HF 4117

as introduced - 93rd Legislature (2023 - 2024) Posted on 04/02/2024 01:05pm

A bill for an act
relating to education finance; modifying local optional revenue; including revenue
for unemployment costs and family paid medical leave in local optional revenue;
simplifying referendum revenue; increasing equalization aid; appropriating money;
amending Minnesota Statutes 2022, sections 126C.10, by adding subdivisions;
126C.17, subdivisions 1, 5, 6, 7; Minnesota Statutes 2023 Supplement, section
126C.10, subdivision 2e; Laws 2023, chapter 55, article 1, section 36, subdivision
2; repealing Minnesota Statutes 2022, section 126C.17, subdivision 8; Minnesota
Statutes 2023 Supplement, sections 124D.995; 126C.43, subdivision 2.

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

Section 1.

Minnesota Statutes 2023 Supplement, section 126C.10, subdivision 2e, is
amended to read:

Subd. 2e.

Local optional revenue.

(a) new text begin For fiscal year 2024, new text end local optional revenue for
a school district equals the sum of the district's first tier local optional revenue and second
tier local optional revenue. A district's first tier local optional revenue equals $300 times
the adjusted pupil units of the district for that school year. A district's second tier local
optional revenue equals $424 times the adjusted pupil units of the district for that school
year.

new text begin (b) For fiscal year 2025, a school district's local optional revenue equals $920 times the
adjusted pupil units of the district for that year.
new text end

new text begin (c) For fiscal year 2026 and later, a school district's local optional revenue equals the
sum of:
new text end

new text begin (1) the product of the district's adjusted pupil units for that school year, $920, and the
ratio of the general education basic formula allowance for that year to the general education
basic formula allowance for 2025;
new text end

new text begin (2) the district's total unemployment insurance costs for the previous fiscal year; and
new text end

new text begin (3) the district's paid family and medical leave expenses for the previous fiscal year
required under chapter 268B.
new text end

deleted text begin (b) A district's local optional levy equals the sum of the first tier local optional levy and
the second tier local optional levy.
deleted text end

deleted text begin (c) A district's first tier local optional levy equals the district's first tier local optional
revenue times the lesser of one or the ratio of the district's referendum market value per
resident pupil unit to $880,000.
deleted text end

deleted text begin (d) For fiscal year 2023, a district's second tier local optional levy equals the district's
second tier local optional revenue times the lesser of one or the ratio of the district's
referendum market value per resident pupil unit to $548,842. For fiscal year 2024, a district's
second tier local optional levy equals the district's second tier local optional revenue times
the lesser of one or the ratio of the district's referendum market value per resident pupil unit
to $510,000. For fiscal year 2025, a district's second tier local optional levy equals the
district's second tier local optional revenue times the lesser of one or the ratio of the district's
referendum market value per resident pupil unit to $587,244. For fiscal year 2026, a district's
second tier local optional levy equals the district's second tier local optional revenue times
the lesser of one or the ratio of the district's referendum market value per resident pupil unit
to $642,038. For fiscal year 2027 and later, a district's second tier local optional levy equals
the district's second tier local optional revenue times the lesser of one or the ratio of the
district's referendum market value per resident pupil unit to $671,345.
deleted text end

deleted text begin (e) The local optional levy must be spread on referendum market value. A district may
levy less than the permitted amount.
deleted text end

deleted text begin (f) A district's local optional aid equals its local optional revenue minus its local optional
levy. If a district's actual levy for first or second tier local optional revenue is less than its
maximum levy limit for that tier, its aid must be proportionately reduced.
deleted text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for revenue for fiscal year 2025 and later.
new text end

Sec. 2.

Minnesota Statutes 2022, section 126C.10, is amended by adding a subdivision to
read:

new text begin Subd. 2f. new text end

new text begin Local optional levy. new text end

new text begin (a) For fiscal years 2024 and 2025, a district's local
optional levy equals the sum of the first tier local optional levy and the second tier local
optional levy.
new text end

new text begin (b) For fiscal years 2024 and 2025, a district's first tier local optional levy equals the
district's first tier local optional revenue times the lesser of one or the ratio of the district's
referendum market value per resident pupil unit to $880,000.
new text end

new text begin (c) For fiscal year 2024, a district's second tier local optional levy equals the district's
second tier local optional revenue times the lesser of one or the ratio of the district's
referendum market value per resident pupil unit to $510,000. For fiscal year 2025, a district's
second tier local optional levy equals the district's second tier local optional revenue times
the lesser of one or the ratio of the district's referendum market value per resident pupil unit
to $587,244.
new text end

new text begin (d) For fiscal year 2026 and later, a district's local optional levy equals the district's local
optional revenue times the lesser of one or the ratio of the district's referendum market value
per resident pupil unit to $.......
new text end

new text begin (e) The local optional levy must be spread on referendum market value. A district may
levy less than the permitted amount.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for revenue for fiscal year 2025 and later.
new text end

Sec. 3.

