Budget and policy bill advance, Transfer bill moves, Lawmakers get ready for break, Congress passes loan reform, Appropriations out

Legislative Update
March 26, 2010

Conference committee comes to agreement on higher education article 

Approximately one-third of the state’s budget deficit of almost $1 billion is close to being resolved. The supplemental budget conference committee negotiating the bill that makes $313 million in reductions has been meeting this week to resolve the differences between the House and Senate. After a long meeting Thursday night, conference committee members went back to work today and adopted the higher education article and moved that the article be placed in the omnibus bill. As of the time of this writing, the conference committee is still meeting to finalize the remaining articles.

Included in the higher education article of the bill is $10.467 million in reductions to the Minnesota State Colleges and Universities system in fiscal year 2011. Of the cut to the system, $500,000 is to be reduced from the central system office, along with an additional $500,000 internal obligation. The bill includes language that says the Board of Trustees must make a good-faith effort to make the reductions at campuses and the central office in a manner that minimizes reductions related to providing direct services to students and maximizes reductions for administrative services not providing direct services to students.

The bill also increases the revenue fund authority in statute from $200 million to $300 million and removes the House language that limited the revenue fund to only state university projects. As for financial aid, lawmakers had to fill the $42 million state grant shortfall. The bill reduces state work study and also reduces from nine to eight, the number of semesters that a student can attend while maintaining eligibility for the state grant program. The bill modifies the Achieve scholarship program and reduces the technical and community college emergency grants and makes clear that this appropriation in fiscal year 2009 was a one-time appropriation.

The policy language was removed from the bill; however, it was added to the House higher education policy bill earlier this week.

House Majority Leader Rep. Tony Sertich, DFL-Chisholm, said he hopes for smooth passage of the legislation on the House floor. Both the House and Senate are expected to take up the supplemental budget conference committee report on the floor Monday, prior to adjournment for the Passover and Easter break. House Speaker Rep. Margaret Anderson Kelliher, DFL-Minneapolis, said, “We want a signed bill on this piece of legislation,” adding that if that happens, everyone could go home early.

Higher education policy bill moving through House

Higher education policy was discussed by members of the House Higher Education and Workforce Development Finance and Policy Division this week. Included in the bill is language that increases the age from 62 to 66 for receiving reduced tuition as senior citizens. The bill includes language that establishes the system office in statute and provides for general duties of the office. Also in the bill is amended language calling for streamlining of the system office by better targeting the use of state resources and providing services at the most efficient level to avoid duplicating services provided at the colleges and universities. An amendment also passed that includes language on appropriation reductions to the system office that states any reduction to the system office must not be passed through to any institution or campus.

The bill was amended to include the policy language from the House supplemental budget bill that was removed in conference committee. Among the provisions is credit transfer language directing the Board of Trustees to develop and maintain a system wide effective and efficient mechanism for seamless student transfer between system institutions with a goal of minimal loss of credits for transferring students (this also traveled in its own bill, see below). Language also was included that requires a report of transfer activities to the Legislature. The provision regarding the pilot project for local deposit of reserves for system institutions also was amended into the policy bill. The committee adopted the bill as amended. The Senate higher education committee passed their version of a policy bill earlier this session, which differs greatly from the House bill. As the bills make their way through the process, lawmakers will have to iron out the differences.

Transfer bill heard on floor

Transferring credits within the system should be easier. That sums up the intent of new legislation passed by the House and Senate this week. Rep. Larry Haws, DFL-St. Cloud, carried the House version of the bill, HF 3164, which requires documentation of transfer, accessible transfer information online, consistent transfer among institutions and training for campus staff. “The students are happy, the faculty are happy,” Haws said. Rep. Mark Buesgens,R Jordan, questioned why this needs to be legislated, saying, “We have to tell them how to talk to each other?” Haws responded, “This is exactly what this House should be doing … I will take teamwork anytime” in making policy. The Senate passed its version of the credit transfer bill, SF 2822, earlier this week. Bill author Sen. Tarryl Clark, DFL-St. Cloud, proposed the Senate’s version of the bill to help make the credit transfer process seamless. The bill versions differ slightly so a conference committee would need to work through the differences. As noted above, transfer language is also included in the House higher education policy bill.

Lawmakers head home for break

As is tradition every year around the Easter and Passover holidays, legislators head home to their districts for a much-deserved break. House DFL leaders have said they are optimistic about their
accomplishments and quick pace in the session thus far. Monday, March 29 will mark the third committee deadline, when divisions of the House and Senate Finance committees need to pass omnibus finance bills. Lawmakers continue to work into the evening tonight to wrap up the supplemental budget bill. Once the House and Senate take up the budget bill and jobs creation bill on the floor Monday, they anticipate adjourning in time to allow those traveling and preparing for Passover adequate time before the sunset start of the religious holiday. Lawmakers will be in their home districts Tuesday, March 30 through Monday, April 5.

