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.
1.7 BE 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
1.10 following terms have the meanings given.
1.11 Sec. 2. Minnesota Statutes 2024, section 136G.03, is amended by adding a subdivision to
1.12 read:
1.13 Subd. 6a.Children's higher education investment account. "Children's higher education
1.14 investment account" means the account established in the special revenue fund under section
1.15 136G.15, subdivision 7.
1.16 Sec. 3. Minnesota Statutes 2024, section 136G.03, is amended by adding a subdivision to
1.17 read:
1.18 Subd. 12a.Eligible child. "Eligible child" means a current Minnesota resident under 18
1.19 years of age, born on or after July 1, 2026.
2.1 Sec. 4. Minnesota Statutes 2024, section 136G.03, is amended by adding a subdivision to
2.2 read:
2.3 Subd. 17a.Low-income households. "Low-income households" means households
2.4 where children or households are identified by the commissioner or by other means as
2.5 low-income for purposes of the program.
2.6 Sec. 5. Minnesota Statutes 2024, section 136G.03, is amended by adding a subdivision to
2.7 read:
2.8 Subd. 21b.MinneKIDS account. "MinneKIDS account" means an account created by
2.9 the 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
2.11 read:
2.12 Subd. 21c.MinneKIDS affiliate. "MinneKIDS affiliate" means an entity designated
2.13 by the commissioner to receive grant money under section 136G.16 or contribute to
2.14 MinneKIDS accounts under section 136G.15.
2.15 Sec. 7. Minnesota Statutes 2024, section 136G.03, is amended by adding a subdivision to
2.16 read:
2.17 Subd. 32a.Seed deposit. "Seed deposit" means a financial contribution into a MinneKIDS
2.18 account 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
2.20 SCHOLARSHIP PROGRAM.
2.21 Subdivision 1.MinneKIDS accounts. (a) The commissioner must create a MinneKIDS
2.22 account 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
2.24 subdivision 4; or
2.25 (2) receiving a request from a parent or guardian of an eligible child that does not have
2.26 a MinneKIDS account.
2.27 (b) The commissioner must provide the parent or guardian a simple process for opting
2.28 the parent or guardian's eligible child out of the MinneKIDS account program. Within 30
2.29 days of receiving a request to opt an eligible child out of the MinneKIDS account program,
3.1 the commissioner must close the eligible child's MinneKIDS account and return any money
3.2 in 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,
3.4 individual, or government approved by the commissioner may contribute money to an
3.5 eligible child's MinneKIDS account.
3.6 (d) Money deposited in a MinneKIDS account must be invested pursuant to section
3.7 136G.07.
3.8 (e) A MinneKIDS account established pursuant to this section, any seed deposit or
3.9 additional deposits, and any investment earnings will remain assets of and be owned by the
3.10 state until used for the payment of qualified higher education expenses at an eligible education
3.11 institution.
3.12 (f) The commissioner may accept for deposit into the children's higher education
3.13 investment account gifts, grants, awards, matching contributions, interest income, and
3.14 appropriations from individuals, businesses, state and local governmental entities, and
3.15 nonstate 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
3.17 MinneKIDS account for an eligible child pursuant to subdivision 1, and then at least once
3.18 in each subsequent year until the MinneKIDS account is closed, the commissioner must
3.19 notify at least one parent or legal guardian of the eligible child about the program. The
3.20 notification 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
3.23 deposit provided in subdivision 3, paragraph (b);
3.24 (3) the MinneKIDS account opened for the eligible child pursuant to paragraph (a), and
3.25 any deposit provided pursuant to subdivision 3;
3.26 (4) how the parent or legal guardian may view the balance of the eligible child's
3.27 MinneKIDS account;
3.28 (5) how the parent or legal guardian may establish and contribute to a separate Minnesota
3.29 college savings plan account;
3.30 (6) how the parent or legal guardian may link a MinneKIDS account to a separate
3.31 Minnesota college savings plan account;
3.32 (7) how the eligible child may qualify for additional deposits, as applicable;
4.1 (8) limitations on contributions to the MinneKIDS account pursuant to subdivision 1;
4.2 and
4.3 (9) ownership status of money held in a MinneKIDS account described in subdivision
4.4 1 and that the money in the account will be forfeited and returned to the program if the
4.5 eligible child does not use it before reaching 26 years of age.
4.6 (b) The commissioner must translate notifications and information regarding the program
4.7 established in this section into common languages spoken throughout Minnesota.
4.8 Subd. 3.Seed deposits; incentive deposits. (a) The commissioner must make a seed
4.9 deposit of $50 from the children's higher education investment account in each MinneKIDS
4.10 account created under subdivision 1.
4.11 (b) The commissioner must make an additional seed deposit of $50 from the children's
4.12 higher education investment account in each MinneKIDS account created under subdivision
4.13 1 on behalf of an eligible child that the commissioner identifies as being from a low-income
4.14 household.