Minnesota Statutes 2022, section 126C.10, is amended by adding a subdivision to
read:

new text begin Subd. 2g. new text end

new text begin Local optional aid. new text end

new text begin A district's local optional aid equals its local optional
revenue minus its local optional levy. If a district's actual levy for its local optional revenue
is less than its maximum levy limit for that tier, the district's aid must be proportionately
reduced.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for revenue for fiscal year 2025 and later.
new text end

Sec. 4.

Minnesota Statutes 2022, section 126C.17, subdivision 1, is amended to read:

Subdivision 1.

Referendum allowance.

(a) A district's initial referendum allowance for
fiscal year deleted text begin 2021 deleted text end new text begin 2026 new text end and later equals the deleted text begin result deleted text end new text begin sum new text end of deleted text begin the following calculations deleted text end :

new text begin (1) the district's referendum allowance for fiscal year 2025;
new text end

new text begin (2) any amounts approved after January 1, 2024; and
new text end

new text begin (3) any annual inflationary increase.
new text end

new text begin (b) The amount in paragraph (a) must be reduced by the amount of any referendum
amounts expiring for fiscal year 2025 or later.
new text end

deleted text begin (1) subtract $424 from the district's allowance under Minnesota Statutes 2018, section
126C.17, subdivision 1, paragraph (a), clause (5);
deleted text end

deleted text begin (2) if the result of clause (1) is less than zero, set the allowance to zero;
deleted text end

deleted text begin (3) add to the result in clause (2) any new referendum allowance authorized between
July 1, 2013, and December 31, 2013, under Minnesota Statutes 2013, section 126C.17,
subdivision 9a;
deleted text end

deleted text begin (4) add to the result in clause (3) any additional referendum allowance per adjusted pupil
unit authorized between January 1, 2014, and June 30, 2019;
deleted text end

deleted text begin (5) subtract from the result in clause (4) any allowances expiring in fiscal year 2016,
2017, 2018, 2019, or 2020;
deleted text end

deleted text begin (6) subtract $300 from the result in clause (5); and
deleted text end

deleted text begin (7) if the result of clause (6) is less than zero, set the allowance to zero.
deleted text end

deleted text begin (b) A district's referendum allowance equals the sum of the district's initial referendum
allowance, plus any new referendum allowance authorized after July 1, 2019, minus any
allowances expiring in fiscal year 2021 or later, plus any inflation adjustments for fiscal
year 2021 and later approved by the voters prior to July 1, 2019, provided that the allowance
may not be less than zero. For a district with more than one allowance for fiscal year 2015
that expires in the same year, the reduction under paragraph (a), clauses (1) and (6), shall
be made first from any allowances that do not have an inflation adjustment approved by the
voters.
deleted text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for revenue for fiscal year 2026 and later.
new text end

Sec. 5.

Minnesota Statutes 2022, section 126C.17, subdivision 5, is amended to read:

Subd. 5.

Referendum equalization revenue.

deleted text begin (a) deleted text end A district's referendum equalization
revenue equals the deleted text begin sum of the first tier referendum equalization revenue and the second tier
referendum equalization revenue deleted text end new text begin district's referendum allowance for that year times its
adjusted pupil units for that year new text end .

deleted text begin (b) A district's first tier referendum equalization revenue equals the district's first tier
referendum equalization allowance times the district's adjusted pupil units for that year.
deleted text end

deleted text begin (c) A district's first tier referendum equalization allowance equals the lesser of the
district's referendum allowance under subdivision 1 or $460.
deleted text end

deleted text begin (d) A district's second tier referendum equalization revenue equals the district's second
tier referendum equalization allowance times the district's adjusted pupil units for that year.
deleted text end

deleted text begin (e) A district's second tier referendum equalization allowance equals the lesser of the
district's referendum allowance under subdivision 1 or 25 percent of the formula allowance,
minus the sum of $300 and the district's first tier referendum equalization allowance.
deleted text end

deleted text begin (f) Notwithstanding paragraph (e), the second tier referendum allowance for a district
qualifying for secondary sparsity revenue under section 126C.10, subdivision 7, or elementary
sparsity revenue under section 126C.10, subdivision 8, equals the district's referendum
allowance under subdivision 1 minus the district's first tier referendum equalization
allowance.
deleted text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for revenue for fiscal year 2025 and later.
new text end

Sec. 6.

Minnesota Statutes 2022, section 126C.17, subdivision 6, is amended to read:

Subd. 6.

Referendum equalization levy.

deleted text begin (a) deleted text end A district's referendum equalization levy
equals the deleted text begin sum of the first tier referendum equalization levy and the second tier referendum
equalization levy. deleted text end new text begin district's referendum equalization revenue times the lesser of one or the
ratio of the district's referendum market value per resident pupil unit to $........
new text end

deleted text begin (b) A district's first tier referendum equalization levy equals the district's first tier
referendum equalization revenue times the lesser of one or the ratio of the district's
referendum market value per resident pupil unit to $567,000.
deleted text end

deleted text begin (c) A district's second tier referendum equalization levy equals the district's second tier
referendum equalization revenue times the lesser of one or the ratio of the district's
referendum market value per resident pupil unit to $290,000.
deleted text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for revenue for fiscal year 2025 and later.
new text end

Sec. 7.