U.S. Congress approves student loan reform

It appeared that the House and Senate were riding a seesaw with the nation’s student loan reform legislation this week. First it was at the House, then it went to the Senate, where changes were made, then back to the House for final approval. The student loan reform was sent to the President after the House passed the Senate’s amended bill Thursday on a vote of 220-207. The Student Aid Fiscal Responsibility Act traveled with the health care reform bill in the budget reconciliation process. After the passage of the reconciliation bill, the House and Senate wrapped up and left Washington, D.C. for a two week recess.

Under the legislation, all student loans will be given out under the Direct Lending program. This change will begin July 1, 2010. The Congressional Budget Office estimates the change will save $61 billion over the next 10 years. The savings will be used to increase the Pell Grants $690 in mandatory funds (not subject to annual appropriations approval). This change will bring the current $4,860 award to $5,550. The legislation also directs the award to increase by the consumer price index for a projected maximum $5,975 award. This maximum would be maintained for fiscal years 2019 and beyond without further Congressional action.

The legislation also includes $2 billion for the Community College and Career Training Grant Program. This program would award funds to programs taught at institutions of higher education that do not exceed two years in length and have a strong community focus and component. The program is to be directly tied to improving the skill sets of individuals who have lost their jobs for trade-related reasons and will be administered through the U.S. Department of Labor.

The existing College Access Challenge Grant program will receive $150 million each year (currently funded at $66 million) for five years for a total amount of $750 million. This program is designed to help students understand the benefits of a postsecondary education, provide the financing options for postsecondary education, and initiate outreach programs for students at risk of not enrolling or completing.

The bill also will provide $2.5 billion for Minority Serving Institutions, including Historically Black Colleges and Universities. This funding continues previously authorized funds through the College Cost Reduction and Access Act to better target programs focused on retention and completion.

Finally, funds were provided to make changes to the current Income Based Repayment Program that first was proposed in President Obama’s fiscal year 2011 budget. Currently, students who pursue that program may have their loan payment amount reduced to 15 percent of their total income and must make 25 years of continuous payments before any remaining balance is forgiven. The president proposed reducing these amounts to 10 percent and 20 years, respectively. Using funds provided in this legislation, first-time borrowers will be eligible for these benefits under the updated program beginning in 2014.

To see how the Senate voted, click here.
To see how the House voted, click here.

Learn more about earmark appropriation submissions 

U.S. House members have posted their fiscal year 2011 appropriations projects that have been submitted to the Appropriations Committee on their web pages. Congressman Kline, Congressman Paulsen, and Congresswoman Bachmann did not submit appropriations projects. Links to the pages are below:

Congressman Tim Walz (DFL - 1st District)

Congresswoman Betty McCollum (DFL - 4th District)

Congressman Keith Ellison (DFL - 5th District)

Congressman Collin Peterson (DFL - 7th District)

Chairman Jim Oberstar (DFL - 8th District)


Jobs legislation passes House

In the second phase of what is expected to be a series of jobs legislation, the U.S. House passed a tax incentives bill (HR 4849) this week. The bill provides an estimated $13.2 billion for bond programs used largely by state and local governments for infrastructure development. Among the bond provisions is an extension of the Build America Bonds program through June 2013, which provides financial support to state and local governments through federal tax exemptions for interest on municipal bonds. The third piece, headed to the House floor (HR4899), would provide $5.7 million for disaster relief, $600 million in funding for summer jobs, and $60 million for a small-business loan program. The estimates indicate this bill would support 300,000 summer jobs for teens and young adults.

Here's What's Happening at the Capitol:

This schedule shows all meetings that we are aware of at the time of publication that may have an impact on the system. This schedule may change. Please watch the House and Senate schedules posted on the Legislature web site.

Monday, March 29

8:30 AM
House in Session
Anticipated consideration of:
● Omnibus supplemental budget bill
● HF2695 (Lenczewski) Job creation encouraged, small business tax credits allowed, special assessment use expanded, tax increment financing expanded, Bloomington's development restrictions of the Mall of America site repealed, tax system and debt collection management provided, energy improvement financing program established, property tax exemption and minerals distribution modified, and money appropriated.

8:30 AM
Senate in Session
Anticipated consideration of:
● Omnibus supplemental budget bill
● S.F. 2568 (Bakk) Economic development and job creation encouragement; small business investment credit and appropriation, Minnesota business investment credit and historical structure rehabilitation credit establishment and appropriation; compact development district.

Tuesday, March 30 - Monday, April 5
Legislative Break

Tuesday, April 6

10:00 AM *Note time change* House Higher Education and Workforce Development Finance and Policy Division
Room: 10 State Office Building
Chair: Rep. Tom Rukavina
Agenda: Higher education system and campus budget planning

Wednesday, April 7

8:00 AM
Trustee Candidate Advisory Council
Room: 300N State Office Building
Chair: Kent Eklund
Agenda: Candidates interviewed for Minnesota State Colleges and Universities Board of Trustees

Thursday, April 8

8:00 AM
Trustee Candidate Advisory Council
Room: 300N State Office Building
Chair: Kent Eklund
Agenda: Candidates interviewed for Minnesota State Colleges and Universities Board of Trustees