To repeal sections 41.435, 42.105, 42.135 and 173.215, RSMo 1994, and sections 173.239 and 313.835, RSMo Supp. 1996, relating to certain military benefits and other scholarships, and to enact in lieu thereof eleven new sections relating to the same subject, with penalty provisions.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF MISSOURI, AS FOLLOWS:

Section A. Sections 41.435, 42.105, 42.135 and 173.215, RSMo 1994, and sections 173.239 and 313.835, RSMo Supp. 1996, are repealed and eleven new sections enacted in lieu thereof, to be known as sections 41.214, 41.215, 41.435, 41.958, 42.105, 42.135, 173.215, 173.239, 173.340, 313.835 and 1, to read as follows:

41.214. 1. There is established in the state treasury a special trust fund, to be known as the "Missouri National Guard Trust Fund". The state treasurer shall credit to and deposit in the Missouri national guard trust fund all amounts received pursuant to section 41.215 and any other amounts which may be received from grants, gifts, bequests, the federal government or other sources granted or given for this specific purpose.

2. The state treasurer shall invest moneys in the Missouri national guard trust fund in the same manner as surplus state funds are invested pursuant to section 30.260, RSMo. All earnings resulting from the investment of moneys in the Missouri national guard trust fund shall be credited to the Missouri national guard trust fund.

3. Until the amount in the Missouri national guard trust fund exceeds one million dollars, not more than one-half of the money deposited in the Missouri national guard trust fund each year from contributions made pursuant to section 41.215, plus all earnings from the investment of moneys in the trust fund credited during the previous fiscal year, shall be available for disbursement by the office of the adjutant general in accordance with sections 41.010 to 41.1000. When the state treasurer certifies that the assets in the Missouri national guard trust fund exceed one million dollars, then, from that time on, all credited earnings plus all future annual deposits to the fund from contributions made pursuant to section 41.215 shall be available for disbursement by the office of the adjutant general within the limits of appropriations and for the purposes provided by sections 41.010 to 41.1000. The general assembly may appropriate moneys annually from the Missouri national guard trust fund to the department of revenue to offset costs incurred for collecting and transferring funds pursuant to section 41.215. Moneys appropriated to the department of revenue for such costs shall be reasonable and shall not exceed five percent of the revenues credited to the fund pursuant to subsections 1 and 2 of this section during the preceding fiscal year.

4. Except as provided in subsection 5 of this section, funds appropriated by the general assembly from the Missouri national guard trust fund shall only be used by the office of the adjutant general for purposes authorized pursuant to sections 41.010 to 41.1000.

5. Funds received from gifts, bequests, contributions, other than contributions made pursuant to section 41.215, grants and federal funds may be used and expended by the office of the adjutant general for such purposes as may be specified in any requirements, terms or conditions attached thereto or, in the absence of any specific requirements, terms or conditions, as the office of the adjutant general may determine for any lawful purpose.

6. The provisions of section 33.080, RSMo, requiring all unexpended balances remaining in various state funds to be transferred and placed to the credit of the general revenue fund of this state at the end of each biennium shall not apply to the Missouri national guard trust fund.

41.215. 1. In each tax year beginning on or after January 1, 1998, each individual or corporation entitled to a tax refund in an amount sufficient to make a designation pursuant to this section may designate that two dollars or any amount in excess of two dollars on a single return and four dollars or any amount in excess of four dollars on a combined return, of the refund due be credited to the Missouri national guard trust fund. The contribution designation authorized by this section shall be clearly and unambiguously printed on each income tax return form provided by this state. If any individual or corporation which is not entitled to a tax refund in an amount sufficient to make a designation pursuant to this section wishes to make a contribution to the Missouri national guard trust fund, such individual or corporation may, by separate check, draft or other negotiable instrument, send in with the payment of taxes, or may send in separately, that amount, clearly designated for the Missouri national guard trust fund, the individual or corporation wishes to contribute and the department of revenue shall forward such amount to the state treasurer for deposit to the Missouri national guard trust fund as provided in subsection 2 of this section.

