1.1                          A bill for an act 
  1.2             relating to education; prekindergarten through grade 
  1.3             12; providing for general education revenue; 
  1.4             transportation; special and targeted needs programs; 
  1.5             community programs; facilities; organization and 
  1.6             cooperation; other education programs; miscellaneous 
  1.7             provisions; technology libraries; state agencies; 
  1.8             imposing limits on property taxes; providing for 
  1.9             appointments; appropriating money; amending Minnesota 
  1.10            Statutes 1994, sections 6.62, subdivision 1; 13.43, 
  1.11            subdivision 2; 16B.465; 120.062, subdivision 9; 
  1.12            120.064; 120.101, subdivision 5c, and by adding a 
  1.13            subdivision; 120.17, subdivision 3b, and by adding a 
  1.14            subdivision; 120.73, subdivision 1; 120.74, 
  1.15            subdivision 1; 120.75, subdivision 1; 121.11, 
  1.16            subdivision 7c; 121.15, subdivision 6; 121.16, by 
  1.17            adding a subdivision; 121.207, subdivisions 2 and 3; 
  1.18            121.702, by adding a subdivision; 121.705; 121.706; 
  1.19            121.707, subdivisions 2, 3, 4, 6, and 7; 121.708; 
  1.20            121.709; 121.710; 121.8355, subdivision 2; 121.885, 
  1.21            subdivisions 1 and 4; 121.904, subdivisions 4a and 4c; 
  1.22            121.912, subdivisions 1, 1b, and 6; 121.932; 121.935; 
  1.23            121.936; 122.21, subdivision 4; 122.532, subdivision 
  1.24            3a; 122.91, subdivisions 1, 2, and 2a; 122.92, 
  1.25            subdivision 1; 122.93, subdivision 1; 122.94, 
  1.26            subdivision 1; 123.34, by adding a subdivision; 
  1.27            123.35, subdivisions 19a and 19b; 123.351, 
  1.28            subdivisions 1, 3, 4, and 5; 123.3514, subdivisions 3, 
  1.29            4, 4a, 4e, 5, 6c, 7, 8, and by adding a subdivision; 
  1.30            123.39, subdivisions 1 and 6; 123.70, subdivision 8; 
  1.31            123.76; 123.78, subdivisions 1, 2, and 3; 123.79, 
  1.32            subdivision 1, and by adding a subdivision; 123.7991, 
  1.33            subdivisions 2 and 3; 123.805, subdivisions 1 and 2; 
  1.34            124.06; 124.155, subdivision 2; 124.17, subdivisions 
  1.35            1, 2f, and by adding a subdivision; 124.195, 
  1.36            subdivisions 10, 11, and by adding a subdivision; 
  1.37            124.214, subdivisions 2 and 3; 124.223; 124.225, 
  1.38            subdivisions 1, 3a, 7b, 7d, 7f, 8a, 8l, 8m, and 9; 
  1.39            124.226, subdivisions 3, 4, and 9; 124.243, 
  1.40            subdivision 2; 124.244, subdivision 1; 124.2445; 
  1.41            124.248; 124.261, subdivision 1; 124.2725, 
  1.42            subdivisions 1, 3, 4, and 15; 124.2726, subdivisions 
  1.43            1, 2, and 4; 124.2727, subdivision 6d; 124.2728, 
  1.44            subdivision 1; 124.273, by adding subdivisions; 
  1.45            124.32, subdivisions 6, 7, and 10; 124.321; 124.322; 
  1.46            124.323, by adding a subdivision; 124.431, subdivision 
  2.1             2; 124.573, subdivision 3; 124.574, subdivision 9, and 
  2.2             by adding subdivisions; 124.83, subdivision 4; 124.84, 
  2.3             subdivision 3; 124.91, subdivisions 3 and 5; 124.912, 
  2.4             subdivision 1; 124.916, subdivision 2; 124.918, 
  2.5             subdivisions 1 and 2; 124.95, subdivisions 2, 4, and 
  2.6             6; 124.961; 124A.03, subdivisions 1c, 1g, 1h, and 2; 
  2.7             124A.22, subdivisions 1, 2, 3, 4, 4a, 4b, 6, 6a, 8a, 
  2.8             9, and by adding subdivisions; 124A.225, subdivision 
  2.9             1; 124A.23, subdivisions 1 and 4; 124A.24; 124A.29; 
  2.10            124C.07; 124C.08, subdivision 2; 124C.45, subdivision 
  2.11            1; 124C.46, subdivision 2; 124C.48, subdivision 1; 
  2.12            124C.60, subdivision 1; 125.12, subdivision 3; 125.62, 
  2.13            subdivision 7; 126.031, subdivision 1; 126.15, 
  2.14            subdivision 2; 126.22, subdivisions 2, 3, 3a, and 8; 
  2.15            126.23; 126.237; 126.49, by adding a subdivision; 
  2.16            126.70; 126.78, subdivision 2; 126B.01; 126B.03, 
  2.17            subdivisions 2 and 3; 127.40; 127.41; 127.42; 128A.02, 
  2.18            subdivisions 1 and 3; 128A.021; 128A.022, subdivisions 
  2.19            1 and 6; 128A.024, subdivision 4; 128A.025, 
  2.20            subdivisions 1 and 2; 128A.026; 128A.05, subdivisions 
  2.21            1 and 2; 128B.08; 128B.10, subdivision 1; 134.155; 
  2.22            134.351, subdivision 4; 169.01, subdivision 6; 169.21, 
  2.23            subdivision 2; 169.444, subdivision 2; 169.4502, 
  2.24            subdivision 4; 169.4503, by adding a subdivision; 
  2.25            169.451, by adding a subdivision; 169.452; 169.454, 
  2.26            subdivision 5, and by adding a subdivision; 171.01, 
  2.27            subdivision 21; 171.18, subdivision 1; 171.321, 
  2.28            subdivisions 3, 4, and 5; 171.3215, subdivisions 1, 2, 
  2.29            and 3; 237.065; 268.06, subdivision 27; 275.065, 
  2.30            subdivision 1; 275.60; 469.1831, subdivision 4; and 
  2.31            631.40, subdivision 1a; Laws 1965, chapter 705, 
  2.32            section 1, subdivisions 3 and 4; Laws 1992, chapter 
  2.33            499, article 11, section 9, as amended; Laws 1993, 
  2.34            chapter 224, article 8, section 21, subdivision 1; 
  2.35            section 22, subdivision 12, as amended; and article 
  2.36            12, sections 39 and 41; Laws 1994, chapter 587, 
  2.37            article 3, section 19, subdivision 1; and chapter 647, 
  2.38            articles 3, section 25; and 7, section 15; proposing 
  2.39            coding for new law in Minnesota Statutes, chapters 
  2.40            120; 121; 123; 124; 125; 126B; 127; 136D; 145; and 
  2.41            169; repealing Minnesota Statutes 1994, sections 
  2.42            3.198; 121.702, subdivision 9; 121.703; 121.912, 
  2.43            subdivisions 7 and 8; 121.93; 121.931; 121.933; 
  2.44            123.3514, subdivision 9; 123.37, subdivision 1b; 
  2.45            123.58; 124.17, subdivisions 1b, 1d, and 1e; 124.225, 
  2.46            subdivisions 1, 3a, 7a, 7b, 7d, 7e, 8a, 8k, 8m, and 
  2.47            10; 124.226; 124.243; 124.244; 124.2455; 124.273, 
  2.48            subdivisions 1b and 2c; 124.32, subdivisions 1b, 1c, 
  2.49            1d, 1f, 2, 2b, 3a, and 10; 124.573, subdivisions 1, 2, 
  2.50            2b, 2e, 2f, 3a, and 5a; 124.574, subdivisions 2b, 3, 
  2.51            4, and 4a; 124.83; 124.91, subdivision 2; 124.912, 
  2.52            subdivisions 2, 7, and 8; 124.962; 124A.22, 
  2.53            subdivisions 4, 4a, and 4b; 124A.26; 124A.27, 
  2.54            subdivision 11; 125.05, subdivision 7; 125.231, 
  2.55            subdivision 2; 126.019; 126B.02; 126B.03, subdivision 
  2.56            1; 126B.04; 126B.05; 128A.02, subdivisions 2, 4, and 
  2.57            5; and 128A.03; Laws 1992, chapter 499, article 7, 
  2.58            section 27; Laws 1993, First Special Session chapter 
  2.59            2, article 5, sections 1; 2, as amended; 3; 4; 5; and 
  2.60            6. 
  2.61  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  2.62                             ARTICLE 1 
  2.63                    GENERAL AND UNIFORM REVENUE 
  2.64     Section 1.  Minnesota Statutes 1994, section 6.62, 
  2.65  subdivision 1, is amended to read: 
  3.1      Subdivision 1.  [LEVY OF TAX.] Counties, cities and towns 
  3.2   are authorized, if necessary, to levy an amount sufficient to 
  3.3   pay the expense of a postaudit by the state auditor. 
  3.4      A school district is authorized to levy an amount 
  3.5   sufficient to pay for the expense of a postaudit by the state 
  3.6   auditor if the audit is performed at the discretion of the state 
  3.7   auditor pursuant to section 6.51 or if the audit has been 
  3.8   requested through a petition by eligible voters pursuant to 
  3.9   section 6.54.  A school district is not authorized to levy these 
  3.10  amounts if the postaudit by the state auditor is requested by 
  3.11  the school board pursuant to section 6.55. 
  3.12     Sec. 2.  Minnesota Statutes 1994, section 120.062, 
  3.13  subdivision 9, is amended to read: 
  3.14     Subd. 9.  [TRANSPORTATION.] (a) If requested by the parent 
  3.15  of a pupil, the nonresident district shall may provide 
  3.16  transportation within the nonresident district.  The nonresident 
  3.17  district may provide transportation within the pupil's resident 
  3.18  district pursuant to section 123.39, subdivision 6.  For fiscal 
  3.19  year 1996, the state shall pay transportation aid to the 
  3.20  district according to section 124.225. 
  3.21     The resident district is not required to provide or pay for 
  3.22  transportation between the pupil's residence and the border of 
  3.23  the nonresident district.  A parent may be reimbursed by the 
  3.24  nonresident district for the costs of transportation from the 
  3.25  pupil's residence to the border of the nonresident district if 
  3.26  the pupil is from a family whose income is at or below the 
  3.27  poverty level, as determined by the federal government.  The 
  3.28  reimbursement may not exceed the pupil's actual cost of 
  3.29  transportation or 15 cents per mile traveled, whichever is 
  3.30  less.  Reimbursement may not be paid for more than 250 miles per 
  3.31  week.  
  3.32     At the time a nonresident district notifies a parent or 
  3.33  guardian that an application has been accepted under subdivision 
  3.34  5 or 6, the nonresident district must provide the parent or 
  3.35  guardian with the following information regarding the 
  3.36  transportation of nonresident pupils under this section: 
  4.1      (1) a nonresident district may transport a pupil within the 
  4.2   pupil's resident district under this section only with the 
  4.3   approval of the resident district; and 
  4.4      (2) a parent or guardian of a pupil attending a nonresident 
  4.5   district under this section may appeal under section 123.39, 
  4.6   subdivision 6, the refusal of the resident district to allow the 
  4.7   nonresident district to transport the pupil within the resident 
  4.8   district. 
  4.9      (b) Notwithstanding paragraph (a) and section 124.225, 
  4.10  subdivision 8l, transportation provided by a nonresident 
  4.11  district between home and school for a pupil attending school 
  4.12  under this section is authorized for nonregular transportation 
  4.13  revenue under section 124.225 for fiscal year 1996, if the 
  4.14  following criteria are met: 
  4.15     (1) the school that the pupil was attending prior to 
  4.16  enrolling in the nonresident district under this section was 
  4.17  closed; 
  4.18     (2) the distance from the closed school to the next nearest 
  4.19  school in the district that the student could attend is at least 
  4.20  20 miles; 
  4.21     (3) the pupil's residence is at least 20 miles from any 
  4.22  school that the pupil could attend in the resident district; and 
  4.23     (4) the pupil's residence is closer to the school of 
  4.24  attendance in the nonresident district than to any school the 
  4.25  pupil could attend in the resident district. 
  4.26     Sec. 3.  Minnesota Statutes 1994, section 120.73, 
  4.27  subdivision 1, is amended to read: 
  4.28     Subdivision 1.  A school board is authorized to require 
  4.29  payment of fees in the following areas: 
  4.30     (a) in any program where the resultant product, in excess 
  4.31  of minimum requirements and at the pupil's option, becomes the 
  4.32  personal property of the pupil; 
  4.33     (b) admission fees or charges for extra curricular 
  4.34  activities, where attendance is optional; 
  4.35     (c) a security deposit for the return of materials, 
  4.36  supplies, or equipment; 
  5.1      (d) personal physical education and athletic equipment and 
  5.2   apparel, although any pupil may personally provide it if it 
  5.3   meets reasonable requirements and standards relating to health 
  5.4   and safety established by the school board; 
  5.5      (e) items of personal use or products which a student has 
  5.6   an option to purchase such as student publications, class rings, 
  5.7   annuals, and graduation announcements; 
  5.8      (f) fees specifically permitted by any other statute, 
  5.9   including but not limited to section 171.04, subdivision 1, 
  5.10  clause (1); 
  5.11     (g) field trips considered supplementary to a district 
  5.12  educational program; 
  5.13     (h) any authorized voluntary student health and accident 
  5.14  benefit plan; 
  5.15     (i) for the use of musical instruments owned or rented by 
  5.16  the district, a reasonable rental fee not to exceed either the 
  5.17  rental cost to the district or the annual depreciation plus the 
  5.18  actual annual maintenance cost for each instrument; 
  5.19     (j) transportation of pupils to and from extra curricular 
  5.20  activities conducted at locations other than school, where 
  5.21  attendance is optional; 
  5.22     (k) transportation of pupils to and from school for which 
  5.23  aid is not authorized under section 124.223, subdivision 1, and 
  5.24  for which levy is not authorized under section 124.226, 
  5.25  subdivision 5, if a district charging fees for transportation of 
  5.26  pupils establishes guidelines for that transportation to ensure 
  5.27  that no pupil is denied transportation solely because of 
  5.28  inability to pay.  The guidelines and determination of fees or 
  5.29  other charges for administration or other costs are subject to 
  5.30  sections 123.76 to 123.79; 
  5.31     (l) motorcycle classroom education courses conducted 
  5.32  outside of regular school hours; provided the charge shall not 
  5.33  exceed the actual cost of these courses to the school district; 
  5.34     (m) transportation to and from post-secondary institutions 
  5.35  for pupils enrolled under the post-secondary enrollment options 
  5.36  program under section 123.39, subdivision 16.  Fees collected 
  6.1   for this service must be reasonable and shall be used to reduce 
  6.2   the cost of operating the route.  Families who qualify for 
  6.3   mileage reimbursement under section 123.3514, subdivision 8, may 
  6.4   use their state mileage reimbursement to pay this fee.  If no 
  6.5   fee is charged, districts shall allocate costs based on the 
  6.6   number of pupils riding the route. 
  6.7      Sec. 4.  Minnesota Statutes 1994, section 120.74, 
  6.8   subdivision 1, is amended to read: 
  6.9      Subdivision 1.  A school board is not authorized to charge 
  6.10  fees in the following areas: 
  6.11     (a) Textbooks, workbooks, art materials, laboratory 
  6.12  supplies, towels; 
  6.13     (b) Supplies necessary for participation in any 
  6.14  instructional course except as authorized in sections 120.73 and 
  6.15  120.75; 
  6.16     (c) Field trips which are required as a part of a basic 
  6.17  education program or course; 
  6.18     (d) Graduation caps, gowns, any specific form of dress 
  6.19  necessary for any educational program, and diplomas; 
  6.20     (e) Instructional costs for necessary school personnel 
  6.21  employed in any course or educational program required for 
  6.22  graduation; 
  6.23     (f) Library books required to be utilized for any 
  6.24  educational course or program; 
  6.25     (g) Admission fees, dues, or fees for any activity the 
  6.26  pupil is required to attend; 
  6.27     (h) Any admission or examination cost for any required 
  6.28  educational course or program; 
  6.29     (i) Locker rentals; 
  6.30     (j) Transportation of pupils (1) for which state 
  6.31  transportation aid is authorized pursuant to section 124.223 or 
  6.32  (2) for which a levy is authorized under section 124.226, 
  6.33  subdivision 5. 
  6.34     Sec. 5.  Minnesota Statutes 1994, section 121.15, 
  6.35  subdivision 6, is amended to read: 
  6.36     Subd. 6.  [REVIEW AND COMMENT.] No referendum for bonds or 
  7.1   solicitation of bids A school district must not initiate an 
  7.2   installment contract for purchase, hold a referendum for bonds, 
  7.3   nor solicit bids for new construction, expansion, or remodeling 
  7.4   of an educational facility that requires an expenditure in 
  7.5   excess of $400,000 per school site shall be initiated prior to 
  7.6   review and comment by the commissioner.  A school board shall 
  7.7   not separate portions of a single project into components to 
  7.8   avoid the requirements of this subdivision.  
  7.9      Sec. 6.  Minnesota Statutes 1994, section 121.904, 
  7.10  subdivision 4a, is amended to read: 
  7.11     Subd. 4a.  [LEVY RECOGNITION.] (a) "School district tax 
  7.12  settlement revenue" means the current, delinquent, and 
  7.13  manufactured home property tax receipts collected by the county 
  7.14  and distributed to the school district, including distributions 
  7.15  made pursuant to section 279.37, subdivision 7, and excluding 
  7.16  the amount levied pursuant to section 124.914, subdivision 1. 
  7.17     (b) In June of each year, the school district shall 
  7.18  recognize as revenue, in the fund for which the levy was made, 
  7.19  the lesser of:  
  7.20     (1) the May, June, and July school district tax settlement 
  7.21  revenue received in that calendar year; or 
  7.22     (2) the sum of the state aids and credits enumerated in 
  7.23  section 124.155, subdivision 2, which are for the fiscal year 
  7.24  payable in that fiscal year plus an amount equal to the levy 
  7.25  recognized as revenue in June of the prior year plus 37.4 44.2 
  7.26  percent for fiscal year 1994 1996 and thereafter of the amount 
  7.27  of the levy certified in the prior calendar year according to 
  7.28  section 124A.03, subdivision 2, plus or minus auditor's 
  7.29  adjustments, not including levy portions that are assumed by the 
  7.30  state; or 
  7.31     (3) 37.4 44.2 percent for fiscal year 1994 1996 and 
  7.32  thereafter of the amount of the levy certified in the prior 
  7.33  calendar year, plus or minus auditor's adjustments, not 
  7.34  including levy portions that are assumed by the state, which 
  7.35  remains after subtracting, by fund, the amounts levied for the 
  7.36  following purposes:  
  8.1      (i) reducing or eliminating projected deficits in the 
  8.2   reserved fund balance accounts for unemployment insurance and 
  8.3   bus purchases; 
  8.4      (ii) statutory operating debt pursuant to section 124.914, 
  8.5   subdivision 1; 
  8.6      (iii) (ii) retirement and severance pay pursuant to 
  8.7   sections 122.531, subdivision 9, 124.2725, subdivision 15, 
  8.8   124.4945, 124.912, subdivision 1, and 124.916, subdivision 3, 
  8.9   and Laws 1975, chapter 261, section 4; 
  8.10     (iv) (iii) amounts levied for bonds issued and interest 
  8.11  thereon, amounts levied for debt service loans and capital 
  8.12  loans, amounts levied for down payments under section 124.82, 
  8.13  subdivision 3, and amounts levied pursuant to section 136C.411; 
  8.14  and 
  8.15     (v) (iv) amounts levied under section 124.755.  
  8.16     (c) In July of each year, the school district shall 
  8.17  recognize as revenue that portion of the school district tax 
  8.18  settlement revenue received in that calendar year and not 
  8.19  recognized as revenue for the previous fiscal year pursuant to 
  8.20  clause (b).  
  8.21     (d) All other school district tax settlement revenue shall 
  8.22  be recognized as revenue in the fiscal year of the settlement. 
  8.23  Portions of the school district levy assumed by the state, 
  8.24  including prior year adjustments and the amount to fund the 
  8.25  school portion of the reimbursement made pursuant to section 
  8.26  273.425, shall be recognized as revenue in the fiscal year 
  8.27  beginning in the calendar year for which the levy is payable. 
  8.28     Sec. 7.  Minnesota Statutes 1994, section 121.904, 
  8.29  subdivision 4c, is amended to read: 
  8.30     Subd. 4c.  [PROPERTY TAX SHIFT REDUCTION CHANGE IN LEVY 
  8.31  RECOGNITION PERCENT.] (a) Money appropriated under section 
  8.32  16A.152, subdivision 2, must be used to reduce the levy 
  8.33  recognition percent specified in subdivision 4a, clauses (b)(2) 
  8.34  and (b)(3), for taxes payable in the succeeding calendar year.  
  8.35     (b) The levy recognition percent shall equal the result of 
  8.36  the following computation:  the current levy recognition 
  9.1   percent, times the ratio of 
  9.2      (1) the statewide total amount of levy recognized in June 
  9.3   of the year in which the taxes are payable pursuant to 
  9.4   subdivision 4a, clause (b), excluding those levies that are 
  9.5   shifted for revenue recognition but are not included in the 
  9.6   computation of the adjustment to aids under section 124.155, 
  9.7   subdivision 1, reduced by the difference between the amount of 
  9.8   money appropriated under section 16A.152, subdivision 2, and the 
  9.9   amount required for the adjustment payment under clause (d), to 
  9.10     (2) the statewide total amount of the levy recognized in 
  9.11  June of the year in which the taxes are payable pursuant to 
  9.12  subdivision 4a, clause (b), excluding those levies that are 
  9.13  shifted for revenue recognition but are not included in the 
  9.14  computation of the adjustment to aids under section 124.155, 
  9.15  subdivision 1.  
  9.16     The result shall be rounded up to the nearest one-tenth of 
  9.17  a percent.  However, in no case shall the levy recognition 
  9.18  percent be reduced below zero or increased above the current 
  9.19  levy recognition percent.  
  9.20     (c) The commissioner of finance must certify to the 
  9.21  commissioner of education the levy recognition percent computed 
  9.22  under this subdivision by January 5 of each year.  The 
  9.23  commissioner of education must notify school districts of a 
  9.24  change in the levy recognition percent by January 15. 
  9.25     (d) For fiscal years 1994 and 1995, When the levy 
  9.26  recognition percent is increased or decreased as provided in 
  9.27  this subdivision, a special aid adjustment shall be made to each 
  9.28  school district with an operating referendum levy:  
  9.29     (i) When the levy recognition percent is increased from the 
  9.30  prior fiscal year, the commissioner of education shall calculate 
  9.31  the difference between (1) the amount of the levy under section 
  9.32  124A.03, that is recognized as revenue for the current fiscal 
  9.33  year according to subdivision 4a; and (2) the amount of the 
  9.34  levy, under section 124A.03, that would have been recognized as 
  9.35  revenue for the current fiscal year had the percentage according 
  9.36  to subdivision 4a, not been increased.  The commissioner shall 
 10.1   reduce other aids due the district by the amount of the 
 10.2   difference.  This aid reduction shall be in addition to the aid 
 10.3   reduction required because of the increase pursuant to this 
 10.4   subdivision of the levy recognition percent.  
 10.5      (ii)  When the levy recognition percent is reduced as 
 10.6   provided in this subdivision from the prior fiscal year, a 
 10.7   special adjustment payment shall be made to each school district 
 10.8   with an operating referendum levy that received an aid reduction 
 10.9   under Laws 1991, chapter 265, article 1, section 31, or Laws 
 10.10  1992, chapter 499, article 1, section 22 when the levy 
 10.11  recognition percent was last increased.  The special adjustment 
 10.12  payment shall be in addition to the additional payments required 
 10.13  because of the reduction pursuant to this subdivision of the 
 10.14  levy recognition percent.  The amount of the special adjustment 
 10.15  payment shall be computed by the commissioner of education such 
 10.16  that any remaining portion of the aid reduction these districts 
 10.17  received that has not been repaid is repaid on a proportionate 
 10.18  basis as the levy recognition percent is reduced from 50 percent 
 10.19  to 31 percent.  The special adjustment payment must be included 
 10.20  in the state aid payments to school districts according to the 
 10.21  schedule specified in section 124.195, subdivision 3.  An 
 10.22  additional adjustment shall be made on June 30, 1995, for the 
 10.23  final payment otherwise due July 1, 1995, under Minnesota 
 10.24  Statutes 1992, section 136C.36. 
 10.25     (e) The commissioner of finance shall transfer from the 
 10.26  general fund to the education aids appropriations specified by 
 10.27  the commissioner of education, the amounts needed to finance the 
 10.28  additional payments required because of the reduction pursuant 
 10.29  to this subdivision of the levy recognition percent.  Payments 
 10.30  to a school district of additional state aids resulting from a 
 10.31  reduction in the levy recognition percent must be included in 
 10.32  the cash metering of payments made according to section 124.195 
 10.33  after January 15, and must be paid in a manner consistent with 
 10.34  the percent specified in that section. 
 10.35     Sec. 8.  Minnesota Statutes 1994, section 121.912, 
 10.36  subdivision 1, is amended to read: 
 11.1      Subdivision 1.  [LIMITATIONS.] Except as provided in this 
 11.2   subdivision, sections 121.9121, 123.36, 124.243, 475.61, and 
 11.3   475.65, a school district may not permanently transfer money 
 11.4   from (1) an operating fund to a nonoperating fund; (2) a 
 11.5   nonoperating fund to another nonoperating fund; or (3) a 
 11.6   nonoperating fund to an operating fund.  Permanent transfers may 
 11.7   be made from any fund to any other fund to correct for prior 
 11.8   fiscal years' errors discovered after the books have been closed 
 11.9   for that year.  Permanent transfers may be made from the general 
 11.10  fund to any other operating funds according to section 123.7045 
 11.11  or if the resources of the other fund are not adequate to 
 11.12  finance approved expenditures from that other fund.  Permanent 
 11.13  transfers may also be made from the general fund to eliminate 
 11.14  deficits in another fund when that other fund is being 
 11.15  discontinued.  When a district discontinues operation of a 
 11.16  district-owned bus fleet or a substantial portion of a fleet, 
 11.17  permanent transfers must be made, on June 30 of the fiscal year 
 11.18  that the operation is discontinued, from the fund balance 
 11.19  account entitled "pupil transportation fund reserved for bus 
 11.20  purchases" to the capital expenditure fund.  The sum of the 
 11.21  levies authorized pursuant to sections 124.243, 124.244, and 
 11.22  124.83 shall be reduced by an amount equal to the amount 
 11.23  transferred.  Any school district may transfer any amount from 
 11.24  the undesignated fund balance account in its transportation fund 
 11.25  to any other operating fund or to the reserved fund balance 
 11.26  account for bus purchases in its transportation fund the balance 
 11.27  shall cancel to the district's general fund. 
