SF3120

Purpose of the Bill

The purpose of this bill is to establish the MinneKIDS program, a statewide children's savings account initiative in Minnesota aimed at helping families save for higher education expenses. It is intended to create accounts for children born in Minnesota to encourage saving for college and to involve local community partners in supporting these efforts.

Main Provisions

• Children's Higher Education Investment Account: Creates a MinneKIDS account for eligible children, defined as those born on or after July 1, 2026, in Minnesota. The accounts are funded with a $50 seed deposit, with an additional $50 for children from low-income households.
• Eligible Use of Funds: Money in these accounts, including investment earnings, is to be used for qualified higher education expenses at eligible institutions. Funds cannot be used for elementary or secondary education expenses.
• Notification and Opt-Out: Parents or guardians are notified about the account establishment and usage yearly. They can opt-out their child from the program if desired.
• Account Investment and Funds Management: The accounts are owned by the state but managed for the child’s benefit until they are used for educational purposes. If funds remain unused when the child turns 26, they revert to the state's education investment account.

Local Partner Grants

• MinneKIDS Local Partner Grant Program: Establishes grants for local governments, tribes, nonprofits, and other entities to promote college savings and participation in the MinneKIDS program via outreach and education.
• Eligibility for Grants: Grants are given to entities without existing college savings programs, with a focus on creating local initiatives that can integrate with the statewide program.

Reporting and Evaluation

• A report on the implementation of MinneKIDS and the partner grant program is required by February 15, 2028, to assess expenditures, account openings, and the effectiveness of integrating with existing savings plans.

Significant Changes to Existing Law

• Introduces a new section to Minnesota Statutes creating the framework and funding for a statewide children's savings program focused on higher education.
• Establishes new roles for community organizations in supporting higher education savings efforts and creates reporting obligations to ensure program efficacy and transparency.

Appropriations

Funds are appropriated from the general fund to support the MinneKIDS program and its grant initiatives for fiscal years 2026 and 2027.

Relevant Terms

• MinneKIDS program
• Children's Higher Education Investment Account
• Seed deposit
• Eligible child
• Low-income households
• Higher education expenses
• Local partner grants
• Opt-out process
• State-owned accounts