and notwithstanding section 144.225, subdivision
4.272, the commissioner of health must provide the commissioner with the following birth data
4.28for each eligible child in a file format as defined by the commissioner:
4.29 (1) the eligible child's name and birth date;
4.30 (2) the name and contact information of each parent of the eligible child, including the
4.31parent's street address;
4Sec. 8.
25-04410 as introduced03/21/25 REVISOR VH/VJ 5.1 (3) if provided to the Department of Health, the parent's mobile telephone number and
5.2email address;
5.3 (4) amended birth record information of an eligible child to assist the commissioner in
5.4verifying a legal name change of an eligible child; and
5.5 (5) any other information the commissioner requests as necessary for administering this
5.6section.
5.7 (b) Except data that is classified as confidential pursuant to section 144.225, subdivision
5.82, this subdivision does not apply to data that is classified as not public data as defined in
5.9section 13.02, subdivision 8a, or that is sealed by court order.
5.10 (c) Any birth data provided to the commissioner under this section is private data on
5.11individuals as defined in section 13.02, subdivision 12.
5.12 Subd. 5.Disbursements.(a) Money in a MinneKIDS account designated for an eligible
5.13child, including any investment earnings, must be used for the purpose of providing awards
5.14for qualified higher education expenses associated with the attendance of the eligible child
5.15at an eligible educational institution.
5.16 (b) Notwithstanding anything to the contrary in this section, "qualified higher education
5.17expenses" must not include any tuition or other expenses in connection with enrollment or
5.18attendance at an elementary or secondary public, private, or religious school.
5.19 (c) The commissioner must make a distribution directly to an eligible educational
5.20institution on behalf of the beneficiary when the beneficiary:
5.21 (1) requests a distribution from the MinneKIDS account;
5.22 (2) self-certifies that the beneficiary is enrolled at an eligible educational institution; and
5.23 (3) self-certifies that the beneficiary has resided in the state of Minnesota for at least
5.24one year immediately preceding the payment of qualified higher education expenses on the
5.25beneficiary's behalf.
5.26 (d) If the beneficiary requests a distribution pursuant to paragraph (c), but has no account
5.27balance with the eligible educational institution, then the eligible educational institution
5.28must distribute money received on the beneficiary's behalf pursuant to this subdivision
5.29directly to the beneficiary for the purpose of paying the beneficiary's qualified higher
5.30education expenses.
5.31 Subd. 6.Account closures; forfeiture.(a) The money in a MinneKIDS account must
5.32remain invested pursuant to section 136G.07 until the earlier of the date:
5Sec. 8.
25-04410 as introduced03/21/25 REVISOR VH/VJ 6.1 (1) the beneficiary of a MinneKIDS account requests a distribution pursuant to
6.2subdivision 5; or
6.3 (2) the account is closed pursuant to paragraph (b).
6.4 (b) If the beneficiary has not used all or any portion of the money in the beneficiary's
6.5MinneKIDS account for a qualified higher education expense for any reason, including
6.6death or disability of the beneficiary, by the time the beneficiary has achieved 26 years of
6.7age, then:
6.8 (1) the beneficiary's MinneKIDS account must be closed; and
6.9 (2) the money in the beneficiary's MinneKIDS account must be forfeited and deposited
6.10into the children's higher education investment account.
6.11 (c) The commissioner must contact the beneficiary of a MinneKIDS account 60 days
6.12prior to closing the beneficiary's MinneKIDS account pursuant to paragraph (b) and provide
6.13an opportunity for the beneficiary to appeal the closing of the MinneKIDS account.
6.14 (d) If the beneficiary does not appeal the closing of a MinneKIDS account within 45
6.15days of receiving notice under paragraph (c), then the commissioner may close the
6.16beneficiary's MinneKIDS account and return the money to the children's higher education
6.17investment account.
6.18 (e) Money, less applicable penalties, collected pursuant to section 529 of the Internal
6.19Revenue Code not used within the time period described in paragraph (b) must revert to the
6.20children's higher education investment account after the payment of any amount determined
6.21to be due to the federal government as a result of the reversion.
6.22 (f) If an eligible child is opted out of the program, all money in the eligible child's
6.23MinneKIDS account, including any investment earnings, is forfeited and must be deposited
6.24into the children's higher education investment account in a timely manner and the eligible
6.25child's MinneKIDS account must be closed.