2. The director of revenue shall transfer at least monthly all contributions designated by individuals pursuant to this section to the state treasurer for deposit in the Missouri national guard trust fund.

3. The director of revenue shall transfer at least monthly all contributions designated by corporations pursuant to this section, less an amount sufficient to cover the cost of collection and handling by the department of revenue, to the state treasurer for deposit in the Missouri national guard trust fund.

4. A contribution designated pursuant to this section shall only be transferred and deposited in the Missouri national guard trust fund after all other claims against the refund from which such contribution is to be made have been satisfied.

5. Notwithstanding any other law to the contrary, the names and addresses of individuals or corporations who designate a contribution to this fund may be supplied to the office of the adjutant general, for the purpose of sending an acknowledgement and written appreciation to those individuals and corporations. Under no circumstances shall the names and addresses be used for any purpose other than that expressed in this subsection. Any person who releases or uses any of the names and addresses for any other purpose is guilty of a class C felony.

41.435. 1. The adjutant general of the state of Missouri may pay out of funds appropriated for [this] purpose as provided in this section to each individual who reenlists or extends his or her enlistment in the Missouri national guard the sum [of one hundred dollars] equivalent to one month active base pay for each year of such reenlistment or extension. The maximum payment made to any individual for any one reenlistment or extension shall be [six hundred dollars] the sum equivalent to three months active base pay, payable in sums of one [hundred dollars] month active base pay at the beginning of each year of service. No such payment shall be made until the individual satisfactorily completes all requirements established by the appropriate state and federal authorities for reenlistment or extension. Any reenlistment in the Missouri national guard must be accomplished within thirty days of the expiration of the preceding enlistment in order to be eligible for payment of this gratuity. Any member of the Missouri national guard who fails for any reason, except death or disability, to complete the period of reenlistment or extension for which he or she has received a gratuity [under] pursuant to the provisions of this section shall be required to repay that part of the gratuity represented by the uncompleted portion of the reenlistment or extension contract.

2. The adjutant general shall administer the provisions of this section.

3. The provisions of this section shall terminate upon the resumption of inductions by the federal government under the provisions of the Universal Military Training and Service Act.

41.958. 1. When requested by the commander of any recognized veterans' organization, military commander or by any friend or relative of a deceased person or the director of a funeral home for any deceased person who served in the armed forces of the United States during a time of war or is otherwise entitled to military honors at the person's burial, internment or memorial service, the adjutant general shall, subject to appropriation, order the appropriate requested uniformed honor detail to attend and render the requested services; except that, if an honor detail is unavailable or previously committed elsewhere, the adjutant general shall request and coordinate the appropriate detail with a recognized veterans' organization. The adjutant general shall ensure that appropriate service records are collected authorizing the honor detail, shall ensure that the honor detail meets the appropriate military requirements for uniform and conduct, shall ensure that if a recognized veterans' organization renders the services, the organization is compensated for services through the Missouri national guard trust fund, shall provide assistance in training honor details for recognized veterans' organizations, and shall serve as the coordinator for military funerals and such details when requested. The amount paid regardless of rank shall be at a minimum of one day's basic pay for a sergeant (E5), a day for each person who is a member of such honor detail. The amount authorized by this section shall be paid from funds appropriated from the Missouri national guard trust fund.

2. The adjutant general shall promulgate rules to administer the provisions of this section. No rule or portion of a rule promulgated pursuant to the authority of this section shall be effective unless it has been promulgated pursuant to the provisions of section 536.024, RSMo.

42.105. Citizens of the state of Missouri who meet the criteria established by the United States Department of Veterans' Affairs, or its successor organization, for veteran status or who have an honorable discharge from the national guard and who require institutional health care services shall be entitled to admission into a Missouri veterans' home. No spouse of a qualified veteran shall be required to vacate the premises of a Missouri veterans' home if the spouse was a resident of the home on August 28, 1989.

42.135. 1. There is established in the state treasury a special trust fund, to be known as the "Veterans' Trust Fund". The state treasurer shall credit to and deposit in the veterans' trust fund all amounts received [under] pursuant to section 42.140, and any other amounts which may be received from grants, gifts, bequests, the federal government, or other sources granted or given for this specific purpose.