 11.28     Sec. 9.  Minnesota Statutes 1994, section 121.912, 
 11.29  subdivision 1b, is amended to read: 
 11.30     Subd. 1b.  [TRA AND FICA TRANSFER.] (a) Notwithstanding 
 11.31  subdivision 1, a district shall may transfer money from the 
 11.32  general fund to the community service fund for the employer 
 11.33  contributions for teacher retirement and FICA for employees who 
 11.34  are members of a teacher retirement association and who are paid 
 11.35  from the community service fund.  
 11.36     (b) A district shall not transfer money under paragraph (a) 
 12.1   for employees who are paid with money other than normal 
 12.2   operating funds, as defined in section 354.05, subdivision 27.  
 12.3      Sec. 10.  Minnesota Statutes 1994, section 121.912, 
 12.4   subdivision 6, is amended to read: 
 12.5      Subd. 6.  [ACCOUNT TRANSFER FOR REORGANIZING DISTRICTS.] 
 12.6   (a) A school district that has reorganized according to section 
 12.7   122.22, 122.23, or sections 122.241 to 122.248 or has conducted 
 12.8   a successful referendum on the question of combination under 
 12.9   section 122.243, subdivision 2, or consolidation under section 
 12.10  122.23, subdivision 13, may make permanent transfers between any 
 12.11  of the funds in the newly created or enlarged district with the 
 12.12  exception of the debt redemption fund, food service fund, and 
 12.13  health and safety account of the capital expenditure fund.  Fund 
 12.14  transfers under this section may be made only for up to one year 
 12.15  prior to the effective date of combination or consolidation and 
 12.16  during the year following the effective date of reorganization. 
 12.17     (b) A district that has conducted a successful referendum 
 12.18  on the question of combination under section 122.243, 
 12.19  subdivision 2, may make permanent transfers between any of the 
 12.20  funds in the district with the exception of the debt redemption 
 12.21  fund, food service fund, and health and safety account of the 
 12.22  capital expenditure fund for up to one year prior to the 
 12.23  effective date of combination under sections 122.241 to 122.248. 
 12.24     Sec. 11.  Minnesota Statutes 1994, section 122.21, 
 12.25  subdivision 4, is amended to read: 
 12.26     Subd. 4.  Within six months of the time when the petition 
 12.27  was filed, the county board shall issue its order either 
 12.28  granting or denying the petition, unless all or part of the land 
 12.29  area described in the petition is included in a plat for 
 12.30  consolidation or combination which has been approved by the 
 12.31  state board commissioner of education in which event, no order 
 12.32  may be issued while consolidation or combination proceedings are 
 12.33  pending.  No order shall be issued which results in attaching to 
 12.34  a district any territory not adjoining that district, as defined 
 12.35  in subdivision 1(a).  No order shall be issued which reduces the 
 12.36  size of any district to less than four sections unless the 
 13.1   district is not operating a school within the district.  The 
 13.2   order may be made effective at a deferred date not later than 
 13.3   July 1 next following its issuance.  If the petition be granted, 
 13.4   the auditor shall transmit a certified copy to the 
 13.5   commissioner.  Failure to issue an order within six months of 
 13.6   the filing of the petition or termination of proceedings upon an 
 13.7   approved consolidation plat, whichever is later, is a denial of 
 13.8   the petition. 
 13.9      Sec. 12.  Minnesota Statutes 1994, section 122.532, 
 13.10  subdivision 3a, is amended to read: 
 13.11     Subd. 3a.  [INTERIM CONTRACTUAL AGREEMENTS.] (a) Until a 
 13.12  successor contract is executed between the new school board and 
 13.13  the exclusive representative of the teachers of the new 
 13.14  district, the school boards of both districts and the exclusive 
 13.15  representatives of the teachers of both districts may agree: 
 13.16     (1) to comply with the contract of either district with 
 13.17  respect to all of the teachers assigned to the new district; or 
 13.18     (2) that each of the contracts shall apply to the teachers 
 13.19  previously subject to the respective contract.  
 13.20     (b) In the absence of an agreement according to paragraph 
 13.21  (a), the following shall apply: 
 13.22     (1) if the effective date is July 1 of an even-numbered 
 13.23  year, each of the contracts shall apply to the teachers 
 13.24  previously subject to the respective contract and shall be 
 13.25  binding on the new school board; or 
 13.26     (2) if the effective date is July 1 of an odd-numbered 
 13.27  year, the contract of the district that previously employed the 
 13.28  largest proportion of teachers assigned to the new district 
 13.29  applies to all of the teachers assigned to the new district and 
 13.30  shall be binding on the new school board.  The application of 
 13.31  this section shall not result in a reduction in a teacher's 
 13.32  salary or benefits until a successor contract is executed 
 13.33  between the new school board and the exclusive representative. 
 13.34     Sec. 13.  Minnesota Statutes 1994, section 123.3514, 
 13.35  subdivision 3, is amended to read: 
 13.36     Subd. 3.  [DEFINITIONS.] For purposes of this section, an 
 14.1   "eligible institution" means a Minnesota public post-secondary 
 14.2   institution, a private, nonprofit two-year trade and technical 
 14.3   school granting associate degrees, an opportunities 
 14.4   industrialization center accredited by the north central 
 14.5   association of colleges and schools, or a private, residential, 
 14.6   two-year or four-year, liberal arts, degree-granting college or 
 14.7   university located in Minnesota.  "Course" means a course or 
 14.8   program.  "Pupil" means a student receiving instruction under 
 14.9   section 120.101.  
 14.10     Sec. 14.  Minnesota Statutes 1994, section 123.3514, 
 14.11  subdivision 4, is amended to read: 
 14.12     Subd. 4.  [AUTHORIZATION; NOTIFICATION.] Notwithstanding 
 14.13  any other law to the contrary, an 11th or 12th grade pupil 
 14.14  enrolled in a public school or an American Indian-controlled 
 14.15  tribal contract or grant school eligible for aid under section 
 14.16  124.86, except a foreign exchange pupil enrolled in a district 
 14.17  under a cultural exchange program, may apply to an eligible 
 14.18  institution, as defined in subdivision 3, to enroll in 
 14.19  nonsectarian courses offered by that post-secondary 
 14.20  institution.  If an institution accepts a secondary pupil for 
 14.21  enrollment under this section, the institution shall send 
 14.22  written notice to the pupil, the pupil's school or school 
 14.23  district, and the commissioner of education within ten days of 
 14.24  acceptance.  The notice shall indicate the course and hours of 
 14.25  enrollment of that pupil.  If the pupil enrolls in a course for 
 14.26  post-secondary credit, the institution shall notify the pupil 
 14.27  about payment in the customary manner used by the institution. 
 14.28     Sec. 15.  Minnesota Statutes 1994, section 123.3514, 
 14.29  subdivision 4a, is amended to read: 
 14.30     Subd. 4a.  [COUNSELING.] To the extent possible, the school 
 14.31  or school district shall provide counseling services to pupils 
 14.32  and their parents or guardian before the pupils enroll in 
 14.33  courses under this section to ensure that the pupils and their 
 14.34  parents or guardian are fully aware of the risks and possible 
 14.35  consequences of enrolling in post-secondary courses.  The school 
 14.36  or school district shall provide information on the program 
 15.1   including who may enroll, what institutions and courses are 
 15.2   eligible for participation, the decision-making process for 
 15.3   granting academic credits, financial arrangements for tuition, 
 15.4   books and materials, eligibility criteria for transportation 
 15.5   aid, available support services, the need to arrange an 
 15.6   appropriate schedule, consequences of failing or not completing 
 15.7   a course in which the pupil enrolls, the effect of enrolling in 
 15.8   this program on the pupil's ability to complete the required 
 15.9   high school graduation requirements, and the academic and social 
 15.10  responsibilities that must be assumed by the pupils and their 
 15.11  parents or guardian.  The person providing counseling shall 
 15.12  encourage pupils and their parents or guardian to also use 
 15.13  available counseling services at the post-secondary institutions 
 15.14  before the quarter or semester of enrollment to ensure that 
 15.15  anticipated plans are appropriate.  
 15.16     Prior to enrolling in a course, the pupil and the pupil's 
 15.17  parents or guardian must sign a form that must be provided by 
 15.18  the school or school district and may be obtained from a 
 15.19  post-secondary institution stating that they have received the 
 15.20  information specified in this subdivision and that they 
 15.21  understand the responsibilities that must be assumed in 
 15.22  enrolling in this program.  The department of education shall, 
 15.23  upon request, provide technical assistance to a school or school 
 15.24  district in developing appropriate forms and counseling 
 15.25  guidelines. 
 15.26     Sec. 16.  Minnesota Statutes 1994, section 123.3514, 
 15.27  subdivision 4e, is amended to read: 
 15.28     Subd. 4e.  [COURSES ACCORDING TO AGREEMENTS.] An eligible 
 15.29  pupil, according to subdivision 4, may enroll in a nonsectarian 
 15.30  course taught by a secondary teacher or a post-secondary faculty 
 15.31  member and offered at a secondary school, or another location, 
 15.32  according to an agreement between a public school board and the 
 15.33  governing body of an eligible public post-secondary system or an 
 15.34  eligible private post-secondary institution, as defined in 
 15.35  subdivision 3.  All provisions of this section shall apply to a 
 15.36  pupil, public school board, school district, and the governing 
 16.1   body of a post-secondary institution, except as otherwise 
 16.2   provided. 
 16.3      Sec. 17.  Minnesota Statutes 1994, section 123.3514, 
 16.4   subdivision 6c, is amended to read: 
 16.5      Subd. 6c.  [FINANCIAL ARRANGEMENTS FOR COURSES PROVIDED 
 16.6   ACCORDING TO AGREEMENTS.] (a) The agreement between a public 
 16.7   school board and the governing body of a public post-secondary 
 16.8   system or private post-secondary institution shall set forth the 
 16.9   payment amounts and arrangements, if any, from the public school 
 16.10  board to the post-secondary institution.  No payments shall be 
 16.11  made by the department of education according to subdivision 6 
 16.12  or 6b.  For the purpose of computing state aids for a school 
 16.13  district, a pupil enrolled according to subdivision 4e shall be 
 16.14  counted in the average daily membership of the school district 
 16.15  as though the pupil were enrolled in a secondary course that is 
 16.16  not offered in connection with an agreement.  Nothing in this 
 16.17  subdivision shall be construed to prohibit a public 
 16.18  post-secondary system or private post-secondary institution from 
 16.19  receiving additional state funding that may be available under 
 16.20  any other law.  
 16.21     (b) If a course is provided under subdivision 4e, offered 
 16.22  at a secondary school, and taught by a secondary teacher, the 
 16.23  post-secondary system or institution must not require a payment 
 16.24  from the school board that exceeds the cost to the 
 16.25  post-secondary institution that is directly attributable to 
 16.26  providing that course. 
 16.27     Sec. 18.  Minnesota Statutes 1994, section 123.3514, 
 16.28  subdivision 8, is amended to read: 
 16.29     Subd. 8.  [TRANSPORTATION.] A parent or guardian of a pupil 
 16.30  enrolled in a course for secondary credit may apply to the 
 16.31  pupil's district of residence for reimbursement for transporting 
 16.32  the pupil between the secondary school in which the pupil is 
 16.33  enrolled or the pupil's home and the post-secondary institution 
 16.34  that the pupil attends.  The commissioner shall establish 
 16.35  guidelines for providing state aid to districts to reimburse the 
 16.36  parent or guardian for the necessary transportation costs, which 
 17.1   shall be based on financial need.  The reimbursement may not 
 17.2   exceed the pupil's actual cost of transportation or 15 cents per 
 17.3   mile traveled, whichever is less.  Reimbursement may not be paid 
 17.4   for more than 250 miles per week.  However, if the nearest 
 17.5   post-secondary institution is more than 25 miles from the 
 17.6   pupil's resident secondary school, the weekly reimbursement may 
 17.7   not exceed the reimbursement rate per mile times the actual 
 17.8   distance between the secondary school or the pupil's home and 
 17.9   the nearest post-secondary institution times ten.  The state 
 17.10  shall pay aid to the district according to the guidelines 
 17.11  established under this subdivision.  Chapter 14 does not apply 
 17.12  to the guidelines. 
 17.13     Sec. 19.  Minnesota Statutes 1994, section 123.39, 
 17.14  subdivision 1, is amended to read: 
 17.15     Subdivision 1.  The board may provide for the 
 17.16  transportation of pupils to and from school and for any other 
 17.17  purpose for which aid is authorized under section 124.223 or for 
 17.18  which levies are authorized under sections 124.226, 124.2716, 
 17.19  124.91, 124.912, 124.914, 124.916, 124.918, and 136C.411.  The 
 17.20  board may also provide for the transportation of pupils to 
 17.21  schools in other districts for grades and departments not 
 17.22  maintained in the district, including high school, at the 
 17.23  expense of the district, when funds are available therefor and 
 17.24  if agreeable to the district to which it is proposed to 
 17.25  transport the pupils, for the whole or a part of the school 
 17.26  year, as it may deem advisable, and subject to its rules.  In 
 17.27  any school district, the board shall may arrange for the 
 17.28  attendance of all pupils living two miles or more from the 
 17.29  school, except pupils whose transportation privileges have been 
 17.30  revoked under section 123.805, subdivision 1, clause (6), or 
 17.31  123.7991, paragraph (b), through suitable provision for 
 17.32  transportation or through the boarding and rooming of the pupils 
 17.33  who may be more economically and conveniently provided for by 
 17.34  that means.  The board shall provide transportation to and from 
 17.35  the home of a child with a disability not yet enrolled in 
 17.36  kindergarten when special instruction and services under 
 18.1   sections 120.17 and 120.1701 are provided in a location other 
 18.2   than in the child's home.  When transportation is provided, 
 18.3   scheduling of routes, establishment of the location of bus 
 18.4   stops, manner and method of transportation, control and 
 18.5   discipline of school children and any other matter relating 
 18.6   thereto shall be within the sole discretion, control, and 
 18.7   management of the school board.  The district may provide for 
 18.8   the transportation of pupils or expend a reasonable amount for 
 18.9   room and board of pupils whose attendance at school can more 
 18.10  economically and conveniently be provided for by that means or 
 18.11  who attend school in a building rented or leased by a district 
 18.12  within the confines of an adjacent district. 
 18.13     Sec. 20.  Minnesota Statutes 1994, section 123.39, 
 18.14  subdivision 6, is amended to read: 
 18.15     Subd. 6.  For the purposes of this subdivision, a 
 18.16  "nonresident pupil" is a pupil who resides in one district, 
 18.17  defined as the "resident district" and attends school in another 
 18.18  district, defined as the "nonresident district." 
 18.19     A nonresident district may transport a nonresident pupil 
 18.20  within its borders.  A nonresident district may not transport a 
 18.21  nonresident pupil on a school district owned or contractor 
 18.22  operated school bus within the pupil's resident district without 
 18.23  the approval of the resident district under section 120.062. 
 18.24     The parent or guardian of a nonresident pupil attending a 
 18.25  nonresident district under section 120.062 may submit a written 
 18.26  request to the resident district asking that the resident 
 18.27  district allow the nonresident district to provide 
 18.28  transportation for the pupil within the pupil's resident 
 18.29  district.  The resident district must approve or disapprove the 
 18.30  request, in writing, within 30 days.  The parent or guardian may 
 18.31  appeal the refusal of the resident district to the commissioner 
 18.32  of education.  The commissioner must act on the appeal within 30 
 18.33  days.  When a district decides to transport a nonresident pupil 
 18.34  within the pupil's resident district, the nonresident district 
 18.35  shall notify the pupil's resident district in writing that the 
 18.36  nonresident district shall be providing transportation for the 
 19.1   pupil within the pupil's resident district. 
 19.2      Sec. 21.  Minnesota Statutes 1994, section 123.70, 
 19.3   subdivision 8, is amended to read: 
 19.4      Subd. 8.  The administrator or other person having general 
 19.5   control and supervision of the elementary or secondary school 
 19.6   shall file a report with the commissioner of education on all 
 19.7   persons enrolled in the school, except that the superintendent 
 19.8   of each school district shall file a report with the 
 19.9   commissioner of education for all persons within the district 
 19.10  receiving instruction in a home school in compliance with 
 19.11  sections 120.101 and 120.102.  The parent of persons receiving 
 19.12  instruction in a home school shall submit the statements as 
 19.13  required by subdivisions 1, 2, 3, and 4 to the superintendent of 
 19.14  the school district in which the person resides by October 1 of 
 19.15  each school year.  The school report shall be prepared on forms 
 19.16  developed jointly by the commissioner of health and the 
 19.17  commissioner of education and be distributed to the local school 
 19.18  districts by the commissioner of health and shall state the 
 19.19  number of persons attending the school, the number of persons 
 19.20  who have not been immunized according to subdivision 1 or 2, and 
 19.21  the number of persons who received an exemption under 
 19.22  subdivision 3, clause (c) or (d).  The school report shall be 
 19.23  filed with the commissioner of education within 60 days of the 
 19.24  commencement of each new school term.  Upon request, a district 
 19.25  shall be given a 60-day extension for filing the school report.  
 19.26  The commissioner of education shall forward the report, or a 
 19.27  copy thereof, to the commissioner of health who shall provide 
 19.28  summary reports to boards of health as defined in section 
 19.29  145A.02, subdivision 2.  The administrator or other person 
 19.30  having general control and supervision of the child care 
 19.31  facility shall file a report with the commissioner of human 
 19.32  services on all persons enrolled in the child care facility.  
 19.33  The child care facility report must be prepared on forms 
 19.34  developed jointly by the commissioner of health and the 
 19.35  commissioner of human services and be distributed to child care 
 19.36  facilities by the commissioner of health and must state the 
 20.1   number of persons enrolled in the facility, the number of 
 20.2   persons with no immunizations, the number of persons who 
 20.3   received an exemption under subdivision 3, clause (c) or (d), 
 20.4   and the number of persons with partial or full immunization 
 20.5   histories.  The child care facility report shall be filed with 
 20.6   the commissioner of human services by November 1 of each year.  
 20.7   The commissioner of human services shall forward the report, or 
 20.8   a copy thereof, to the commissioner of health who shall provide 
 20.9   summary reports to boards of health as defined in section 
 20.10  145A.02, subdivision 2.  The report required by this subdivision 
 20.11  is not required of a family child care or group family child 
 20.12  care facility, for prekindergarten children enrolled in any 
 20.13  elementary or secondary school provided services according to 
 20.14  section 120.17, subdivision 2, nor for child care facilities in 
 20.15  which at least 75 percent of children in the facility 
 20.16  participate on a one-time only or occasional basis to a maximum 
 20.17  of 45 hours per child, per month.  
 20.18     Sec. 22.  Minnesota Statutes 1994, section 123.76, is 
 20.19  amended to read: 
 20.20     123.76 [POLICY.] 
 20.21     In districts where the state provides aids for 
 20.22  transportation It is in the public interest to provide equality 
 20.23  of treatment in transporting school children of the state who 
 20.24  are required to attend elementary and secondary schools pursuant 
 20.25  to chapter 120, so that the health, welfare and safety of such 
 20.26  children, while using the public highways of the state, shall be 
 20.27  protected.  
 20.28     School children attending any schools, complying with 
 20.29  section 120.101, are therefore entitled to the same rights and 
 20.30  privileges relating to transportation.  
 20.31     Sec. 23.  Minnesota Statutes 1994, section 123.78, 
 20.32  subdivision 1, is amended to read: 
 20.33     Subdivision 1.  [GENERAL PROVISIONS.] A district eligible 
 20.34  to receive state aid for transportation under chapter 124 shall 
 20.35  provide equal transportation within the district for all school 
 20.36  children to any school when transportation is deemed necessary 
 21.1   by the school board because of distance or traffic condition in 
 21.2   like manner and form as provided in sections 123.39 and 124.223, 
 21.3   when applicable. 
 21.4      Sec. 24.  Minnesota Statutes 1994, section 123.78, 
 21.5   subdivision 2, is amended to read: 
 21.6      Subd. 2.  When transportation is provided, the scheduling 
 21.7   of routes, manner and method of transportation, control and 
 21.8   discipline of school children and any other matter relating 
 21.9   thereto shall be within the sole discretion, control and 
 21.10  management of the school board.  A nonpublic school and the 
 21.11  school district in which it is located shall jointly determine 
 21.12  the attendance boundaries.  If there is a dispute, either party 
 21.13  may appeal to the commissioner. 
 21.14     Sec. 25.  Minnesota Statutes 1994, section 123.78, 
 21.15  subdivision 3, is amended to read: 
 21.16     Subd. 3.  [RULES.] The state board of education may amend 
 21.17  rules relating to equal transportation.  The department, 
 21.18  together with the council under section 123.935, subdivision 7, 
 21.19  shall determine uniform guidelines that districts shall use in 
 21.20  reimbursing nonpublic schools or parents for transportation 
 21.21  services. 
 21.22     Sec. 26.  Minnesota Statutes 1994, section 123.79, 
 21.23  subdivision 1, is amended to read: 
 21.24     Subdivision 1.  Such state aids as may become are made 
 21.25  available or appropriated shall be governed by section 124.225, 
 21.26  be paid to the school district entitled thereto for the equal 
 21.27  benefit of all school children, and be disbursed in such manner 
 21.28  as determined by the board. 
 21.29     Sec. 27.  Minnesota Statutes 1994, section 123.79, is 
 21.30  amended by adding a subdivision to read: 
 21.31     Subd. 3.  [REIMBURSEMENT FOR TRANSPORTATION.] (a) For 
 21.32  1996-97 and later school years, the state shall pay each 
 21.33  district for transportation services for nonpublic school pupils 
 21.34  according to sections 123.39, 123.76 to 123.78, 124.223, and 
 21.35  124.226, an amount equal to the sum of the amounts computed in 
 21.36  paragraphs (b) and (c).  This revenue does not limit the 
 22.1   obligation to transport pupils under sections 123.76 to 123.79. 
 22.2      (b) For regular and excess transportation according to 
 22.3   section 124.225, subdivision 1, paragraph (c), clauses (1) and 
 22.4   (3), an amount equal to the product of: 
 22.5      (1) the district's actual expenditure per pupil transported 
 22.6   in the regular and excess transportation categories during the 
 22.7   second preceding school year; times 
 22.8      (2) the number of nonpublic school pupils residing in the 
 22.9   district who receive regular or excess transportation service or 
 22.10  reimbursement for the current school year; times 
 22.11     (3) the ratio of the formula allowance pursuant to section 
 22.12  124A.22, subdivision 2, for the current school year to the 
 22.13  formula allowance pursuant to section 124A.22, subdivision 2, 
 22.14  for the second preceding school year. 
 22.15     (c) For nonregular transportation according to section 
 22.16  124.225, subdivision 1, paragraph (c), clause (2), and late 
 22.17  activity transportation according to section 124.226, 
 22.18  subdivision 9, an amount equal to the product of: 
 22.19     (1) the district's actual expenditure for nonregular and 
 22.20  late activity transportation for nonpublic school pupils during 
 22.21  the second preceding school year; times 
 22.22     (2) the ratio of the formula allowance pursuant to section 
 22.23  124A.22, subdivision 2, for the current school year to the 
 22.24  formula allowance pursuant to section 124A.22, subdivision 2, 
 22.25  for the second preceding school year. 
 22.26     Sec. 28.  Minnesota Statutes 1994, section 124.06, is 
 22.27  amended to read: 
 22.28     124.06 [INSUFFICIENT FUNDS TO PAY ORDERS.] 
 22.29     (a) In the event that a district or a cooperative unit 
 22.30  defined in section 123.35, subdivision 19b, has insufficient 
 22.31  funds to pay its usual lawful current obligations, subject to 
 22.32  section 471.69, the board may enter into agreements with banks 
 22.33  or any person to take its orders at any rate of interest not to 
 22.34  exceed six percent per annum.  Any order drawn after having been 
 22.35  presented to the treasurer for payment and not paid for want of 
 22.36  funds shall be endorsed by the treasurer by putting on the back 
 23.1   thereof the words "not paid for want of funds," giving the date 
 23.2   of endorsement and signed by the treasurer.  A record of such 
 23.3   presentment, nonpayment and endorsement shall be made by the 
 23.4   treasurer.  Every such order shall bear interest at the rate of 
 23.5   not to exceed six percent per annum from the date of such 
 23.6   presentment.  The treasurer shall serve a written notice upon 
 23.7   the payee or the payee's assignee, personally, or by mail, when 
 23.8   the treasurer is prepared to pay such orders; such notice may be 
 23.9   directed to the payee or the payee's assignee at the address 
 23.10  given in writing by such payee or assignee to such treasurer, at 
 23.11  any time prior to the service of such notice.  No order shall 
 23.12  draw any interest if such address is not given when the same is 
 23.13  unknown to the treasurer, and no order shall draw any interest 
 23.14  after the service of such notice.  
 23.15     (b) A district may enter, subject to section 471.69, into a 
 23.16  line of credit agreement with a financial institution.  The 
 23.17  amount of credit available must not exceed 95 percent of average 
 23.18  expenditure per month of operating expenditures in the previous 
 23.19  fiscal year.  Any amount advanced must be repaid no later than 
 23.20  45 days after the day of advancement. 
 23.21     Sec. 29.  Minnesota Statutes 1994, section 124.155, 
 23.22  subdivision 2, is amended to read: 
 23.23     Subd. 2.  [ADJUSTMENT TO AIDS.] (a) The amount specified in 
 23.24  subdivision 1 shall be used to adjust the following state aids 
 23.25  and credits in the order listed: 
 23.26     (1) general education aid authorized in sections 124A.23 
 23.27  and 124B.20; 
 23.28     (2) secondary vocational aid authorized in section 124.573; 
 23.29     (3) special education aid authorized in section 124.32; 
 23.30     (4) secondary vocational aid for children with a disability 
 23.31  authorized in section 124.574; 
 23.32     (5) aid for pupils of limited English proficiency 
 23.33  authorized in section 124.273; 
 23.34     (6) transportation aid authorized in section 124.225; 
 23.35     (7) community education programs aid authorized in section 
 23.36  124.2713; 
 24.1      (8) adult education aid authorized in section 124.26; 
 24.2      (9) early childhood family education aid authorized in 
 24.3   section 124.2711; 
 24.4      (10) capital expenditure aid authorized in sections 
 24.5   124.243, 124.244, and 124.83; 
 24.6      (11) school district cooperation aid authorized in section 
 24.7   124.2727; 
 24.8      (12) assurance of mastery aid according to section 124.311; 
 24.9      (13) homestead and agricultural credit aid, disparity 
 24.10  credit and aid, and changes to credits for prior year 
 24.11  adjustments according to section 273.1398, subdivisions 2, 3, 4, 
 24.12  and 7; 
 24.13     (14) attached machinery aid authorized in section 273.138, 
 24.14  subdivision 3; and 
 24.15     (15) alternative delivery aid authorized in section 
 24.16  124.322; 
 24.17     (16) special education equalization aid authorized in 
 24.18  section 124.321; 
 24.19     (17) special education excess cost aid authorized in 
 24.20  section 124.323; 
 24.21     (18) learning readiness aid authorized in section 124.2615; 
 24.22     (19) cooperation-combination aid authorized in section 
 24.23  124.2725; and 
 24.24     (20) district cooperation revenue aid authorized in section 
 24.25  124.2727. 