Minnesota Statutes 2022, section 126C.17, subdivision 7, is amended to read:

Subd. 7.

Referendum equalization aid.

(a) A district's referendum equalization aid
equals the difference between its referendum equalization revenue and levy.

(b) If a district's actual levy for deleted text begin first or second tier deleted text end referendum equalization revenue is
less than its maximum levy limit deleted text begin for that tier deleted text end , aid deleted text begin shall deleted text end new text begin must new text end be proportionately reduced.

deleted text begin (c) Notwithstanding paragraph (a), the referendum equalization aid for a district must
not exceed: (1) 25 percent of the formula allowance minus $300; times (2) the district's
adjusted pupil units. A district's referendum levy is increased by the amount of any reduction
in referendum aid under this paragraph.
deleted text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for revenue for fiscal year 2025 and later.
new text end

Sec. 8.

Laws 2023, chapter 55, article 1, section 36, subdivision 2, is amended to read:

Subd. 2.

General education aid.

(a) For general education aid under Minnesota Statutes,
section 126C.13, subdivision 4:

	$	8,093,493,000	.....	2024
	$	deleted text begin 8,229,982,000 deleted text end new text begin ....... new text end	.....	2025

(b) The 2024 appropriation includes $707,254,000 for 2023 and $7,386,239,000 for
2024.

(c) The 2025 appropriation includes $771,521,000 for 2024 and deleted text begin $7,458,461,000 deleted text end new text begin $....... new text end
for 2025.

Sec. 9. new text begin REPEALER.
new text end

new text begin (a) new text end new text begin Minnesota Statutes 2022, section 126C.17, subdivision 8, new text end new text begin is repealed.
new text end

new text begin (b) new text end new text begin Minnesota Statutes 2023 Supplement, sections 124D.995; and 126C.43, subdivision
2, new text end new text begin are repealed for fiscal year 2026 and later.
new text end

APPENDIX

Repealed Minnesota Statutes: 24-06023

124D.995 SCHOOL UNEMPLOYMENT AID.

Subdivision 1.

Account established.

An account is established in the special revenue fund known as the school unemployment aid account.

Subd. 2.

Funds deposited in account.

Funds appropriated for school unemployment aid must be transferred to the school unemployment aid account in the special revenue fund.

Subd. 3.

Money appropriated.

(a) Subject to the availability of funds, money in the account is annually appropriated to the commissioner of education to reimburse school districts; charter schools; intermediate school districts and cooperative units under section 123A.24, subdivision 2; the Perpich Center for Arts Education; and the Minnesota State Academies for costs associated with providing unemployment benefits to school employees under section 268.085, subdivision 7, paragraph (b).

(b) The Perpich Center for Arts Education and the Minnesota State Academies may only apply to the commissioner for reimbursement of unemployment insurance amounts in excess of the amounts specifically identified in their annual agency appropriations.

(c) If the amount in the account is insufficient, the commissioner must proportionately reduce the aid payment to each recipient. Aid payments must be paid 100 percent in the current year.

Subd. 4.

Administration and monitoring.

Up to $275,000 is annually appropriated from the account to the commissioner of education for costs associated with administering and monitoring the program under this section. This amount is in addition to any other amount specifically appropriated for this purpose.

Subd. 5.

School reimbursement.

The commissioner of education must reimburse school districts, charter schools, intermediate school districts and other cooperative units, the Perpich Center for Arts Education, and the Minnesota State Academies in the form and manner specified by the commissioner. The commissioner may establish procedures to ensure that any costs reimbursed under this section are excluded from other school revenue calculations.

Subd. 6.

Expiration.

This section expires on June 30, 2027, and any balance remaining in the account is canceled to the general fund.

126C.17 REFERENDUM REVENUE.

Subd. 8.

Unequalized referendum levy.

Each year, a district may levy an amount equal to the difference between its total referendum revenue according to subdivision 4 and its referendum equalization revenue according to subdivision 5.

126C.43 LEVIES; STATUTORY OBLIGATIONS.

Subd. 2.

Payment to unemployment insurance program trust fund by state and political subdivisions.

(a) A district may levy the amount necessary (1) to pay the district's obligations under section 268.052, subdivision 1, and (2) to pay for job placement services offered to employees who may become eligible for benefits pursuant to section 268.085 for the fiscal year the levy is certified.

(b) Districts with a balance remaining in their reserve for reemployment as of June 30, 2003, may not expend the reserved funds for future reemployment expenditures. Each year a levy reduction must be made to return these funds to taxpayers. The amount of the levy reduction must be equal to the lesser of: (1) the remaining reserved balance for reemployment; or (2) the amount of the district's current levy under paragraph (a).

(c) The amount in paragraph (a) must not include the amounts for hourly school employees during the period of the summer term.