1.1 	A bill for an act
1.2 	relating to education finance; increasing the general
1.3 	education basic formula allowance; increasing funding
1.4 	for declining enrollment; reinstating a general
1.5 	education levy; promoting alternative teacher
1.6 	compensation programs; creating a new revenue source
1.7 	for deferred maintenance; authorizing funding for
1.8 	school district telecommunication and Internet access;
1.9 	providing incentives for school districts delivering
1.10 	exceptional education services; authorizing state
1.11 	funding for unfunded federal mandates; appropriating
1.12 	money; amending Minnesota Statutes 2004, sections
1.13 	122A.414; 122A.415, subdivisions 1, 3; 123B.59, by
1.14 	adding subdivisions; 126C.05, subdivisions 5, 6;
1.15 	126C.10, subdivisions 1, 2, by adding subdivisions;
1.16 	126C.13, by adding subdivisions; 127A.45, subdivision
1.17 	11; proposing coding for new law in Minnesota
1.18 	Statutes, chapter 125B.
1.19 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.20 	Section 1. Minnesota Statutes 2004, section 122A.414, is
1.21 	amended to read:
1.22 	122A.414 ALTERNATIVE TEACHER COMPENSATION.
1.23 		Subdivision 1.Restructured pay system. A restructured
1.24 	teacher compensation system is established under subdivision 2
1.25 	to provide incentives for teachers to improve their knowledge
1.26 	and skills and for school districts and charter schools to
1.27 	recruit and retain highly qualified teachers, and to support
1.28 	teachers' roles in improving students' educational achievement.
1.29 		Subd. 2.Alternative teacher professional pay system.
 1.30 	(a) To participate in this program, a school district or charter
1.31 	school must have an educational improvement plan as described in
1.32 	section 122A.413 and an alternative teacher professional pay
2.1 	system as described in paragraph (b).
2.2 	(b) The alternative teacher professional pay system must:
2.3 	(1) describe ~~the conditions necessary for~~ how teachers can
2.4 	achieve career advancement and additional compensation;
2.5 	(2) describe how the school district will provide career
2.6 	advancement options for teachers ~~retaining~~ which allow them to
2.7 	retain primary roles in student instruction.  These options
2.8 	shall include positions that provide multiple career paths such
2.9 	as master and mentor teaching positions to help peers increase
2.10 	their teaching skills;
2.11 	(3) use a professional pay system that replaces the ~~step~~ 
2.12 	lockstep steps and ~~lane~~ lanes salary ~~schedule and is not based~~
2.13 	~~on years of service~~ system and allows school districts and
2.14 	charter schools to compensate teachers for satisfactory service
2.15 	and completion of annual performance goals;
2.16 	(4) include performance compensation for teachers in
2.17 	districts or charter schools based on, at a minimum:
2.18 	(i) student achievement gains and school achievement gains
2.19 	under section 120B.35, locally selected standardized
2.20 	assessments, or both; and 
2.21 	(ii) results of individual teacher evaluations based on
2.22 	classroom observations by a locally selected evaluation team;
2.23 	~~(4) encourage teachers' continuous improvement in content~~
2.24 	~~knowledge, pedagogy, and use of best practices~~ (5) provide staff
2.25 	development for teachers that:
2.26 	(i) utilize best practice research;
2.27 	(ii) are integrated and collaborative;
2.28 	(iii) provide for ongoing site-based and teacher-led
2.29 	professional growth activities aligned with student needs as
2.30 	outlined in sections 122A.413 and 122A.601; and 
2.31 	(iv) focus on the identified needs of students, which may
2.32 	include skill development in reading strategies, methods to
2.33 	align curriculum with learning standards, intervention with
2.34 	students not meeting proficiency level, and use of state and
2.35 	local assessment data; and
2.36 	~~(5)~~ (6) implement ~~an objective~~ a teacher performance 
3.1 	evaluation ~~system~~ that is a comprehensive system based on
3.2 	scientifically based education research and on specific
3.3 	performance and accountability goals aligned with the
3.4 	district's, the charter school's, or the site's educational
3.5 	improvement plan as described in section 122A.413 and the staff
3.6 	development plan described in section 122A.601.  The evaluation
3.7 	shall include the locally selected evaluation team.  The
3.8 	evaluation of each teacher's performance in the school shall
3.9 	occur several times during the school year, including classroom
3.10 	observation~~, that is aligned with the district's or the site's~~
3.11 	~~educational improvement plan as described in section 122A.413~~.
3.12 		Subd. 3.Report. Participating districts, charter
3.13 	schools,and school sites must report on the implementation and
3.14 	effectiveness of the alternative teacher compensation plan,
3.15 	particularly addressing each requirement under subdivision 2 and
3.16 	make biennial recommendations by January 1 to their school
3.17 	boards.  The school boards shall transmit a copy of the report
3.18 	with a summary of the findings and recommendations of their
3.19 	district or charter school to the commissioner of education.