 24.26     (b) The commissioner of education shall schedule the timing 
 24.27  of the adjustments to state aids and credits specified in 
 24.28  subdivision 1, as close to the end of the fiscal year as 
 24.29  possible. 
 24.30     Sec. 30.  Minnesota Statutes 1994, section 124.17, 
 24.31  subdivision 1, is amended to read: 
 24.32     Subdivision 1.  [PUPIL UNIT.] Pupil units for each resident 
 24.33  pupil in average daily membership shall be counted according to 
 24.34  this subdivision.  
 24.35     (a) A prekindergarten pupil with a disability who is 
 24.36  enrolled for the entire fiscal year in a program approved by the 
 25.1   commissioner and has an individual education plan that requires 
 25.2   up to 437 hours of assessment and education services in the 
 25.3   fiscal year is counted as one-half of a pupil unit.  If the plan 
 25.4   requires more than 437 hours of assessment and education 
 25.5   services, the pupil is counted as the ratio of the number of 
 25.6   hours of assessment and education service to 875 825 with a 
 25.7   minimum of 0.28, but not more than one. 
 25.8      (b) A prekindergarten pupil with a disability who is 
 25.9   enrolled for less than the entire fiscal year in a program 
 25.10  approved by the commissioner is counted as the greater of: 
 25.11     (1) one-half times the ratio of the number of instructional 
 25.12  days from the date the pupil is enrolled to the date the pupil 
 25.13  withdraws to the number of instructional days in the school 
 25.14  year; or 
 25.15     (2) the ratio of the number of hours of assessment and 
 25.16  education service required in the fiscal year by the pupil's 
 25.17  individual education program plan to 875, but not more than one. 
 25.18     (c) A prekindergarten pupil who is assessed but determined 
 25.19  not to be handicapped is counted as the ratio of the number of 
 25.20  hours of assessment service to 875 825.  
 25.21     (d) (c) A kindergarten pupil with a disability who is 
 25.22  enrolled in a program approved by the commissioner is counted as 
 25.23  the ratio of the number of hours of assessment and education 
 25.24  services required in the fiscal year by the pupil's individual 
 25.25  education program plan to 875, but not more than one. 
 25.26     (e) (d) A kindergarten pupil who is not included in 
 25.27  paragraph (d) (c) is counted as .515 of a pupil unit for fiscal 
 25.28  year 1994 and .53 of a pupil unit for fiscal year 1995 and .55 
 25.29  of a pupil unit for fiscal year 1996 and thereafter. 
 25.30     (f) (e) A pupil who is in any of grades 1 to 6 is counted 
 25.31  as 1.03 pupil units for fiscal year 1994 and 1.06 pupil units 
 25.32  for fiscal year 1995 and 1.1 of a pupil unit for fiscal year 
 25.33  1996 and thereafter. 
 25.34     (g) (f) A pupil who is in any of grades 7 to 12 is counted 
 25.35  as 1.3 pupil units.  
 25.36     (h) (g) A pupil who is in the post-secondary enrollment 
 26.1   options program is counted as 1.3 pupil units. 
 26.2      Sec. 31.  Minnesota Statutes 1994, section 124.17, is 
 26.3   amended by adding a subdivision to read: 
 26.4      Subd. 1h.  [FUND BALANCE PUPIL UNITS.] Fund balance pupil 
 26.5   units must be computed separately for kindergarten pupils, 
 26.6   elementary pupils in grades 1 to 6, and secondary pupils in 
 26.7   grades 7 to 12.  Total fund balance pupil units means the sum of 
 26.8   kindergarten, elementary, and secondary fund balance pupil 
 26.9   units.  Fund balance pupil units for each category means the 
 26.10  number of resident pupil units in average daily membership, 
 26.11  including shared time pupil units, according to section 124A.02, 
 26.12  subdivision 20, plus 
 26.13     (1) pupils attending the district for which general 
 26.14  education aid adjustments are made according to section 
 26.15  124A.036, subdivision 5; minus 
 26.16     (2) the sum of the resident pupils attending other 
 26.17  districts for which general education aid adjustments are made 
 26.18  according to section 124A.036, subdivision 5, plus pupils for 
 26.19  whom payment is made according to section 126.22, subdivision 8, 
 26.20  or 126.23. 
 26.21     Sec. 32.  Minnesota Statutes 1994, section 124.17, 
 26.22  subdivision 2f, is amended to read: 
 26.23     Subd. 2f.  [PSEO PUPILS.] The average daily membership for 
 26.24  a student pupil participating in the post-secondary enrollment 
 26.25  options program equals the lesser of 
 26.26     (1) (a) 1.00, or 
 26.27     (2) (b) the greater of 
 26.28     (i) (1) .12, or 
 26.29     (ii) (2) the ratio of (i) the sum of the number of 
 26.30  instructional hours the student pupil is enrolled in the 
 26.31  secondary school to the product of the number of days required 
 26.32  in section 120.101, subdivision 5b, times the minimum length of 
 26.33  day required in Minnesota Rules, part 3500.1500, subpart 
 26.34  1. during quarters, trimesters, or semesters during which the 
 26.35  pupil participates in PSEO, and hours enrolled in the secondary 
 26.36  school during the remainder of the school year, to (ii) the 
 27.1   actual number of instructional days in the school year times the 
 27.2   length of day in the school. 
 27.3      Sec. 33.  Minnesota Statutes 1994, section 124.195, is 
 27.4   amended by adding a subdivision to read: 
 27.5      Subd. 3c.  [CASH FLOW WAIVER.] For any district exceeding 
 27.6   its expenditure limitations under section 121.917, and if 
 27.7   requested by the district, the commissioner of education, in 
 27.8   consultation with the commissioner of finance, and a school 
 27.9   district may negotiate a cash flow payment schedule under 
 27.10  subdivision 3 corresponding to the district's cash flow needs so 
 27.11  as to minimize the district's short-term borrowing needs. 
 27.12     Sec. 34.  Minnesota Statutes 1994, section 124.195, 
 27.13  subdivision 10, is amended to read: 
 27.14     Subd. 10.  [AID PAYMENT PERCENTAGE.] Except as provided in 
 27.15  subdivisions 8, 9, and 11, each fiscal year, all education aids 
 27.16  and credits in this chapter and chapters 121, 123, 124A, 124B, 
 27.17  125, 126, 134, and section 273.1392, shall be paid at 90 percent 
 27.18  for districts operating a program under section 121.585 for 
 27.19  grades 1 to 12 for all students in the district and 85 percent 
 27.20  for other districts of the estimated entitlement during the 
 27.21  fiscal year of the entitlement, unless a higher rate has been 
 27.22  established according to section 121.904, subdivision 4d.  
 27.23  Districts operating a program under section 121.585 for grades 1 
 27.24  to 12 for all students in the district shall receive 85 percent 
 27.25  of the estimated entitlement plus an additional amount of 
 27.26  general education aid equal to five percent of the estimated 
 27.27  entitlement.  For all districts, the final adjustment payment 
 27.28  according to subdivision 6, shall be the amount of the actual 
 27.29  entitlement, after adjustment for actual data, minus the 
 27.30  payments made during the fiscal year of the entitlement shall be 
 27.31  paid as the final adjustment payment according to subdivision 6. 
 27.32     Sec. 35.  Minnesota Statutes 1994, section 124.195, 
 27.33  subdivision 11, is amended to read: 
 27.34     Subd. 11.  [NONPUBLIC AIDS.] The state shall pay aid 
 27.35  according to sections 123.931 to 123.947, and 123.79 for pupils 
 27.36  attending nonpublic schools as follows: 
 28.1      (1) an advance payment by November 30 equal to 85 percent 
 28.2   of the estimated entitlement for the current fiscal year; and 
 28.3      (2) a final payment by October 31 of the following fiscal 
 28.4   year, adjusted for actual data.  
 28.5      If a payment advance to meet cash flow needs is requested 
 28.6   by a district and approved by the commissioner, the state shall 
 28.7   pay basic transportation aid according to section 124.225 123.79 
 28.8   attributable to pupils attending nonpublic schools by October 31.
 28.9      Sec. 36.  Minnesota Statutes 1994, section 124.214, 
 28.10  subdivision 2, is amended to read: 
 28.11     Subd. 2.  [ABATEMENTS.] Whenever by virtue of chapter 278, 
 28.12  sections 270.07, 375.192, or otherwise, the net tax capacity of 
 28.13  any school district for any taxable year is changed after the 
 28.14  taxes for that year have been spread by the county auditor and 
 28.15  the local tax rate as determined by the county auditor based 
 28.16  upon the original net tax capacity is applied upon the changed 
 28.17  net tax capacities, the county auditor shall, prior to February 
 28.18  1 of each year, certify to the commissioner of education the 
 28.19  amount of any resulting net revenue loss that accrued to the 
 28.20  school district during the preceding year.  Each year, the 
 28.21  commissioner shall pay an abatement adjustment to the district 
 28.22  in an amount calculated according to the provisions of this 
 28.23  subdivision.  This amount shall be deducted from the amount of 
 28.24  the levy authorized by section 124.912, subdivision 9.  The 
 28.25  amount of the abatement adjustment shall be the product of:  
 28.26     (1) the net revenue loss as certified by the county 
 28.27  auditor, times 
 28.28     (2) the ratio of:  
 28.29     (a) the sum of the amounts of the district's certified levy 
 28.30  in the preceding year according to the following:  
 28.31     (i) section 124A.23 if the district receives received 
 28.32  general education aid according to that section for the second 
 28.33  preceding year, or section 124B.20, if the education district of 
 28.34  which the district is a member receives general education aid 
 28.35  according to that section; 
 28.36     (ii) section 124.226, subdivisions 1 and 4, if the district 
 29.1   receives transportation aid according to section 124.225; 
 29.2      (iii) section 124.243, if the district receives capital 
 29.3   expenditure facilities aid according to that section; 
 29.4      (iv) section 124.244, if the district receives capital 
 29.5   expenditure equipment aid according to that section; 
 29.6      (v) section 124.83, if the district receives received 
 29.7   health and safety aid according to that section for the second 
 29.8   preceding year; 
 29.9      (vi) sections 124.2713, 124.2714, and 124.2715, if the 
 29.10  district receives received aid for community education programs 
 29.11  according to any of those sections for the second preceding 
 29.12  year; 
 29.13     (vii) section 124.2711, subdivision 2a, if the 
 29.14  district receives received early childhood family education aid 
 29.15  according to section 124.2711 for the second preceding year; 
 29.16     (viii) section 124.321, subdivision 3, if the district 
 29.17  receives received special education levy equalization aid 
 29.18  according to that section for the second preceding year; 
 29.19     (ix) section 124A.03, subdivision 1g, if the district 
 29.20  receives received referendum equalization aid according to that 
 29.21  section for the second preceding year; and 
 29.22     (x) section 124A.22, subdivision 4a, if the district 
 29.23  receives training and experience aid according to that section; 
 29.24     (b) to the total amount of the district's certified levy in 
 29.25  the preceding October, plus or minus auditor's adjustments. 
 29.26     Sec. 37.  Minnesota Statutes 1994, section 124.214, 
 29.27  subdivision 3, is amended to read: 
 29.28     Subd. 3.  [EXCESS TAX INCREMENT.] If a return of excess tax 
 29.29  increment is made to a school district pursuant to section 
 29.30  469.176, subdivision 2, or upon decertification of a tax 
 29.31  increment district, the school district's aid and levy 
 29.32  limitations must be adjusted for the fiscal year in which the 
 29.33  excess tax increment is paid under the provisions of this 
 29.34  subdivision. 
 29.35     (a) An amount must be subtracted from the school district's 
 29.36  aid for the current fiscal year equal to the product of: 
 30.1      (1) the amount of the payment of excess tax increment to 
 30.2   the school district, times 
 30.3      (2) the ratio of: 
 30.4      (A) the sum of the amounts of the school district's 
 30.5   certified levy for the fiscal year in which the excess tax 
 30.6   increment is paid according to the following: 
 30.7      (i) section 124A.23, if the district receives received 
 30.8   general education aid according to that section, or section 
 30.9   124B.20, if the education district of which the district is a 
 30.10  member receives general education aid according to that 
 30.11  section for the second preceding year; 
 30.12     (ii) section 124.226, subdivisions 1 and 4, if the school 
 30.13  district receives transportation aid according to section 
 30.14  124.225; 
 30.15     (iii) section 124.243, if the district receives capital 
 30.16  expenditure facilities aid according to that section; 
 30.17     (iv) section 124.244, if the district receives capital 
 30.18  expenditure equipment aid according to that section; 
 30.19     (v) section 124.83, if the district receives received 
 30.20  health and safety aid according to that section for the second 
 30.21  preceding year; 
 30.22     (vi) sections 124.2713, 124.2714, and 124.2715, if the 
 30.23  district receives received aid for community education programs 
 30.24  according to any of those sections for the second preceding 
 30.25  year; 
 30.26     (vii) section 124.2711, subdivision 2a, if the 
 30.27  district receives received early childhood family education aid 
 30.28  according to section 124.2711 for the second preceding year; 
 30.29     (viii) section 124.321, subdivision 3, if the district 
 30.30  receives received special education levy equalization aid 
 30.31  according to that section for the second preceding year; 
 30.32     (ix) section 124A.03, subdivision 1g, if the district 
 30.33  receives received referendum equalization aid according to that 
 30.34  section for the second preceding year; and 
 30.35     (x) section 124A.22, subdivision 4a, if the district 
 30.36  receives training and experience aid according to that section; 
 31.1      (B) to the total amount of the school district's certified 
 31.2   levy for the fiscal year, plus or minus auditor's adjustments. 
 31.3      (b) An amount must be subtracted from the school district's 
 31.4   levy limitation for the next levy certified equal to the 
 31.5   difference between: 
 31.6      (1) the amount of the distribution of excess increment, and 
 31.7      (2) the amount subtracted from aid pursuant to clause (a). 
 31.8      If the aid and levy reductions required by this subdivision 
 31.9   cannot be made to the aid for the fiscal year specified or to 
 31.10  the levy specified, the reductions must be made from aid for 
 31.11  subsequent fiscal years, and from subsequent levies.  The school 
 31.12  district shall use the payment of excess tax increment to 
 31.13  replace the aid and levy revenue reduced under this subdivision. 
 31.14     This subdivision applies only to the total amount of excess 
 31.15  increments received by a school district for a calendar year 
 31.16  that exceeds $25,000. 
 31.17     Sec. 38.  Minnesota Statutes 1994, section 124.223, is 
 31.18  amended to read: 
 31.19     124.223 [TRANSPORTATION AID AUTHORIZATION.] 
 31.20     Subdivision 1.  [TO AND FROM SCHOOL; BETWEEN SCHOOLS.] 
 31.21  (a) State transportation aid is authorized for School districts 
 31.22  may provide transportation or board of resident elementary 
 31.23  pupils who reside one mile or more from the public schools which 
 31.24  they could attend; transportation or board of resident secondary 
 31.25  pupils who reside two miles or more from the public schools 
 31.26  which they could attend; transportation to and from schools the 
 31.27  resident pupils attend according to a program approved by the 
 31.28  commissioner of education, or between the schools the resident 
 31.29  pupils attend for instructional classes, or to and from service 
 31.30  learning programs; transportation of resident elementary pupils 
 31.31  who reside one mile or more from a nonpublic school actually 
 31.32  attended; transportation of resident secondary pupils who reside 
 31.33  two miles or more from a nonpublic school actually attended; but 
 31.34  with respect to transportation of pupils to nonpublic schools 
 31.35  actually attended, only to the extent permitted by sections 
 31.36  123.76 to 123.79; transportation of resident pupils to and from 
 32.1   language immersion programs; transportation of a pupil who is a 
 32.2   custodial parent and that pupil's child between the pupil's home 
 32.3   and the child care provider and between the provider and the 
 32.4   school, if the home and provider are within the attendance area 
 32.5   of the school.  State transportation aid is not authorized for 
 32.6   Late transportation home from school for pupils involved in 
 32.7   after school activities.  State transportation aid is not 
 32.8   authorized for summer program transportation except as provided 
 32.9   in subdivision 8. 
 32.10     (b) For the purposes of this subdivision, a district may 
 32.11  designate a licensed day care facility, respite care facility, 
 32.12  the residence of a relative, or the residence of a person chosen 
 32.13  by the pupil's parent or guardian as the home of a pupil for 
 32.14  part or all of the day, if requested by the pupil's parent or 
 32.15  guardian and if that facility or residence is within the 
 32.16  attendance area of the school the pupil attends. 
 32.17     (c) State transportation aid is authorized for School 
 32.18  districts may provide transportation to and from school of an 
 32.19  elementary pupil who moves during the school year within an area 
 32.20  designated by the district as a mobility zone, but only for the 
 32.21  remainder of the school year.  The attendance areas of schools 
 32.22  in a mobility zone must be contiguous.  To be in a mobility 
 32.23  zone, a school must meet both of the following requirements: 
 32.24     (1) more than 50 percent of the pupils enrolled in the 
 32.25  school are eligible for free or reduced school lunch; and 
 32.26     (2) the pupil withdrawal rate for the last year is more 
 32.27  than 12 percent. 
 32.28     (d) A pupil withdrawal rate is determined by dividing: 
 32.29     (1) the sum of the number of pupils who withdraw from the 
 32.30  school, during the school year, and the number of pupils 
 32.31  enrolled in the school as a result of transportation provided 
 32.32  under this paragraph, by 
 32.33     (2) the number of pupils enrolled in the school. 
 32.34     (e) The district may establish eligibility requirements for 
 32.35  individual pupils to receive transportation in the mobility zone.
 32.36     Subd. 2.  [OUTSIDE DISTRICT.] State transportation aid is 
 33.1   authorized for School districts may provide transportation to 
 33.2   and from or board and lodging in another district, of resident 
 33.3   pupils of a district without a secondary school.  The pupils may 
 33.4   attend a classified secondary school in another district 
 33.5   and shall may receive board and lodging in or transportation to 
 33.6   and from a district having a classified secondary school at the 
 33.7   expense of the district of the pupil's residence. 
 33.8      Subd. 3.  [SECONDARY VOCATIONAL CENTERS.] State 
 33.9   transportation aid is authorized for School districts may 
 33.10  provide transportation to and from a commissioner approved 
 33.11  secondary vocational center for secondary vocational classes for 
 33.12  resident pupils of any of the districts who are members of or 
 33.13  participating in programs at that center. 
 33.14     Subd. 4.  [PUPILS WITH DISABILITIES.] State transportation 
 33.15  aid is authorized for School districts may provide 
 33.16  transportation or board and lodging of a pupil with a disability 
 33.17  when that pupil cannot be transported on a regular school bus, 
 33.18  the conveying of pupils with a disability between home or a 
 33.19  respite care facility and school and within the school plant, 
 33.20  necessary transportation of pupils with a disability from home 
 33.21  or from school to other buildings, including centers such as 
 33.22  developmental achievement centers, hospitals and treatment 
 33.23  centers where special instruction or services required by 
 33.24  sections 120.17 and 120.1701 are provided, within or outside the 
 33.25  district where services are provided, and necessary 
 33.26  transportation for resident pupils with a disability required by 
 33.27  sections 120.17, subdivision 4a, and 120.1701.  Transportation 
 33.28  of pupils with a disability between home or a respite care 
 33.29  facility and school shall not be subject to any distance 
 33.30  requirement for children not yet enrolled in kindergarten or to 
 33.31  the requirement in subdivision 1 that elementary pupils reside 
 33.32  at least one mile from school and secondary pupils reside at 
 33.33  least two miles from school in order for the transportation to 
 33.34  qualify for aid. 
 33.35     Subd. 5.  [BOARD AND LODGING; NONRESIDENTS WITH 
 33.36  DISABILITIES.] State transportation aid is authorized for School 
 34.1   districts may provide, when necessary, board and lodging for 
 34.2   nonresident pupils with a disability in a district maintaining 
 34.3   special classes. 
 34.4      Subd. 6.  [SHARED TIME.] State transportation aid is 
 34.5   authorized for School districts may provide transportation from 
 34.6   one educational facility to another within the district for 
 34.7   resident pupils enrolled on a shared time basis in educational 
 34.8   programs, and necessary transportation required by sections 
 34.9   120.17, subdivision 9, and 120.1701 for resident pupils with a 
 34.10  disability who are provided special instruction and services on 
 34.11  a shared time basis. 
 34.12     Subd. 7.  [FARIBAULT STATE ACADEMIES.] State transportation 
 34.13  aid is authorized for School districts may provide 
 34.14  transportation for residents resident pupils with disabilities 
 34.15  to and from the Minnesota state academy for the deaf or the 
 34.16  Minnesota state academy for the blind board and lodging 
 34.17  facilities when the pupil is boarded and lodged for educational 
 34.18  purposes. 
 34.19     Subd. 8.  [SUMMER INSTRUCTIONAL PROGRAMS.] State 
 34.20  transportation aid is authorized for School districts may 
 34.21  provide services described in subdivisions 1 to 7, 9, and 10 
 34.22  when provided for pupils with a disability in conjunction with a 
 34.23  summer program that meets the requirements of section 124A.27, 
 34.24  subdivision 9.  State transportation aid is authorized 
 34.25  for School districts may provide services described in 
 34.26  subdivision 1 when provided during the summer in conjunction 
 34.27  with a learning year program established under section 121.585. 
 34.28     Subd. 9.  [COOPERATIVE ACADEMIC AND VOCATIONAL.] State 
 34.29  transportation aid is authorized for School districts may 
 34.30  provide transportation to, from or between educational 
 34.31  facilities located in any of two or more school districts 
 34.32  jointly offering academic classes or secondary vocational 
 34.33  classes not provided at a secondary vocational center for 
 34.34  resident pupils of any of these districts. 
 34.35     Subd. 10.  [NONPUBLIC SUPPORT SERVICES.] State 
 34.36  transportation aid is authorized for School districts may 
 35.1   provide necessary transportation within district boundaries 
 35.2   between a nonpublic school and a public school or a neutral site 
 35.3   for nonpublic school pupils who are provided pupil support 
 35.4   services pursuant to section 123.935. 
 35.5      Subd. 11.  [RULES.] The state board of education may amend 
 35.6   rules relating to transportation aid and data. 
 35.7      Sec. 39.  Minnesota Statutes 1994, section 124.225, 
 35.8   subdivision 1, is amended to read: 
 35.9      Subdivision 1.  [DEFINITIONS.] For purposes of this 
 35.10  section, the terms defined in this subdivision have the meanings 
 35.11  given to them. 
 35.12     (a) "FTE" means a full-time equivalent pupil whose 
 35.13  transportation is authorized for aid purposes by section 124.223.
 35.14     (b) "Authorized cost for regular transportation" means the 
 35.15  sum of: 
 35.16     (1) all expenditures for transportation in the regular 
 35.17  category, as defined in paragraph (c), clause (1), for which aid 
 35.18  is authorized in section 124.223, plus 
 35.19     (2) an amount equal to one year's depreciation on the 
 35.20  district's school bus fleet and mobile units computed on a 
 35.21  straight line basis at the rate of 15 percent per year for 
 35.22  districts operating a program under section 121.585 for grades 1 
 35.23  to 12 for all students in the district and 12-1/2 percent per 
 35.24  year for other districts of the cost of the fleet, plus 
 35.25     (3) an amount equal to one year's depreciation on district 
 35.26  school buses reconditioned by the department of corrections 
 35.27  computed on a straight line basis at the rate of 33-1/3 percent 
 35.28  per year of the cost to the district of the reconditioning, plus 
 35.29     (4) an amount equal to one year's depreciation on the 
 35.30  district's type three school buses, as defined in section 
 35.31  169.01, subdivision 6, clause (5), which must be used a majority 
 35.32  of the time for the purposes in sections 124.223 and 124.226, 
 35.33  subdivisions 5, 8, and 9, and were purchased after July 1, 1982, 
 35.34  for authorized transportation of pupils, with the prior approval 
 35.35  of the commissioner, computed on a straight line basis at the 
 35.36  rate of 20 percent per year of the cost of the type three school 
 36.1   buses.  
 36.2      (c) "Transportation category" means a category of 
 36.3   transportation service provided to pupils as follows:  
 36.4      (1) Regular transportation is transportation services 
 36.5   provided during the regular school year under section 124.223, 
 36.6   subdivisions 1 and 2, excluding the following transportation 
 36.7   services provided under section 124.223, subdivision 1:  
 36.8   transportation between schools; transportation to and from 
 36.9   service learning programs; noon transportation to and from 
 36.10  school for kindergarten pupils attending half-day sessions; 
 36.11  transportation of pupils to and from schools located outside 
 36.12  their normal attendance areas under the provisions of a plan for 
 36.13  desegregation mandated by the state board of education or under 
 36.14  court order; and transportation of elementary pupils to and from 
 36.15  school within a mobility zone. 
 36.16     (2) Nonregular transportation is transportation services 
 36.17  provided under section 124.223, subdivision 1, that are excluded 
 36.18  from the regular category and transportation services provided 
 36.19  under section 124.223, subdivisions 3, 4, 5, 6, 7, 8, 9, and 10. 
 36.20     (3) Excess transportation is transportation to and from 
 36.21  school during the regular school year for secondary pupils 
 36.22  residing at least one mile but less than two miles from the 
 36.23  public school they could attend or from the nonpublic school 
 36.24  actually attended, and transportation to and from school for 
 36.25  pupils residing less than one mile from school who are 
 36.26  transported because of extraordinary traffic, drug, or crime 
 36.27  hazards. 
 36.28     (4) Desegregation transportation is transportation during 
 36.29  the regular school year of pupils to and from schools located 
 36.30  outside their normal attendance areas under a plan for 
 36.31  desegregation mandated by the state board or under court order.  
 36.32     (5) Handicapped transportation is transportation provided 
 36.33  under section 124.223, subdivision 4, for pupils with a 
 36.34  disability between home or a respite care facility and school or 
 36.35  other buildings where special instruction required by sections 
 36.36  120.17 and 120.1701 is provided. 
 37.1      (d) "Mobile unit" means a vehicle or trailer designed to 
 37.2   provide facilities for educational programs and services, 
 37.3   including diagnostic testing, guidance and counseling services, 
 37.4   and health services.  A mobile unit located off nonpublic school 
 37.5   premises is a neutral site as defined in section 123.932, 
 37.6   subdivision 9. 