4.15 (c) Subject to available money in the children's higher education investment account,
4.16 the commissioner may make additional deposits from the children's higher education
4.17 investment account into specific MinneKIDS accounts to encourage college saving and
4.18 participation 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
4.20 under subdivision 2;
4.21 (2) links the MinneKIDS account with a separate Minnesota college plan savings account;
4.22 or
4.23 (3) engages with the MinneKIDS account or Minnesota college plan savings account
4.24 by 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
4.26 under section 144.215 for an eligible child, and notwithstanding section 144.225, subdivision
4.27 2, the commissioner of health must provide the commissioner with the following birth data
4.28 for 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
4.31 parent's street address;
5.1 (3) if provided to the Department of Health, the parent's mobile telephone number and
5.2 email address;
5.3 (4) amended birth record information of an eligible child to assist the commissioner in
5.4 verifying a legal name change of an eligible child; and
5.5 (5) any other information the commissioner requests as necessary for administering this
5.6 section.
5.7 (b) Except data that is classified as confidential pursuant to section 144.225, subdivision
5.8 2, this subdivision does not apply to data that is classified as not public data as defined in
5.9 section 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
5.11 individuals as defined in section 13.02, subdivision 12.
5.12 Subd. 5.Disbursements. (a) Money in a MinneKIDS account designated for an eligible
5.13 child, including any investment earnings, must be used for the purpose of providing awards
5.14 for qualified higher education expenses associated with the attendance of the eligible child
5.15 at an eligible educational institution.
5.16 (b) Notwithstanding anything to the contrary in this section, "qualified higher education
5.17 expenses" must not include any tuition or other expenses in connection with enrollment or
5.18 attendance at an elementary or secondary public, private, or religious school.
5.19 (c) The commissioner must make a distribution directly to an eligible educational
5.20 institution 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
5.24 one year immediately preceding the payment of qualified higher education expenses on the
5.25 beneficiary's behalf.
5.26 (d) If the beneficiary requests a distribution pursuant to paragraph (c), but has no account
5.27 balance with the eligible educational institution, then the eligible educational institution
5.28 must distribute money received on the beneficiary's behalf pursuant to this subdivision
5.29 directly to the beneficiary for the purpose of paying the beneficiary's qualified higher
5.30 education expenses.
5.31 Subd. 6.Account closures; forfeiture. (a) The money in a MinneKIDS account must
5.32 remain invested pursuant to section 136G.07 until the earlier of the date:
6.1 (1) the beneficiary of a MinneKIDS account requests a distribution pursuant to
6.2 subdivision 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
6.5 MinneKIDS account for a qualified higher education expense for any reason, including
6.6 death or disability of the beneficiary, by the time the beneficiary has achieved 26 years of
6.7 age, 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
6.10 into the children's higher education investment account.
6.11 (c) The commissioner must contact the beneficiary of a MinneKIDS account 60 days
6.12 prior to closing the beneficiary's MinneKIDS account pursuant to paragraph (b) and provide
6.13 an 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
6.15 days of receiving notice under paragraph (c), then the commissioner may close the
6.16 beneficiary's MinneKIDS account and return the money to the children's higher education
6.17 investment account.
6.18 (e) Money, less applicable penalties, collected pursuant to section 529 of the Internal
6.19 Revenue Code not used within the time period described in paragraph (b) must revert to the
6.20 children's higher education investment account after the payment of any amount determined
6.21 to 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
6.23 MinneKIDS account, including any investment earnings, is forfeited and must be deposited
6.24 into the children's higher education investment account in a timely manner and the eligible
6.25 child's MinneKIDS account must be closed.
6.26 Subd. 7.Account established; appropriation. A children's higher education investment
6.27 account is created in the special revenue fund in the state treasury. Money in the account,
6.28 including appropriations and transfers made to the account and forfeited MinneKIDS account
6.29 balances returned to the account, is appropriated to the commissioner for the purposes
6.30 specified in this section. Money remaining in the account at the end of a fiscal year is not
6.31 canceled to the general fund but remains available until expended.
7.1 Sec. 9. [136G.16] MINNEKIDS LOCAL PARTNER GRANT PROGRAM.
7.2 Subdivision 1.Establishment. A MinneKIDS local partner grant program is established
7.3 under the supervision of the Office of Higher Education. The program makes money available
7.4 to eligible entities to encourage college readiness, saving for college, and participation in
7.5 the MinneKIDS account program. The commissioner must develop policies and adopt rules
7.6 as necessary to implement and administer the program.
7.7 Subd. 2.Eligible entities. (a) A local government, Tribal government, philanthropic
7.8 entity, or a nonprofit organization is eligible to receive a grant under this section and to be
7.9 designated 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
7.14 purpose 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
7.18 children from birth to age 25;
7.19 (3) develop a plan to supplement money received under this chapter from nonstate
7.20 sources; and
7.21 (4) specify in the entity's application that the proposed local college savings program
7.22 has the capacity to align or integrate the local program with the statewide MinneKIDS
7.23 program.