3.20 	Sec. 2. Minnesota Statutes 2004, section 122A.415,
3.21 	subdivision 1, is amended to read:
3.22 		Subdivision 1.~~aid~~ revenue amount.  (a) A school district
3.23 	or charter school that meets the conditions of section 122A.414
3.24 	and submits an application approved by the commissioner is
3.25 	eligible for alternative compensation ~~aid~~ revenue.
3.26 	(b) The commissioner must consider only applications
3.27 	submitted jointly by a school district and the exclusive
3.28 	representative of the teachers for participation in the
3.29 	program.  The application must contain a formally adopted
3.30 	collective bargaining agreement, memorandum of understanding, or
3.31 	other binding agreement that implements an alternative teacher
3.32 	professional pay system consistent with section 122A.414, is in
3.33 	compliance with the Public Employment Labor Relations Act under
3.34 	chapter 179A,and includes all teachers in a district~~,~~or all
3.35 	teachers at a school site~~, or at least 25 percent of the~~
3.36 	~~teachers in a district~~. ~~The commissioner, in approving~~
4.1 	~~applications, may give preference to applications involving~~
4.2 	~~entire districts or sites or to applications that align measures~~
4.3 	~~of teacher performance with student academic achievement and~~
4.4 	~~progress under section 120B.35, subdivision 1.~~
4.5 	~~(b)~~ Alternative compensation ~~aid~~ revenue for a qualifying
4.6 	school district~~,~~or site~~, or portion of a district or school~~
4.7 	~~site is as follows:~~
4.8 	~~(1) for a school district~~ in which the school board and the
4.9 	exclusive representative of the teachers agree to place all
4.10 	teachers in the district or at the site on the alternative
4.11 	compensation schedule, alternative compensation ~~aid~~ revenue 
4.12 	equals ~~$150~~ $225 times the district's or the site's number of
4.13 	pupils enrolled on October 1 of the previous fiscal year~~; or~~ 
4.14 	~~(2) for a district in which the school board and the~~
4.15 	~~exclusive representative of the teachers agree that at least 25~~
4.16 	~~percent of the district's licensed teachers will be paid on the~~
4.17 	~~alternative compensation schedule, alternative compensation aid~~
4.18 	~~equals $150 times the percentage of participating teachers times~~
4.19 	~~the district's number of pupils enrolled as of October 1 of the~~
4.20 	~~previous fiscal year~~.
4.21 	(c) Charter school applications must be submitted by the
4.22 	chair of the charter school board of directors and must
4.23 	contain:  (1) an agreement that implements an alternative
4.24 	teacher compensation program consistent with section 122A.414;
4.25 	(2) a resolution by the charter school board of directors
4.26 	adopting the agreement; and (3) documentation of a vote of the
4.27 	teachers showing that at least 70 percent of the teachers
4.28 	supporting the agreement that implements the alternative teacher
4.29 	compensation program.
4.30 	Alternative compensation revenue for a qualifying charter
4.31 	school must be calculated under section 126C.10, subdivision 34,
4.32 	paragraph (b).