 37.7      (e) "Current year" means the school year for which aid will 
 37.8   be paid.  
 37.9      (f) "Base year" means the second school year preceding the 
 37.10  school year for which aid will be paid.  
 37.11     (g) "Base cost" means the ratio of: 
 37.12     (1) the sum of the authorized cost in the base year for 
 37.13  regular transportation as defined in paragraph (b) plus the 
 37.14  actual cost in the base year for excess transportation as 
 37.15  defined in paragraph (c); 
 37.16     (2) to the sum of the number of weighted FTE's in the 
 37.17  regular and excess categories in the base year. 
 37.18     (h) "Pupil weighting factor" for the excess transportation 
 37.19  category for a school district means the lesser of one, or the 
 37.20  result of the following computation: 
 37.21     (1) Divide the square mile area of the school district by 
 37.22  the number of FTE's in the regular and excess categories in the 
 37.23  base year. 
 37.24     (2) Raise the result in clause (1) to the one-fifth power. 
 37.25     (3) Divide four-tenths by the result in clause (2). 
 37.26     The pupil weighting factor for the regular transportation 
 37.27  category is one.  
 37.28     (i) "Weighted FTE's"  means the number of FTE's in each 
 37.29  transportation category multiplied by the pupil weighting factor 
 37.30  for that category. 
 37.31     (j) "Sparsity index" for a school district means the 
 37.32  greater of .005 or the ratio of the square mile area of the 
 37.33  school district to the sum of the number of weighted FTE's by 
 37.34  the district in the regular and excess categories in the base 
 37.35  year. 
 37.36     (k) "Density index" for a school district means the greater 
 38.1   of one or the result obtained by subtracting the product of the 
 38.2   district's sparsity index times 20 from two. 
 38.3      (l) "Contract transportation index" for a school district 
 38.4   means the greater of one or the result of the following 
 38.5   computation: 
 38.6      (1) Multiply the district's sparsity index by 20. 
 38.7      (2) Select the lesser of one or the result in clause (1). 
 38.8      (3) Multiply the district's percentage of regular FTE's in 
 38.9   the current year using vehicles that are not owned by the school 
 38.10  district by the result in clause (2). 
 38.11     (m) "Adjusted predicted base cost" means the predicted base 
 38.12  cost as computed in subdivision 3a as adjusted under subdivision 
 38.13  7a. 
 38.14     (n) "Regular transportation allowance" means the adjusted 
 38.15  predicted base cost, inflated and adjusted under subdivision 7b. 
 38.16     Sec. 40.  Minnesota Statutes 1994, section 124.225, 
 38.17  subdivision 3a, is amended to read: 
 38.18     Subd. 3a.  [PREDICTED BASE COST.] A district's predicted 
 38.19  base cost equals the result of the following computation:  
 38.20     (a) Multiply the transportation formula allowance by the 
 38.21  district's sparsity index raised to the one-fourth power.  The 
 38.22  transportation formula allowance is $447 $477 for the 
 38.23  1991-1992 1993-1994 base year and $463 for the 1992-1993 base 
 38.24  year.  
 38.25     (b) Multiply the result in paragraph (a) by the district's 
 38.26  density index raised to the 35/100 1/2 power.  
 38.27     (c) Multiply the result in paragraph (b) by the district's 
 38.28  contract transportation index raised to the 1/20 power.  
 38.29     Sec. 41.  Minnesota Statutes 1994, section 124.225, 
 38.30  subdivision 7b, is amended to read: 
 38.31     Subd. 7b.  [INFLATION FACTORS.] (a) The adjusted predicted 
 38.32  base cost determined for a district under subdivision 7a for the 
 38.33  base year must be increased by 2.35 zero percent to determine 
 38.34  the district's regular transportation allowance for the 
 38.35  1993-1994 1995-1996 school year and by 3.425 percent to 
 38.36  determine the district's regular transportation allowance for 
 39.1   the 1994-1995 school year, but. 
 39.2      (b) Notwithstanding paragraph (a), the regular 
 39.3   transportation allowance for a district for the 1995-1996 school 
 39.4   year cannot be less than the district's minimum regular 
 39.5   transportation allowance according to Minnesota Statutes 1990, 
 39.6   section 124.225, subdivision 1, paragraph (t). 
 39.7      Sec. 42.  Minnesota Statutes 1994, section 124.225, 
 39.8   subdivision 7d, is amended to read: 
 39.9      Subd. 7d.  [TRANSPORTATION REVENUE.] Transportation revenue 
 39.10  for each district equals the sum of the district's regular 
 39.11  transportation revenue and the district's nonregular 
 39.12  transportation revenue. 
 39.13     (a) The regular transportation revenue for each district 
 39.14  equals the district's regular transportation allowance according 
 39.15  to subdivision 7b times the sum of the number of FTE's by the 
 39.16  district in the regular, desegregation, and handicapped 
 39.17  categories in the current school year. 
 39.18     (b) For the 1992-1993 and later school years 1995-1996 
 39.19  school year, the nonregular transportation revenue for each 
 39.20  district equals the lesser of the district's actual cost in the 
 39.21  current school year for nonregular transportation services or 
 39.22  the product of the district's actual cost in the base year for 
 39.23  nonregular transportation services as defined for the current 
 39.24  year in subdivision 1, paragraph (c), times the ratio of the 
 39.25  district's average daily membership for the current year to the 
 39.26  district's average daily membership for the base year according 
 39.27  to section 124.17, subdivision 2, times the nonregular 
 39.28  transportation inflation factor for the current year, minus the 
 39.29  amount of regular transportation revenue attributable to FTE's 
 39.30  in the desegregation and handicapped categories in the current 
 39.31  school year, plus the excess nonregular transportation revenue 
 39.32  for the current year according to subdivision 7e.  The 
 39.33  nonregular transportation inflation factor is 1.0435 1.0 for the 
 39.34  1993-1994 1995-1996 school year and 1.03425 for the 1994-1995 
 39.35  school year.  
 39.36     Sec. 43.  Minnesota Statutes 1994, section 124.225, 
 40.1   subdivision 7f, is amended to read: 
 40.2      Subd. 7f.  [RESERVED REVENUE FOR TRANSPORTATION SAFETY.] A 
 40.3   district shall reserve an amount equal to the greater of $1,000 
 40.4   or one percent of the sum of the district's regular 
 40.5   transportation revenue according to subdivision 7d, paragraph 
 40.6   (a), and nonregular transportation revenue according to 
 40.7   subdivision 7d, paragraph (b), $3 times the number of pupil 
 40.8   units served in the district for that school year to provide 
 40.9   student transportation safety programs under section 
 40.10  123.799.  This revenue may only be used if the district complies 
 40.11  with the reporting requirements of section 123.7991, 123.805, 
 40.12  169.452, 169.4582, or 171.321, subdivision 5. 
 40.13     Sec. 44.  Minnesota Statutes 1994, section 124.225, 
 40.14  subdivision 8a, is amended to read: 
 40.15     Subd. 8a.  [TRANSPORTATION AID.] (a) A district's 
 40.16  transportation aid equals the product of: 
 40.17     (1) the difference between the transportation revenue and 
 40.18  the sum of: 
 40.19     (i) the maximum basic transportation levy for that school 
 40.20  year under section 275.125 124.226, subdivision 5 1, plus 
 40.21     (ii) the maximum nonregular transportation levy for that 
 40.22  school year under section 124.226, subdivision 4, plus 
 40.23     (iii) the contracted services aid reduction under 
 40.24  subdivision 8k, 
 40.25     (2) times the ratio of the sum of the actual amounts levied 
 40.26  under section 124.226, subdivisions 1 and 4, to the sum of the 
 40.27  permitted maximum levies under section 124.226, subdivisions 1 
 40.28  and 4. 
 40.29     (b) If the total appropriation for transportation aid for 
 40.30  any fiscal year is insufficient to pay all districts the full 
 40.31  amount of aid earned, the department of education shall reduce 
 40.32  each district's aid in proportion to the number of resident 
 40.33  pupils in average daily membership in the district to the state 
 40.34  total average daily membership, and shall reduce the 
 40.35  transportation levy of off-formula districts in the same 
 40.36  proportion. 
 41.1      Sec. 45.  Minnesota Statutes 1994, section 124.225, 
 41.2   subdivision 8l, is amended to read: 
 41.3      Subd. 8l.  [ALTERNATIVE ATTENDANCE PROGRAMS.] A district 
 41.4   that enrolls nonresident pupils in programs under sections 
 41.5   120.062, 120.075, 120.0751, 120.0752, 124C.45 to 124C.48, and 
 41.6   126.22, shall may provide authorized transportation to the pupil 
 41.7   within the attendance area for the school that the pupil 
 41.8   attends.  The state shall pay transportation aid attributable to 
 41.9   the pupil to the nonresident district according to this 
 41.10  section.  The resident district need not provide or pay for 
 41.11  transportation between the pupil's residence and the district's 
 41.12  border.  
 41.13     Sec. 46.  Minnesota Statutes 1994, section 124.225, 
 41.14  subdivision 9, is amended to read: 
 41.15     Subd. 9.  [DISTRICT REPORTS.] Each district shall report 
 41.16  data to the department as required by the department to 
 41.17  implement the transportation aid formula account for 
 41.18  transportation expenditures.  If a district's final 
 41.19  transportation aid payment is adjusted after the final aid 
 41.20  payment has been made to all districts, the adjustment shall be 
 41.21  made by increasing or decreasing the district's aid for the next 
 41.22  fiscal year.  
 41.23     Sec. 47.  Minnesota Statutes 1994, section 124.226, 
 41.24  subdivision 3, is amended to read: 
 41.25     Subd. 3.  [OFF-FORMULA ADJUSTMENT.] In a district if the 
 41.26  basic transportation levy under subdivision 1 attributable to 
 41.27  that fiscal year is more than the difference between (1) the 
 41.28  district's transportation revenue under section 124.225, 
 41.29  subdivision 7d, and (2) the sum of the district's maximum 
 41.30  nonregular levy under subdivision 4 and the district's 
 41.31  contracted services aid reduction under section 124.225, 
 41.32  subdivision 8k, and the amount of any reduction due to 
 41.33  insufficient appropriation under section 124.225, subdivision 
 41.34  8a, the district's transportation levy in the second year 
 41.35  following each fiscal year must be reduced by the difference 
 41.36  between the amount of the excess and the amount of the aid 
 42.1   reduction for the same fiscal year according to subdivision 3a. 
 42.2      Sec. 48.  Minnesota Statutes 1994, section 124.226, 
 42.3   subdivision 4, is amended to read: 
 42.4      Subd. 4.  [NONREGULAR TRANSPORTATION.] A school district 
 42.5   may also make a levy for unreimbursed nonregular transportation 
 42.6   costs pursuant to this subdivision.  
 42.7      (a) For the 1995-1996 school year, the amount of the levy 
 42.8   shall be the result of the following computation: 
 42.9      (a) (1) multiply 
 42.10     (1) (i) the amount of the district's nonregular 
 42.11  transportation revenue under section 124.225, subdivision 7d, 
 42.12  that is more than the product of $60 $65 times the district's 
 42.13  average daily membership, by 
 42.14     (2) (ii) 50 percent; 
 42.15     (b) (2) subtract the result in clause (a) (1) from the 
 42.16  district's total nonregular transportation revenue; 
 42.17     (c) (3) multiply the result in clause (b) (2) by the lesser 
 42.18  of one or the ratio of 
 42.19     (i) the quotient derived by dividing the adjusted net tax 
 42.20  capacity of the district for the year before the year the levy 
 42.21  is certified by the average daily membership in the district for 
 42.22  the school year to which the levy is attributable, to 
 42.23     (ii) $8,000. 
 42.24     Sec. 49.  Minnesota Statutes 1994, section 124.226, 
 42.25  subdivision 9, is amended to read: 
 42.26     Subd. 9.  [LATE ACTIVITY BUSES.] (a) For taxes payable in 
 42.27  1996, a school district may levy an amount equal to the lesser 
 42.28  of: 
 42.29     (1) the actual cost of late transportation home from 
 42.30  school, between schools within a district, or between schools in 
 42.31  one or more districts that have an agreement under sections 
 42.32  122.241 to 122.248, 122.535, 122.541, or 124.494, for pupils 
 42.33  involved in after school activities for the school year 
 42.34  beginning in the year the levy is certified; or 
 42.35     (2) two percent of the sum of the district's regular 
 42.36  transportation revenue and the district's nonregular 
 43.1   transportation revenue for that school year according to section 
 43.2   124.225, subdivision 7d. 
 43.3      (b) A district that levies under this section must provide 
 43.4   late transportation from school for students participating in 
 43.5   any academic-related activities provided by the district if 
 43.6   transportation is provided for students participating in 
 43.7   athletic activities. 
 43.8      (c) Notwithstanding section 121.904, 50 percent of the levy 
 43.9   certified for taxes payable in 1994, and for each year 
 43.10  thereafter the entire amount of this levy, shall be recognized 
 43.11  as revenue for the fiscal year in which the levy is certified. 
 43.12     Sec. 50.  Minnesota Statutes 1994, section 124.243, 
 43.13  subdivision 2, is amended to read: 
 43.14     Subd. 2.  [CAPITAL EXPENDITURE FACILITIES REVENUE.] (a) For 
 43.15  fiscal years 1994 and 1995, Capital expenditure facilities 
 43.16  previous formula revenue for a district equals $128 times its 
 43.17  actual pupil units for the school year. 
 43.18     (b) For fiscal years 1996 and later, capital expenditure 
 43.19  facilities revenue for a district equals $100 times the 
 43.20  district's maintenance cost index times its actual pupil units 
 43.21  for the school year. 
 43.22     (c) A district's capital expenditure facilities revenue for 
 43.23  a school year shall be reduced if the unreserved balance in the 
 43.24  capital expenditure facilities account on June 30 of the prior 
 43.25  school year exceeds $675 times the fund balance pupil units in 
 43.26  the prior year as defined in section 124A.26, subdivision 1.  If 
 43.27  a district's capital expenditure facilities revenue is reduced, 
 43.28  the reduction equals the lesser of (1) the amount that the 
 43.29  unreserved balance in the capital expenditure facilities account 
 43.30  on June 30 of the prior year exceeds $675 times the fund balance 
 43.31  pupil units in the prior year, or (2) the capital expenditure 
 43.32  facilities revenue for that year. 
 43.33     (d) For 1996 and later fiscal years, the previous formula 
 43.34  revenue equals the amount of revenue computed for the district 
 43.35  according to section 124.243 for fiscal year 1995. 
 43.36     (e) (c) Notwithstanding paragraph (b), for fiscal year 
 44.1   1996, the revenue for each district equals 25 percent of the 
 44.2   amount determined in paragraph (b) plus 75 percent of the 
 44.3   previous formula revenue. 
 44.4      (f) (d) Notwithstanding paragraph (b), for fiscal year 
 44.5   1997, the revenue for each district equals 50 percent of the 
 44.6   amount determined in paragraph (b) plus 50 percent of the 
 44.7   previous formula revenue. 
 44.8      (g) (e) Notwithstanding paragraph (b), for fiscal year 
 44.9   1998, the revenue for each district equals 75 percent of the 
 44.10  amount determined in paragraph (b) plus 25 percent of the 
 44.11  previous formula revenue. 
 44.12     (h) (f) The revenue in paragraph (b) for a district that 
 44.13  operates a program under section 121.585, is increased by an 
 44.14  amount equal to $15 times the number of actual pupil units at 
 44.15  the site where the program is implemented. 
 44.16     Sec. 51.  Minnesota Statutes 1994, section 124.244, 
 44.17  subdivision 1, is amended to read: 
 44.18     Subdivision 1.  [REVENUE AMOUNT.] (a) For fiscal year 1995, 
 44.19  the capital expenditure equipment revenue for each district 
 44.20  equals $66 times its actual pupil units for the school year. 
 44.21     (b) For fiscal years 1996 and later, the capital 
 44.22  expenditure equipment revenue for each district equals $69 times 
 44.23  its actual pupil units for the school year.  
 44.24     (c) Of a district's capital expenditure equipment revenue, 
 44.25  $3 times its actual pupil units for the school year shall be 
 44.26  reserved and used according to subdivision 4, paragraph (b). 
 44.27     Sec. 52.  Minnesota Statutes 1994, section 124.2445, is 
 44.28  amended to read: 
 44.29     124.2445 [PURCHASE OF CERTAIN EQUIPMENT.] 
 44.30     The board of a school district may issue certificates of 
 44.31  indebtedness or capital notes subject to the school district 
 44.32  debt limits to purchase vehicles other than school buses, 
 44.33  computers, telephone systems, cable equipment, photocopy and 
 44.34  office equipment, technological equipment for instruction, and 
 44.35  other capital equipment having an expected useful life at least 
 44.36  as long as the terms of the certificates or notes.  The 
 45.1   certificates or notes must be payable in not more than five 
 45.2   years and must be issued on the terms and in the manner 
 45.3   determined by the board.  The certificates or notes may be 
 45.4   issued by resolution and without the requirement for an 
 45.5   election.  A tax levy must be made for the payment of the 
 45.6   principal and interest on the certificates or notes, in 
 45.7   accordance with section 475.61, as in the case of bonds.  That 
 45.8   tax levy for each year must not exceed the amount of the 
 45.9   district's total operating capital expenditure equipment levy 
 45.10  under section 124.244 revenue for the year the initial debt 
 45.11  service levies are certified.  The district's capital 
 45.12  expenditure levy under section 124.244 general education levy 
 45.13  for each year must be reduced by the amount of the tax levies 
 45.14  for debt service certified for each year for payment of the 
 45.15  principal and interest on the certificates or notes as required 
 45.16  by section 475.61.  
 45.17     Sec. 53.  Minnesota Statutes 1994, section 124.2725, 
 45.18  subdivision 1, is amended to read: 
 45.19     Subdivision 1.  [ELIGIBILITY.] A school district is 
 45.20  eligible for cooperation and combination revenue if it has a 
 45.21  plan approved by the commissioner according to section 
 45.22  122.243 and it levied under subdivision 3 for taxes payable in 
 45.23  1995.  
 45.24     Sec. 54.  Minnesota Statutes 1994, section 124.2725, 
 45.25  subdivision 3, is amended to read: 
 45.26     Subd. 3.  [COOPERATION AND COMBINATION LEVY.] To obtain 
 45.27  cooperation and combination revenue, a district may levy an 
 45.28  amount equal to the cooperation and combination revenue 
 45.29  multiplied by the lesser of one or the following ratio: 
 45.30     (1) the quotient derived by dividing the adjusted net tax 
 45.31  capacity for the district in the year preceding the year the 
 45.32  levy is certified by the actual pupil units in the district for 
 45.33  the year to which the levy is attributable, to 
 45.34     (2) the percentage, amount specified in subdivision 4, of 
 45.35  the equalizing factor for the school year to which the levy is 
 45.36  attributable. 
 46.1      Sec. 55.  Minnesota Statutes 1994, section 124.2725, 
 46.2   subdivision 4, is amended to read: 
 46.3      Subd. 4.  [INCREASING LEVY.] (a) For districts that did not 
 46.4   enter into an agreement under section 122.541 at least three 
 46.5   years before the date of a successful referendum held under 
 46.6   section 122.243, subdivision 2, and that combine without 
 46.7   cooperating, the percentage amount in subdivision 3, clause (2), 
 46.8   shall be: 
 46.9      (1) 50 percent $4,707.50 for the first year of combination; 
 46.10  and 
 46.11     (2) 25 percent $2,353.75 for the second year of combination.
 46.12     (b) For districts that entered into an agreement under 
 46.13  section 122.541 at least three years before the date of a 
 46.14  successful referendum held under section 122.243, subdivision 2, 
 46.15  and combine without cooperating, the percentages in subdivision 
 46.16  3, clause (2), shall be: 
 46.17     (1) 100 percent $9,415 for the first year of combination; 
 46.18     (2) 75 percent $7,061.25 for the second year of 
 46.19  combination; 
 46.20     (3) 50 percent $4,707.50 for the third year of combination; 
 46.21  and 
 46.22     (4) 25 percent $2,353.75 for the fourth year of combination.
 46.23     (c) For districts that combine after one year of 
 46.24  cooperation, the percentage in subdivision 3, clause (2), shall 
 46.25  be: 
 46.26     (1) 100 percent $9,415 for the first year of cooperation; 
 46.27     (2) 75 percent $7,061.25 for the first year of combination; 
 46.28     (3) 50 percent $4,707.50 for the second year of 
 46.29  combination; and 
 46.30     (4) 25 percent $2,353.75 for the third year of combination. 
 46.31     (d) For districts that combine after two years of 
 46.32  cooperation, the percentage in subdivision 3, clause (2), shall 
 46.33  be: 
 46.34     (1) 100 percent $9,415 for the first year of cooperation; 
 46.35     (2) 75 percent $7,061.25 for the second year of 
 46.36  cooperation; 
 47.1      (3) 50 percent $4,707.50 for the first year of combination; 
 47.2   and 
 47.3      (4) 25 percent $2,353.75 for the second year of combination.
 47.4      Sec. 56.  Minnesota Statutes 1994, section 124.2725, 
 47.5   subdivision 15, is amended to read: 
 47.6      Subd. 15.  [RETIREMENT AND SEVERANCE LEVY.] A cooperating 
 47.7   or combined district that levied under subdivision 3 for taxes 
 47.8   payable in 1995 may levy for severance pay or early retirement 
 47.9   incentives for licensed and nonlicensed employees who retire 
 47.10  early as a result of the cooperation or combination. 
 47.11     Sec. 57.  Minnesota Statutes 1994, section 124.2726, 
 47.12  subdivision 1, is amended to read: 
 47.13     Subdivision 1.  [ELIGIBILITY AND USE.] A school district 
 47.14  that has been reorganized after June 30, 1994, under section 
 47.15  122.23 and has not received revenue under section 124.2725 is 
 47.16  eligible for consolidation transition revenue.  Revenue is equal 
 47.17  to the sum of aid under subdivision 2 and levy under subdivision 
 47.18  3.  Consolidation transition revenue may only be used according 
 47.19  to this section.  Revenue must initially be used for the payment 
 47.20  of district costs for the early retirement incentives granted by 
 47.21  the district under section 122.23, subdivision 20.  Any revenue 
 47.22  under subdivision 2 remaining after the payment of district 
 47.23  costs for the early retirement incentives must be used to reduce 
 47.24  operating debt as defined in section 121.915.  Any additional 
 47.25  aid remaining after the reduction of operating debt must be 
 47.26  deposited in the district's general fund.  Revenue must be used 
 47.27  for the following purposes and may be distributed among these 
 47.28  purposes at the discretion of the district: 
 47.29     (1) to offer early retirement incentives as provided by 
 47.30  section 122.23, subdivision 20; 
 47.31     (2) to reduce operating debt as defined in section 121.915; 
 47.32     (3) to enhance learning opportunities for students in the 
 47.33  reorganized district; and 
 47.34     (4) for other costs incurred in the reorganization. 
 47.35     Revenue received and utilized under clause (3) or (4) may 
 47.36  be expended for operating, facilities, and/or equipment.  
 48.1   Revenue received under this section shall not be included in the 
 48.2   determination of the reduction under section 124A.26, 
 48.3   subdivision 1.  
 48.4      Sec. 58.  Minnesota Statutes 1994, section 124.2726, 
 48.5   subdivision 2, is amended to read: 
 48.6      Subd. 2.  [AID.] (a) Consolidation transition aid is equal 
 48.7   to $200 times the number of actual pupil units in the newly 
 48.8   created district in the year of consolidation and $100 times the 
 48.9   number of actual pupil units in the first year following the 
 48.10  year of consolidation.  The number of pupil units used to 
 48.11  calculate aid in either year shall not exceed 1,000 for 
 48.12  districts consolidating July 1, 1994, and 1,500 for districts 
 48.13  consolidating July 1, 1995, and thereafter.  
 48.14     (b) If the total appropriation for consolidation transition 
 48.15  aid for any fiscal year, plus any amount transferred under 
 48.16  section 124.14, subdivision 7, is insufficient to pay all 
 48.17  districts the full amount of aid earned, the department of 
 48.18  education shall first pay the districts in the first year 
 48.19  following the year of consolidation the full amount of aid 
 48.20  earned and distribute any remaining funds to the newly created 
 48.21  districts in the first year of consolidation. 
 48.22     Sec. 59.  Minnesota Statutes 1994, section 124.2726, 
 48.23  subdivision 4, is amended to read: 
 48.24     Subd. 4.  [NEW DISTRICTS.] If a district consolidates with 
 48.25  another district that has received consolidation transition 
 48.26  aid under 124.2725 or 124.2726 within six years of the effective 
 48.27  date of the new consolidation, only the pupil units in the 
 48.28  district or districts not previously reorganized shall be 
 48.29  counted for aid purposes under subdivision 2.  If two or more 
 48.30  districts consolidate and both all districts received aid under 
 48.31  subdivision 2 within six years of the effective date of the new 
 48.32  consolidation, only one quarter of the pupil units in the newly 
 48.33  created district shall be used to determine aid under 
 48.34  subdivision 2.  
 48.35     Sec. 60.  Minnesota Statutes 1994, section 124.2727, 
 48.36  subdivision 6d, is amended to read: 
 49.1      Subd. 6d.  [REVENUE USES.] (a) A district must place its 
 49.2   district cooperation revenue in a reserved account and may only 
 49.3   use the revenue to purchase goods and services from entities 
 49.4   formed for cooperative purposes or to otherwise provide 
 49.5   educational services in a cooperative manner. 
 49.6      (b) A district that was a member of an intermediate school 
 49.7   district organized pursuant to chapter 136D on July 1, 1994, and 
 49.8   that has fewer than 25,000 actual pupil units must place its 
 49.9   district cooperation revenue in a reserved account and must 
 49.10  allocate a portion of the reserved revenue for instructional 
 49.11  services from entities formed for cooperative services for 
 49.12  special education programs and secondary vocational programs.  
 49.13  The allocated amount is equal to the levy made according to 
 49.14  section 124.2727, subdivision 6, for taxes payable in 1994 
 49.15  divided by the actual pupil units in the intermediate school 
 49.16  district for fiscal year 1995 times the number of actual pupil 
 49.17  units in the school district in 1995.  The district must use 
 49.18  5/11 of the revenue for special education and 6/11 of the 
 49.19  revenue for secondary vocational education.  The district must 
 49.20  demonstrate that the revenue is being used to provide the full 
 49.21  range of special education and secondary vocational programs and 
 49.22  services available to each child served by the intermediate.  
 49.23  The secondary vocational programs and service must meet the 
 49.24  requirements established in an articulation agreement developed 
 49.25  between the state board of education and the higher education 
 49.26  board. 
