Purpose

• Establishes a process for designating and listing scholarship granting organizations (SGOs) in Minnesota that meet the requirements of section 25F of the Internal Revenue Code (IRC). The goal is to align Minnesota’s program with the federal IRC 25F framework and participate in its qualified donation program for K-12 scholarship support.

Main provisions

• Section 270C.411 – List of approved K-12 scholarship granting programs
  • By January 1 each year, the Minnesota commissioner must:
  • Submit to the U.S. Secretary of the Treasury and publish on the Minnesota Department of Revenue’s website a list of SGOs located in Minnesota that meet IRC section 25F requirements.
  • Ensure the submission complies with IRC 25F requirements, its regulations, and any Treasury guidance.
  • Include all Minnesota SGOs meeting IRC 25F requirements in the submission.
  • Note that the submission also serves as Minnesota’s election to participate in the IRC 25F program, though SGOs can be submitted to the Treasury in subsequent years after meeting the requirements.
• Section 270C.411(a) – Ministerial role and compliance
  • The commissioner’s role is ministerial to ensure compliance; rules may be established for how entities qualify to be included on the list, but such rules must align with Treasury rules and guidance.
• Section 270C.411(b) – Rules for qualification
  • The commissioner may set rules governing the process and documentation required for an entity to qualify as an SGO on the list.
• Section 270C.411(c) – Notice of intent to receive qualified donations
  • SGOs that are registered and allowed to operate and receive donations in Minnesota may participate by submitting a notice of intent to receive qualified donations under IRC 25F.
  • The notice must be in a form prescribed by the commissioner and submitted no later than December 1 of the year before the calendar year for the required submission under paragraph (a).
• Section 270C.411(d) – Definition
  • For purposes of this section, “scholarship granting organization” has the meaning given in IRC section 25Fc5, as amended through July 4, 2025.

Significant changes to existing law

• Creates a formal framework for Minnesota to designate and publish SGOs that qualify under IRC 25F, tying state action to the federal program.
• Establishes annual deadlines and a publication process (January 1 deadline, list submission to Treasury, and public posting on the Department of Revenue website).
• Introduces a formal “notice of intent” mechanism for SGOs to receive qualified donations, with a December 1 deadline preceding the annual submission.
• Clarifies the commissioner’s role as ministerial for compliance, while allowing rulemaking to govern qualification processes consistent with federal guidance.
• Adopts the IRC 25F definition of SGO as amended through a specific date, ensuring alignment with current federal terms.

Relevant Terms - scholarship granting organization - Internal Revenue Code, section 25F - Minnesota Department of Revenue - Minnesota Statutes chapter 270C - List of approved K12 scholarship granting programs - Secretary of the Treasury - notice of intent to receive qualified donations - qualified donations - January 1 deadline (annual publication/submission) - December 1 deadline (notice of intent) - ministerial designation (commissioner’s role) - IRC section 25Fc5 (definition reference)

Relevant Terms (plain) scholarship granting organization, Internal Revenue Code section 25F, Notice of intent to receive qualified donations, qualified donations, Secretary of the Treasury, Minnesota Department of Revenue, Minnesota Statutes chapter 270C, List of approved K12 scholarship granting programs, ministerial, IRC section 25Fc5, January 1, December 1.