4.33 	Sec. 3. Minnesota Statutes 2004, section 122A.415,
4.34 	subdivision 3, is amended to read:
4.35 		Subd. 3.~~aid~~ revenue timing.  (a) Districts ~~or~~ , school 
4.36 	sites, or charter schools with approved applications must
5.1 	receive alternative compensation ~~aid~~ revenue for each school
5.2 	year that the district ~~or~~ , school site, or charter school,
5.3 	participates in the program as described in this subdivision.
5.4 	Districts ~~or~~ , school sites, or charter schools with applications
5.5 	~~received~~ approved by the commissioner ~~before June 1 of the first~~
5.6 	~~year of a two-year contract~~ shall receive alternative
5.7 	compensation ~~aid~~ revenue for ~~both~~ the school years ~~of the~~
5.8 	~~contract.  Districts or sites with applications received by the~~
5.9 	~~commissioner after June 1 of the first year of a two-year~~
5.10 	~~contract shall receive alternative compensation aid only for the~~
5.11 	~~second year of the contract~~ in which the alternative teacher
5.12 	compensation program is implemented for the full school
5.13 	year. For fiscal year 2007 and later,a qualifying district ~~or~~ ,
5.14 	school site, or charter school that received alternative
5.15 	compensation ~~aid~~ revenue for the previous fiscal year must
5.16 	receive at least an amount of alternative compensation revenue 
5.17 	equal to the lesser of the amount it received for the previous
5.18 	fiscal year or ~~its proportionate share of the previous year's~~
5.19 	~~appropriation~~ the amount it qualifies for under subdivision 1
5.20 	for the current fiscal year if the district, charter school,or
5.21 	site submits a timely application and the commissioner
5.22 	determines that the district, charter school,or site continues
5.23 	to implement an alternative teacher professional pay system,
5.24 	consistent with its application under this section. ~~The~~
5.25 	~~commissioner must approve initial applications for school~~
5.26 	~~districts qualifying under subdivision 1, paragraph (b), clause~~
5.27 	~~(1), by January 15 of each year.  If any money remains, the~~
5.28 	~~commissioner must approve aid amounts for school districts~~
5.29 	~~qualifying under subdivision 1, paragraph (b), clause (2), by~~
5.30 	~~February 15 of each year.~~
5.31 	(b) The commissioner shall select applicants that qualify
5.32 	for this program, notify school districts, charter schools,and
5.33 	school sites about the program, develop and disseminate
5.34 	application materials, and carry out other activities needed to
5.35 	implement this section.

5.36 	Sec. 4. Minnesota Statutes 2004, section 123B.59, is
6.1 	amended by adding a subdivision to read:
6.2 		Subd. 9.Deferred maintenance revenue. A school district
6.3 	that does not qualify for revenue under subdivision 1 is
6.4 	eligible for deferred maintenance revenue equal to the product
6.5 	of:  (1) the district's adjusted marginal cost pupil units for
6.6 	that year; (2) $50; and (3) the district's building maintenance
6.7 	index as calculated under section 126C.10, subdivision 16.
6.8 	
EFFECTIVE DATE. This section is effective for revenue for
6.9 	fiscal year 2007.

6.10 	Sec. 5. Minnesota Statutes 2004, section 123B.59, is
6.11 	amended by adding a subdivision to read:
6.12 		Subd. 10.Deferred maintenance levy. To receive deferred
6.13 	maintenance revenue under subdivision 9, a school district must
6.14 	levy an amount equal to the revenue under subdivision 9
6.15 	multiplied by the lesser of one or the ratio of the quotient
6.16 	derived by dividing the adjusted net tax capacity of the
6.17 	district for the year preceding the year the levy is certified
6.18 	by the adjusted marginal cost pupil units in the district for
6.19 	the year to which the levy is attributable, to $3,000.
6.20 	
EFFECTIVE DATE. This section is effective for revenue for
6.21 	fiscal year 2007.

6.22 	Sec. 6. Minnesota Statutes 2004, section 123B.59, is
6.23 	amended by adding a subdivision to read:
6.24 		Subd. 11.Deferred maintenance aid. A school district's
6.25 	deferred maintenance aid is equal to the difference between its
6.26 	deferred maintenance revenue and its deferred maintenance levy.
6.27 	
EFFECTIVE DATE. This section is effective for revenue for
6.28 	fiscal year 2007.