6.26 Subd. 7.Account established; appropriation.A children's higher education investment
6.27account is created in the special revenue fund in the state treasury. Money in the account,
6.28including appropriations and transfers made to the account and forfeited MinneKIDS account
6.29balances returned to the account, is appropriated to the commissioner for the purposes
6.30specified in this section. Money remaining in the account at the end of a fiscal year is not
6.31canceled to the general fund but remains available until expended.
6Sec. 8.
25-04410 as introduced03/21/25 REVISOR VH/VJ 7.1 Sec. 9. [136G.16] MINNEKIDS LOCAL PARTNER GRANT PROGRAM.
7.2 Subdivision 1.Establishment.A MinneKIDS local partner grant program is established
7.3under the supervision of the Office of Higher Education. The program makes money available
7.4to eligible entities to encourage college readiness, saving for college, and participation in
7.5the MinneKIDS account program. The commissioner must develop policies and adopt rules
7.6as necessary to implement and administer the program.
7.7 Subd. 2.Eligible entities.(a) A local government, Tribal government, philanthropic
7.8entity, or a nonprofit organization is eligible to receive a grant under this section and to be
7.9designated by the commissioner as a MinneKIDS affiliate.
7.10 (b) The commissioner may award a grant to an eligible entity to:
7.11 (1) design a new local MinneKIDS outreach and education program; or
7.12 (2) implement an established MinneKIDS outreach and education program.
7.13 (c) The commissioner may designate an eligible entity as a MinneKIDS affiliate for the
7.14purpose of allowing the MinneKIDS affiliate to make contributions to MinneKIDS accounts.
7.15 Subd. 3.Design grants.(a) To receive a design grant, an eligible entity must:
7.16 (1) not have a local college savings or MinneKIDS account program in operation;
7.17 (2) seek the grant to establish a local college savings program that primarily targets
7.18children from birth to age 25;
7.19 (3) develop a plan to supplement money received under this chapter from nonstate
7.20sources; and
7.21 (4) specify in the entity's application that the proposed local college savings program
7.22has the capacity to align or integrate the local program with the statewide MinneKIDS
7.23program.
7.24 (b) Design grant awards must be used for convening, planning, engagement, outreach,
7.25marketing, staff for local coordination, and other programmatic expenses.
7.26 Subd. 4.Implementation grants.(a) To receive an implementation grant, an eligible
7.27entity must:
7.28 (1) have previously received a MinneKIDS design grant or have a local college savings
7.29account program in operation that primarily targets children from birth to age 25;
7.30 (2) have a one-to-one local match of money from nonstate sources with the grants applied
7.31for under this section to support the entity's program; and
7Sec. 9.
25-04410 as introduced03/21/25 REVISOR VH/VJ 8.1 (3) specify in the entity's application that the proposed local college savings program
8.2has the capacity to align or integrate with the statewide MinneKIDS program.
8.3 (b) Implementation grant awards must be used for convening, planning, engagement,
8.4outreach, marketing, staff for local coordination, additional deposits in MinneKIDS accounts,
8.5and other programmatic expenses.
8.6 Subd. 5.Outreach and technical support.(a) The commissioner must provide outreach
8.7to potential grantees to review, score, and select grantees, and to oversee and evaluate grant
8.8implementation.
8.9 (b) The commissioner must give outreach priority to underrepresented regions of the
8.10state that are not already served by a local college savings program.
8.11 (c) The commissioner must provide technical assistance to applicants that includes but
8.12is not limited to:
8.13 (1) developing a toolkit for eligible entities seeking to be designated as a MinneKIDS
8.14affiliate;
8.15 (2) assisting eligible entities that are not offering a local college savings program in
8.16developing an application to receive a grant; and
8.17 (3) other activities to advance the program as determined by the commissioner.
8.18 (d) The commissioner and grantee must follow grant management requirements outlined
8.19in section 16B.97 and other applicable grant compliance requirements outlined in state
8.20statutes.
8.21 Subd. 6.Priorities.(a) The commissioner must consider the following when distributing
8.22grants to eligible entities:
8.23 (1) the amount of available money under the MinneKIDS local partner grant program;
8.24 (2) the number of children that each eligible entity intends to serve under the proposed
8.25or existing local college savings program; and
8.26 (3) the percentage of low-income families residing in the community served by the
8.27proposed or existing local college savings program.