2. The state treasurer shall invest moneys in the veterans' trust fund in the same manner as surplus state funds are invested pursuant to section 30.260, RSMo. All earnings resulting from the investment of moneys in the veterans' trust fund shall be credited to the veterans' trust fund.

3. Until the amount in the veterans' trust fund exceeds one million dollars, not more than one-half of the money deposited in the veterans' trust fund each year from contributions made [under] pursuant to section 42.140, plus all earnings from the investment of moneys in the trust fund credited during the previous fiscal year, shall be available for disbursement by the commission in accordance with sections 42.002 to 42.140. When the state treasurer certifies that the assets in the veterans' trust fund exceed one million dollars, then, from that time on, all credited earnings plus all future annual deposits to the fund from contributions made [under] pursuant to section 42.140 shall be available for disbursement by the commission within the limits of appropriations and for the purposes provided by sections 42.002 to 42.140. The general assembly may appropriate moneys annually from the veterans' trust fund to the department of revenue to offset costs incurred for collecting and transferring funds [under] pursuant to section 42.140. Moneys appropriated to the department of revenue for such costs shall be reasonable and shall not exceed five percent of the revenues credited to the fund pursuant to subsections 1 and 2 of this section during the preceding fiscal year.

4. Except as provided in subsection 5 of this section, funds appropriated by the general assembly from the veterans' trust fund shall only be used by the commission for purposes authorized [under] pursuant to sections 42.002 to 42.140 [and shall not be used to supplant any existing program or service].

5. Funds received from gifts, bequests, contributions other than contributions made pursuant to section 42.140, grants, and federal funds may be used and expended by the commission for such purposes as may be specified in any requirements, terms or conditions attached thereto or, in the absence of any specific requirements, terms or conditions, as the commission may determine for any lawful purpose.

6. The provisions of section 33.080, RSMo, requiring all unexpended balances remaining in various state funds to be transferred and placed to the credit of the ordinary revenue fund of this state at the end of each biennium shall not apply to the veterans' trust fund.

173.215. 1. An applicant shall be eligible for initial or renewed financial assistance only if, at the time of his application and throughout the period during which he is receiving such assistance, he

(1) Is a citizen or a permanent resident of the United States;

(2) Is a resident of the state of Missouri, as determined by reference to standards promulgated [pursuant to section 173.140] by the board;

(3) Is enrolled, or has been accepted for enrollment, as a full-time undergraduate student in an approved private or public institution;

(4) Establishes that he has financial need;

(5) Has never been convicted in any court of an offense which involved the use of force, disruption or seizure of property under the control of any institution of higher education to prevent officials or students in such institutions from engaging in their duties or pursuing their studies; and

(6) No award shall be made under sections 173.200 to 173.230 to any applicant who is enrolled, or who intends to use the award to enroll, in a course of study leading to a degree in theology or divinity.

2. Financial assistance shall be allotted for one academic year, but a recipient shall be eligible for renewed assistance until he has obtained a baccalaureate degree, provided such financial assistance shall not exceed a total of ten semesters or fifteen quarters or their equivalent. Standards of eligibility for renewed assistance shall be the same as for an initial award of financial assistance.

173.239. 1. Any member of the Missouri national guard who has served in the Missouri national guard [for at least one year] after December 31, 1983, and who possesses the qualifications set forth in this section may be awarded a scholarship to an approved public institution or an approved private institution, as those terms are defined in section 173.205, of his or her choice while he or she is a member of the Missouri national guard. Funding for scholarships [under] pursuant to this section shall be requested annually from the Missouri national guard trust fund in the budget of the Missouri national guard. Scholarships provided [under] pursuant to this section shall not exceed funds appropriated for that purpose.

2. Scholarships provided [under] pursuant to this section shall not exceed the tuition amount nor shall any person receive a scholarship in excess of five hundred dollars per regular semester nor in excess of two hundred and fifty dollars per summer semester nor in excess of one thousand two hundred and fifty dollars per school year.