6.29 	Sec. 7. [125B.26] TELECOMMUNICATIONS AND INTERNET ACCESS
6.30 	EQUITY AID.
6.31 		Subdivision 1.Costs to be submitted. (a) A district or
6.32 	charter school shall submit its actual telecommunications and
6.33 	Internet access costs for the previous fiscal year, adjusted for
6.34 	any e-rate revenue received, to the department by August 15 of
6.35 	each year as prescribed by the commissioner.  Costs eligible for
6.36 	reimbursement under this program are limited to the following:
7.1 	(1) ongoing or recurring telecommunications and Internet
7.2 	access costs associated with Internet access, data lines, and
7.3 	video links providing:
7.4 	(i) the equivalent of one data line, video link, or
7.5 	integrated data and video link that relies on a transport medium
7.6 	that operates at a speed of 1.544 megabytes per second (T1) for
7.7 	each elementary school, middle school, or high school under
7.8 	section 120A.05, subdivisions 9, 11, and 13, including the
7.9 	recurring telecommunications line lease costs and ongoing
7.10 	Internet access service fees; or 
7.11 	(ii) the equivalent of one data line or video circuit or
7.12 	integrated data and video link that relies on a transport medium
7.13 	that operates at a minimum speed of 1.544 megabytes per second
7.14 	(T1) for each district, including recurring telecommunications
7.15 	line lease costs and ongoing Internet access service fees;
7.16 	(2) recurring costs of contractual or vendor-provided
7.17 	maintenance on the school district's wide area network to the
7.18 	point of presence at the school building up to the router,
7.19 	codec, or other service delivery equipment located at the point
7.20 	of presence termination at the school or school district;
7.21 	(3) recurring costs of cooperative, shared arrangements for
7.22 	regional delivery of telecommunications and Internet access
7.23 	between school districts, postsecondary institutions, and public
7.24 	libraries including network gateways, peering points, regional
7.25 	network infrastructure, Internet2 access, and network support,
7.26 	maintenance, and coordination; and 
7.27 	(4) service provider installation fees for installation of
7.28 	new telecommunications lines or increased bandwidth.
7.29 	(b) Costs not eligible for reimbursement under this program
7.30 	include:
7.31 	(1) recurring costs of school district staff providing
7.32 	network infrastructure support;
7.33 	(2) recurring costs associated with voice and standard
7.34 	telephone service;
7.35 	(3) costs associated with purchase of network hardware,
7.36 	telephones, computers, or other peripheral equipment needed to
8.1 	deliver telecommunications access to the school or school
8.2 	district;
8.3 	(4) costs associated with laying fiber for
8.4 	telecommunications access;
8.5 	(5) costs associated with wiring school or school district
8.6 	buildings;
8.7 	(6) costs associated with purchase and installation of
8.8 	Internet filtering; and 
8.9 	(7) costs associated with digital content, including online
8.10 	learning or distance learning programming, and information
8.11 	databases.
8.12 		Subd. 2.E-rates. To be eligible for aid under this
8.13 	section, a district or charter school is required to file an
8.14 	e-rate application either separately or through its
8.15 	telecommunications access cluster and to have a current
8.16 	technology plan on file with the Department of Education.
8.17 	Discounts received on telecommunications expenditures shall be
8.18 	reflected in the costs submitted to the department for aid under
8.19 	this section.
8.20 		Subd. 3.Reimbursement criteria. The commissioner shall
8.21 	develop criteria for approving costs submitted by school
8.22 	districts and charter schools under subdivision 1.
8.23 		Subd. 4.District aid. For fiscal year 2006 and later, a
8.24 	district or charter school's Internet access equity aid equals
8.25 	90 percent of the district or charter school's approved cost for
8.26 	the previous fiscal year according to subdivision 1 exceeding
8.27 	$15 times the district's adjusted marginal cost pupil units for
8.28 	the previous fiscal year.
8.29 		Subd. 5.Telecommunications and internet access services
8.30 	for nonpublic schools. (a) Districts shall provide each year
8.31 	upon formal request by or on behalf of a nonpublic school, not
8.32 	including home schools located in that district or area, ongoing
8.33 	or recurring telecommunications access services to the nonpublic
8.34 	school either through existing district providers or through
8.35 	separate providers.
8.36 	(b) The amount of district aid for telecommunications
9.1 	access services for each nonpublic school under this subdivision
9.2 	equals the lesser of:
9.3 	(1) 90 percent of the nonpublic school's approved cost for
9.4 	the previous fiscal year according to subdivision 1 exceeding
9.5 	$10 times the number of weighted pupils enrolled at the
9.6 	nonpublic school as of October 1 of the previous school year; or 
9.7 	(2) the product of the district's aid per adjusted marginal
9.8 	cost pupil unit according to subdivision 4 times the number of
9.9 	weighted pupils enrolled at the nonpublic school as of October 1
9.10 	of the previous school year.
9.11 	(c) For purposes of this subdivision, nonpublic school
9.12 	pupils shall be weighted by grade level using the weighing
9.13 	factors defined in section 126C.05, subdivision 1.
9.14 	(d) Each year, a district providing services under
9.15 	paragraph (a) may claim up to five percent of the aid determined
9.16 	in paragraph (b) for costs of administering this subdivision.
9.17 	No district may expend an amount for these telecommunications
9.18 	access services which exceeds the amount allocated under this
9.19 	subdivision.  The nonpublic school is responsible for the
9.20 	Internet access costs not covered by this section.
9.21 	(e) At the request of a nonpublic school, districts may
9.22 	allocate the amount determined in paragraph (b) directly to the
9.23 	nonpublic school to pay for or offset the nonpublic school's
9.24 	costs for telecommunications access services; however, the
9.25 	amount allocated directly to the nonpublic school may not exceed
9.26 	the actual amount of the school's ongoing or recurring
9.27 	telecommunications access costs.
9.28 		Subd. 6.Severability. If any portion of this section is
9.29 	found by a court to be unconstitutional, the remaining portions
9.30 	of the section shall remain in effect.
9.31 	
EFFECTIVE DATE. This section is effective for revenue for
9.32 	fiscal year 2006.

