HF 3664

as introduced - 86th Legislature (2009 - 2010) Posted on 03/15/2010 09:49am

A bill for an act
relating to education finance; replacing Minnesota's K-12 funding system with a
foundation aid program; amending Minnesota Statutes 2008, sections 126C.05,
subdivisions 1, 3, 5, 17, by adding subdivisions; 126C.17, subdivisions 1, 2;
126C.20; proposing coding for new law in Minnesota Statutes, chapter 126C;
repealing Minnesota Statutes 2008, sections 125A.76, subdivisions 2, 4, 4a, 5, 7,
8; 125A.78; 125A.79, subdivisions 1, 4, 5, 6, 7, 8; 126C.12, subdivisions 1, 2,
3, 4, 5, 6; 126C.13, subdivisions 4, 5; 126C.15, subdivisions 1, 3, 5; 126C.16,
subdivisions 1, 3; 126C.17, subdivision 3; Minnesota Statutes 2009 Supplement,
sections 125A.76, subdivision 1; 126C.15, subdivisions 2, 4.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2008, section 126C.05, subdivision 1, is amended to read:

Subdivision 1.

Pupil unit.

Pupil units for each Minnesota resident pupil under the
age of 21 or who meets the requirements of section 120A.20, subdivision 1, paragraph (c),
in average daily membership enrolled in the district of residence, in another district under
sections 123A.05 to 123A.08, 124D.03, 124D.08, or 124D.68; in a charter school under
section 124D.10; or for whom the resident district pays tuition under section 123A.18,
123A.22, 123A.30, 123A.32, 123A.44, 123A.488, 123B.88, subdivision 4, 124D.04,
124D.05, 125A.03 to 125A.24, 125A.51, or 125A.65, shall be counted according to this
subdivision.

(a) A prekindergarten pupil with a disability who is enrolled in a program approved
by the commissioner and has an individual education plan is counted as the ratio of the
number of hours of assessment and education service to 825 times 1.25 with a minimum
average daily membership of 0.28, but not more than 1.25 pupil units.

(b) A prekindergarten pupil who is assessed but determined not to be disabled is
counted as the ratio of the number of hours of assessment service to 825 times 1.25.

(c) A kindergarten pupil with a disability who is enrolled in a program approved
by the commissioner is counted as the ratio of the number of hours of assessment and
education services required in the fiscal year by the pupil's individual education program
plan to 875, but not more than one.

(d) A kindergarten pupil who is not included in paragraph (c) is counted as deleted text begin .612 deleted text end new text begin 1.0 new text end
pupil units new text begin plus the amounts in paragraphs (f) to (h) new text end .

(e) A pupil who is in any of grades 1 to deleted text begin 3 deleted text end new text begin 12 new text end is counted as deleted text begin 1.115 deleted text end new text begin 1.0 new text end pupil units deleted text begin for
fiscal year 2000 and thereafter deleted text end new text begin plus the additional weighting in paragraph (h) new text end .

(f) A deleted text begin pupil who is any of grades 4 to 6 is counted as 1.06 pupil units for fiscal year
1995 and thereafter deleted text end new text begin pupil's weight under this subdivision is increased by the amounts for
that pupil calculated under subdivisions 3, 17, and 21 new text end .

(g) deleted text begin A pupil who is in any of grades 7 to 12 is counted as 1.3 pupil units.
deleted text end

deleted text begin (h) deleted text end A pupil who is in the postsecondary enrollment options program is counted as
deleted text begin 1.3 deleted text end new text begin 1.0 new text end pupil units.

new text begin (h) A pupil's weight is increased by the pupil's special education service weighting
and its supplemental service weighting.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for revenue for fiscal year 2014
and later.
new text end

Sec. 2.

Minnesota Statutes 2008, section 126C.05, subdivision 3, is amended to read:

Subd. 3.

