1.1                          A bill for an act 
  1.2             relating to education; providing for general 
  1.3             education; special programs; community and school 
  1.4             services; children and family support; lifework 
  1.5             development; education organization and cooperation; 
  1.6             education excellence; nutrition and other education 
  1.7             programs; education policy provisions; libraries; 
  1.8             technology; tax deduction and credit; education 
  1.9             investment; state agencies; appropriating money; 
  1.10            amending Minnesota Statutes 1996, sections 120.062, 
  1.11            subdivisions 3, 6, 7, 9, and 11; 121.611, subdivisions 
  1.12            1, 2, and by adding subdivisions; 121.904, subdivision 
  1.13            4a; 123.35, by adding subdivisions; 123.3514, 
  1.14            subdivision 6; 124.155, subdivision 1; 124.17, 
  1.15            subdivisions 1, 1d, 1e, 4, 5, and by adding 
  1.16            subdivisions; 124.175; 124.225, subdivisions 1, 7f, 
  1.17            13, 14, 15, 16, and 17; 124.226, subdivision 10; 
  1.18            124.2445; 124.2455; 124.248, subdivisions 1, 1a, 3, 4, 
  1.19            and by adding a subdivision; 124.2613, subdivision 6; 
  1.20            124.2711, subdivisions 1 and 2a; 124.2716, subdivision 
  1.21            3; 124.2725, subdivision 2; 124.2726, subdivision 2; 
  1.22            124.2727, subdivisions 6a, 6c, and 6d; 124.273, 
  1.23            subdivisions 1e, 1f, and 5; 124.312, subdivisions 4 
  1.24            and 5; 124.313; 124.314, subdivisions 1 and 2; 
  1.25            124.3201, subdivisions 1, 2, and 4; 124.321, 
  1.26            subdivisions 1 and 3; 124.323, subdivisions 1 and 2; 
  1.27            124.42, subdivision 4; 124.431, subdivision 11; 
  1.28            124.45; 124.574, subdivision 2f; 124.83, subdivision 
  1.29            4; 124.86, subdivision 2, and by adding a subdivision; 
  1.30            124.91, subdivisions 1 and 5; 124.912, subdivisions 1, 
  1.31            2, and 3; 124.916, subdivisions 1, 2, and 3; 124.918, 
  1.32            subdivision 6; 124.95, subdivision 4; 124.961; 
  1.33            124A.02, subdivision 21; 124A.029, subdivisions 1, 3, 
  1.34            and by adding a subdivision; 124A.03, subdivisions 1c, 
  1.35            1f, 1g, and 3c; 124A.036, subdivisions 5 and 6; 
  1.36            124A.04, subdivision 2; 124A.22, subdivisions 1, 2, 3, 
  1.37            6, 6a, 8, 8a, 10, 11, 13, 13a, 13b, 13d, 13f, and by 
  1.38            adding a subdivision; 124A.225, subdivision 1; 
  1.39            124A.23, subdivisions 1, 2, 3, and 5; 124A.26, 
  1.40            subdivisions 1 and 2; 124A.28; 126.22, subdivisions 3, 
  1.41            3a, and 8; 126.23, subdivision 1; 179A.16, by adding a 
  1.42            subdivision; 179A.17, subdivision 1; 290.01, 
  1.43            subdivisions 19a and 19b; and 290.091, subdivisions 2 
  1.44            and 6; Laws 1995, First Special Session chapter 3, 
  1.45            article 12, section 7, subdivision 1; Laws 1996, 
  1.46            chapter 412, article 12, section 8; Laws 1996, chapter 
  2.1             461, section 3, subdivision 2; proposing coding for 
  2.2             new law in Minnesota Statutes, chapters 11A; 121; 123; 
  2.3             124; 136A; 179A; and 290; repealing Minnesota Statutes 
  2.4             1996, sections 121.611, subdivision 3; 123.951; 
  2.5             124.177; 124.223; 124.225, subdivisions 3a, 7a, 7b, 
  2.6             7d, 7e, 8a, and 8k; 124.226; 124.2727, subdivisions 
  2.7             6a, 6b, 6c, and 9; 124.2728; 124.276; 124.311; 
  2.8             124.312; 124.313; 124.314; 124.3201, subdivisions 2a 
  2.9             and 2b; 124.912, subdivisions 2 and 3; 124A.02, 
  2.10            subdivision 24; 124A.22, subdivisions 2a, 4, 4a, 4b, 
  2.11            and 9; 124A.292; and 134.46; Laws 1994, chapter 647, 
  2.12            articles 7, section 18; and 8, section 43; and Laws 
  2.13            1995, First Special Session chapter 3, articles 4, 
  2.14            section 31, paragraph (a); and 12, section 8. 
