Short session weeks; Policy bill moves; State grant shortfall bill moves; Race for the Top discussed; Federal Student Loan Act heard

Legislative Update
April 23, 2010

Two short weeks at the Capitol while political parties endorse candidates

It was a short week in St. Paul as DFL state delegates headed north to Duluth for the 2010 DFL State Convention, which officially kicked off this morning. Convention delegates will hear today from U.S. Sen. Amy Klobuchar, D-Minn., but starting Saturday morning, the gubernatorial endorsement process begins. There is a lengthy list of DFL candidates. Five of them have said they will abide by the endorsement and won’t be on the primary ballot: Speaker of the House Margaret Anderson Kelliher, Minneapolis Mayor R.T. Rybak, state representatives Paul Thissen and Tom Rukavina, and state Sen. John Marty. Three other DFL gubernatorial candidates who have said they are not abiding by the endorsement and will run in the August 10 primary are former Sen. Mark Dayton, Ramsey County Attorney Susan Gaertner and former House Minority Leader Matt Entenza.

Next week, Republican state delegates will gather beginning Thurs., April 29, at the Minneapolis Convention Center, where state representatives Tom Emmer and Marty Seifert will battle it out for the endorsement for governor.


Higher education policy bill passes Senate

On the Senate floor this week, lawmakers took up SF 184, the Senate omnibus higher education policy bill, and passed it after successfully adding three amendments. The first amendment related to the Minnesota State Colleges and Universities system deletes the provision on credit transfer. Bill author Sen. Sandy Pappas, DFL-St. Paul, explained to senators that the transfer language is in a separate bill that is being worked out in conference committee. Since the Senate floor debate, a compromise on credit transfer was reached and can be found here. The rest of the amendment was technical in nature.

The other amendment related to the system, introduced by Sen. Chuck Wiger, DFL-Maplewood, regards monitoring of the federal postsecondary textbook disclosure law. The language requires the Office of Higher Education to monitor implementation of the Higher Education Opportunity Act as it relates to the disclosure of textbook pricing and other information to students.

The bill also includes a provision that asks public colleges and universities to make a reasonable attempt to identify and purchase food products that are grown within the state. You may find the latest version of the bill here.

The omnibus higher education policy bill in the House is awaiting action on the House floor.

Bill to fill state grant shortfall traveling through committee process

The House Finance committee heard HF 3757 this week. The bill, introduced by Rep. Bill Hilty, DFL-Finlayson, increases the fee to register a mutual fund from 1/20 of 1 percent to 1/10 of 1 percent. Rep. Hilty testified that this is consistent with most other states and said that for every $10,000 invested in a mutual fund, there would be a $5 fee increase to help fill $23 million of the now $35 million state grant shortfall. Rep. Mary Kiffmeyer, R-Big Lake, said in committee that while many other states charge a fee of 1/10 of 1 percent, the other states set a cap on the fee, while HF 3757 does not.

Chair Lyndon Carlson, DFL-Crystal, asked the Minnesota Office of Higher Education about the average loss students are seeing in their state grant awards because of the shortfall. Tricia Grimes of the office said the average student will see a $300 loss, but some students at a higher-cost institution could see up to a reduction of $1,000 in their state grants. Grimes also told committee members that 7,000 students will lose their state grant award altogether and more than 5,000 of these students are from community and technical colleges.

Chair Carlson explained to committee members that because of the economy, many more students are showing up at higher education institutions and a larger number of these students have a greater financial need. The Office of Higher Education moved dollars from the second year of the biennium to the first year to cover the cost of this greater need, which has resulted in the shortfall in the second year. Carlson also said it is difficult to predict how much money will be needed in the state grant program from year to year, but under law, the Office of Higher Education has to prorate students' awards if there is a shortfall.

Rep. Laura Brod, R-New Prague, said the state grant program is a great program and lawmakers should make it a priority, but should find a different way to fund it without creating a tax.

The bill is slated to be heard next in the Tax committee. If the Tax committee passes the bill on its own, it will travel to the Ways and Means committee and the next stop would be the House floor. The Tax committee also could roll the bill into its omnibus bill or not pass the bill at all. The Senate companion, SF 3355, sponsored by Sen. David Tomassoni, DFL-Chisholm, has not yet been heard.

Movement this week on a second Race to the Top proposal

Earlier this week a joint House and Senate education committee met to discuss a second Race to the Top proposal after Minnesota was not awarded a federal education grant in the first round, coming in 20th out of 41 states that applied. The grant is intended to stimulate education reforms and help states fix low-performing schools. As reported last week, a grant could be worth $60 million to $175 million to Minnesota. Rep. Mindy Greiling, DFL-Roseville, said, “I would say this is the most important education meeting we have had this session; the main way to win is if we come together and do what’s best for our students.” Meetings continued later in the week when Greiling, Sen. LeRoy Stumpf, DFL-Plummer, and other lawmakers met with the federal Department of Education about a second Race to the Top proposal. Greiling said they learned that the winners from the first round had in common was that their governors personally worked with union leaders on the proposal, because “it’s not done to them but rather with them.”