9.33 	Sec. 8. Minnesota Statutes 2004, section 126C.05,
9.34 	subdivision 5, is amended to read:
9.35 		Subd. 5.Adjusted pupil units.  (a) Adjusted pupil units
9.36 	for a district or charter school means the sum of:
10.1 	(1) the number of pupil units served, according to
10.2 	subdivision 7, plus
10.3 	(2) pupil units according to subdivision 1 for whom the
10.4 	district or charter school pays tuition under section 123A.18,
10.5 	123A.22, 123A.30, 123A.32, 123A.44, 123A.488, 123B.88,
10.6 	subdivision 4, 124D.04, 124D.05, 125A.03 to 125A.24, 125A.51, or
10.7 	125A.65, minus
10.8 	(3) pupil units according to subdivision 1 for whom the
10.9 	district or charter school receives tuition under section
10.10 	123A.18, 123A.22, 123A.30, 123A.32, 123A.44, 123A.488, 123B.88,
10.11 	subdivision 4, 124D.04, 124D.05, 125A.03 to 125A.24, 125A.51, or
10.12 	125A.65.
10.13 	(b) Adjusted marginal cost pupil units means the greater of:
10.14 	(1) the sum of~~.77~~ .50 times the pupil units defined in
10.15 	paragraph (a) for the current school year and~~.23~~ .50 times the
10.16 	pupil units defined in paragraph (a) for the previous school
10.17 	year; or
10.18 	(2) the number of adjusted pupil units defined in paragraph
10.19 	(a) for the current school year.
10.20 	
EFFECTIVE DATE. This section is effective for revenue for
10.21 	fiscal year 2006.

10.22 	Sec. 9. Minnesota Statutes 2004, section 126C.05,
10.23 	subdivision 6, is amended to read:
10.24 		Subd. 6.Resident pupil units.  (a) Resident pupil units
10.25 	for a district means the number of pupil units according to
10.26 	subdivision 1 residing in the district.
10.27 	(b) Resident marginal cost pupil units means the greater of:
10.28 	(1) the sum of~~.77~~ .50 times the pupil units defined in
10.29 	paragraph (a) for the current year and~~.23~~ .50 times the pupil
10.30 	units defined in paragraph (a) for the previous school year; or
10.31 	(2) the number of resident pupil units defined in paragraph
10.32 	(a) for the current school year.
10.33 	
EFFECTIVE DATE. This section is effective for revenue for
10.34 	fiscal year 2006.

