1.1                          A bill for an act
  1.2             relating to education; authorizing a fund transfer for 
  1.3             independent school district No. 2, Hill City; 
  1.4             providing for the repayment of a debt service loan; 
  1.5             forgiving a general education fund balance reduction; 
  1.6             appropriating money. 
  1.7   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.8      Section 1.  [FUND TRANSFER.] 
  1.9      Notwithstanding Minnesota Statutes, section 121.912 or 
  1.10  121.9121, before June 30, 1997, independent school district No. 
  1.11  2, Hill City, may permanently transfer up to $55,000 from its 
  1.12  general fund to its debt redemption fund for the purpose of 
  1.13  repaying the principal and any interest owed on its outstanding 
  1.14  debt service loans.  Any amount transferred but not used to 
  1.15  repay the debt service loans must be applied to the district's 
  1.16  outstanding capital loan balance. 
  1.17     Sec. 2.  [GENERAL EDUCATION FUND BALANCE REDUCTION 
  1.18  PENALTY.] 
  1.19     Subdivision 1.  [FUND BALANCE COMPUTATION.] The 
  1.20  commissioner of children, families, and learning shall recompute 
  1.21  the general education fund balance reduction for fiscal year 
  1.22  1997 for independent school district No. 2, Hill City.  For 
  1.23  purposes of this reduction, the commissioner shall lower the 
  1.24  district's net unappropriated operating balance as of June 30, 
  1.25  1996, by the amount that is transferred from the general fund to 
  1.26  the debt redemption fund under section 1. 
  2.1      Subd. 2.  [AID ADJUSTMENT.] General education aid for 
  2.2   fiscal year 1997 for independent school district No. 2, Hill 
  2.3   City, must be adjusted according to subdivision 1. 
  2.4      Subd. 3.  [LEVY ADJUSTMENT.] The general education levy 
  2.5   attributable to fiscal year 1997 for independent school district 
  2.6   No. 2, Hill City, must be adjusted according to subdivision 1. 
  2.7      Sec. 3.  [EFFECTIVE DATE.] 
  2.8      Sections 1 and 2 are effective the day following final 
  2.9   enactment.