Gov. Tim Pawlenty has said he will not sign a second-round application unless the Legislature passes reforms that will satisfy grant criteria. These reforms include alternative teacher licensure; linking student achievement data to teacher effectiveness, tenure and pay; implementing statewide teacher and principal evaluation systems; and the ability to dismiss educators shown to be ineffective according to defined criteria. Bush Foundation Vice President and Educational Achievement Team Leader Susan Heegaard said research indicates that students who have effective teachers progress three times faster than those with less effective teachers. Heegaard said the Bush Foundation has committed $40 million over 10 years to strengthen teacher training and ongoing support for new teachers, in partnership with 14 higher education institutions in Minnesota, North Dakota and South Dakota that will guarantee their graduates are effective.

“Our goal is to improve student readiness for college and close the achievement gap,” Heegaard said. Rep. Carlos Mariani, DFL-St. Paul, said the original application did not adequately address Minnesota’s “disgraceful achievement gap,” which Greiling said is second-worst in the nation, above only the District of Columbia.

Current legislation at the Capitol may help increase the chances for a second round application. Rep. Mariani sponsored HF 3163 that would strengthen teacher preparation programs and use longitudinal data to track teacher performance. The bill awaits action by the House K-12 Education Finance Division. HF 3093, also sponsored by Rep. Mariani, would create pathways to licensure for nontraditional teacher candidates. This bill passed the House and awaits action by the Senate. In the Senate, SF 2757, which includes both House provisions and is being carried by Sen. Terri Bonoff, DFL-Minnetonka, awaits action by the Senate E-12 Education Budget and Policy Division.


Federal Private Student Loan Bankruptcy Fairness Act of 2010 heard in committee

The U.S. House of Representatives Subcommittee on Commercial and Administrative Law had a hearing this week on a bill introduced in both the Senate and House that would treat privately issued student loans in bankruptcy the same as other types of private debt. Sen. Al Franken, D-Minn, is a co-author of the Senate bill, S. 3217. The House bill, H.R. 5043, was introduced by Rep. Stephen Cohen , D-TN.

Language in the bill would restore the private student loan provision in bankruptcy law to the language that was in place before 2005, so that privately issued student loans will once again be dischargeable in bankruptcy. Under current law, private student loans cannot be discharged unless borrowers can prove that repaying the loans would be an “undue hardship.” By comparison, mortgages and credit-card balances can be excused without showing undue hardship. Supporters of the bill say the legislation would restore fairness to the bankruptcy system by treating private student loans like other types of private debt.

An opponent of the bill, Rep. Trent Franks, R-Ariz., said the legislation would “discourage private lending and encourage abuse of the bankruptcy system.” John A. Hupalo, managing director of a group specializing in student-loan finance at Samuel A. Ramirez and Co., warned that interest rates for all borrowers of private student loans would have to rise to compensate for the increased risk that borrowers would eliminate their private-student loan debt through bankruptcy. It is unclear at this point how far the bill will go in Congress.


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 legislative web site.

Monday, April 26

12:00 PM
House in Session

1:00 PM (or 30 minutes after session adjourns)
House K-12 Education Finance
Room: 5 State Office Building
Chair: Rep. Mindy Greiling
Agenda: Walk-through of the omnibus K-12 finance and policy bill.
NOTE: Copies of the articles will be posted online and be available to the public at approximately noon Monday.
HF243 (Greiling) School finance system modified, and new education funding framework created.

2:00 PM
Senate in Session

Tuesday, April 27

8:30 AM
House State and Local Government Operations Reform, Technology and Elections
Room: 10 State Office Building
Chair: Rep. Gene Pelowski
Agenda: HF2958 (Pelowski) Open Meeting Law changed.
HF2227 (Marquart) Board of Innovation reestablished, powers and duties imposed, and money appropriated.

9:30 AM
House Finance
Room: Basement State Office Building
Chair: Rep. Lyndon Carlson
Agenda:
HR 8 (Huntley) A house resolution expressing the sense of the Minnesota House of Representatives regarding an extension of the enhanced federal Medicaid match.
HF3281 (Murphy) Omnibus pension bill
HF3660 (Koenen) Department of corrections; settlement provided for certain claims against the state for injuries suffered.
HF3571 (Koenen) Publicly owned nursing facilities rate increase authorized, and local share required for nonfederal medical assistance costs.
HF3748 (Simon) Chairs and ranking minority members of the Committee on Finance and Ways and Means authorized to request local impact notes.
SF2505 (Slawik) Statewide child care provider training, coaching, consultation, and supports funding provided to prepare for the voluntary Minnesota quality rating system, and money appropriated.
HF1993 (Clark) Minneapolis; utility poles treated with or containing pentachlorophenol prohibited.
HF3490 (Holberg) Requirements established governing capital requests and legislative reporting for projects to establish fixed guideway transit and rail lines.

Wednesday, April 28

8:30 AM
Senate Finance
Room: 123 Capitol
Chair: Sen. Richard J. Cohen
Agenda:
S.F. 2918-Betzold: Omnibus retirement bill.
S.F. 2573-Betzold: State, local, legislator and hospital public employees retirement financial sustainability provisions modifications.
S.F. 2644-Betzold: Minneapolis employees retirement fund (MERF) administrative functions transfer to the public employees retirement association (PERA); MERF consolidation account in PERA establishment and operation provisions.

10:00 AM
House K-12 Education Finance
Room: 5 State Office Building
Chair: Rep. Mindy Greiling
Agenda: Mark-up and passage of HF2431, the omnibus K-12 finance and policy bill.