 49.27     (c) A district that was not a member of an intermediate 
 49.28  district organized under chapter 136D on July 1, 1994, must 
 49.29  spend at least $9 per pupil unit of its district cooperation 
 49.30  revenue on secondary vocational programs. 
 49.31     Sec. 61.  Minnesota Statutes 1994, section 124.2728, 
 49.32  subdivision 1, is amended to read: 
 49.33     Subdivision 1.  [ELIGIBILITY.] A school district that 
 49.34  reorganizes under section 122.23 or sections 122.241 to 122.248 
 49.35  effective on or after July 1, 1994, is eligible for special 
 49.36  consolidation aid under this section.  A district may receive 
 50.1   aid under this section for only three years. 
 50.2      Sec. 62.  Minnesota Statutes 1994, section 124.431, 
 50.3   subdivision 2, is amended to read: 
 50.4      Subd. 2.  [DISTRICT REQUEST FOR REVIEW AND COMMENT.] A 
 50.5   school district or a joint powers district that intends to apply 
 50.6   for a capital loan must submit a proposal to the commissioner 
 50.7   for review and comment according to section 121.15 on or before 
 50.8   July 1.  The commissioner must prepare a review and comment on 
 50.9   the proposed facility, regardless of the amount of the capital 
 50.10  expenditure required to construct the facility.  In addition to 
 50.11  the information provided under section 121.15, subdivision 7, 
 50.12  the commissioner shall consider the following criteria in 
 50.13  determining whether to make a positive review and comment.  
 50.14     (a) To grant a positive review and comment the commissioner 
 50.15  must determine that all of the following conditions are met: 
 50.16     (1) the facilities are needed for pupils for whom no 
 50.17  adequate facilities exist or will exist; 
 50.18     (2) the district will serve, on average, at least 80 pupils 
 50.19  per grade or is eligible for elementary or secondary sparsity 
 50.20  revenue; 
 50.21     (3) no form of cooperation with another district would 
 50.22  provide the necessary facilities; 
 50.23     (4) the facilities are comparable in size and quality to 
 50.24  facilities recently constructed in other districts that have 
 50.25  similar enrollments; 
 50.26     (5) the facilities are comparable in size and quality to 
 50.27  facilities recently constructed in other districts that are 
 50.28  financed without a capital loan; 
 50.29     (6) the district is projected to maintain or increase its 
 50.30  average daily membership over the next five years or is eligible 
 50.31  for elementary or secondary sparsity revenue; 
 50.32     (7) the current facility poses a threat to the life, 
 50.33  health, and safety of pupils, and cannot reasonably be brought 
 50.34  into compliance with fire, health, or life safety codes; 
 50.35     (8) the district has made a good faith effort, as evidenced 
 50.36  by its maintenance expenditures, to adequately maintain the 
 51.1   existing facility during the previous ten years and to comply 
 51.2   with fire, health, and life safety codes and state and federal 
 51.3   requirements for handicapped accessibility; 
 51.4      (9) the district has made a good faith effort to encourage 
 51.5   integration of social service programs within the new facility; 
 51.6   and 
 51.7      (10) evaluations by school boards of adjacent districts 
 51.8   have been received. 
 51.9      (b) The commissioner may grant a negative review and 
 51.10  comment if: 
 51.11     (1) the state demographer has examined the population of 
 51.12  the communities to be served by the facility and determined that 
 51.13  the communities have not grown during the previous five years; 
 51.14     (2) the state demographer determines that the economic and 
 51.15  population bases of the communities to be served by the facility 
 51.16  are not likely to grow or to remain at a level sufficient, 
 51.17  during the next ten years, to ensure use of the entire facility; 
 51.18     (3) the need for facilities could be met within the 
 51.19  district or adjacent districts at a comparable cost by leasing, 
 51.20  repairing, remodeling, or sharing existing facilities or by 
 51.21  using temporary facilities; 
 51.22     (4) the district plans do not include cooperation and 
 51.23  collaboration with health and human services agencies and other 
 51.24  political subdivisions; or 
 51.25     (5) if the application is for new construction, an existing 
 51.26  facility that would meet the district's needs could be purchased 
 51.27  at a comparable cost from any other source within the area. 
 51.28     Sec. 63.  Minnesota Statutes 1994, section 124.83, 
 51.29  subdivision 4, is amended to read: 
 51.30     Subd. 4.  [HEALTH AND SAFETY LEVY.] To receive health and 
 51.31  safety revenue, a district may levy an amount equal to the 
 51.32  district's health and safety revenue as defined in subdivision 3 
 51.33  multiplied by the lesser of one, or the ratio of the quotient 
 51.34  derived by dividing the adjusted net tax capacity of the 
 51.35  district for the year preceding the year the levy is certified 
 51.36  by the actual pupil units in the district for the school year to 
 52.1   which the levy is attributable, to 50 percent of the equalizing 
 52.2   factor $4,707.50. 
 52.3      Sec. 64.  Minnesota Statutes 1994, section 124.84, 
 52.4   subdivision 3, is amended to read: 
 52.5      Subd. 3.  [LEVY AUTHORITY.] The district may levy up to 
 52.6   $300,000 under this section, as approved by the commissioner.  
 52.7   The approved amount may be levied over five eight or fewer years.
 52.8      Sec. 65.  Minnesota Statutes 1994, section 124.91, 
 52.9   subdivision 3, is amended to read: 
 52.10     Subd. 3.  [POST-JUNE 1992 LEASE PURCHASE, INSTALLMENT 
 52.11  BUYS.] (a) Upon application to, and approval by, the 
 52.12  commissioner in accordance with the procedures and limits in 
 52.13  subdivision 1, a district, as defined in this subdivision, may: 
 52.14     (1) purchase real or personal property under an installment 
 52.15  contract or may lease real or personal property with an option 
 52.16  to purchase under a lease purchase agreement, by which 
 52.17  installment contract or lease purchase agreement title is kept 
 52.18  by the seller or vendor or assigned to a third party as security 
 52.19  for the purchase price, including interest, if any; and 
 52.20     (2) annually levy the amounts necessary to pay the 
 52.21  district's obligations under the installment contract or lease 
 52.22  purchase agreement. 
 52.23     (b)(1) The obligation created by the installment contract 
 52.24  or the lease purchase agreement must not be included in the 
 52.25  calculation of net debt for purposes of section 475.53, and does 
 52.26  not constitute debt under other law.  
 52.27     (2) An election is not required in connection with the 
 52.28  execution of the installment contract or the lease purchase 
 52.29  agreement. 
 52.30     (c) The proceeds of the levy authorized by this subdivision 
 52.31  must not be used to acquire a facility to be primarily used for 
 52.32  athletic or school administration purposes. 
 52.33     (d) In this subdivision, "district" means: 
 52.34     (1) a school district required to have a comprehensive plan 
 52.35  for the elimination of segregation whose plan has been 
 52.36  determined by the commissioner to be in compliance with the 
 53.1   state board of education rules relating to equality of 
 53.2   educational opportunity and school desegregation; or 
 53.3      (2) a school district that participates in a joint program 
 53.4   for interdistrict desegregation with a district defined in 
 53.5   clause (1) if the facility acquired under this subdivision is to 
 53.6   be primarily used for the joint program. 
 53.7      (e) Notwithstanding subdivision 1, the prohibition against 
 53.8   a levy by a district to lease or rent a district-owned building 
 53.9   to itself does not apply to levies otherwise authorized by this 
 53.10  subdivision. 
 53.11     (f) Projects may be approved under this section by the 
 53.12  commissioner in fiscal years 1993, 1994, and 1995 only. 
 53.13     (g) For the purposes of this subdivision, any references in 
 53.14  subdivision 1 to building or land shall be deemed to include 
 53.15  personal property. 
 53.16     Sec. 66.  Minnesota Statutes 1994, section 124.912, 
 53.17  subdivision 1, is amended to read: 
 53.18     Subdivision 1.  [STATUTORY OBLIGATIONS.] (a) A school 
 53.19  district may levy the amounts necessary to pay the district's 
 53.20  obligations under section 6.62; the amount authorized for 
 53.21  liabilities of dissolved districts pursuant to section 122.45; 
 53.22  the amounts necessary to pay the district's obligations under 
 53.23  section 268.06, subdivision 25; the amounts necessary to pay for 
 53.24  job placement services offered to employees who may become 
 53.25  eligible for benefits pursuant to section 268.08; the amounts 
 53.26  necessary to pay the district's obligations under section 
 53.27  127.05; the amounts authorized by section 122.531; the amounts 
 53.28  necessary to pay the district's obligations under section 
 53.29  122.533; and for severance pay required by sections 120.08, 
 53.30  subdivision 3, and 122.535, subdivision 6. 
 53.31     (b) An education district that negotiates a collective 
 53.32  bargaining agreement for teachers under section 122.937 may 
 53.33  certify to the department of education the amount necessary to 
 53.34  pay all of the member districts' obligations and the education 
 53.35  district's obligations under section 268.06, subdivision 25. 
 53.36     The department of education must allocate the levy amount 
 54.1   proportionately among the member districts based on adjusted net 
 54.2   tax capacity.  The member districts must levy the amount 
 54.3   allocated. 
 54.4      (c) Each year, a member district of an education district 
 54.5   that levies under this subdivision must transfer the amount of 
 54.6   revenue certified under paragraph (b) to the education district 
 54.7   board according to this subdivision.  By June 20 and November 30 
 54.8   of each year, an amount must be transferred equal to: 
 54.9      (1) 50 percent times 
 54.10     (2) the amount certified in paragraph (b) minus homestead 
 54.11  and agricultural credit aid allocated for that levy according to 
 54.12  section 273.1398, subdivision 6. 
 54.13     Sec. 67.  Minnesota Statutes 1994, section 124.916, 
 54.14  subdivision 2, is amended to read: 
 54.15     Subd. 2.  [RETIRED EMPLOYEE HEALTH BENEFITS.] For taxes 
 54.16  payable in 1994 1996 and 1995 1997 only, a school district may 
 54.17  levy an amount up to the amount the district is required by the 
 54.18  collective bargaining agreement in effect on March 30, 1992, to 
 54.19  pay for health insurance or unreimbursed medical expenses for 
 54.20  licensed and nonlicensed employees who have terminated services 
 54.21  in the employing district and withdrawn from active teaching 
 54.22  service or other active service, as applicable, before July 1, 
 54.23  1992.  The total amount of the levy each year may not exceed 
 54.24  $300,000.  
 54.25     Notwithstanding section 121.904, 50 percent of the proceeds 
 54.26  of this levy shall be recognized in the fiscal year in which it 
 54.27  is certified. 
 54.28     Sec. 68.  Minnesota Statutes 1994, section 124.918, 
 54.29  subdivision 1, is amended to read: 
 54.30     Subdivision 1.  [CERTIFY LEVY LIMITS.] By September 1 8, 
 54.31  the commissioner shall notify the school districts of their levy 
 54.32  limits.  The commissioner shall certify to the county auditors 
 54.33  the levy limits for all school districts headquartered in the 
 54.34  respective counties together with adjustments for errors in 
 54.35  levies not penalized pursuant to section 124.918, subdivision 3, 
 54.36  as well as adjustments to final pupil unit counts. A school 
 55.1   district may require the commissioner to review the 
 55.2   certification and to present evidence in support of modification 
 55.3   of the certification. 
 55.4      The county auditor shall reduce levies for any excess of 
 55.5   levies over levy limitations pursuant to section 275.16.  Such 
 55.6   reduction in excess levies may, at the discretion of the school 
 55.7   district, be spread over two calendar years. 
 55.8      Sec. 69.  Minnesota Statutes 1994, section 124.918, 
 55.9   subdivision 2, is amended to read: 
 55.10     Subd. 2.  [NOTICE TO COMMISSIONER; FORMS.] By September 
 55.11  15 30 of each year each district shall notify the commissioner 
 55.12  of education of the proposed levies in compliance with the levy 
 55.13  limitations of this chapter and chapters 124A, 124B, 136C, and 
 55.14  136D.  By January 15 of each year each district shall notify the 
 55.15  commissioner of education of the final levies certified.  The 
 55.16  commissioner of education shall prescribe the form of these 
 55.17  notifications and may request any additional information 
 55.18  necessary to compute certified levy amounts. 
 55.19     Sec. 70.  Minnesota Statutes 1994, section 124.95, 
 55.20  subdivision 2, is amended to read: 
 55.21     Subd. 2.  [ELIGIBILITY.] (a) The following portions of a 
 55.22  district's debt service levy qualify for debt service 
 55.23  equalization: 
 55.24     (1) debt service for repayment of principal and interest on 
 55.25  bonds issued before July 2, 1992; 
 55.26     (2) debt service for bonds refinanced after July 1, 1992, 
 55.27  if the bond schedule has been approved by the commissioner and, 
 55.28  if necessary, adjusted to reflect a 20-year maturity schedule; 
 55.29  and 
 55.30     (3) debt service for bonds issued after July 1, 1992, for 
 55.31  construction projects that have received a positive review and 
 55.32  comment according to section 121.15, if the commissioner has 
 55.33  determined that the district has met the criteria under section 
 55.34  124.431, subdivision 2, and if the bond schedule has been 
 55.35  approved by the commissioner and, if necessary, adjusted to 
 55.36  reflect a 20-year maturity schedule.  
 56.1      (b) The criterion in section 124.431, subdivision 2, 
 56.2   paragraph (a), clause (2), shall be considered to have been met 
 56.3   if the district in the fiscal year in which the bonds are 
 56.4   authorized at an election conducted under chapter 475: 
 56.5      (i) serves an average of at least 66 pupils per grade in 
 56.6   the grades to be served by the facility; or 
 56.7      (ii) is eligible for elementary or secondary sparsity 
 56.8   revenue. 
 56.9      (c) The criterion described in section 124.431, subdivision 
 56.10  2, paragraph (a), clause (9), does not apply to bonds authorized 
 56.11  by elections held before July 1, 1992. 
 56.12     (d) Districts identified in Laws 1990, chapter 562, article 
 56.13  11, section 8, do not need to meet the criteria of section 
 56.14  124.431, subdivision 2, to qualify. 
 56.15     Sec. 71.  Minnesota Statutes 1994, section 124.95, 
 56.16  subdivision 4, is amended to read: 
 56.17     Subd. 4.  [EQUALIZED DEBT SERVICE LEVY.] To obtain debt 
 56.18  service equalization revenue, a district must levy an amount not 
 56.19  to exceed the district's debt service equalization revenue times 
 56.20  the lesser of one or the ratio of: 
 56.21     (1) the quotient derived by dividing the adjusted net tax 
 56.22  capacity of the district for the year before the year the levy 
 56.23  is certified by the actual pupil units in the district for the 
 56.24  school year ending in the year prior to the year the levy is 
 56.25  certified; to 
 56.26     (2) 50 percent of the equalizing factor as defined in 
 56.27  section 124A.02, subdivision 8, for the year to which the levy 
 56.28  is attributable $4,707.50. 
 56.29     Sec. 72.  Minnesota Statutes 1994, section 124.95, 
 56.30  subdivision 6, is amended to read: 
 56.31     Subd. 6.  [DEBT SERVICE EQUALIZATION AID PAYMENT SCHEDULE.] 
 56.32  Debt service equalization aid must be paid as 
 56.33  follows:  one-third 30 percent before September 15, one-third 30 
 56.34  percent before December 15, and one-third 25 percent before 
 56.35  March 15 of each year, and a final payment of 15 percent by July 
 56.36  15 of the subsequent fiscal year. 
 57.1      Sec. 73.  Minnesota Statutes 1994, section 124.961, is 
 57.2   amended to read: 
 57.3      124.961 [DEBT SERVICE APPROPRIATION.] 
 57.4      (a) $17,000,000 in fiscal year 1994, $26,000,000 in fiscal 
 57.5   year 1995, and $31,600,000 $30,054,000 in fiscal year 1996, 
 57.6   $27,370,000 in fiscal year 1997, and each year thereafter is 
 57.7   appropriated from the general fund to the commissioner of 
 57.8   education for payment of debt service equalization aid under 
 57.9   section 124.95.  The 1994 1997 appropriation includes $3,000,000 
 57.10  for 1993 and $14,000,000 for 1994 $27,370,000 for 1997. 
 57.11     (b) The appropriations in paragraph (a) must be reduced by 
 57.12  the amount of any money specifically appropriated for the same 
 57.13  purpose in any year from any state fund. 
 57.14     Sec. 74.  Minnesota Statutes 1994, section 124A.03, 
 57.15  subdivision 1c, is amended to read: 
 57.16     Subd. 1c.  [REFERENDUM ALLOWANCE LIMIT.] Notwithstanding 
 57.17  subdivision 1b, a district's referendum allowance must not 
 57.18  exceed the greater of:  
 57.19     (1) the district's referendum allowance for fiscal year 
 57.20  1994; or 
 57.21     (2) 25 percent of the formula allowance for fiscal year 
 57.22  1995 and later.  
 57.23     Sec. 75.  Minnesota Statutes 1994, section 124A.03, 
 57.24  subdivision 1g, is amended to read: 
 57.25     Subd. 1g.  [REFERENDUM EQUALIZATION LEVY.] (a) For fiscal 
 57.26  year 1996, a district's referendum equalization levy equals the 
 57.27  district's referendum equalization revenue times the lesser of 
 57.28  one or the ratio of the district's adjusted net tax capacity per 
 57.29  actual pupil unit to 100 percent of the equalizing factor as 
 57.30  defined in section 124A.02, subdivision 8. 
 57.31     (b) For fiscal year 1997 and thereafter, a district's 
 57.32  referendum equalization levy for a referendum levied against the 
 57.33  referendum market value of all taxable property as defined in 
 57.34  section 124A.02, subdivision 3b, equals the district's 
 57.35  referendum equalization revenue times the lesser of one or the 
 57.36  ratio of the district's referendum market value per actual pupil 
 58.1   unit to $476,000. 
 58.2      (c) For fiscal year 1997 and thereafter, a district's 
 58.3   referendum equalization levy for a referendum levied against the 
 58.4   net tax capacity of all taxable property equals the district's 
 58.5   referendum equalization revenue times the lesser of one or the 
 58.6   ratio of the district's adjusted net tax capacity per actual 
 58.7   pupil unit to $9,937. 
 58.8      Sec. 76.  Minnesota Statutes 1994, section 124A.03, 
 58.9   subdivision 1h, is amended to read: 
 58.10     Subd. 1h.  [REFERENDUM EQUALIZATION AID.] (a) A district's 
 58.11  referendum equalization aid equals the difference between its 
 58.12  referendum equalization revenue and levy. 
 58.13     (b) For fiscal year 1993, a district's referendum 
 58.14  equalization aid is equal to one-third of the amount calculated 
 58.15  in clause (a). 
 58.16     (c) For fiscal year 1994, a district's referendum 
 58.17  equalization aid is equal to two-thirds of the amount calculated 
 58.18  in clause (a). 
 58.19     (d) If a district's actual levy for referendum equalization 
 58.20  revenue is less than its maximum levy limit, aid shall be 
 58.21  proportionately reduced. 
 58.22     Sec. 77.  Minnesota Statutes 1994, section 124A.03, 
 58.23  subdivision 2, is amended to read: 
 58.24     Subd. 2.  [REFERENDUM REVENUE.] (a) The revenue authorized 
 58.25  by section 124A.22, subdivision 1, or the revenue for targeted 
 58.26  needs pupils or community and family support activities may be 
 58.27  increased in the amount approved by the voters of the district 
 58.28  at a referendum called for the purpose.  The referendum may be 
 58.29  called by the school board or shall be called by the school 
 58.30  board upon written petition of qualified voters of the 
 58.31  district.  The referendum shall be conducted during the one or 
 58.32  two calendar year years before the increased levy authority, if 
 58.33  approved, first becomes payable.  Only one election to approve 
 58.34  an increase may be held in a calendar year.  Unless the 
 58.35  referendum is conducted by mail under paragraph (g), the 
 58.36  referendum must be held on the first Tuesday after the first 
 59.1   Monday in November.  The ballot shall state the maximum amount 
 59.2   of the increased revenue per actual pupil unit, the estimated 
 59.3   referendum tax rate as a percentage of market value in the first 
 59.4   year it is to be levied, and that the revenue shall be used to 
 59.5   finance school operations.  The ballot may state that existing 
 59.6   referendum levy authority is expiring.  In this case, the ballot 
 59.7   may also compare the proposed levy authority to the existing 
 59.8   expiring levy authority, and express the proposed increase as 
 59.9   the amount, if any, over the expiring referendum levy 
 59.10  authority.  The ballot shall designate the specific number of 
 59.11  years, not to exceed ten, for which the referendum authorization 
 59.12  shall apply.  The notice required under section 275.60 may be 
 59.13  modified to read, in cases of renewing existing levies: 
 59.14     "BY VOTING "YES" ON THIS BALLOT QUESTION, YOU MAY BE VOTING 
 59.15     FOR A PROPERTY TAX INCREASE." 
 59.16     The ballot may contain a textual portion with the 
 59.17  information required in this subdivision and a question stating 
 59.18  substantially the following:  
 59.19     "Shall the increase in the revenue proposed by (petition 
 59.20  to) the board of ........., School District No. .., be approved?"
 59.21     If approved, an amount equal to the approved revenue per 
 59.22  actual pupil unit times the actual pupil units for the school 
 59.23  year beginning in the year after the levy is certified shall be 
 59.24  authorized for certification for the number of years approved, 
 59.25  if applicable, or until revoked or reduced by the voters of the 
 59.26  district at a subsequent referendum. 
 59.27     (b) The school board shall prepare and deliver by first 
 59.28  class mail at least 15 days but no more than 30 days prior to 
 59.29  the day of the referendum to each taxpayer a notice of the 
 59.30  referendum and the proposed revenue increase.  The school board 
 59.31  need not mail more than one notice to any taxpayer.  For the 
 59.32  purpose of giving mailed notice under this subdivision, owners 
 59.33  shall be those shown to be owners on the records of the county 
 59.34  auditor or, in any county where tax statements are mailed by the 
 59.35  county treasurer, on the records of the county treasurer.  Every 
 59.36  property owner whose name does not appear on the records of the 
 60.1   county auditor or the county treasurer shall be deemed to have 
 60.2   waived this mailed notice unless the owner has requested in 
 60.3   writing that the county auditor or county treasurer, as the case 
 60.4   may be, include the name on the records for this purpose.  The 
 60.5   notice must project the anticipated amount of tax increase in 
 60.6   annual dollars and annual percentage for typical residential 
 60.7   homesteads, agricultural homesteads, apartments, and 
 60.8   commercial-industrial property within the school district. 
 60.9      The notice for a referendum may state that an existing 
 60.10  referendum levy is expiring and project the anticipated amount 
 60.11  of increase over the existing referendum levy, if any, in annual 
 60.12  dollars and annual percentage for typical residential 
 60.13  homesteads, agricultural homesteads, apartments, and 
 60.14  commercial-industrial property within the school district. 
 60.15     The notice must include the following statement:  "Passage 
 60.16  of this referendum will result in an increase in your property 
 60.17  taxes."  However, in cases of renewing existing levies, the 
 60.18  notice may include the following statement:  "Passage of this 
 60.19  referendum may result in an increase in your property taxes." 
 60.20     (c) A referendum on the question of revoking or reducing 
 60.21  the increased revenue amount authorized pursuant to paragraph 
 60.22  (a) may be called by the school board and shall be called by the 
 60.23  school board upon the written petition of qualified voters of 
 60.24  the district.  A referendum to revoke or reduce the levy amount 
 60.25  must be based upon the dollar amount, local tax rate, or amount 
 60.26  per actual pupil unit, that was stated to be the basis for the 
 60.27  initial authorization.  Revenue approved by the voters of the 
 60.28  district pursuant to paragraph (a) must be received at least 
 60.29  once before it is subject to a referendum on its revocation or 
 60.30  reduction for subsequent years.  Only one revocation or 
 60.31  reduction referendum may be held to revoke or reduce referendum 
 60.32  revenue for any specific year and for years thereafter. 
 60.33     (d) A petition authorized by paragraph (a) or (c) shall be 
 60.34  effective if signed by a number of qualified voters in excess of 
 60.35  15 percent of the registered voters of the school district on 
 60.36  the day the petition is filed with the school board.  A 
 61.1   referendum invoked by petition shall be held on the date 
 61.2   specified in paragraph (a). 
 61.3      (e) The approval of 50 percent plus one of those voting on 
 61.4   the question is required to pass a referendum authorized by this 
 61.5   subdivision. 
 61.6      (f) At least 15 days prior to the day of the referendum, 
 61.7   the district shall submit a copy of the notice required under 
 61.8   paragraph (b) to the commissioner of education.  Within 15 days 
 61.9   after the results of the referendum have been certified by the 
 61.10  school board, or in the case of a recount, the certification of 
 61.11  the results of the recount by the canvassing board, the district 
 61.12  shall notify the commissioner of education of the results of the 
 61.13  referendum. 
 61.14     (g) Except for a referendum held under subdivision 2b, any 
 61.15  referendum under this section held on a day other than the first 
 61.16  Tuesday after the first Monday in November must be conducted by 
 61.17  mail in accordance with section 204B.46.  Notwithstanding 
 61.18  paragraph (b) to the contrary, in the case of a referendum 
 61.19  conducted by mail under this paragraph, the notice required by 
 61.20  paragraph (b) shall be prepared and delivered by first class 
 61.21  mail at least 20 days before the referendum. 
 61.22     Sec. 78.  Minnesota Statutes 1994, section 124A.22, 
 61.23  subdivision 1, is amended to read: 
 61.24     Subdivision 1.  [GENERAL EDUCATION REVENUE.] (a) For fiscal 
 61.25  year 1996, the general education revenue for each district 
 61.26  equals the sum of the district's basic revenue, compensatory 
 61.27  education revenue, training and experience revenue, secondary 
 61.28  sparsity revenue, elementary sparsity revenue, and supplemental 
 61.29  revenue. 
 61.30     (b) For fiscal year 1997 and thereafter, the general 
 61.31  education revenue for each district equals the sum of the 
 61.32  district's basic revenue, secondary sparsity revenue, elementary 
 61.33  sparsity revenue, transportation sparsity revenue, total 
 61.34  operating capital revenue, transition revenue, and supplemental 
 61.35  revenue. 
 61.36     Sec. 79.  Minnesota Statutes 1994, section 124A.22, 
 62.1   subdivision 2, is amended to read: 
 62.2      Subd. 2.  [BASIC REVENUE.] The basic revenue for each 
 62.3   district equals the formula allowance times the actual pupil 
 62.4   units for the school year.  The formula allowance for fiscal 
 62.5   years 1993 and 1994 is $3,050.  The formula allowance for fiscal 
 62.6   year years 1995 and subsequent fiscal years and 1996 is $3,150.  
 62.7   The formula allowance for fiscal year 1997 and subsequent fiscal 
 62.8   years is $3,446. 