3. A member of the Missouri national guard seeking a scholarship pursuant to this section shall provide a certificate of satisfactory service of his or her Missouri national guard duties from his or her commanding officer and shall possess all other necessary entrance requirements of the school of his or her choice and shall [have maintained] maintain a cumulative grade point average (GPA) of two point five on a four point scale, or the equivalent on another scale approved by the program administrator, while [in secondary school] attending the approved public or private institution.

4. If the grade point average (GPA) of a member who is receiving a scholarship pursuant to this section falls below two point five on a four point scale, or the equivalent on another scale, such member shall retain the scholarship and shall be placed on probation under the scholarship program. Failure to achieve a current grade point average (GPA) of two point five on a four point scale, or the equivalent on another scale for future semesters or equivalent academic terms shall result in termination of the scholarship effective as of the next academic term. The member shall be removed from probation status upon achieving a cumulative grade point average (GPA) of two point five on a four point scale or the equivalent on another scale.

[4.] 5. If a recipient of a scholarship pursuant to this section ceases to be a member of the Missouri national guard while enrolled in a course of study or within three years after the completion of a course of study, the scholarship shall be terminated as of the date membership in the Missouri national guard ended and the recipient shall repay any amounts awarded pursuant to this section.

[5.] 6. Applicants for scholarship assistance pursuant to this section shall meet [all] the qualifications established by section 173.215, except the provisions of subdivision (2) or (4) of subsection 1 of section 173.215, and shall be qualified, full-time or part-time students. Applicants for scholarship assistance pursuant to this section shall have composite scores on the American College Testing Program (ACT) of twenty or higher.

[6.] 7. The scholarship program established [under] pursuant to this section shall be administered by the office of the adjutant general of the Missouri national guard. The Missouri national guard shall establish guidelines for equitable distribution of scholarships considering need and ability.

173.740. 1. As used in this section, the following words and terms shall mean:

(1) "Challenge scholarship", a reimbursement for post-secondary education expenses, as calculated pursuant to this section, to be claimed on Missouri state individual income tax returns by, or on behalf of, an eligible student who has enrolled in and completed credit hours in an eligible institution of post-secondary education pursuant to the provisions of this section;

(2) "Eligible institution of post-secondary education", any approved public or private post-secondary education institution, as defined in section 173.205, or any other Missouri private institution that:

(a) Is required by statute to be certified to operate by the coordinating board for higher education;

(b) Is institutionally accredited by a United States Department of Education recognized accrediting commission;

(c) Has operated continuously in the state of Missouri for at least five years;

(d) Has no more than fifty percent of its students in correspondence programs;

(e) Offers a two-year certificate or an associate or higher degree program;

(f) Has at least one articulation agreement relating to a degree program with another institution approved by the coordinating board for higher education; and

(g) Is approved for participation in the challenge scholarship program by the coordinating board for higher education;

(3) "Credit hour", the standard academic measurement of attendance based on a semester term, or its equivalent, in trimester, quarter or clock hour terms;

(4) "Resident of the state of Missouri", a resident of this state as determined under standards promulgated pursuant to section 173.005;

(5) "Eligible claimant", an eligible student claiming a challenge scholarship or another person, such as a parent, claiming a challenge scholarship on behalf of an eligible student under this section, which student or other person satisfies the following conditions throughout the period for which the challenge scholarship is being claimed:

(a) The claimant is a citizen or a permanent resident of the United States; and

(b) The claimant is a resident of the state of Missouri, as defined in this section;

(6) "Eligible student", an individual who is enrolled in an eligible institution of post-secondary education and has been in compliance with the eligibility requirements set forth in subsection 1 of section 173.215, throughout the period for which the challenge scholarship is being claimed, excluding the requirements of full-time enrollment and financial need, and in addition, meets the following requirements:

(a) Has received a high school diploma, general educational development certificate (GED) or equivalent;

(b) Is enrolled in and has maintained satisfactory academic progress in a program leading to a certificate, or an associate or baccalaureate degree;

(c) Has yet to complete sixty semester hours, or the equivalent, of post-secondary course credit earned after the date of receipt of a high school diploma or a GED certificate or the equivalent, with the exception of students participating in the A+ schools program as provided in subdivision (4) of subsection 2 of this section;

(d) Does not have a delinquent debt with an institution of higher education exceeding the amount of the challenge scholarship;

(e) Has not already claimed, or had claimed on the individual's behalf, the maximum allowable cumulative challenge scholarship as defined in subdivision (3) of subsection 2 of this section; and

(f) Is not a person currently confined in any federal or state correctional facility, jail or confined under the jurisdiction of the department of corrections in any other state.