Compensation revenue pupil units.

deleted text begin Compensation revenue pupil units
for fiscal year 1998 and thereafter must be computed according to this subdivision.
deleted text end

(a) deleted text begin The compensation revenue concentration percentage for each building in a
district equals the product of 100 times the ratio of:
deleted text end

deleted text begin (1) the sum of the number of pupils enrolled in the building deleted text end new text begin A pupil new text end eligible
to receive free deleted text begin lunch plus one-half of the pupils eligible to receive reduced priced deleted text end new text begin or
reduced-price new text end lunch on October 1 of the previous fiscal year deleted text begin ; to
deleted text end

deleted text begin (2) the number of pupils enrolled in the building on October 1 of the previous fiscal
year deleted text end new text begin has a compensation revenue pupil weighting of ... new text end .

deleted text begin (b) The compensation revenue pupil weighting factor for a building equals the
lesser of one or the quotient obtained by dividing the building's deleted text end deleted text begin compensation revenue
concentration percentage by 80.0.
deleted text end

deleted text begin (c) The compensation revenue pupil units for a building equals the product of:
deleted text end

deleted text begin (1) the sum of the number of pupils enrolled in the building eligible to receive free
lunch and one-half of the pupils eligible to receive reduced priced lunch on October 1
of the previous fiscal year; times
deleted text end

deleted text begin (2) the compensation revenue pupil weighting factor for the building; times
deleted text end

deleted text begin (3) .60.
deleted text end

deleted text begin (d) deleted text end new text begin (b) new text end Notwithstanding deleted text begin paragraphs deleted text end new text begin paragraph new text end (a) deleted text begin to (c) deleted text end , for charter schools and
contracted alternative programs in the first year of operation, compensation revenue pupil
units shall be computed using data for the current fiscal year. If the charter school or
contracted alternative program begins operation after October 1, compensatory revenue
pupil units shall be computed based on pupils enrolled on an alternate date determined by
the commissioner, and the compensation revenue pupil units shall be prorated based on
the ratio of the number of days of student instruction to 170 days.

deleted text begin (e) The percentages in this subdivision must be based on the count of individual
pupils and not on a building average or minimum.
deleted text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for revenue for fiscal year 2014
and later.
new text end

Sec. 3.

Minnesota Statutes 2008, section 126C.05, subdivision 5, is amended to read:

Subd. 5.

Adjusted pupil units.

deleted text begin (a) deleted text end Adjusted pupil units for a district or charter
school means the sum of:

(1) the number of pupil units served, according to subdivision 7, plus

(2) pupil units according to subdivision 1 for whom the district or charter school
pays tuition under section 123A.18, 123A.22, 123A.30, 123A.32, 123A.44, 123A.488,
123B.88, subdivision 4, 124D.04, 124D.05, 125A.03 to 125A.24, 125A.51, or 125A.65,
minus

(3) pupil units according to subdivision 1 for whom the district or charter school
receives tuition under section 123A.18, 123A.22, 123A.30, 123A.32, 123A.44, 123A.488,
123B.88, subdivision 4, 124D.04, 124D.05, 125A.03 to 125A.24, 125A.51, or 125A.65.

deleted text begin (b) Adjusted marginal cost pupil units means the greater of:
deleted text end

deleted text begin (1) the sum of .77 times the pupil units defined in paragraph (a) for the current school
year and .23 times the pupil units defined in paragraph (a) for the previous school year; or
deleted text end

deleted text begin (2) the number of adjusted pupil units defined in paragraph (a) for the current school
year.
deleted text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for revenue for fiscal year 2014
and later.
new text end

Sec. 4.

Minnesota Statutes 2008, section 126C.05, subdivision 17, is amended to read:

Subd. 17.