 62.9      Sec. 80.  Minnesota Statutes 1994, section 124A.22, 
 62.10  subdivision 3, is amended to read: 
 62.11     Subd. 3.  [FISCAL YEAR 1996 COMPENSATORY EDUCATION 
 62.12  REVENUE.] (a) For fiscal year 1992, the compensatory education 
 62.13  revenue for each district equals the formula allowance times the 
 62.14  AFDC pupil units counted according to section 124.17, 
 62.15  subdivision 1b. 
 62.16     (b) For fiscal year 1993 and thereafter, For fiscal year 
 62.17  1996, the maximum compensatory education revenue for each 
 62.18  district equals the formula allowance times the AFDC pupil units 
 62.19  computed according to section 124.17, subdivision 1d. 
 62.20     (c) For fiscal year 1993 and thereafter, the previous 
 62.21  formula compensatory education revenue for each district equals 
 62.22  the formula allowance times the AFDC pupil units computed 
 62.23  according to section 124.17, subdivision 1b.  
 62.24     (d) For fiscal year 1993, the compensatory education 
 62.25  revenue for each district equals the district's previous formula 
 62.26  compensatory revenue plus one-fourth of the difference between 
 62.27  the district's maximum compensatory education revenue and the 
 62.28  district's previous formula compensatory education revenue.  
 62.29     (e) For fiscal year 1994, the compensatory education 
 62.30  revenue for each district equals the district's previous formula 
 62.31  compensatory education revenue plus one-half of the difference 
 62.32  between the district's maximum compensatory education revenue 
 62.33  and the district's previous formula compensatory education 
 62.34  revenue.  
 62.35     (f) For fiscal year 1995, the compensatory education 
 62.36  revenue for each district equals the district's previous formula 
 63.1   compensatory education revenue plus three-fourths of the 
 63.2   difference between the district's maximum compensatory education 
 63.3   revenue and the district's previous formula compensatory 
 63.4   education revenue.  
 63.5      (g) For fiscal year 1996 and thereafter, the compensatory 
 63.6   education revenue for each district equals the district's 
 63.7   maximum compensatory education revenue.  
 63.8      Sec. 81.  Minnesota Statutes 1994, section 124A.22, 
 63.9   subdivision 4, is amended to read: 
 63.10     Subd. 4.  [TRAINING AND EXPERIENCE REVENUE.] (a) The 
 63.11  previous formula training and experience revenue for each 
 63.12  district equals the greater of zero or the result of the 
 63.13  following computation:  
 63.14     (1) subtract 1.6 from the training and experience index; 
 63.15     (2) multiply the result in clause (1) by the product of 
 63.16  $700 times the actual pupil units for the school year. 
 63.17     (b) The maximum For fiscal year 1996, the training and 
 63.18  experience revenue for each district equals the greater of zero 
 63.19  or the result of the following computation:  
 63.20     (1) subtract .8 from the training and experience index; 
 63.21     (2) multiply the result in clause (1) by the product of 
 63.22  $660 times the actual pupil units for the school year.  
 63.23     (c) For fiscal year 1994, the training and experience 
 63.24  revenue for each district equals the district's previous formula 
 63.25  training and experience revenue plus one-half of the difference 
 63.26  between the district's maximum training and experience revenue 
 63.27  and the district's previous formula training and experience 
 63.28  revenue.  
 63.29     (d) For fiscal year 1995, the training and experience 
 63.30  revenue for each district equals the district's previous formula 
 63.31  training and experience revenue plus three-fourths of the 
 63.32  difference between the district's maximum training and 
 63.33  experience revenue and the district's previous formula training 
 63.34  and experience revenue. 
 63.35     (e) For fiscal year 1996 and thereafter, the training and 
 63.36  experience revenue for each district equals the district's 
 64.1   maximum training and experience revenue.  
 64.2      Sec. 82.  Minnesota Statutes 1994, section 124A.22, 
 64.3   subdivision 4a, is amended to read: 
 64.4      Subd. 4a.  [FISCAL YEAR 1996 TRAINING AND EXPERIENCE LEVY.] 
 64.5   A district's training and experience levy for fiscal year 1996 
 64.6   equals its training and experience revenue times the lesser of 
 64.7   one or the ratio of the district's adjusted net tax capacity per 
 64.8   actual pupil unit for the year before the year the levy is 
 64.9   certified to the equalizing factor for the school year to which 
 64.10  the levy is attributable. 
 64.11     Sec. 83.  Minnesota Statutes 1994, section 124A.22, 
 64.12  subdivision 4b, is amended to read: 
 64.13     Subd. 4b.  [FISCAL YEAR 1996 TRAINING AND EXPERIENCE AID.] 
 64.14  A district's training and experience aid for fiscal year 1996 
 64.15  equals its training and experience revenue minus its training 
 64.16  and experience levy times the ratio of the actual amount levied 
 64.17  to the permitted levy. 
 64.18     Sec. 84.  Minnesota Statutes 1994, section 124A.22, 
 64.19  subdivision 6, is amended to read: 
 64.20     Subd. 6.  [SECONDARY SPARSITY REVENUE.] (a) A district's 
 64.21  secondary sparsity revenue for a school year equals the sum of 
 64.22  the results of the following calculation for each qualifying 
 64.23  high school in the district: 
 64.24     (1) the formula allowance for the school year, $3,150 
 64.25  multiplied by 
 64.26     (2) the secondary average daily membership of the high 
 64.27  school, multiplied by 
 64.28     (3) the quotient obtained by dividing 400 minus the 
 64.29  secondary average daily membership by 400 plus the secondary 
 64.30  daily membership, multiplied by 
 64.31     (4) the lesser of 1.5 or the quotient obtained by dividing 
 64.32  the isolation index minus 23 by ten. 
 64.33     (b) A newly formed school district that is the result of 
 64.34  districts combining under the cooperation and combination 
 64.35  program or consolidating under section 122.23 shall receive 
 64.36  secondary sparsity revenue equal to the greater of:  (1) the 
 65.1   amount calculated under paragraph (a) for the combined district; 
 65.2   or (2) the sum of the amounts of secondary sparsity revenue the 
 65.3   former school districts had in the year prior to consolidation, 
 65.4   increased for any subsequent changes in the secondary sparsity 
 65.5   formula. 
 65.6      Sec. 85.  Minnesota Statutes 1994, section 124A.22, 
 65.7   subdivision 6a, is amended to read: 
 65.8      Subd. 6a.  [ELEMENTARY SPARSITY REVENUE.] A district's 
 65.9   elementary sparsity revenue equals the sum of the following 
 65.10  amounts for each qualifying elementary school in the district:  
 65.11     (1) the formula allowance for the year, $3,150 multiplied 
 65.12  by 
 65.13     (2) the elementary average daily membership of the school, 
 65.14  multiplied by 
 65.15     (3) the quotient obtained by dividing 140 minus the 
 65.16  elementary average daily membership by 140 plus the average 
 65.17  daily membership.  
 65.18     Sec. 86.  Minnesota Statutes 1994, section 124A.22, 
 65.19  subdivision 8a, is amended to read: 
 65.20     Subd. 8a.  [SUPPLEMENTAL LEVY.] To obtain supplemental 
 65.21  revenue, a district may levy an amount not more than the product 
 65.22  of its supplemental revenue for the school year times the lesser 
 65.23  of one or the ratio of its general education levy to its general 
 65.24  education revenue, excluding training and experience transition 
 65.25  revenue and supplemental revenue, for the same year. 
 65.26     Sec. 87.  Minnesota Statutes 1994, section 124A.22, 
 65.27  subdivision 9, is amended to read: 
 65.28     Subd. 9.  [SUPPLEMENTAL REVENUE REDUCTION.] A district's 
 65.29  supplemental revenue allowance is reduced by the sum of: 
 65.30     (1) the sum of one-fourth of the difference of:  
 65.31     (i) the sum of the district's training and experience 
 65.32  revenue and compensatory revenue per actual pupil unit for that 
 65.33  fiscal year 1996, and 
 65.34     (ii) the sum of district's training and experience revenue 
 65.35  and compensatory revenue per actual pupil unit for fiscal year 
 65.36  1994; and 
 66.1      (2) the difference between the formula allowance for the 
 66.2   current fiscal year and $3,050 $100.  
 66.3      A district's supplemental revenue allowance may not be less 
 66.4   than zero. 
 66.5      Sec. 88.  Minnesota Statutes 1994, section 124A.22, is 
 66.6   amended by adding a subdivision to read: 
 66.7      Subd. 10.  [TOTAL OPERATING CAPITAL REVENUE.] (a) For 
 66.8   fiscal year 1997 and thereafter, total operating capital revenue 
 66.9   for a district equals the amount determined under paragraph (b), 
 66.10  (c), (d), (e), or (f), plus $128 times the actual pupil units 
 66.11  for the school year.  The revenue must be placed in a reserved 
 66.12  account in the general fund and may only be used according to 
 66.13  subdivision 11. 
 66.14     (b) For fiscal years 1996 and later, capital revenue for a 
 66.15  district equals $100 times the district's maintenance cost index 
 66.16  times its actual pupil units for the school year. 
 66.17     (c) For 1996 and later fiscal years, the previous formula 
 66.18  revenue equals the amount of revenue computed for the district 
 66.19  according to section 124.243 for fiscal year 1995. 
 66.20     (d) Notwithstanding paragraph (b), for fiscal year 1996, 
 66.21  the revenue for each district equals 25 percent of the amount 
 66.22  determined in paragraph (b) plus 75 percent of the previous 
 66.23  formula revenue. 
 66.24     (e) Notwithstanding paragraph (b), for fiscal year 1997, 
 66.25  the revenue for each district equals 50 percent of the amount 
 66.26  determined in paragraph (b) plus 50 percent of the previous 
 66.27  formula revenue. 
 66.28     (f) Notwithstanding paragraph (b), for fiscal year 1998, 
 66.29  the revenue for each district equals 75 percent of the amount 
 66.30  determined in paragraph (b) plus 25 percent of the previous 
 66.31  formula revenue. 
 66.32     (g) The revenue in paragraph (b) for a district that 
 66.33  operates a program under section 121.585, is increased by an 
 66.34  amount equal to $15 times the number of actual pupil units at 
 66.35  the site where the program is implemented. 
 66.36     Sec. 89.  Minnesota Statutes 1994, section 124A.22, is 
 67.1   amended by adding a subdivision to read: 
 67.2      Subd. 11.  [USES OF TOTAL OPERATING CAPITAL REVENUE.] Total 
 67.3   operating capital revenue may be used only for the following 
 67.4   purposes: 
 67.5      (1) to acquire land for school purposes; 
 67.6      (2) to acquire or construct buildings for school purposes, 
 67.7   up to $400,000; 
 67.8      (3) to rent or lease buildings, including the costs of 
 67.9   building repair or improvement that are part of a lease 
 67.10  agreement; 
 67.11     (4) to improve and repair school sites and buildings, and 
 67.12  equip or reequip school buildings with permanent attached 
 67.13  fixtures; 
 67.14     (5) for a surplus school building that is used 
 67.15  substantially for a public nonschool purpose; 
 67.16     (6) to eliminate barriers or increase access to school 
 67.17  buildings by individuals with a disability; 
 67.18     (7) to bring school buildings into compliance with the 
 67.19  uniform fire code adopted according to chapter 299F; 
 67.20     (8) to remove asbestos from school buildings, encapsulate 
 67.21  asbestos, or make asbestos-related repairs; 
 67.22     (9) to clean up and dispose of polychlorinated biphenyls 
 67.23  found in school buildings; 
 67.24     (10) to clean up, remove, dispose of, and make repairs 
 67.25  related to storing heating fuel or transportation fuels such as 
 67.26  alcohol, gasoline, fuel oil, and special fuel, as defined in 
 67.27  section 296.01; 
 67.28     (11) for energy audits for school buildings and to modify 
 67.29  buildings if the audit indicates the cost of the modification 
 67.30  can be recovered within ten years; 
 67.31     (12) to improve buildings that are leased according to 
 67.32  section 123.36, subdivision 10; 
 67.33     (13) to pay special assessments levied against school 
 67.34  property but not to pay assessments for service charges; 
 67.35     (14) to pay principal and interest on state loans for 
 67.36  energy conservation according to section 216C.37 or loans made 
 68.1   under the northeast Minnesota economic protection trust fund act 
 68.2   according to sections 298.292 to 298.298; and 
 68.3      (15) to purchase or lease interactive telecommunications 
 68.4   equipment; 
 68.5      (16) by school board resolution, to transfer money into the 
 68.6   debt redemption fund to pay the amounts needed to meet, when 
 68.7   due, principal and interest payments on certain obligations 
 68.8   issued according to chapter 475; 
 68.9      (17) to pay capital expenditure equipment-related 
 68.10  assessments of any entity formed under a cooperative agreement 
 68.11  between two or more districts; 
 68.12     (18) to purchase or lease computers and related materials, 
 68.13  copying machines, telecommunications equipment, and other 
 68.14  noninstructional equipment; 
 68.15     (19) to purchase or lease assistive technology or equipment 
 68.16  for instructional programs; 
 68.17     (20) to purchase textbooks; 
 68.18     (21) to purchase new and replacement library books; 
 68.19     (22) to purchase vehicles; and 
 68.20     (23) to purchase or lease telecommunications equipment, 
 68.21  computers, and related equipment for integrated information 
 68.22  management systems for: 
 68.23     (i) managing and reporting learner outcome information for 
 68.24  all students under a results-oriented graduation rule; 
 68.25     (ii) managing student assessment, services, and achievement 
 68.26  information required for students with individual education 
 68.27  plans; and 
 68.28     (iii) other classroom information management needs. 
 68.29     Sec. 90.  Minnesota Statutes 1994, section 124A.22, is 
 68.30  amended by adding a subdivision to read: 
 68.31     Subd. 12.  [MAINTENANCE COST INDEX.] (a) A district's 
 68.32  maintenance cost index is equal to the ratio of: 
 68.33     (1) the total weighted square footage for all eligible 
 68.34  district-owned facilities; and 
 68.35     (2) the total unweighted square footage of these facilities.
 68.36     (b) The department shall determine a district's maintenance 
 69.1   cost index annually.  Eligible district-owned facilities shall 
 69.2   include only instructional or administrative square footage 
 69.3   owned by the district.  The commissioner of education may adjust 
 69.4   the age of a building or addition for major renovation projects. 
 69.5      (c) The square footage weighting factor for each original 
 69.6   building or addition equals the lesser of: 
 69.7      (1) one plus the ratio of the age in years to 100; or 
 69.8      (2) 1.5. 
 69.9      (d) The weighted square footage for each original building 
 69.10  or addition equals the product of the unweighted square footage 
 69.11  times the square footage weighting factor. 
 69.12     Sec. 91.  Minnesota Statutes 1994, section 124A.22, is 
 69.13  amended by adding a subdivision to read: 
 69.14     Subd. 13.  [TRANSPORTATION SPARSITY DEFINITIONS.] The 
 69.15  definitions in this subdivision apply to subdivisions 13a and 
 69.16  13b. 
 69.17     (a) "Sparsity index" for a school district means the 
 69.18  greater of .2 or the ratio of the square mile area of the school 
 69.19  district to the actual pupil units of the school district. 
 69.20     (b) "Density index" for a school district means the ratio 
 69.21  of the square mile area of the school district to the actual 
 69.22  pupil units of the school district.  However, the density index 
 69.23  for a school district cannot be greater than .2 or less than 
 69.24  .005. 
 69.25     (c) "Fiscal year 1996 base allowance" for a school district 
 69.26  means the result of the following computation: 
 69.27     (1) sum the following amounts: 
 69.28     (i) the fiscal year 1996 regular transportation revenue for 
 69.29  the school district according to section 124.225, subdivision 
 69.30  7d, paragraph (a), excluding the revenue attributable nonpublic 
 69.31  school pupils and to pupils with disabilities receiving special 
 69.32  transportation services; plus 
 69.33     (ii) the fiscal year 1996 nonregular transportation revenue 
 69.34  for the school district according to section 124.225, 
 69.35  subdivision 7d, paragraph (b), excluding the revenue for 
 69.36  desegregation transportation according to section 124.225, 
 70.1   subdivision 1, paragraph (c), clause (4), and the revenue 
 70.2   attributable nonpublic school pupils and to pupils with 
 70.3   disabilities receiving special transportation services or board 
 70.4   and lodging; plus 
 70.5      (iii) the fiscal year 1996 excess transportation levy for 
 70.6   the school district according to section 124.226, subdivision 5, 
 70.7   excluding the levy attributable to nonpublic school pupils; plus 
 70.8      (iv) the fiscal year 1996 late activity bus levy for the 
 70.9   school district according to section 124.226, subdivision 9, 
 70.10  excluding the levy attributable to nonpublic school pupils; plus 
 70.11     (v) an amount equal to one-third of the fiscal year 1996 
 70.12  bus depreciation for the school district according to section 
 70.13  124.225, subdivision 1, paragraph (b), clauses (2), (3), and (4).
 70.14     (2) divide the result in paragraph (c), clause (1), by the 
 70.15  school districts 1995-96 actual pupil units. 
 70.16     Sec. 92.  Minnesota Statutes 1994, section 124A.22, is 
 70.17  amended by adding a subdivision to read: 
 70.18     Subd. 13a.  [TRANSPORTATION SPARSITY REVENUE 
 70.19  ALLOWANCE.] (a) A district's transportation sparsity allowance 
 70.20  equals the greater of zero or the result of the following 
 70.21  computation: 
 70.22     (i) Multiply the formula allowance according to section 
 70.23  124A.22, subdivision 2, by .146. 
 70.24     (ii) Multiply the result in clause (i) by the district's 
 70.25  sparsity index raised to the 26/100 power. 
 70.26     (iii) Multiply the result in clause (ii) by the district's 
 70.27  density index raised to the 13/100 power. 
 70.28     (iv) Multiply the formula allowance according to section 
 70.29  124A.22, subdivision 2, by .0485. 
 70.30     (v) Subtract the result in clause (iv) from the result in 
 70.31  clause (iii). 
 70.32     (b) Transportation sparsity revenue is equal to the 
 70.33  transportation sparsity allowance times the actual pupil units. 
 70.34     Sec. 93.  Minnesota Statutes 1994, section 124A.22, is 
 70.35  amended by adding a subdivision to read: 
 70.36     Subd. 13b.  [TRANSITION ALLOWANCE.] (a) A district's 
 71.1   transportation transition allowance for fiscal year 1997 equals 
 71.2   the result of the following computation: 
 71.3      (1) if the result in subdivision 13a, paragraph (a), clause 
 71.4   (iii), for fiscal year 1997 is less than the fiscal year 1996 
 71.5   base allowance, the transportation transition allowance equals 
 71.6   the fiscal year 1996 base allowance minus the result in section 
 71.7   124A.22, subdivision 13a, paragraph (a), clause (iii). 
 71.8      (2) if the result in subdivision 13a, paragraph (b), for 
 71.9   fiscal year 1997 is greater than the fiscal year 1996 base 
 71.10  allowance and less than 110 percent of the fiscal year 1996 base 
 71.11  allowance, the transportation transition allowance equals zero. 
 71.12     (3) if the result in subdivision 13a, paragraph (b), for 
 71.13  fiscal year 1997 is greater than 110 percent of the fiscal year 
 71.14  1996 base allowance, the transportation transition allowance 
 71.15  equals 110 percent of the fiscal year 1996 base allowance minus 
 71.16  the result in subdivision 13a, paragraph (a), clause (iii). 
 71.17     (b) A district's training and experience transition 
 71.18  allowance is equal to the training and experience revenue the 
 71.19  district would have received under section 124A.22, subdivision 
 71.20  4, divided by the actual pupil units for fiscal year 1997 minus 
 71.21  $129.  The allowance shall not be less than zero. 
 71.22     (c) A district's transition allowance for fiscal year 1997 
 71.23  is equal to the sum of its transportation transition allowance 
 71.24  and its training and experience transition allowance. 
 71.25     (d) A district's transition allowance for fiscal year 1998 
 71.26  equals 75 percent of the district's fiscal year 1997 transition 
 71.27  allowance. 
 71.28     (e) A district's transition allowance for fiscal year 1999 
 71.29  equals 50 percent of the district's fiscal year 1997 transition 
 71.30  allowance. 
 71.31     (f) A district's transition allowance for fiscal year 2000 
 71.32  equals 25 percent of the district's fiscal year 1997 transition 
 71.33  allowance. 
 71.34     Sec. 94.  Minnesota Statutes 1994, section 124A.22, is 
 71.35  amended by adding a subdivision to read: 
 71.36     Subd. 13c.  [TRANSITION REVENUE ADJUSTMENT.] A district's 
 72.1   transition revenue adjustment equals the district's transition 
 72.2   allowance times the actual pupil units for the school year. 
 72.3      Sec. 95.  Minnesota Statutes 1994, section 124A.22, is 
 72.4   amended by adding a subdivision to read: 
 72.5      Subd. 13d.  [TRANSITION LEVY ADJUSTMENT.] A district's 
 72.6   general education levy shall be adjusted by an amount equal to 
 72.7   the district's transition revenue times the lesser of 1 or the 
 72.8   ratio of the district's general education levy to its general 
 72.9   education revenue, excluding transition revenue and supplemental 
 72.10  revenue. 
 72.11     Sec. 96.  Minnesota Statutes 1994, section 124A.22, is 
 72.12  amended by adding a subdivision to read: 
 72.13     Subd. 13e.  [TRANSITION AID ADJUSTMENT.] A district's 
 72.14  transition aid adjustment is the difference between the 
 72.15  transition revenue and the transition levy. 
 72.16     Sec. 97.  Minnesota Statutes 1994, section 124A.225, 
 72.17  subdivision 1, is amended to read: 
 72.18     Subdivision 1.  [REVENUE.] Of a district's general 
 72.19  education revenue an amount equal to the sum of the number of 
 72.20  elementary fund balance pupils in average daily membership 
 72.21  defined in section 124.17, subdivision 1, clause (f) 1h, and 
 72.22  one-half of the number of kindergarten fund balance pupils in 
 72.23  average daily membership as defined in section 124.17, 
 72.24  subdivision 1, clause (e) 1h, times .03 for fiscal year 1994 
 72.25  1996 and .06 0.1 for fiscal year 1995 1997 and thereafter 
 72.26  times the formula allowance must be reserved according to this 
 72.27  section. 
 72.28     Sec. 98.  Minnesota Statutes 1994, section 124A.23, 
 72.29  subdivision 1, is amended to read: 
 72.30     Subdivision 1.  [GENERAL EDUCATION TAX RATE.] The 
 72.31  commissioner shall establish the general education tax rate by 
 72.32  July 1 of each year for levies payable in the following year.  
 72.33  The general education tax capacity rate shall be a rate, rounded 
 72.34  up to the nearest tenth of a percent, that, when applied to the 
 72.35  adjusted net tax capacity for all districts, raises the amount 
 72.36  specified this subdivision.  The general education tax rate 
 73.1   shall be the rate that raises $1,044,000,000 for fiscal year 
 73.2   1995 and $1,054,000,000 $1,359,886,000 for fiscal year 1996 1997 
 73.3   and later fiscal years.  The general education tax rate may not 
 73.4   be changed due to changes or corrections made to a district's 
 73.5   adjusted net tax capacity after the tax rate has been 
 73.6   established.  
 73.7      Sec. 99.  Minnesota Statutes 1994, section 124A.23, 
 73.8   subdivision 4, is amended to read: 
 73.9      Subd. 4.  [GENERAL EDUCATION AID.] A district's general 
 73.10  education aid is the sum of the following amounts:  
 73.11     (1) the product of (i) the difference between the general 
 73.12  education revenue, excluding training and experience transition 
 73.13  revenue and supplemental revenue, and the general education 
 73.14  levy, times (ii) the ratio of the actual amount levied to the 
 73.15  permitted levy; 
 73.16     (2) training and experience transition aid according to 
 73.17  section 124A.22, subdivision 4b 13e; 
 73.18     (3) supplemental aid according to section 124.214, 
 73.19  subdivision 2; 
 73.20     (4) (3) shared time aid according to section 124A.02, 
 73.21  subdivision 21; and 
 73.22     (5) (4) referendum aid according to section 124A.03. 
 73.23     Sec. 100.  Minnesota Statutes 1994, section 124A.24, is 
 73.24  amended to read: 
 73.25     124A.24 [GENERAL EDUCATION LEVY EQUITY.] 
 73.26     If a district's general education levy is determined 
 73.27  according to section 124A.23, subdivision 3, an amount must be 
 73.28  deducted from state aid authorized in this chapter and chapters 
 73.29  124 and 124B, receivable for the same school year, and from 
 73.30  other state payments receivable for the same school year 
 73.31  authorized in chapter 273.  The aid in section 124.646 must not 
 73.32  be reduced. 
 73.33     The amount of the deduction equals the difference between: 
 73.34     (1) the general education tax rate, according to section 
 73.35  124A.23, times the district's adjusted net tax capacity used to 
 73.36  determine the general education aid for the same school year; 
 74.1   and 
 74.2      (2) the district's general education revenue, excluding 
 74.3   training and experience transition revenue and supplemental 
 74.4   revenue, for the same school year, according to section 124A.22. 
 74.5      Sec. 101.  Minnesota Statutes 1994, section 124A.29, is 
 74.6   amended to read: 
 74.7      124A.29 [RESERVED REVENUE FOR STAFF DEVELOPMENT.] 
 74.8      Subdivision 1.  [STAFF DEVELOPMENT AND PARENTAL INVOLVEMENT 
 74.9   REVENUE.] (a) Of a district's basic revenue under section 
 74.10  124A.22, subdivision 2, an amount equal to one percent in fiscal 
 74.11  year 1994, two percent in fiscal year 1995, and 2.5 percent in 
 74.12  fiscal year 1996 and thereafter times the formula allowance 
 74.13  times the number of actual total fund balance pupil units shall 
 74.14  be reserved and may be used only for in-service education for 
 74.15  programs under section 126.77, subdivision 2, or for staff 
 74.16  development plans, including plans for challenging instructional 
 74.17  activities and experiences under section 126.70.  Districts may 
 74.18  expend an additional amount of basic revenue for staff 
 74.19  development based on their needs.  The school board shall 
 74.20  initially allocate 50 percent of the revenue to each school site 
 74.21  in the district on a per teacher basis, which shall be retained 
 74.22  by the school site until used.  The board may retain 25 percent 
 74.23  to be used for district wide staff development efforts.  The 
 74.24  remaining 25 percent of the revenue shall be used to make grants 
 74.25  to school sites that demonstrate exemplary use of allocated 
 74.26  staff development revenue.  A grant may be used for any purpose 
 74.27  authorized under section 126.70 or 126.77, subdivision 2, and 
 74.28  determined by the site decision-making team.  The site 
 74.29  decision-making team must demonstrate to the school board the 
 74.30  extent to which staff at the site have met the outcomes of the 
 74.31  program.  The board may withhold a portion of initial allocation 
 74.32  of revenue if the staff development outcomes are not being met. 