2. (1) The actual amount of allowable challenge scholarship shall be the lesser of:

(a) The number of post-secondary credit hours completed in that calendar year and earned after the date of receipt of a high school diploma or a GED certificate or equivalent times the per credit hour allowance, as provided in subdivision (2) of this subsection; or

(b) The maximum allowable challenge scholarship, as provided in subdivision (2) of this subsection.

(2) For calendar year 1998, the per credit hour allowance shall be seventeen dollars and the maximum allowable challenge scholarship shall be five hundred dollars. For calendar year 1999, the per credit hour allowance shall be thirty-three dollars and the maximum allowable challenge scholarship shall be one thousand dollars. For calendar year 2000 and each subsequent calendar year, the per credit hour allowance shall be fifty dollars and the maximum allowable challenge scholarship shall be fifteen hundred dollars.

(3) No student may claim, or have claimed on the student's behalf, more than three thousand dollars of cumulative challenge scholarship.

(4) No student may claim, or have claimed on the student's behalf, a challenge scholarship for post-secondary credit hours earned after that student has successfully completed sixty credit hours or equivalent of post-secondary work after the date of receipt of a high school diploma or a GED certificate or equivalent, except for students who participate in the A+ schools program as established in section 160.545, RSMo. Students who participate in the A+ schools program may use the challenge scholarship for the sixty post-secondary credit hours or equivalent following the exhaustion of financial benefits under the A+ schools program.

(5) The provisions of section 143.811, RSMo, to the contrary notwithstanding, no interest shall be paid on the challenge scholarship provided for in this section.

(6) Nothing in this section shall be construed to limit the actual scholarship amount to the amount of the claimant's Missouri income tax liability.

3. Every eligible institution of post-secondary education shall furnish to each eligible student enrolled at such institution who is a resident of Missouri, a written statement in a form prescribed by the director of revenue showing the credit hours completed by that student for the calendar year and other such information as the director of revenue shall prescribe. This form shall be furnished to each eligible student on or before January thirty-first of the succeeding year, and claims for the challenge scholarship shall be filed with the department of revenue by December thirty-first of such succeeding year.

4. The coordinating board for higher education shall provide to the director of revenue a list of eligible institutions of post-secondary education as determined pursuant to subdivision (2) of subsection 1 of this section for the calendar year. This list shall be provided on or before December thirty-first of that calendar year or by such other, earlier date as specified by the director and agreed to by the coordinating board. The director of revenue shall also provide annually to the coordinating board for higher education a report showing how many eligible students claimed a challenge scholarship, the dollar amount of such scholarships and other information requested by the coordinating board for higher education.

5. Challenge scholarship claims may only be filed for the calendar years beginning on or after January 1, 1998.

6. The coordinating board for higher education, in conjunction with the director of revenue, shall prescribe such rules and regulations as are necessary to carry out the provisions of this section.

7. (1) Fraudulent claims under the provisions of this section shall be subject to the same penalties and under the same conditions as are provided by sections 143.911 to 143.951, RSMo, relating to fraudulent claims for income taxes.

(2) Any repayment of a fraudulent challenge scholarship claim collected by the director of revenue shall include full repayment plus interest thereon at the rate determined by section 32.065, RSMo, from the date the fraudulent claim was filed until such repayment is made.

(3) No challenge scholarship may be sold or assigned to a third party.