LEP pupil units.

deleted text begin (a) Limited English proficiency pupil units for fiscal
year 2004 and thereafter shall be determined according to this subdivision.
deleted text end

deleted text begin (b) The limited English proficiency concentration percentage for a district equals the
product of 100 times the ratio of:
deleted text end

deleted text begin (1) the number of eligible pupils of limited English proficiency in average daily
membership enrolled in the district during the current fiscal year; to
deleted text end

deleted text begin (2) the number of pupils in average daily membership enrolled in the district.
deleted text end

deleted text begin (c) The limited English proficiency pupil units for each eligible pupil of limited
English proficiency in average daily membership equals the lesser of one or the quotient
obtained by dividing the limited English proficiency concentration percentage for the
pupil's district of enrollment by 11.5.
deleted text end

deleted text begin (d) Limited English proficiency pupil units shall be counted by the district of
enrollment.
deleted text end

deleted text begin (e) Notwithstanding paragraph (d), for the purposes of this subdivision, pupils
enrolled in a cooperative or intermediate school district shall be counted by the district of
residence.
deleted text end

deleted text begin (f) deleted text end For the purposes of this subdivision, the terms defined in section 124D.59 have
the same meaning. new text begin A limited English proficiency pupil has a pupil weighting of ....
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for revenue for fiscal year 2014
and later.
new text end

Sec. 5.

Minnesota Statutes 2008, section 126C.05, is amended by adding a subdivision
to read:

new text begin Subd. 21. new text end

new text begin Special education pupil weights. new text end

new text begin (a) A pupil who qualifies for special
education services under chapter 125A generates additional pupil weights as follows:
new text end

new text begin (1) for pupils in the lowest category of service ...;
new text end

new text begin (2) for pupils in the middle category of service ...; and
new text end

new text begin (3) for pupils in the highest category of service ....
new text end

new text begin (b) The commissioner must review the special education service categories and by
February 1 of each odd-numbered year recommend any changes in the categories or
weights to the education committees of the legislature.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for revenue for fiscal year 2014
and later.
new text end

Sec. 6.

Minnesota Statutes 2008, section 126C.05, is amended by adding a subdivision
to read:

new text begin Subd. 22. new text end

new text begin Supplemental services weight. new text end

new text begin A district's supplemental services weight
equals the sum of its compensatory pupil weight and its limited English proficiency
pupil weight.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for revenue for fiscal year 2014
and later.
new text end

Sec. 7.

new text begin [126C.105] FOUNDATION AID PROGRAM DEFINITIONS.
new text end

new text begin Subdivision 1. new text end

new text begin State total cost per pupil. new text end

new text begin The statewide district cost per pupil
equals the total general fund expenditures of all districts in the previous school year
divided by the adjusted pupil units for that year.
new text end

new text begin Subd. 2. new text end

new text begin District total cost per pupil. new text end

new text begin Each district's total cost per pupil equals
the district's total general fund expenditures for the previous year divided by the adjusted
pupil units for that year.
new text end

new text begin Subd. 3. new text end

new text begin Maximum district cost per pupil. new text end

new text begin A district's maximum district cost per
pupil equals 105 percent of its total cost per pupil.
new text end

new text begin Subd. 4. new text end

new text begin Foundation level percent. new text end

new text begin The foundation level percentage equals ....
new text end

new text begin Subd. 5. new text end

new text begin Allowable growth. new text end

new text begin Allowable growth means ... percent per year for
fiscal years 2015 and later.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for revenue for fiscal year 2014
and later.
new text end

Sec. 8.

new text begin [126C.106] FOUNDATION AID PROGRAM.
new text end

new text begin Subdivision 1. new text end

new text begin Uniform levy. new text end

new text begin Each school district's uniform levy equals the
amount raised by a levy of ... percent times the net tax capacity of the district for the
year preceding the year the levy is certified.
new text end

new text begin Subd. 2. new text end

new text begin Foundation aid. new text end

new text begin The foundation aid for a district equals the greater of:
(1) zero; or (2) the difference between (i) the product of the foundation level percentage
and statewide the state cost per pupil, and (ii) the amount raised by the uniform levy
in that district.
new text end

