Minnesota Senate Bill SF3194

Minnesota 2025-2026 Regular Session

• Introduced: 4/1/25
• Refer: 4/1/25

Caption

Certain assets of colleges and universities tax on certain growth establishment and special revenue fund account establishment

Summary

SF3194 creates a new Minnesota excise tax on the growth of assets held by certain colleges and universities, and it also establishes a dedicated special revenue fund account to receive the proceeds. The tax applies only to “applicable educational institutions” that exceed $100 million in total assets, enroll at least 500 tuition-paying students, and have more than half of those students located in Minnesota. The bill defines “asset growth” as the increase in asset value from one taxable year to the next and imposes graduated tax rates based on per-student asset levels: 15 percent, 20 percent, or 25 percent. The bill also amends Minnesota law to create the “higher education assets growth account” in the special revenue fund. Money in that account, including earnings, would be continuously appropriated to the commissioner for the state grant program unless otherwise appropriated, and unspent balances would carry forward rather than revert to the general fund. The tax would be administered under existing Minnesota tax enforcement and appeals procedures, with returns and payments handled by the commissioner, and the revenues deposited into the new account. The tax would take effect for taxable years beginning after December 31, 2025, while the account creation takes effect the day after final enactment.

Impact

If enacted, SF3194 would add a new chapter 290 excise tax targeting asset growth at large private or nonprofit higher education institutions meeting the bill’s size and student-location thresholds. It would also amend section 136A.121 to create a new special revenue account tied to the state grant program, changing how certain revenues are earmarked and spent. The bill would affect colleges and universities with substantial assets, particularly those with large endowments or asset growth, and would direct the resulting tax revenue away from the general fund and into higher education aid.

Sentiment

Based on the bill text and the absence of recorded committee testimony or votes in the provided materials, the available context suggests the bill was introduced as a policy proposal rather than as a measure with documented public debate in this record. The structure of the bill indicates a clear policy intent to raise revenue from wealthy institutions for student grant support, which typically aligns with arguments about equity and higher education affordability. No formal vote history or transcript is available here to show broader legislative support or opposition.

Contention

The main points of contention are likely to be whether it is appropriate to tax college and university asset growth, which institutions should be covered, and whether the revenue should be redirected to state grant aid. Supporters would likely argue that large institutions with significant assets should contribute more to student financial aid, while opponents may argue the tax could reduce endowment growth, discourage long-term institutional planning, or burden institutions that rely on asset returns for operations and scholarships. The bill’s thresholds, use of per-student assets, and treatment of related organizations are also likely to be debated because they determine which institutions are captured and how broadly the tax base reaches.