 74.33     (b) Of a district's basic revenue under section 124A.22, 
 74.34  subdivision 2, an amount equal to $5 times the number of actual 
 74.35  total fund balance pupil units must be reserved and may be used 
 74.36  only to provide parental involvement programs that implement 
 75.1   section 126.69.  Parental involvement programs may include 
 75.2   career teacher programs, programs promoting parental involvement 
 75.3   in the PER process, coordination of volunteer services, 
 75.4   participation in developing, implementing, or evaluating school 
 75.5   desegregation/integration plans, and programs designed to 
 75.6   encourage community involvement. 
 75.7      Subd. 2.  [CAREER TEACHER STAFF DEVELOPMENT.] Of a 
 75.8   district's basic revenue under section 124A.22, subdivision 2, 
 75.9   an amount equal to $5 times the number of actual total fund 
 75.10  balance pupil units shall be reserved by a district operating a 
 75.11  career teacher program according to sections 125.701 to 
 75.12  125.705.  The revenue may be used only to provide staff 
 75.13  development for the career teacher program. 
 75.14     Sec. 102.  Minnesota Statutes 1994, section 124C.60, 
 75.15  subdivision 1, is amended to read: 
 75.16     Subdivision 1.  [ELIGIBILITY.] Two or more districts that 
 75.17  have consolidated under section 122.23 or combined under 
 75.18  sections 122.241 to 122.248, are eligible for a capital 
 75.19  facilities grant of up to $100,000 $200,000 for fiscal year 1995 
 75.20  and $100,000 thereafter under this section.  To qualify the 
 75.21  following criteria must be met: 
 75.22     (1) the proposed facility changes are part of the plan 
 75.23  according to section 122.242, subdivision 10, or the plan 
 75.24  adopted by the reorganized district according to section 
 75.25  124.243, subdivision 1; 
 75.26     (2) the changes proposed to a facility must be needed to 
 75.27  accommodate changes in the educational program due to the 
 75.28  reorganization; 
 75.29     (3) the utilization of the facility for educational 
 75.30  programs is at least 85 percent of capacity; and 
 75.31     (4) the grant will be used only to remodel or improve 
 75.32  existing facilities. 
 75.33     Sec. 103.  Minnesota Statutes 1994, section 126.22, 
 75.34  subdivision 2, is amended to read: 
 75.35     Subd. 2.  [ELIGIBLE PUPILS.] The following pupils are 
 75.36  eligible to participate in the high school graduation incentives 
 76.1   program:  
 76.2      (a) any pupil who is between the ages of 12 and 21, or who 
 76.3   is an elementary pupil, and in either case, who:  
 76.4      (1) is at least two grade levels below the performance 
 76.5   level for pupils of the same age in a locally determined 
 76.6   achievement test; or 
 76.7      (2) is at least one year behind in satisfactorily 
 76.8   completing coursework or obtaining credits for graduation; or 
 76.9      (3) is pregnant or is a parent; or 
 76.10     (4) has been assessed as chemically dependent; or 
 76.11     (5) has been excluded or expelled according to sections 
 76.12  127.26 to 127.39; or 
 76.13     (6) has been referred by a school district for enrollment 
 76.14  in an eligible program or a program pursuant to section 126.23; 
 76.15  or 
 76.16     (7) is a victim of physical or sexual abuse; or 
 76.17     (8) has experienced mental health problems; or 
 76.18     (9) has experienced homelessness sometime within six months 
 76.19  before requesting a transfer to an eligible program; or 
 76.20     (10) speaks English as a second language or has limited 
 76.21  English proficiency; or 
 76.22     (b) any person who is at least 21 years of age and who:  
 76.23     (1) has received fewer than 14 years of public or nonpublic 
 76.24  education, beginning at age 5; 
 76.25     (2) has not completed the requirements for a high school 
 76.26  diploma; and 
 76.27     (3) at the time of application, (i) is eligible for 
 76.28  reemployment insurance benefits or has exhausted the benefits, 
 76.29  (ii) is eligible for, or is receiving income maintenance and 
 76.30  support services, as defined in section 268.0111, subdivision 5, 
 76.31  or (iii) is eligible for services under the displaced homemaker 
 76.32  program, state wage-subsidy program, or any programs under the 
 76.33  federal Jobs Training Partnership Act or its successor. 
 76.34     Sec. 104.  Minnesota Statutes 1994, section 126.22, 
 76.35  subdivision 3a, is amended to read: 
 76.36     Subd. 3a.  [ADDITIONAL ELIGIBLE PROGRAM.] A pupil who is at 
 77.1   least 16 years of age, who is eligible under subdivision 2, 
 77.2   clause (a), and who has been enrolled only in a public school, 
 77.3   if the pupil has been enrolled in any school, during the year 
 77.4   immediately before transferring under this subdivision, may 
 77.5   transfer to any nonprofit, nonpublic school that has contracted 
 77.6   with the serving school district to provide nonsectarian 
 77.7   educational services.  Such a school must enroll every eligible 
 77.8   pupil who seeks to transfer to the school under this program 
 77.9   subject to available space.  If a school board elects not to 
 77.10  enter into a contract under this subdivision, the school may 
 77.11  appeal the school board's decision to the state board of 
 77.12  education if two members of the school board voted to enter into 
 77.13  a contract with the school.  If the state board authorizes the 
 77.14  school to participate in the program, the state board shall 
 77.15  enter into a contract with the school. 
 77.16     Sec. 105.  Minnesota Statutes 1994, section 126.22, 
 77.17  subdivision 8, is amended to read: 
 77.18     Subd. 8.  [ENROLLMENT VERIFICATION.] (a) For a pupil 
 77.19  attending an eligible program full time under subdivision 3, 
 77.20  paragraph (d), the department of education shall pay 88 percent 
 77.21  of the basic revenue determined according to section 124.248, 
 77.22  subdivisions 1 to 3, of the district to the eligible program and 
 77.23  12 percent of the basic revenue determined according to section 
 77.24  124.248, subdivisions 1 to 3, to the resident district within 30 
 77.25  days after the eligible program verifies enrollment using the 
 77.26  form provided by the department.  For a pupil attending an 
 77.27  eligible program part time, basic revenue shall be reduced 
 77.28  proportionately, according to the amount of time the pupil 
 77.29  attends the program, and the payments to the eligible program 
 77.30  and the resident district shall be reduced accordingly.  A pupil 
 77.31  for whom payment is made according to this section may not be 
 77.32  counted by any district for any purpose other than computation 
 77.33  of basic revenue, according to section 124A.22, subdivision 2.  
 77.34  If payment is made for a pupil under this subdivision, a school 
 77.35  district shall not reimburse a program under section 126.23 for 
 77.36  the same pupil. 
 78.1      (b) The department of education shall pay up to 100 percent 
 78.2   of the basic revenue determined according to section 124.248, 
 78.3   subdivisions 1 to 3, to the eligible program if there is an 
 78.4   agreement to that effect between the school district and the 
 78.5   eligible program. 
 78.6      Sec. 106.  Minnesota Statutes 1994, section 126.23, is 
 78.7   amended to read: 
 78.8      126.23 [AID FOR PRIVATE ALTERNATIVE PROGRAMS.] 
 78.9      If a pupil enrolls in an alternative program, eligible 
 78.10  under section 126.22, subdivision 3, paragraph (d), or 
 78.11  subdivision 3a, operated by a private organization that has 
 78.12  contracted with a school district to provide educational 
 78.13  services for eligible pupils under section 126.22, subdivision 
 78.14  2, the district contracting with the private organization must 
 78.15  reimburse the provider an amount equal to at least 88 percent of 
 78.16  the basic revenue determined according to section 124.248, 
 78.17  subdivisions 1 to 3, of the district for each pupil attending 
 78.18  the program full time.  For a pupil attending the program part 
 78.19  time, basic revenue paid to the program shall be reduced 
 78.20  proportionately, according to the amount of time the pupil 
 78.21  attends the program, and basic revenue paid to the district 
 78.22  shall be reduced accordingly.  Pupils for whom a district 
 78.23  provides reimbursement may not be counted by the district for 
 78.24  any purpose other than computation of basic revenue, according 
 78.25  to section 124A.22, subdivision 2 determined according to 
 78.26  section 124.248, subdivisions 1 to 3.  If payment is made to a 
 78.27  district or program for a pupil under this section, the 
 78.28  department of education shall not make a payment for the same 
 78.29  pupil under section 126.22, subdivision 8. 
 78.30     Sec. 107.  Minnesota Statutes 1994, section 268.06, 
 78.31  subdivision 27, is amended to read: 
 78.32     Subd. 27.  [METHOD OF PAYMENT BY POLITICAL SUBDIVISION TO 
 78.33  FUND.] Effective January 1, 1974, a political subdivision or 
 78.34  instrumentality thereof is hereby authorized and directed to pay 
 78.35  its obligations under subdivision 25 by moneys collected from 
 78.36  taxes or other revenues.  Each and every political subdivision 
 79.1   authorized to levy taxes may include in its tax levy the amount 
 79.2   necessary to pay such obligations.  If the taxes authorized to 
 79.3   be levied under this subdivision cause the total amount of taxes 
 79.4   levied to exceed any limitation whatsoever upon the power of a 
 79.5   political subdivision to levy taxes, such political subdivision, 
 79.6   except school districts, may levy taxes in excess of the 
 79.7   limitations in such amounts as is necessary to meet its 
 79.8   obligation under subdivision 25.  The expenditures authorized to 
 79.9   be made under subdivision 25 shall not be included in computing 
 79.10  the cost of government as defined in any home rule charter of 
 79.11  any city affected thereby.  The governing body of a 
 79.12  municipality, for the purpose of meeting its liabilities under 
 79.13  subdivision 25, in the event of a deficit, may issue its 
 79.14  obligations payable in not more than two years, in an amount 
 79.15  which may cause its indebtedness to exceed any statutory or 
 79.16  charter limitations, without an election, and may levy taxes to 
 79.17  pay therefor in the manner provided in section 475.61. 
 79.18     Sec. 108.  Minnesota Statutes 1994, section 275.065, 
 79.19  subdivision 1, is amended to read: 
 79.20     Subdivision 1.  [PROPOSED LEVY.] (a) Notwithstanding any 
 79.21  law or charter to the contrary, on or before September 15, each 
 79.22  taxing authority, other than a school district, shall adopt a 
 79.23  proposed budget and each taxing authority shall certify to the 
 79.24  county auditor the proposed or, in the case of a town, the final 
 79.25  property tax levy for taxes payable in the following year. 
 79.26     (b) On or before September 30, each school district shall 
 79.27  certify to the county auditor the proposed property tax levy for 
 79.28  taxes payable in the following year.  The school district may 
 79.29  certify the proposed levy as: 
 79.30     (1) a specific dollar amount; or 
 79.31     (2) an amount equal to the maximum levy limitation 
 79.32  certified by the commissioner of education to the county auditor 
 79.33  according to section 124.918, subdivision 1. 
 79.34     (c) If the board of estimate and taxation or any similar 
 79.35  board that establishes maximum tax levies for taxing 
 79.36  jurisdictions within a first class city certifies the maximum 
 80.1   property tax levies for funds under its jurisdiction by charter 
 80.2   to the county auditor by September 15, the city shall be deemed 
 80.3   to have certified its levies for those taxing jurisdictions. 
 80.4      (d) For purposes of this section, "taxing authority" 
 80.5   includes all home rule and statutory cities, towns, counties, 
 80.6   school districts, and special taxing districts as defined in 
 80.7   section 275.066.  Intermediate school districts that levy a tax 
 80.8   under chapter 124 or 136D, joint powers boards established under 
 80.9   sections 124.491 to 124.495, and common school districts No. 
 80.10  323, Franconia, and No. 815, Prinsburg, are also special taxing 
 80.11  districts for purposes of this section.  
 80.12     Sec. 109.  Minnesota Statutes 1994, section 275.60, is 
 80.13  amended to read: 
 80.14     275.60 [LEVY OR BOND REFERENDUM; BALLOT NOTICE.] 
 80.15     Notwithstanding any general or special law or any charter 
 80.16  provisions, but subject to section 124A.03, subdivision 2, any 
 80.17  question submitted to the voters by any local governmental 
 80.18  subdivision at a general or special election after the day of 
 80.19  final enactment, authorizing a property tax levy or tax rate 
 80.20  increase, including the issuance of debt obligations payable in 
 80.21  whole or in part from property taxes, must include on the ballot 
 80.22  the following notice in boldface type.  
 80.23     "BY VOTING "YES" ON THIS BALLOT QUESTION, YOU ARE VOTING 
 80.24     FOR A PROPERTY TAX INCREASE." 
 80.25     For purposes of this section and section 275.61, "local 
 80.26  governmental subdivision" includes counties, home rule and 
 80.27  statutory cities, towns, school districts, and all special 
 80.28  taxing districts.  This statement is in addition to any general 
 80.29  or special laws or any charter provisions that govern the 
 80.30  contents of a ballot question. 
 80.31     This section does not apply to a school district bond 
 80.32  election if the debt service payments are to be made entirely 
 80.33  from transfers of revenue from the capital fund to the debt 
 80.34  service fund. 
 80.35     Sec. 110.  Minnesota Statutes 1994, section 469.1831, 
 80.36  subdivision 4, is amended to read: 
 81.1      Subd. 4.  [PROGRAM MONEY; DISTRIBUTION AND RESTRICTIONS.] 
 81.2   (a) Neighborhood revitalization program money may only be 
 81.3   expended in accordance with the program for a purpose listed in 
 81.4   subdivision 3 or this subdivision.  Program money may not be 
 81.5   used in those project areas of the city where the city 
 81.6   determines that private investment will be sufficient to provide 
 81.7   for development and redevelopment of the project area without 
 81.8   public sector assistance, except in cases where program money is 
 81.9   being used to remove or rehabilitate structurally substandard or 
 81.10  obsolete buildings.  Revenues derived from tax increments may 
 81.11  only be expended for the purposes otherwise permitted by law, 
 81.12  except that notwithstanding any law to the contrary, the city 
 81.13  must pay at least the following amount of program money, 
 81.14  including revenues derived from tax increments:  (1) 15 percent 
 81.15  to the school district, (2) 7.5 percent to the county, and (3) 
 81.16  7.5 percent for social services.  Payment must be made to the 
 81.17  county and school district within 15 days after the city 
 81.18  receives the distribution of increment revenues, provided that 
 81.19  the payment for calendar year 1990 may be made at any time 
 81.20  during the year.  Payment to the county for social services 
 81.21  delivery shall be paid only after approval of program and 
 81.22  spending plans under paragraph (b).  Payment to the school 
 81.23  district for education programs and services shall be paid only 
 81.24  after approval of program and spending plans under paragraph (b).
 81.25     (b) The money distributed to the county in a calendar year 
 81.26  must be deducted from the county's levy limit for the following 
 81.27  calendar year.  In calculating the county's levy limit base for 
 81.28  later years, the amount deducted must be treated as a local 
 81.29  government aid payment. 
 81.30     The city must notify the commissioner of education of the 
 81.31  amount of the payment made to the school district for the year.  
 81.32  The commissioner shall deduct from the school district's state 
 81.33  education aid payments one-half of the amount received by the 
 81.34  school district. 
 81.35     The program money paid to the school district by the city 
 81.36  less any amount of state aid deducted by the commissioner must 
 82.1   be expended for additional education programs and services in 
 82.2   accordance with the program.  The amounts expended by the school 
 82.3   district may not replace existing services. 
 82.4      The money for social services must be paid to the county 
 82.5   for the cost of the provision of social services under the plan, 
 82.6   as approved by the policy board and the county board.  
 82.7      (c) The city must expend on housing programs and related 
 82.8   purposes as provided by the program at least 75 percent of the 
 82.9   program money, after deducting the payments to the school 
 82.10  district and county. 
 82.11     (d) Notwithstanding any other provisions of law to the 
 82.12  contrary, for a city of the first class qualifying under section 
 82.13  469.1781, paragraph (a), program money and money described in 
 82.14  Laws 1990, chapter 604, article 7, section 29, as amended, may 
 82.15  be expended anywhere within the city by the authority for a 
 82.16  purpose permitted by this section for any political subdivision 
 82.17  without compliance with section 469.175, subdivision 4, and such 
 82.18  money shall be deemed to be expended for a purpose that is a 
 82.19  permitted project under section 469.176 and for a purpose that 
 82.20  is permitted under section 469.176 for the district from which 
 82.21  the increment was received. 
 82.22     Sec. 111.  [ALTERNATIVE DEBT SERVICE PLAN.] 
 82.23     Notwithstanding the procedures for dealing with outstanding 
 82.24  debt in Minnesota Statutes, section 122.23, subdivision 16, 
 82.25  independent school district Nos. 789, Clarissa, and 790, Eagle 
 82.26  Bend may develop an alternative plan for meeting debt service 
 82.27  for bonds outstanding at the time of reorganization.  That plan 
 82.28  may provide for the obligation of paying bonds outstanding at 
 82.29  the time of reorganization to remain with the district that 
 82.30  originally issued the bonds except that the plan may provide for 
 82.31  independent school district No. 790, Eagle Bend when its 
 82.32  outstanding debt is paid off, to continue making a debt levy and 
 82.33  contribute the proceeds of that levy towards the outstanding 
 82.34  debt of independent school district No. 789, Clarissa.  This 
 82.35  debt plan must be approved by the commissioner of education as 
 82.36  in Minnesota Statutes, section 122.23, subdivision 6.  Any 
 83.1   contributions toward the debt of independent school district No. 
 83.2   789, Clarissa, by independent school district No. 790, Eagle 
 83.3   Bend under this section must not be considered in the 
 83.4   calculation of debt equalization aid for independent school 
 83.5   district Nos. 790, Eagle Bend or 789, Clarissa. 
 83.6      Sec. 112.  [CAPITAL FACILITIES USE.] 
 83.7      Notwithstanding Minnesota Statutes, section 124.243, 
 83.8   subdivision 8, for fiscal year 1996 a district may use up to 
 83.9   one-third of its capital expenditure facilities revenue for 
 83.10  equipment uses under Minnesota Statutes, section 124.244. 
 83.11     Sec. 113.  [LEVY ADJUSTMENT; LE SUEUR-HENDERSON.] 
 83.12     Independent school district No. 2397, Le Sueur-Henderson, 
 83.13  must not receive a negative levy adjustment for any referendum 
 83.14  levy made by independent school district No. 734, Henderson, 
 83.15  that was certified for taxes payable in 1992. 
 83.16     Sec. 114.  [TRANSPORTATION FUND ELIMINATION.] 
 83.17     Effective July 1, 1996, the transportation fund of each 
 83.18  school district or other unit reporting under Minnesota 
 83.19  Statutes, section 121.908, is dissolved.  Any positive balances 
 83.20  shall be transferred to the general fund and shall be used for 
 83.21  the purposes in Minnesota Statutes, section 124A.225. 
 83.22     Sec. 115.  [UNRECOVERED RAILROAD AID.] 
 83.23     Unrecovered railroad aid payments pursuant to Laws 1984, 
 83.24  chapter 502, article 9, section 5, shall be adjusted from the 
 83.25  school district's aid in fiscal year 1997.  If the aid reduction 
 83.26  required by this section cannot be made to the aid for fiscal 
 83.27  year 1997, the reduction must be made from aid for subsequent 
 83.28  fiscal years. 
 83.29     Sec. 116.  [PILOT ENHANCED PAIRING AGREEMENT.] 
 83.30     Subdivision 1.  [AGREEMENT.] Notwithstanding any law to the 
 83.31  contrary, any two or more of the boards of independent school 
 83.32  district Nos. 648, Danube, 654, Renville, 655, Sacred Heart, and 
 83.33  631, Belview, may enter into an enhanced pairing agreement 
 83.34  providing for the discontinuance of one or more grades, or 
 83.35  portions of those grades, and for the instruction of those 
 83.36  grades in another district that is subject to the agreement.  
 84.1   The agreement, and all subsequent amendments, if any, shall be 
 84.2   filed with the commissioner of education. 
 84.3      Subd. 2.  [SINGLE BOARD.] The districts shall provide in 
 84.4   the enhanced pairing agreement that the governance of the 
 84.5   districts will be by the combined membership of the separate 
 84.6   boards acting as a single board for purposes of quorum and 
 84.7   passing resolutions.  A quorum must include a minimum of one 
 84.8   member from each of the separate boards.  The membership of the 
 84.9   separate boards may be reduced to five members in a manner 
 84.10  consistent with Minnesota Statutes, section 123.33, subdivision 
 84.11  1.  The actions reserved for the separate boards shall be 
 84.12  ratification of amendments to the agreement, serving a notice of 
 84.13  withdrawal from the agreement, and other items reserved for the 
 84.14  separate boards as defined in the agreement. 
 84.15     Subd. 3.  [PERSONNEL.] The districts subject to the 
 84.16  enhanced pairing agreement must have one exclusive bargaining 
 84.17  representative, one master contract, and a combined seniority 
 84.18  list.  The teachers and other employees of the districts will be 
 84.19  employees of the single board established by the agreement 
 84.20  unless specifically excluded in the agreement.  If the agreement 
 84.21  dissolves or a board withdraws from the agreement, the affected 
 84.22  employees shall be provided for in a manner consistent with 
 84.23  Minnesota Statutes, section 122.895. 
 84.24     Subd. 4.  [FINANCIAL.] (a) Fiscal operations shall be 
 84.25  merged under the enhanced pairing agreement, and the single 
 84.26  board shall be the fiscal agent to meet reporting requirements.  
 84.27  The department of education shall assign a single identification 
 84.28  number to apply to the districts subject to the agreement.  
 84.29  Levies shall be made jointly except for levies under Minnesota 
 84.30  Statutes, sections 124A.03 and 124.97.  Districts subject to the 
 84.31  agreement shall be considered a single independent school 
 84.32  district for purposes of fees or dues assessments. 
 84.33     (b) Title to all the unattached property and all cash 
 84.34  reserves of any district subject to the enhanced pairing 
 84.35  agreement shall become the property of the single board unless 
 84.36  otherwise provided for in the agreement.  All legally valid and 
 85.1   enforceable claims and contract obligations pass to the single 
 85.2   board.  For purposes of litigation, the districts subject to the 
 85.3   agreement may be recognized singly or jointly.  If the agreement 
 85.4   dissolves or a board withdraws from the agreement, the 
 85.5   commissioner shall divide assets and liabilities of the single 
 85.6   board proportionately based on the weighted average daily 
 85.7   membership over the last three years. 
 85.8      Subd. 5.  [NOTICE AND HEARING.] Prior to entering into an 
 85.9   enhanced pairing agreement, the school board shall consult with 
 85.10  the community at an informational meeting.  The board shall 
 85.11  publish notice of the meeting in the official newspaper of the 
 85.12  district. 
 85.13     Sec. 117.  [FORMULA ALLOWANCE.] 
 85.14     Notwithstanding the amount of the formula allowance for 
 85.15  fiscal year 1997, in Minnesota Statutes, section 124A.22, 
 85.16  subdivision 2, the commissioner shall use the amount of $3,150 
 85.17  for fiscal year 1997 in determining the payments under Minnesota 
 85.18  Statutes, sections 123.3514, subdivisions 6 and 8; 124A.02, 
 85.19  subdivision 21; 126.22; and 126.23. 
 85.20     Sec. 118.  [APPROPRIATIONS.] 
 85.21     Subdivision 1.  [DEPARTMENT OF EDUCATION.] The sums 
 85.22  indicated in this section are appropriated from the general fund 
 85.23  to the department of education for the fiscal years designated.  
 85.24     Subd. 2.  [CAPITAL EXPENDITURE FACILITIES AID.] For capital 
 85.25  expenditure facilities aid according to Minnesota Statutes, 
 85.26  section 124.243, subdivision 5:  
 85.27       $78,353,000     .....     1996 
 85.28       $11,848,100     .....     1997
 85.29     The 1996 appropriation includes $11,214,000 for 1995 and 
 85.30  $67,139,000 for 1996.  
 85.31     The 1997 appropriation includes $11,848,100 for 1996. 
 85.32     Subd. 3.  [CAPITAL EXPENDITURE EQUIPMENT AID.] For capital 
 85.33  expenditure equipment aid according to Minnesota Statutes, 
 85.34  section 124.244, subdivision 3:  
 85.35       $41,933,400     .....     1996 
 85.36       $ 6,379,700     .....     1997
 86.1      The 1996 appropriation includes $5,782,000 for 1995 and 
 86.2   $36,151,400 for 1996.  
 86.3      The 1997 appropriation includes $6,379,700 for 1996. 
 86.4      Subd. 4.  [CAPITAL FACILITY GRANTS FOR COOPERATION AND 
 86.5   COMBINATION.] For competitive grants under Minnesota Statutes, 
 86.6   section 124C.60: 
 86.7        $408,000     .....     1996
 86.8      Subd. 5.  [CONSOLIDATION TRANSITION AID.] For districts 
 86.9   consolidating under Minnesota Statutes, section 124.2726: 
 86.10       $ 991,000     .....     1996
 86.11       $1,153,000    .....     1997
 86.12     The 1996 appropriation includes $75,000 for 1995 and 
 86.13  $916,000 for 1996. 
 86.14     The 1997 appropriation includes $162,000 for 1996 and 
 86.15  $991,000 for 1997. 
 86.16     Subd. 6.  [COOPERATION AND COMBINATION AID.] For aid for 
 86.17  districts that cooperate and combine according to Minnesota 
 86.18  Statutes, section 124.2725: 
 86.19       $3,297,000     .....     1996 
 86.20       $1,973,000     .....     1997
 86.21     The 1996 appropriation includes $542,000 for 1995 and 
 86.22  $2,755,000 for 1996.  
 86.23     The 1997 appropriation includes $486,000 for 1996 and 
 86.24  $1,487,000 for 1997.  
 86.25     Subd. 7.  [DISTRICT COOPERATION REVENUE.] For district 
 86.26  cooperation revenue aid: 
 86.27       $14,070,300    .....     1996
 86.28       $12,797,700    .....     1997
 86.29     The 1996 appropriation includes $2,115,000 for 1995 and 
 86.30  $11,955,300 for 1996. 
 86.31     The 1997 appropriation includes $2,109,800 for 1996 and 
 86.32  $10,687,900 for 1997. 
 86.33     Subd. 8.  [HEALTH AND SAFETY AID.] For health and safety 
 86.34  aid according to Minnesota Statutes, section 124.83, subdivision 
 86.35  5: 
 86.36       $14,725,000     .....     1996 
 87.1        $11,760,000     .....     1997
 87.2      The 1996 appropriation includes $2,606,000 for 1995 and 
 87.3   $12,119,000 for 1996.  