new text begin Subd. 3. new text end

new text begin Additional revenue. new text end

new text begin A school district may make an equalized levy for
the difference between the sum of its uniform levy and foundation aid and its maximum
district cost per pupil.
new text end

new text begin Subd. 4. new text end

new text begin Instructional support program revenue. new text end

new text begin Upon annual adoption of a
written resolution by the school board, a district may make a levy not to exceed ten percent
of the district's total cost per pupil for instructional support programs.
new text end

new text begin Subd. 5. new text end

new text begin Instructional support program levy. new text end

new text begin A school district's instructional
support program levy equals the district's approved instructional support revenue times the
lesser of one, or the ratio of the quotient derived by dividing the district's net tax capacity
for the year preceding the year the levy is certified by the district's adjusted pupil units for
the school year to which the levy is attributable to $10,000.
new text end

new text begin Subd. 6. new text end

new text begin Instructional support program aid. new text end

new text begin A district's instructional support
program aid is equal to the difference between its instructional support revenue and its
instructional support levy.
new text end

new text begin Subd. 7. new text end

new text begin Special education weights. new text end

new text begin The commissioner of education must meet
with school district special education officials, advocates for special education services,
and parents of disabled students to categorize the special instructional services and
determine the student weights for each category. The commissioner must report the initial
categories and student weights to the education committees of the legislature by February
1, 2012. The categories and pupil weights become effective unless the legislature acts to
enact different weights or categories within 60 days of the commissioner's report.
new text end

new text begin Subd. 8. new text end

new text begin Supplemental services weights. new text end

new text begin The commissioner of education, after
consultation with school officials and other interested parties, must establish the pupil
weights for compensatory services, limited English proficiency services, and other
services as determined by the commissioner.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for revenue for fiscal year 2014
and later.
new text end

Sec. 9.

Minnesota Statutes 2008, section 126C.17, subdivision 1, is amended to read:

Subdivision 1.

Referendum allowance.

(a) new text begin A district that does not have
instructional support levy approved by its board of directors under section 126C.106
may request revenue under this section. new text end For fiscal year deleted text begin 2003 deleted text end new text begin 2014 new text end and later, a district's
initial referendum revenue allowance equals the deleted text begin sum of the allowance under section
126C.16, subdivision 2, plus any additional allowance per resident marginal cost pupil
unit authorized under subdivision 9 before May 1, 2001, for fiscal year 2002 and later,
plus the referendum conversion allowance approved under subdivision 13, minus $415.
For districts with more than one referendum authority, the reduction must be computed
separately for each authority deleted text end new text begin allowance for the preceding year new text end . deleted text begin The reduction must be
applied first to the referendum conversion allowance and next to the authority with the
earliest expiration date. A district's initial referendum revenue allowance may not be
less than zero. deleted text end

(b) deleted text begin For fiscal year 2003, a district's referendum revenue allowance equals the initial
referendum allowance plus any additional allowance per resident marginal cost pupil unit
authorized under subdivision 9 between April 30, 2001, and December 30, 2001, for
fiscal year 2003 and later deleted text end new text begin A district's referendum allowance is reduced by the amounts of
any expiring referenda authority new text end .

deleted text begin (c) For fiscal year 2004 and later, a district's referendum revenue allowance equals
the sum of:
deleted text end

deleted text begin (1) the product of (i) the ratio of the resident marginal cost pupil units the district
would have counted for fiscal year 2004 under Minnesota Statutes 2002, section 126C.05,
to the district's resident marginal cost pupil units for fiscal year 2004, times (ii) the initial
referendum allowance plus any additional allowance per resident marginal cost pupil unit
authorized under subdivision 9 between April 30, 2001, and May 30, 2003, for fiscal
year 2003 and later, plus deleted text end

deleted text begin (2) any additional allowance per resident marginal cost pupil unit authorized under
subdivision 9 after May 30, 2003, for fiscal year 2005 and later.
deleted text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for revenue for fiscal year 2014
and later.
new text end

Sec. 10.