10.35 	Sec. 10. Minnesota Statutes 2004, section 126C.10,
10.36 	subdivision 1, is amended to read:
11.1 		Subdivision 1.General education revenue. ~~(a) For fiscal~~
11.2 	~~year 2003, the general education revenue for each district~~
11.3 	~~equals the sum of the district's basic revenue, basic skills~~
11.4 	~~revenue, training and experience revenue, secondary sparsity~~
11.5 	~~revenue, elementary sparsity revenue, transportation sparsity~~
11.6 	~~revenue, total operating capital revenue, and equity revenue.~~
11.7 	~~(b) For fiscal year 2004 and later,~~The general education
11.8 	revenue for each district equals the sum of the district's basic
11.9 	revenue, extended time revenue, unfunded federal mandates
11.10 	revenue, education excellence revenue,basic skills revenue,
11.11 	training and experience revenue, secondary sparsity revenue,
11.12 	elementary sparsity revenue, transportation sparsity revenue,
11.13 	total operating capital revenue, equity revenue, alternative
11.14 	compensation revenue,and transition revenue.
11.15 	
EFFECTIVE DATE. This section is effective for revenue for
11.16 	fiscal year 2006.

11.17 	Sec. 11. Minnesota Statutes 2004, section 126C.10,
11.18 	subdivision 2, is amended to read:
11.19 		Subd. 2.Basic revenue.  The basic revenue for each
11.20 	district equals the formula allowance times the adjusted
11.21 	marginal cost pupil units for the school year. ~~The formula~~
11.22 	~~allowance for fiscal year 2001 is $3,964.  The formula allowance~~
11.23 	~~for fiscal year 2002 is $4,068.~~The formula allowance for
11.24 	fiscal year 2003 through fiscal year 2005 is $4,601.  The
11.25 	formula allowance for fiscal year 2006 is $4,765.  The formula
11.26 	allowance for fiscal year 2007 and subsequent years is
11.27 	~~$4,601~~ $4,958.
11.28 	
EFFECTIVE DATE. This section is effective for revenue for
11.29 	fiscal year 2006.

11.30 	Sec. 12. Minnesota Statutes 2004, section 126C.10, is
11.31 	amended by adding a subdivision to read:
11.32 		Subd. 2b.Unfunded federal mandates revenue. The
11.33 	unfunded federal mandates revenue equals $50 times the
11.34 	district's adjusted marginal cost pupil units for that year.  A
11.35 	school district must spend its unfunded federal mandates revenue
11.36 	only on federally mandated programs, including special education
12.1 	services and activities required under the federal No Child Left
12.2 	Behind Act.
12.3 	
EFFECTIVE DATE. This section is effective for revenue for
12.4 	fiscal year 2006.

12.5 	Sec. 13. Minnesota Statutes 2004, section 126C.10, is
12.6 	amended by adding a subdivision to read:
12.7 		Subd. 2c.Education excellence revenue. (a) Beginning in
12.8 	fiscal year 2007 a school district is eligible for education
12.9 	excellence revenue based on the school district's performance on
12.10 	the following six standards:
12.11 	(1) graduation rate;
12.12 	(2) attendance rate;
12.13 	(3) achievement of educational standards;
12.14 	(4) adequate yearly progress;
12.15 	(5) school safety; and 
12.16 	(6) publication of a school report card.
12.17 	The commissioner of education must establish minimum
12.18 	qualifying benchmarks for each of the six standards listed in
12.19 	this paragraph.  A school district that meets or exceeds the
12.20 	benchmarks established by the commissioner for that school
12.21 	district is eligible for educational excellence revenue for each
12.22 	standard that is met.
12.23 	(b) Total revenue in the education excellence account
12.24 	equals $10,000,000.
12.25 	(c) Each year, the commissioner shall determine the
12.26 	education excellence revenue allowance.  The allowance is equal
12.27 	to the total amount of revenue deposited in the account under
12.28 	paragraph (b) divided by the number adjusted marginal cost pupil
12.29 	units in each school district multiplied by the number of
12.30 	standards under paragraph (a) that have been met or exceeded for
12.31 	the school district for the previous school year.
12.32 	(d) The revenue in the education excellence account is
12.33 	annually appropriated for the purpose of paying educational
12.34 	excellence revenue to school districts.
12.35 	(e) A school district's education excellence allowance
12.36 	equals the product of the education excellence allowance, the
13.1 	district's adjusted marginal cost pupil units for that year, and
13.2 	the number of standards that have been met or exceeded for the
13.3 	previous school year.
13.4 	
EFFECTIVE DATE. This section is effective for revenue for
13.5 	fiscal year 2007.