 87.4      The 1997 appropriation includes $2,138,000 for 1996 and 
 87.5   $9,622,000 for 1997.  
 87.6      Subd. 9.  [DEBT SERVICE AID.] For debt service aid 
 87.7   according to Minnesota Statutes, section 124.95, subdivision 5: 
 87.8        $30,054,000     .....     1996
 87.9        $27,370,000     .....     1997
 87.10     The 1996 appropriation includes $30,054,000 for 1996. 
 87.11     The 1997 appropriation includes $27,370,000 for 1997.  This 
 87.12  appropriation is 85 percent of the aid entitlement for 1997. 
 87.13     Subd. 10.  [GENERAL AND SUPPLEMENTAL EDUCATION AID.] For 
 87.14  general and supplemental education aid:  
 87.15       $2,072,750,000     .....     1996
 87.16       $2,320,338,000     .....     1997
 87.17     The 1996 appropriation includes $301,965,000 for 1995 and 
 87.18  $1,770,785,000 for 1996.  
 87.19     The 1997 appropriation includes $325,175,000 for 1996 and 
 87.20  $1,995,164,000 for 1997.  
 87.21     Subd. 11.  [SPECIAL CONSOLIDATION AID.] For special 
 87.22  consolidation aid under Minnesota Statutes, section 124.2728: 
 87.23       $75,000    .....     1996
 87.24       $40,000    .....     1997
 87.25     The 1996 appropriation includes $12,000 for 1995 and 
 87.26  $63,000 for 1996. 
 87.27     The 1997 appropriation includes $9,000,000 for 1996 and 
 87.28  $31,000 for 1997. 
 87.29     Subd. 12.  [TRANSPORTATION AID.] For transportation aid 
 87.30  according to Minnesota Statutes, section 124.225: 
 87.31       $145,896,000     .....     1996
 87.32       $ 22,033,000     .....     1997
 87.33     The 1996 appropriation includes $21,038,000 for 1995 and 
 87.34  $124,858,000 for 1996.  
 87.35     The 1997 appropriation includes $22,033,000 for 1996. 
 87.36     Subd. 13.  [TRANSPORTATION AID FOR ENROLLMENT OPTIONS.] For 
 88.1   transportation of pupils attending post-secondary institutions 
 88.2   according to Minnesota Statutes, section 123.3514 or for 
 88.3   transportation of pupils attending nonresident districts 
 88.4   according to Minnesota Statutes, section 120.062: 
 88.5        $ 92,000     .....     1996
 88.6        $102,000     .....     1997
 88.7      Subd. 14.  [NONPUBLIC PUPIL AID.] For nonpublic pupil 
 88.8   education aid according to Minnesota Statutes, sections 123.79 
 88.9   and 123.931 to 123.947: 
 88.10        $ 9,686,000      .....      1996 
 88.11        $22,043,000      .....      1997 
 88.12     The 1996 appropriation includes $1,452,000 for 1995 and 
 88.13  $8,234,000 for 1996. 
 88.14     The 1997 appropriation includes $1,452,000 for 1996 and 
 88.15  $20,591,000 for 1997.  $13,809,000 of the 1997 appropriation is 
 88.16  85 percent of the entitlement for transportation under Minnesota 
 88.17  Statutes, section 123.79. 
 88.18     Subd. 15.  [RURAL COMPUTERIZED TRANSPORTATION ROUTING PILOT 
 88.19  PROJECT.] For a grant to independent school district No. 2148, 
 88.20  Blue Earth Area, for equipment and software to develop a 
 88.21  computerized school bus routing and mapping system.  The grantee 
 88.22  district shall cooperate with at least two other school 
 88.23  districts in developing and implementing the system: 
 88.24        $25,000      .....      1996 
 88.25     Subd. 16.  [WIDE AREA TRANSPORTATION SERVICE PILOT 
 88.26  PROJECT.] For a wide area transportation service pilot project: 
 88.27        $250,000      .....      1996 
 88.28     The purpose of the project is to pilot the use of 
 88.29  computerized mapping and scheduling programs for school 
 88.30  districts to jointly provide transportation services for 
 88.31  low-incidence programs in the metropolitan area.  These services 
 88.32  include, but are not limited to, transportation for special 
 88.33  education, nonpublic pupils, results-oriented chartered schools, 
 88.34  enrollment options programs, area learning center programs and 
 88.35  desegregation programs.  The department shall work with 
 88.36  representatives of the affected programs, transportation 
 89.1   managers from both metropolitan and rural districts, and the 
 89.2   metropolitan council.  The department shall contract for 
 89.3   services as appropriate.  The project may consider the 
 89.4   relationship of education transportation with transportation 
 89.5   services provided by noneducation agencies.  This appropriation 
 89.6   is available until June 30, 1997. 
 89.7      Subd. 17.  [TRANSPORTATION SAFETY.] For student 
 89.8   transportation safety aid according to Minnesota Statutes, 
 89.9   section 124.225, subdivision 8m: 
 89.10       $2,522,000     .....     1996 
 89.11       $  380,000     .....     1997
 89.12     The 1996 appropriation includes $368,000 for 1995 and 
 89.13  $2,154,000 for 1996.  
 89.14     The 1997 appropriation includes $380,000 for 1996. 
 89.15     Subd. 18.  [ABATEMENT AID.] For abatement aid according to 
 89.16  Minnesota Statutes, section 124.214: 
 89.17        $24,241,000      .....      1996 
 89.18        $ 8,905,000      .....      1997 
 89.19     The 1996 appropriation includes $1,135,000 for 1995 and 
 89.20  $23,106,000 for 1996. 
 89.21     The 1997 appropriation includes $4,077,000 for 1996 and 
 89.22  $4,828,000 for 1997. 
 89.23     Subd. 19.  [ONE ROOM SCHOOLHOUSE.] For a grant to 
 89.24  independent school district No. 690, Warroad, to operate the 
 89.25  Angle Inlet School: 
 89.26        $50,000      .....      1996 
 89.27        $50,000      .....      1997 
 89.28     Subd. 20.  [PRESTON-FOUNTAIN; HARMONY DISTRICT.] For a 
 89.29  grant to the new school district comprised of independent school 
 89.30  district No. 233, Preston-Fountain and independent school 
 89.31  district No. 228, Harmony: 
 89.32        $70,000      .....      1996 
 89.33     This grant must be placed in the district's debt redemption 
 89.34  fund.  The department must reduce the new district debt service 
 89.35  levy by this amount. 
 89.36     Subd. 21.  [PLANNING GRANT.] For a grant to independent 
 90.1   school district Nos. 325, Lakefield; 328, Sioux Valley; 330, 
 90.2   Heron Lake-Okabena; 513, Brewster; and 516, Round Lake acting as 
 90.3   a joint powers agreement: 
 90.4        $40,000     .....     1996 
 90.5      The grant is to cover costs associated with planning for 
 90.6   facility needs for a combined district.  The facilities must 
 90.7   provide for the location of a significant number of 
 90.8   noneducational student and community service programs within the 
 90.9   facility.  The joint powers group must consult with independent 
 90.10  school district Nos. 324, Jackson; 177, Windom; and 518, 
 90.11  Worthington, and include facility needs and availability in 
 90.12  those districts in the group's planning. 
 90.13     Subd. 22.  [BUS INCIDENT REPORTING FORMS.] For the cost of 
 90.14  bus incident reporting forms: 
 90.15        $100,000      .....      1996 
 90.16     The commissioner of education, in consultation with the 
 90.17  commissioner of public safety and the school bus safety advisory 
 90.18  committee, shall use this appropriation to reimburse school 
 90.19  districts for the costs of school bus incident reporting forms. 
 90.20     Subd. 23.  [SECONDARY VOCATIONAL EDUCATION AID.] For 
 90.21  secondary vocational education aid according to Minnesota 
 90.22  Statutes, section 124.573: 
 90.23       $13,449,000     .....     1996 
 90.24       $ 2,018,000     .....     1997 
 90.25     The 1996 appropriation includes $2,017,000 for 1995 and 
 90.26  $11,432,000 for 1996.  
 90.27     The 1997 appropriation includes $2,018,000 for 1996 and $0 
 90.28  for 1997.  
 90.29     Sec. 119.  [REPEALER.] 
 90.30     (a) Minnesota Statutes 1994, sections 123.3514, subdivision 
 90.31  9; and 124A.27, subdivision 11, are repealed. 
 90.32     (b) Minnesota Statutes 1994, sections 121.912, subdivisions 
 90.33  7 and 8; 123.37, subdivision 1b; 124.17, subdivision 1b; 
 90.34  124.225, subdivisions 1, 3a, 7a, 7b, 7d, 7e, 8a, 8k, 8m, and 10; 
 90.35  124.226; 124.243; 124.244; 124.912, subdivisions 7 and 8; 
 90.36  124.962; 124A.22, subdivisions 4, 4a, and 4b; 124A.26; and 
 91.1   126.019, are repealed. 
 91.2      (c) Minnesota Statutes 1994, section 124.83, is repealed. 
 91.3      (d) Minnesota Statutes 1994, sections 124.2455; and 124.91, 
 91.4   subdivision 2, are repealed except that districts may continue 
 91.5   to levy under subdivision 2, for contracts entered into prior to 
 91.6   July 1, 1995. 
 91.7      Sec. 120.  [EFFECTIVE DATE.] 
 91.8      Section 119, paragraph (a), is effective July 1, 1995. 
 91.9      Sections 1, 4, 6, paragraph b, clause (3), item (i), 8, 19, 
 91.10  20, 22, 23, 27, 34, 37, 42, 44, 45, 51, 61, 62, 65, 66, 69, 
 91.11  paragraph (b), clause (ii), 76, 77, 87 to 95, 98, 107, and 119, 
 91.12  paragraph (b), are effective for revenue for fiscal year 1997. 
 91.13     Section 49, paragraph (c), is effective retroactive to July 
 91.14  1, 1993, and applies for fiscal years 1994 and 1995. 
 91.15     Section 119, paragraphs (c) and (d), are effective for 
 91.16  revenue for fiscal year 1999. 
 91.17                             ARTICLE 2 
 91.18                      TARGETED NEEDS PROGRAMS 
 91.19     Section 1.  Minnesota Statutes 1994, section 120.17, 
 91.20  subdivision 3b, is amended to read: 
 91.21     Subd. 3b.  [PROCEDURES FOR DECISIONS.] Every district shall 
 91.22  utilize at least the following procedures for decisions 
 91.23  involving identification, assessment, and educational placement 
 91.24  of children with a disability: 
 91.25     (a) Parents and guardians shall receive prior written 
 91.26  notice of:  
 91.27     (1) any proposed formal educational assessment or proposed 
 91.28  denial of a formal educational assessment of their child; 
 91.29     (2) a proposed placement of their child in, transfer from 
 91.30  or to, or denial of placement in a special education program; or 
 91.31     (3) the proposed provision, addition, denial or removal of 
 91.32  special education services for their child; 
 91.33     (b) The district shall not proceed with the initial formal 
 91.34  assessment of a child, the initial placement of a child in a 
 91.35  special education program, or the initial provision of special 
 91.36  education services for a child without the prior written consent 
 92.1   of the child's parent or guardian.  The refusal of a parent or 
 92.2   guardian to consent may be overridden by the decision in a 
 92.3   hearing held pursuant to clause (e) at the district's 
 92.4   initiative; 
 92.5      (c) Parents and guardians shall have an opportunity to meet 
 92.6   with appropriate district staff in at least one conciliation 
 92.7   conference if they object to any proposal of which they are 
 92.8   notified pursuant to clause (a).  The conciliation process shall 
 92.9   not be used to deny or delay a parent or guardian's right to a 
 92.10  due process hearing.  If the parent or guardian refuses efforts 
 92.11  by the district to conciliate the dispute with the school 
 92.12  district, the requirement of an opportunity for conciliation 
 92.13  shall be deemed to be satisfied; 
 92.14     (d) The commissioner shall establish a mediation process to 
 92.15  assist parents, school districts, or other parties to resolve 
 92.16  disputes arising out of the identification, assessment, or 
 92.17  educational placement of children with a disability.  The 
 92.18  mediation process must be offered as an informal alternative to 
 92.19  the due process hearing provided under clause (e), but must not 
 92.20  be used to deny or postpone the opportunity of a parent or 
 92.21  guardian to obtain a due process hearing. 
 92.22     (e) Parents, guardians, and the district shall have an 
 92.23  opportunity to obtain an impartial due process hearing initiated 
 92.24  and conducted by and in the school district responsible for 
 92.25  assuring that an appropriate program is provided in accordance 
 92.26  with state board rules, if the parent or guardian continues to 
 92.27  object to:  
 92.28     (1) a proposed formal educational assessment or proposed 
 92.29  denial of a formal educational assessment of their child; 
 92.30     (2) the proposed placement of their child in, or transfer 
 92.31  of their child to a special education program; 
 92.32     (3) the proposed denial of placement of their child in a 
 92.33  special education program or the transfer of their child from a 
 92.34  special education program; 
 92.35     (4) the proposed provision or addition of special education 
 92.36  services for their child; or 
 93.1      (5) the proposed denial or removal of special education 
 93.2   services for their child. 
 93.3      At least five Within 15 calendar days before the after the 
 93.4   request for a hearing, or as directed by the hearing officer, 
 93.5   the objecting party shall provide the other party with a brief 
 93.6   written statement of the objection and the reasons for the 
 93.7   objection and a written statement of the specific remedies 
 93.8   sought.  
 93.9      The hearing shall take place before an impartial hearing 
 93.10  officer mutually agreed to by the school board and the parent or 
 93.11  guardian.  If the school board and the parent or guardian are 
 93.12  unable to agree on a hearing officer, the school board shall 
 93.13  request the commissioner to appoint a hearing officer.  The 
 93.14  hearing officer shall not be a school board member or employee 
 93.15  of the school district where the child resides or of the child's 
 93.16  school district of residence, an employee of any other public 
 93.17  agency involved in the education or care of the child, or any 
 93.18  person with a personal or professional interest which would 
 93.19  conflict with the person's objectivity at the hearing.  A person 
 93.20  who otherwise qualifies as a hearing officer is not an employee 
 93.21  of the district solely because the person is paid by the 
 93.22  district to serve as a hearing officer.  If the hearing officer 
 93.23  requests an independent educational assessment of a child, the 
 93.24  cost of the assessment shall be at district expense.  The 
 93.25  proceedings shall be recorded and preserved, at the expense of 
 93.26  the school district, pending ultimate disposition of the action. 
 93.27     (f) The decision of the hearing officer pursuant to clause 
 93.28  (e) shall be rendered not more than 45 calendar days from the 
 93.29  date of the receipt of the request for the hearing.  A hearing 
 93.30  officer may grant specific extensions of time beyond the 45-day 
 93.31  period at the request of either party.  The decision of the 
 93.32  hearing officer shall be binding on all parties unless appealed 
 93.33  to the hearing review officer by the parent, guardian, or the 
 93.34  school board of the district where the child resides pursuant to 
 93.35  clause (g). 
 93.36     The local decision shall: 
 94.1      (1) be in writing; 
 94.2      (2) state the controlling facts upon which the decision is 
 94.3   made in sufficient detail to apprise the parties and the hearing 
 94.4   review officer of the basis and reason for the decision; 
 94.5      (3) state whether the special education program or special 
 94.6   education services appropriate to the child's needs can be 
 94.7   reasonably provided within the resources available to the 
 94.8   responsible district or districts; 
 94.9      (4) state the amount and source of any additional district 
 94.10  expenditure necessary to implement the decision; and 
 94.11     (5) be based on the standards set forth in subdivision 3a 
 94.12  and the rules of the state board. 
 94.13     (g) Any local decision issued pursuant to clauses (e) and 
 94.14  (f) may be appealed to the hearing review officer within 30 
 94.15  calendar days of receipt of that written decision, by the 
 94.16  parent, guardian, or the school board of the district 
 94.17  responsible for assuring that an appropriate program is provided 
 94.18  in accordance with state board rules. 
 94.19     If the decision is appealed, a written transcript of the 
 94.20  hearing shall be made by the school district and shall be 
 94.21  accessible to the parties involved within five calendar days of 
 94.22  the filing of the appeal.  The hearing review officer shall 
 94.23  issue a final independent decision based on an impartial review 
 94.24  of the local decision and the entire record within 30 calendar 
 94.25  days after the filing of the appeal.  The hearing review officer 
 94.26  shall seek additional evidence if necessary and may afford the 
 94.27  parties an opportunity for written or oral argument; provided 
 94.28  any hearing held to seek additional evidence shall be an 
 94.29  impartial due process hearing but shall be deemed not to be a 
 94.30  contested case hearing for purposes of chapter 14.  The hearing 
 94.31  review officer may grant specific extensions of time beyond the 
 94.32  30-day period at the request of any party. 
 94.33     The final decision shall: 
 94.34     (1) be in writing; 
 94.35     (2) include findings and conclusions; and 
 94.36     (3) be based upon the standards set forth in subdivision 3a 
 95.1   and in the rules of the state board. 
 95.2      (h) The decision of the hearing review officer shall be 
 95.3   final unless appealed by the parent or guardian or school board 
 95.4   to the court of appeals.  The judicial review shall be in 
 95.5   accordance with chapter 14.  
 95.6      (i) The commissioner of education shall select an 
 95.7   individual who has the qualifications enumerated in this 
 95.8   paragraph to serve as the hearing review officer: 
 95.9      (1) the individual must be knowledgeable and impartial; 
 95.10     (2) the individual must not have a personal interest in or 
 95.11  specific involvement with the student who is a party to the 
 95.12  hearing; 
 95.13     (3) the individual must not have been employed as an 
 95.14  administrator by the district that is a party to the hearing; 
 95.15     (4) the individual must not have been involved in the 
 95.16  selection of the administrators of the district that is a party 
 95.17  to the hearing; 
 95.18     (5) the individual must not have a personal, economic, or 
 95.19  professional interest in the outcome of the hearing other than 
 95.20  the proper administration of the federal and state laws, rules, 
 95.21  and policies; 
 95.22     (6) the individual must not have substantial involvement in 
 95.23  the development of a state or local policy or procedures that 
 95.24  are challenged in the appeal; and 
 95.25     (7) the individual is not a current employee or board 
 95.26  member of a Minnesota public school district, education 
 95.27  district, intermediate unit or regional education agency, the 
 95.28  state department of education, the state board of education, or 
 95.29  a parent advocacy organization or group.  
 95.30     (j) In all appeals, the parent or guardian of the pupil 
 95.31  with a disability or the district that is a party to the hearing 
 95.32  may challenge the impartiality or competence of the proposed 
 95.33  hearing review officer by applying to the state board of 
 95.34  education hearing review officer. 
 95.35     (k) Pending the completion of proceedings pursuant to this 
 95.36  subdivision, unless the district and the parent or guardian of 
 96.1   the child agree otherwise, the child shall remain in the child's 
 96.2   current educational placement and shall not be denied initial 
 96.3   admission to school. 
 96.4      (l) The child's school district of residence, a resident 
 96.5   district, and providing district shall receive notice of and may 
 96.6   be a party to any hearings or appeals under this subdivision. 
 96.7      (m) A hearing officer or hearing review officer appointed 
 96.8   under this subdivision shall be deemed to be an employee of the 
 96.9   state under section 3.732 for the purposes of section 3.736 only.
 96.10     (n) In order to be eligible for selection, hearing officers 
 96.11  and hearing review officers shall participate in training and 
 96.12  follow procedures as designated by the commissioner. 
 96.13     Sec. 2.  Minnesota Statutes 1994, section 120.17, is 
 96.14  amended by adding a subdivision to read: 
 96.15     Subd. 3d.  [INTERAGENCY SERVICES.] If at the time of 
 96.16  initial referral for an educational assessment, or a 
 96.17  reassessment, the school district determines that a child with 
 96.18  disabilities who is age 3 through 21 may be eligible for 
 96.19  interagency services, the district shall request that the county 
 96.20  of residence provide a representative to the initial assessment 
 96.21  or reassessment team meeting or the first individual education 
 96.22  plan team meeting following the assessment or reassessment.  The 
 96.23  district may request to have a county representative attend 
 96.24  other individual education plan team meetings when it is 
 96.25  necessary to facilitate coordination between district and county 
 96.26  provided services.  Upon request from a school district, the 
 96.27  resident county shall provide a representative to assist the 
 96.28  individual education plan team in determining the child's 
 96.29  eligibility for existing health, mental health, or other support 
 96.30  services administered or provided by the county.  The individual 
 96.31  education plan team and the county representative shall develop 
 96.32  an interagency plan of care for an eligible child and the 
 96.33  child's family to coordinate services required under the child's 
 96.34  individual education plan with county services.  The interagency 
 96.35  plan of care shall include appropriate family information with 
 96.36  the consent of the family, a description of how services will be 
 97.1   coordinated between the district and county, a description of 
 97.2   service coordinator responsibilities and services, and a 
 97.3   description of activities for obtaining third-party payment for 
 97.4   eligible services, including medical assistance payments. 
 97.5      Sec. 3.  [120.186] [TRAINING FOR EARLY IDENTIFICATION.] 
 97.6      Instructors working with children eligible for services 
 97.7   under Title I, shall receive in-service training for identifying 
 97.8   and referring for services children with attention deficit or 
 97.9   attention deficit/hyperactivity disorders. 
 97.10     Sec. 4.  Minnesota Statutes 1994, section 121.8355, 
 97.11  subdivision 2, is amended to read: 
 97.12     Subd. 2.  [DUTIES.] (a) Each collaborative shall: 
 97.13     (1) establish, with assistance from families and service 
 97.14  providers, clear goals for addressing the health, developmental, 
 97.15  educational, and family-related needs of children and youth and 
 97.16  use outcome-based indicators to measure progress toward 
 97.17  achieving those goals; 
 97.18     (2) establish a comprehensive planning process that 
 97.19  involves all sectors of the community, identifies local needs, 
 97.20  and surveys existing local programs; 
 97.21     (3) integrate service funding sources so that children and 
 97.22  their families obtain services from providers best able to 
 97.23  anticipate and meet their needs; 
 97.24     (4) coordinate families' services to avoid duplicative and 
 97.25  overlapping assessment and intake procedures; 
 97.26     (5) focus primarily on family-centered services; 
 97.27     (6) encourage parents and volunteers to actively 
 97.28  participate by using flexible scheduling and actively recruiting 
 97.29  volunteers; 
 97.30     (7) provide services in locations that are readily 
 97.31  accessible to children and families; 
 97.32     (8) use new or reallocated funds to improve or enhance 
 97.33  services provided to children and their families; 
 97.34     (9) identify federal, state, and local institutional 
 97.35  barriers to coordinating services and suggest ways to remove 
 97.36  these barriers; and 
 98.1      (10) design and implement an integrated local service 
 98.2   delivery system for children and their families that coordinates 
 98.3   services across agencies and is client centered.  The delivery 
 98.4   system shall provide a continuum of services for children birth 
 98.5   to age 18, or birth through age 21 for individuals with 
 98.6   disabilities.  The collaborative shall describe the community 
 98.7   plan for serving pregnant women and children from birth to age 
 98.8   six. 
 98.9      (b) The outcome-based indicators developed in paragraph 
 98.10  (a), clause (1), may include the number of low birth weight 
 98.11  babies, the infant mortality rate, the number of children who 
 98.12  are adequately immunized and healthy, require out-of-home 
 98.13  placement or long-term special education services, and the 
 98.14  number of minor parents. 
 98.15     Sec. 5.  Minnesota Statutes 1994, section 123.3514, 
 98.16  subdivision 7, is amended to read: 
 98.17     Subd. 7.  [FEES; TEXTBOOKS; MATERIALS.] A post-secondary 
 98.18  institution that receives reimbursement for a pupil under 
 98.19  subdivision 6 may not charge that pupil for fees, textbooks, 
 98.20  materials, support services as defined in section 135A.16, or 
 98.21  other necessary costs of the course or program in which the 
 98.22  pupil is enrolled if the charge would be prohibited under 
 98.23  section 120.74, except for equipment purchased by the pupil that 
 98.24  becomes the property of the pupil.  An institution may require 
 98.25  the pupil to pay for fees, textbooks, and materials for a course 
 98.26  taken for post-secondary credit. 
 98.27     Sec. 6.  Minnesota Statutes 1994, section 123.3514, is 
 98.28  amended by adding a subdivision to read: 
 98.29     Subd. 7b.  [SUPPORT SERVICES.] The postsecondary 
 98.30  institution shall inform the pupil of the support services 
 98.31  available at that institution.  If the student has an individual 
 98.32  education plan that provides general education support and 
 98.33  accommodations, the post-secondary institution and the district 
 98.34  shall negotiate an agreement to provide the services.  If the 
 98.35  parties cannot agree on the services, on application of either 
 98.36  party, the commissioner shall resolve the dispute in the same 
 99.1   manner the commissioner fixes tuition rates under section 
 99.2   120.17, subdivision 4.  The commissioner's decision is binding 
 99.3   on both parties. 
 99.4      Sec. 7.  Minnesota Statutes 1994, section 124.17, 
 99.5   subdivision 1, is amended to read: 
 99.6      Subdivision 1.  [PUPIL UNIT.] Pupil units for each resident 
 99.7   pupil in average daily membership shall be counted according to 
 99.8   this subdivision.  
 99.9      (a) A prekindergarten pupil with a disability who is 
 99.10  enrolled for the entire fiscal year in a program approved by the 
 99.11  commissioner and has an individual education plan that requires 
 99.12  up to 437 hours of assessment and education services in the 
 99.13  fiscal year is counted as one-half of a pupil unit.  If the plan 
 99.14  requires more than 437 hours of assessment and education 
 99.15  services, the pupil is counted as the ratio of the number of 
 99.16  hours of assessment and education service to 875, but not more 
 99.17  than one. 
 99.18     (b) A prekindergarten pupil with a disability who is 
 99.19  enrolled for less than the entire fiscal year in a program 
 99.20  approved by the commissioner is counted as the greater of: 
 99.21     (1) one-half times the ratio of the number of instructional 
 99.22  days from the date the pupil is enrolled to the date the pupil 
 99.23  withdraws to the number of instructional days in the school 
 99.24  year; or 
 99.25     (2) the ratio of the number of hours of assessment and 
 99.26  education service required in the fiscal year by the pupil's 
 99.27  individual education program plan to 875, but not more than one. 
 99.28     (c) A prekindergarten pupil who is assessed but determined 
 99.29  not to be handicapped is counted as the ratio of the number of 
 99.30  hours of assessment service to 875.  
 99.31     (d) A kindergarten pupil with a disability who is enrolled 
 99.32  in a program approved by the commissioner is counted as the 
 99.33  ratio of the number of hours of assessment and education 
 99.34  services required in the fiscal year by the pupil's individual 
 99.35  education program plan to 875, but not more than one. 
 99.36     (e) A kindergarten pupil who is not included in paragraph