8.28 (b) The commissioner must consider geographic diversity in awarding grants under this
8.29section, including by awarding approximately 50 percent of the total grant award amounts
8.30to eligible entities that serve Tribal nations and communities outside of the seven-county
8.31metropolitan area of Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, and Washington
8.32Counties.
8Sec. 9.
25-04410 as introduced03/21/25 REVISOR VH/VJ 9.1 (c) The commissioner must give grant priority to local college savings programs that
9.2align with the following criteria:
9.3 (1) local college savings programs that serve, or propose to serve, a community or
9.4geographic area with an average median income that is lower than statewide median income;
9.5 (2) local college savings programs that serve, or propose to serve, a community or
9.6geographic area with an average college attendance rate that is lower than the average college
9.7attendance rate statewide;
9.8 (3) existing local college savings programs that demonstrate a high total amount of
9.9money saved for college in connection with the program;
9.10 (4) existing local college savings programs that hold a high number of outreach events
9.11to encourage family and community contributions to college savings accounts;
9.12 (5) an eligible entity with a demonstrated ability to sustain and potentially expand the
9.13entity's program;
9.14 (6) an eligible entity that has existing partnerships with schools and community
9.15organizations;
9.16 (7) an eligible entity that secures a high amount of money through local budget
9.17commitments, philanthropy, or other nonstate money sources; and
9.18 (8) other priorities or criteria determined by the commissioner.
9.19 Sec. 10. MINNEKIDS PROGRAM REPORT REQUIRED.
9.20 (a) By February 15, 2028, the commissioner of the Office of Higher Education must
9.21report information regarding the implementation of the program established in Minnesota
9.22Statutes, section 136G.15, to the chairs and ranking minority members of the legislative
9.23committees having jurisdiction over higher education. The report must include but not be
9.24limited to:
9.25 (1) detailed program expenditure information;
9.26 (2) the number of accounts opened;
9.27 (3) the number of state and nonstate contributions made to accounts;
9.28 (4) information about how parents were notified about the program;
9.29 (5) a description of the commissioner's marketing of the program;
9Sec. 10.
25-04410 as introduced03/21/25 REVISOR VH/VJ 10.1 (6) a description of the commissioner's efforts and success in aligning or integrating
10.2with the Minnesota 529 college savings plan established by Minnesota Statutes, section
10.3136G.01; and
10.4 (7) recommendations for improving the MinneKIDS program.
10.5 (b) By February 15, 2028, the commissioner of the Office of Higher Education must
10.6report information regarding the implementation of the program established in Minnesota
10.7Statutes, section 136G.16, to the chairs and ranking minority members of the legislative
10.8committees having jurisdiction over higher education. The report must include but not be
10.9limited to:
10.10 (1) a list of eligible entities provided grants pursuant to Minnesota Statutes, section
10.11136G.16, and the entities' progress and successes;
10.12 (2) detailed program expenditure information;
10.13 (3) a description of the success in soliciting nonstate money to support the program and
10.14the program's growth or sustainability;
10.15 (4) a description of how MinneKIDS affiliate grantees are or anticipate aligning or
10.16integrating with the program established by Minnesota Statutes, section 136G.15; and
10.17 (5) recommendations for improving the MinneKIDS local partner grant program
10.18established by Minnesota Statutes, section 136G.16.
10.19Sec. 11. APPROPRIATIONS.
10.20 (a) $....... in fiscal year 2026 and $....... in fiscal year 2027 are appropriated from the
10.21general fund to the commissioner of the Office of Higher Education for the MinneKIDS
10.22program under Minnesota Statutes, sections 136G.15 and 136G.16.
10.23 (b) Of the amounts appropriated in paragraph (a):
10.24 (1) $....... in fiscal year 2026 and $....... in fiscal year 2027 are for transfer to the children's
10.25higher education investment account in the special revenue fund for deposit into eligible
10.26children's MinneKIDS accounts under Minnesota Statutes, section 136G.15; and
10.27 (2) $....... in fiscal year 2026 and $....... in fiscal year 2027 are for the MinneKIDS local
10.28partner grant program under Minnesota Statutes, section 136G.16.
10Sec. 11.
25-04410 as introduced03/21/25 REVISOR VH/VJ