13.6 	Sec. 14. Minnesota Statutes 2004, section 126C.10, is
13.7 	amended by adding a subdivision to read:
13.8 		Subd. 34.Basic alternative compensation aid. (a) For
13.9 	fiscal year 2006, the basic alternative compensation aid for a
13.10 	district or charter school with an alternative compensation plan
13.11 	approved under section 122A.415 equals the alternative
13.12 	compensation revenue according to section 122A.415, subdivision
13.13 	1.
13.14 	(b) For fiscal year 2007 and later, the basic alternative
13.15 	compensation aid for a district with an alternative compensation
13.16 	plan approved under section 122A.415 equals 68.9 percent of the
13.17 	alternative compensation revenue according to section 122A.415,
13.18 	subdivision 1.  The basic alternative compensation aid for a
13.19 	charter school with an alternative compensation plan approved
13.20 	under section 122A.415 equals the school's alternative
13.21 	compensation revenue according to section 122A.415, subdivision
13.22 	1, times the ratio of the sum of the alternative compensation
13.23 	aid and alternative compensation levy for all participating
13.24 	school districts to the maximum alternative compensation revenue
13.25 	for those districts according to section 122A.415, subdivision 1.
13.26 	(c) Notwithstanding paragraphs (a) and (b) and section
13.27 	122A.415, subdivision 1, the state total basic alternative
13.28 	compensation aid entitlement must not exceed $6,700,000 for
13.29 	fiscal year 2006 and $20,700,000 for fiscal year 2007 and
13.30 	later.  The commissioner must limit the amount of alternative
13.31 	compensation revenue approved under section 122A.415, so as not
13.32 	to exceed these limits.

13.33 	Sec. 15. Minnesota Statutes 2004, section 126C.10, is
13.34 	amended by adding a subdivision to read:
13.35 		Subd. 35.Alternative compensation levy. For fiscal year
13.36 	2007 and later, the alternative compensation levy for a district
14.1 	receiving basic alternative compensation aid equals the product
14.2 	of (1) the difference between the district's alternative
14.3 	compensation revenue and the district's basic alternative
14.4 	compensation aid times (2) the lesser of one or the ratio of the
14.5 	district's adjusted net tax capacity per adjusted pupil unit to
14.6 	$6,900.

14.7 	Sec. 16. Minnesota Statutes 2004, section 126C.10, is
14.8 	amended by adding a subdivision to read:
14.9 		Subd. 36.Alternative compensation aid. (a) For fiscal
14.10 	year 2007 and later, a district's alternative compensation
14.11 	equalization aid equals the district's alternative compensation
14.12 	revenue minus the district's basic alternative compensation aid
14.13 	minus the district's alternative compensation levy.  If a
14.14 	district does not levy the entire amount permitted, the
14.15 	alternative compensation equalization aid must be reduced in
14.16 	proportion to the actual amount levied.
14.17 	(b) A district's alternative compensation aid equals the
14.18 	sum of the district's basic alternative compensation aid and the
14.19 	district's alternative compensation equalization aid.

14.20 	Sec. 17. Minnesota Statutes 2004, section 126C.13, is
14.21 	amended by adding a subdivision to read:
14.22 		Subd. 6.Statewide general education levy. The general
14.23 	education levy is $225,000,000 for taxes payable in 2006 and
14.24 	subsequent years.
14.25 	
EFFECTIVE DATE. This section is effective for revenue for
14.26 	fiscal year 2007.