7.24 (b) Design grant awards must be used for convening, planning, engagement, outreach,
7.25 marketing, staff for local coordination, and other programmatic expenses.
7.26 Subd. 4.Implementation grants. (a) To receive an implementation grant, an eligible
7.27 entity must:
7.28 (1) have previously received a MinneKIDS design grant or have a local college savings
7.29 account 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
7.31 for under this section to support the entity's program; and
8.1 (3) specify in the entity's application that the proposed local college savings program
8.2 has the capacity to align or integrate with the statewide MinneKIDS program.
8.3 (b) Implementation grant awards must be used for convening, planning, engagement,
8.4 outreach, marketing, staff for local coordination, additional deposits in MinneKIDS accounts,
8.5 and other programmatic expenses.
8.6 Subd. 5.Outreach and technical support. (a) The commissioner must provide outreach
8.7 to potential grantees to review, score, and select grantees, and to oversee and evaluate grant
8.8 implementation.
8.9 (b) The commissioner must give outreach priority to underrepresented regions of the
8.10 state 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
8.12 is not limited to:
8.13 (1) developing a toolkit for eligible entities seeking to be designated as a MinneKIDS
8.14 affiliate;
8.15 (2) assisting eligible entities that are not offering a local college savings program in
8.16 developing 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
8.19 in section 16B.97 and other applicable grant compliance requirements outlined in state
8.20 statutes.
8.21 Subd. 6.Priorities. (a) The commissioner must consider the following when distributing
8.22 grants 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
8.25 or existing local college savings program; and
8.26 (3) the percentage of low-income families residing in the community served by the
8.27 proposed or existing local college savings program.
8.28 (b) The commissioner must consider geographic diversity in awarding grants under this
8.29 section, including by awarding approximately 50 percent of the total grant award amounts
8.30 to eligible entities that serve Tribal nations and communities outside of the seven-county
8.31 metropolitan area of Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, and Washington
8.32 Counties.
9.1 (c) The commissioner must give grant priority to local college savings programs that
9.2 align with the following criteria:
9.3 (1) local college savings programs that serve, or propose to serve, a community or
9.4 geographic 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
9.6 geographic area with an average college attendance rate that is lower than the average college
9.7 attendance rate statewide;
9.8 (3) existing local college savings programs that demonstrate a high total amount of
9.9 money saved for college in connection with the program;
9.10 (4) existing local college savings programs that hold a high number of outreach events
9.11 to 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
9.13 entity's program;
9.14 (6) an eligible entity that has existing partnerships with schools and community
9.15 organizations;
9.16 (7) an eligible entity that secures a high amount of money through local budget
9.17 commitments, 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
9.21 report information regarding the implementation of the program established in Minnesota
9.22 Statutes, section 136G.15, to the chairs and ranking minority members of the legislative
9.23 committees having jurisdiction over higher education. The report must include but not be
9.24 limited 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;
10.1 (6) a description of the commissioner's efforts and success in aligning or integrating
10.2 with the Minnesota 529 college savings plan established by Minnesota Statutes, section
10.3 136G.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
10.6 report information regarding the implementation of the program established in Minnesota
10.7 Statutes, section 136G.16, to the chairs and ranking minority members of the legislative
10.8 committees having jurisdiction over higher education. The report must include but not be
10.9 limited to:
10.10 (1) a list of eligible entities provided grants pursuant to Minnesota Statutes, section
10.11 136G.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
10.14 the program's growth or sustainability;
10.15 (4) a description of how MinneKIDS affiliate grantees are or anticipate aligning or
10.16 integrating with the program established by Minnesota Statutes, section 136G.15; and
10.17 (5) recommendations for improving the MinneKIDS local partner grant program
10.18 established by Minnesota Statutes, section 136G.16.
10.19 Sec. 11. APPROPRIATIONS.
10.20 (a) $1 million in fiscal year 2026 and $1 million in fiscal year 2027 are appropriated from the
10.21 general fund to the commissioner of the Office of Higher Education for the MinneKIDS
10.22 program under Minnesota Statutes, sections 136G.15 and 136G.16.
10.23 (b) Of the amounts appropriated in paragraph (a):
10.24 (1) $ 6.5 million in fiscal year 2026 and $6.5 million in fiscal year 2027 are for transfer to the children's
10.25 higher education investment account in the special revenue fund for deposit into eligible
10.26 children's MinneKIDS accounts under Minnesota Statutes, section 136G.15; and
10.27 (2) $1 million in fiscal year 2026 and $1 million in fiscal year 2027 are for the MinneKIDS local
10.28 partner grant program under Minnesota Statutes, section 136G.16.
10.29 This is a one time appropriation. It is not a base adjustment or an ongoing appropriation.