8. This section shall only apply to credit hours accrued after January 1, 1998.

313.835. 1. All revenue received by the commission from license fees, penalties, administrative fees, reimbursement by any excursion gambling boat operators for services provided by the commission and admission fees authorized [under] pursuant to the provisions of sections 313.800 to 313.850 shall be deposited in the state treasury to the credit of the "Gaming Commission Fund" which is hereby created for the sole purpose of funding the administrative costs of the commission, subject to appropriation. Moneys deposited into this fund shall not be considered proceeds of [excursion] gambling [boat] operations. Moneys deposited into the gaming commission fund shall be considered state funds pursuant to article IV, section 15 of the Missouri Constitution. All interest received on the gaming commission fund shall be credited to the gaming commission fund. [Any appropriation from the state general revenue fund to fund expenses of the state gaming commission, other than funds from the gaming commission fund, shall be reimbursed to the general revenue fund by July 1, 1995. Beginning July 1, 1995, any excess moneys not already encumbered at the end of any fiscal year] In each fiscal year, total revenues to the gaming commission fund for the preceding fiscal year shall be compared to total expenditures and transfers from the gaming commission fund for the preceding fiscal year. The remaining net proceeds in the gaming commission fund shall be distributed in the following manner:

(1) The first five hundred thousand dollars shall be appropriated on a per capita basis to cities and counties that match the state portion and have demonstrated a need for funding community neighborhood organization programs for the homeless and to deter gang-related violence and crimes;

(2) [Until July 1, 2000, the remaining unencumbered funds] The remaining net proceeds in the gaming commission fund for fiscal year 1997 and prior years shall be transferred to the "Veterans' Commission Capital Improvement Trust Fund", as hereby created in the state treasury. The state treasurer shall administer the veterans' commission capital improvement trust fund, and the moneys in such fund shall be used solely, upon appropriation, by the Missouri veterans' commission for the construction, maintenance or renovation of veterans' homes and the construction, maintenance, renovation and operation of veterans' cemeteries in this state. Any interest which accrues to the fund shall remain in the fund and shall be used in the same manner as moneys which are transferred to the fund pursuant to this section. Notwithstanding the provisions of section 33.080, RSMo, to the contrary, moneys in the veterans' commission capital improvement trust fund at the end of any biennium shall not be transferred to the credit of the general revenue fund. [Beginning July 1, 2000, the remaining unencumbered funds shall be transferred from the gaming commission fund to the state general revenue fund.];

     (3) The remaining net proceeds in the gaming commission fund for fiscal year 1998 and each fiscal year thereafter shall be distributed as follows:

     (a) Three million dollars shall be transferred to the veterans' commission capital improvement trust fund;

     (b) Two million dollars shall be transferred to the Missouri national guard trust fund created in section 41.214, RSMo;

     (c) All remaining net proceeds in the gaming commission fund shall be transferred to an "Education Fund for Early Childhood Programs Fund" which is hereby created. Any moneys deposited in this fund shall, subject to appropriation, be used to support activities that prepare children to enter school ready to learn. All interest received on the early childhood education fund shall be credited to the early childhood education fund. Notwithstanding the provisions of section 33.080, RSMo, moneys in the early childhood education fund at the end of any biennium shall not be transferred to the credit of the general revenue fund.

     2. The veterans' commission may, subject to appropriation, transfer moneys from the veterans' commission capital improvements trust fund to the Missouri national guard trust fund to support the activities described in section 41.958, RSMo.

     Section 1. 1. In any action challenging any rule promulgated pursuant to this act, the agency as defined in section 536.010, RSMo, promulgating such rule shall be required to prove by a preponderance of the evidence that the rule or threatened application of the rule is valid, is authorized by law, is not in conflict with any law and is not arbitrary and capricious.

     2. The court shall award reasonable fees and expenses as defined in section 536.085, RSMo, to any party who prevails in such action.

     3. All rules promulgated pursuant to the provisions of this act shall expire on August twenty-eighth of the year after the year in which the rules become effective unless the general assembly extends by statute the rule or set of rules beyond that date to a date specified by the general assembly.

     4. Any rulemaking authority granted pursuant to the provisions of this act is subject to any rulemaking authority contained in chapter 536, RSMo, including any subsequent amendments to chapter 536, RSMo.

     5. The provisions of this section shall terminate if legislation amending the provisions of section 536.024, RSMo, has been signed into law prior to the effective date of this act.