14.27 	Sec. 18. Minnesota Statutes 2004, section 126C.13, is
14.28 	amended by adding a subdivision to read:
14.29 		Subd. 7.General education tax rate. The commissioner
14.30 	must establish the general education tax rate by July 1 of each
14.31 	year for taxes payable in the following year.  The general
14.32 	education tax rate must be a rate, rounded to the nearest
14.33 	hundredth of a percent, that, when applied to the adjusted net
14.34 	tax capacity for all districts, raises the amount specified in
14.35 	subdivision 6.  The general education tax rate may not be
14.36 	changed due to changes or corrections made to a district's
15.1 	adjusted net tax capacity after the tax rate has been
15.2 	established.
15.3 	
EFFECTIVE DATE. This section is effective for revenue for
15.4 	fiscal year 2007.

15.5 	Sec. 19. Minnesota Statutes 2004, section 126C.13, is
15.6 	amended by adding a subdivision to read:
15.7 		Subd. 8.Levy for general education. To obtain general
15.8 	education revenue, a district must levy an amount not to exceed
15.9 	the general education tax rate times the adjusted net tax
15.10 	capacity of the district for the preceding year.
15.11 	
EFFECTIVE DATE. This section is effective for revenue for
15.12 	fiscal year 2007.

15.13 	Sec. 20. Minnesota Statutes 2004, section 126C.13, is
15.14 	amended by adding a subdivision to read:
15.15 		Subd. 9.General education aid. A district's general
15.16 	education aid under subdivision 4 is reduced by the amount of
15.17 	the district's levy under subdivision 8.
15.18 	
EFFECTIVE DATE. This section is effective for revenue for
15.19 	fiscal year 2007.

15.20 	Sec. 21. Minnesota Statutes 2004, section 126C.13, is
15.21 	amended by adding a subdivision to read:
15.22 		Subd. 10.Adjusted net tax capacity. For the purposes of
15.23 	this section, adjusted net tax capacity means the adjusted net
15.24 	tax capacity as otherwise determined under section 127A.48, but
15.25 	excluding all class 2 property under section 273.13, subdivision
15.26 	23, except that portion of class 2a property consisting of the
15.27 	house, garage, and surrounding one acre of land.
15.28 	
EFFECTIVE DATE. This section is effective for revenue for
15.29 	fiscal year 2007.

15.30 	Sec. 22. Minnesota Statutes 2004, section 127A.45,
15.31 	subdivision 11, is amended to read:
15.32 		Subd. 11.Payment percentage for reimbursement aids.  One
15.33 	hundred percent of the aid for the previous fiscal year must be
15.34 	paid in the current year for the following aids:
15.35 	telecommunications and Internet access equity aid according to
15.36 	section 125B.26;special education special pupil aid according
16.1 	to section 125A.75, subdivision 3~~,~~;aid for litigation costs
16.2 	according to section 125A.75, subdivision 8~~,~~;aid for
16.3 	court-placed special education expenses according to section
16.4 	125A.79, subdivision 4~~,~~;and aid for special education
16.5 	out-of-state tuition according to section 125A.79, subdivision 8.
16.6 	
EFFECTIVE DATE. This section is effective for revenue for
16.7 	fiscal year 2006.

16.8 	Sec. 23. APPROPRIATIONS.
 16.9 		Subdivision 1.Department of education. The sums
16.10 	indicated in this section are appropriated from the general fund
16.11 	to the Department of Education for the fiscal years designated.
16.12 		Subd. 2.Internet access equity aid. For
16.13 	telecommunications and Internet access cost equity aid under
16.14 	Minnesota Statutes, section 125B.26:
16.15 	$4,500,000 .....2006 
16.16 	$4,500,000 .....2007 
16.17 	If the appropriation for either fiscal year is
16.18 	insufficient, the aid for that year shall be prorated among
16.19 	participating schools and districts so as not to exceed the
16.20 	total authorized appropriation for that year.