1.1 A bill for an act
1.2 relating to higher education; establishing a participation fee on certain growth of
1.3 certain assets of colleges and universities; establishing an account in the special
1.4 revenue fund; amending Minnesota Statutes 2024, section 136A.121, by adding
1.5 subdivisions; proposing coding for new law in Minnesota Statutes, chapter 136A.
1.6BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.7 Section 1. Minnesota Statutes 2024, section 136A.121, is amended by adding a subdivision
1.8to read:
1.9 Subd. 12b.State grant participation fee compliance.To be eligible for student aid
1.10under this section, an eligible institution must pay any fees required under section 136A.1212.
1.11 Sec. 2. Minnesota Statutes 2024, section 136A.121, is amended by adding a subdivision
1.12to read:
1.13 Subd. 22.Higher education assets growth account.The higher education assets growth
1.14account is created in the special revenue fund in the state treasury. Unless otherwise
1.15appropriated, money in the account is appropriated to the commissioner for the state grant
1.16program under this section. Earnings, such as interest, dividends, and any other earnings
1.17arising from the assets of the account, are credited to the account. Money remaining in the
1.18account at the end of a fiscal year is not canceled to the general fund but remains available
1.19until expended.
1.20 EFFECTIVE DATE.This section is effective the day following final enactment.
1Sec. 2.
25-05269 as introduced03/27/25 REVISOR VH/VJ
SENATE
STATE OF MINNESOTA
S.F. No. 3248NINETY-FOURTH SESSION
(SENATE AUTHORS: PUTNAM)
OFFICIAL STATUSD-PGDATE
Introduction and first reading04/03/2025
Referred to Higher Education 2.1 Sec. 3. [136A.1212] STATE GRANT PROGRAM PARTICIPATION FEE BASED
2.2ON ASSETS GROWTH OF COLLEGES AND UNIVERSITIES.
2.3 Subdivision 1.Definitions.(a) For purposes of this section, the following terms have
2.4the meanings given.
2.5 (b) "Applicable educational institution" means an eligible institution under section
2.6136A.103:
2.7 (1) with total assets at any time during a taxable year in excess of $100,000,000;
2.8 (2) having at least 500 tuition-paying students during the preceding taxable year; and
2.9 (3) having more than 50 percent of tuition-paying students located in Minnesota.
2.10 (c) "Asset growth" means the positive difference between the value of assets at the close
2.11of the current taxable year and the value of assets at the close of the immediately preceding
2.12taxable year.
2.13 (d) "Assets" means assets not used directly in carrying out an applicable educational
2.14institution's exempt purpose, as provided by Code of Federal Regulations, title 26, section
2.154968-1(b)(5)(2020).
2.16 (e) "Per-student assets" means the value of an applicable educational institution's assets
2.17at the close of the current taxable year divided by the number of tuition-paying students at
2.18the close of the current taxable year.
2.19 (f) "Related organization" has the meaning given in section 4968(d)(2) of the Internal
2.20Revenue Code.
2.21 Subd. 2.Participation fee.(a) To be eligible to receive student aid under section
2.22136A.121, an applicable educational institution must pay a fee equal to a percentage of the
2.23asset growth of the applicable educational institution, calculated according to the percentages
2.24in subdivision 3.
2.25 (b) An eligible institution must pay the fee required by this section by May 30 to receive
2.26student aid under section 136A.121 in the next academic year.
2.27 Subd. 3.Calculation of fee.The fee required under subdivision 2 is calculated as follows:
2.28 (1) for per-student assets over $74,999 but not over $150,000, 15 percent;
2.29 (2) for per-student assets over $150,000 but not over $250,000, 20 percent; and
2.30 (3) for per-student assets over $250,000, 25 percent.
2Sec. 3.
25-05269 as introduced03/27/25 REVISOR VH/VJ 3.1 Subd. 4.Other provisions apply.(a) For purposes of subdivision 1, paragraph (b),
3.2clauses (1) and (2), the provisions of section 4968(b)(2) of the Internal Revenue Code apply.
3.3 (b) Assets of related organizations of eligible institutions are treated as assets of the
3.4eligible institution, except assets not intended or available for use or benefit of the eligible
3.5institution are excluded from the calculation of per-student endowment growth differential
3.6unless the related organization is controlled by the eligible institution or is an organization
3.7described in section 509(a)(3) of the Internal Revenue Code.
3.8 Subd. 5.Payment of fee.An applicable educational institution must report the fee on a
3.9form prescribed by the commissioner and must pay the fee in a form and manner prescribed
3.10by the commissioner.
3.11 Subd. 6.Deposit of revenues; account established.The commissioner must deposit
3.12the revenues derived from the fee imposed by this section in the higher education endowment
3.13growth account in the special revenue fund.
3.14 EFFECTIVE DATE.This section is effective for taxable years beginning after December
3.1531, 2025, and for student financial aid for the 2026-2027 academic year.
3Sec. 3.
25-05269 as introduced03/27/25 REVISOR VH/VJ