Minnesota Statutes 2008, section 126C.17, subdivision 2, is amended to read:

Subd. 2.

Referendum allowance limit.

deleted text begin (a) deleted text end Notwithstanding subdivision 1, for fiscal
year deleted text begin 2007 deleted text end new text begin 2014 new text end and later, a district's referendum allowance must not exceed the greater of:

(1) deleted text begin the sum of: (i) a district's referendum allowance for fiscal year 1994 times
1.177 times the annual inflationary increase as calculated under paragraph (b) plus (ii)
its referendum conversion allowance for fiscal year 2003, minus (iii) $215 deleted text end new text begin the district's
unexpired authority under subdivision 1 new text end ; new text begin or
new text end

(2) deleted text begin the greater of (i): 26 percent of the formula allowance or (ii) $1,294 times the
annual inflationary increase as calculated under paragraph (b); or
deleted text end

deleted text begin (3) for a newly reorganized district created after July 1, 2006, the referendum
revenue authority for each reorganizing district in the year preceding reorganization
divided by its resident marginal cost pupil units for the year preceding reorganization deleted text end new text begin ten
percent of the district's total cost per pupil for instructional programs new text end .

deleted text begin (b) For purposes of this subdivision, for fiscal year 2005 and later, "inflationary
increase" means one plus the percentage change in the Consumer Price Index for urban
consumers, as prepared by the United States Bureau of Labor Standards, for the current
fiscal year to fiscal year 2004. For fiscal years 2009 and later, for purposes of paragraph
(a), clause (1), the inflationary increase equals the inflationary increase for fiscal year
2008 plus one-fourth of the percentage increase in the formula allowance for that year
compared with the formula allowance for fiscal year 2008.
deleted text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for revenue for fiscal year 2014
and later.
new text end

Sec. 11.

Minnesota Statutes 2008, section 126C.20, is amended to read:

126C.20 ANNUAL deleted text begin GENERAL EDUCATION deleted text end new text begin FOUNDATION new text end AID
APPROPRIATION.

There is annually appropriated from the general fund to the department the amount
necessary for deleted text begin general education deleted text end new text begin the new text end aid new text begin required under this chapter for the foundation
aid program new text end . This amount must be reduced by the amount of any money specifically
appropriated for the same purpose in any year from any state fund.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for revenue for fiscal year 2014
and later.
new text end

Sec. 12. new text begin SPECIAL EDUCATION MAINTENANCE OF EFFORT.
new text end

new text begin Notwithstanding any law to the contrary, a school district or charter school's special
education maintenance of effort requirements are not affected by the change from a cost
reimbursement funding system to a pupil weighting system of funding special education
services.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for revenue for fiscal year 2014
and later.
new text end

Sec. 13. new text begin REVISOR'S INSTRUCTION.
new text end

new text begin The revisor of statutes shall change all references from the general education revenue
program to the foundation aid program.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for revenue for fiscal year 2014
and later.
new text end

Sec. 14. new text begin REPEALER.
new text end

new text begin (a) new text end new text begin Minnesota Statutes 2008, sections 125A.76, subdivisions 2, 4, 4a, 5, 7, and 8;
125A.78; 125A.79, subdivisions 1, 4, 5, 6, 7, and 8; 126C.12, subdivisions 1, 2, 3, 4,
5, and 6; 126C.13, subdivisions 4 and 5; 126C.15, subdivisions 1, 3, and 5; 126C.16,
subdivisions 1 and 3; and 126C.17, subdivision 3, new text end new text begin are repealed.
new text end

new text begin (b) new text end new text begin Minnesota Statutes 2009 Supplement, sections 125A.76, subdivision 1; and
126C.15, subdivisions 2 and 4, new text end new text begin are repealed.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for revenue for fiscal year 2014
and later.
new text end