  2.15  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  2.16                             ARTICLE 1
  2.17                         GENERAL EDUCATION
  2.18     Section 1.  Minnesota Statutes 1996, section 120.062, 
  2.19  subdivision 9, is amended to read: 
  2.20     Subd. 9.  [TRANSPORTATION.] (a) If requested by the parent 
  2.21  of a pupil, the nonresident district shall provide 
  2.22  transportation within the district.  The state shall pay 
  2.23  transportation aid to the district according to section 124.225. 
  2.24     The resident district is not required to provide or pay for 
  2.25  transportation between the pupil's residence and the border of 
  2.26  the nonresident district.  A parent may be reimbursed by the 
  2.27  nonresident district for the costs of transportation from the 
  2.28  pupil's residence to the border of the nonresident district if 
  2.29  the pupil is from a family whose income is at or below the 
  2.30  poverty level, as determined by the federal government.  The 
  2.31  reimbursement may not exceed the pupil's actual cost of 
  2.32  transportation or 15 cents per mile traveled, whichever is 
  2.33  less.  Reimbursement may not be paid for more than 250 miles per 
  2.34  week.  
  2.35     At the time a nonresident district notifies a parent or 
  2.36  guardian that an application has been accepted under subdivision 
  2.37  5 or 6, the nonresident district must provide the parent or 
  2.38  guardian with the following information regarding the 
  2.39  transportation of nonresident pupils under this section: 
  2.40     (1) a nonresident district may transport a pupil within the 
  2.41  pupil's resident district under this section only with the 
  2.42  approval of the resident district; and 
  3.1      (2) a parent or guardian of a pupil attending a nonresident 
  3.2   district under this section may appeal under section 123.39, 
  3.3   subdivision 6, the refusal of the resident district to allow the 
  3.4   nonresident district to transport the pupil within the resident 
  3.5   district. 
  3.6      (b) Notwithstanding paragraph (a) and section 124.225, 
  3.7   subdivision 8l, transportation provided by a nonresident 
  3.8   district between home and school for a pupil attending school 
  3.9   under this section is authorized for nonregular transportation 
  3.10  revenue under section 124.225, if the following criteria are met:
  3.11     (1) the school that the pupil was attending prior to 
  3.12  enrolling in the nonresident district under this section was 
  3.13  closed; 
  3.14     (2) the distance from the closed school to the next nearest 
  3.15  school in the district that the student could attend is at least 
  3.16  20 miles; 
  3.17     (3) the pupil's residence is at least 20 miles from any 
  3.18  school that the pupil could attend in the resident district; and 
  3.19     (4) the pupil's residence is closer to the school of 
  3.20  attendance in the nonresident district than to any school the 
  3.21  pupil could attend in the resident district. 
  3.22     Sec. 2.  Minnesota Statutes 1996, section 121.904, 
  3.23  subdivision 4a, is amended to read: 
  3.24     Subd. 4a.  [LEVY RECOGNITION.] (a) "School district tax 
  3.25  settlement revenue" means the current, delinquent, and 
  3.26  manufactured home property tax receipts collected by the county 
  3.27  and distributed to the school district, including distributions 
  3.28  made pursuant to section 279.37, subdivision 7, and excluding 
  3.29  the amount levied pursuant to section 124.914, subdivision 1. 
  3.30     (b) In June of each year, the school district shall 
  3.31  recognize as revenue, in the fund for which the levy was made, 
  3.32  the lesser of:  
  3.33     (1) the May, June, and July school district tax settlement 
  3.34  revenue received in that calendar year; or 
  3.35     (2) the sum of the state aids and credits enumerated in 
  3.36  section 124.155, subdivision 2, which are for the fiscal year 
  4.1   payable in that fiscal year plus an amount equal to the levy 
  4.2   recognized as revenue in June of the prior year plus 31 percent 
  4.3   for fiscal year 1996 and thereafter of the amount of the levy 
  4.4   certified in the prior calendar year according to section 
  4.5   124A.03, subdivision 2, plus or minus auditor's adjustments, not 
  4.6   including levy portions that are assumed by the state; or 
  4.7      (3) 18.1 percent for fiscal year 1996, the percent 
  4.8   determined under Laws 1996, chapter 461, section 3, for fiscal 
  4.9   year 1997 and that same percent thereafter of the amount of the 
  4.10  levy certified in the prior calendar year, plus or minus 
  4.11  auditor's adjustments, not including levy portions that are 
  4.12  assumed by the state, which remains after subtracting, by fund, 
  4.13  the amounts levied for the following purposes:  
  4.14     (i) reducing or eliminating projected deficits in the 
  4.15  reserved fund balance accounts for unemployment insurance and 
  4.16  bus purchases; 
  4.17     (ii) statutory operating debt pursuant to section 124.914, 
  4.18  subdivision 1; 
  4.19     (iii) retirement and severance pay pursuant to sections 
  4.20  122.531, subdivision 9, 124.2725, subdivision 15, 124.4945, 
  4.21  124.912, subdivision 1, and 124.916, subdivision 3, and Laws 
  4.22  1975, chapter 261, section 4; 
  4.23     (iv) amounts levied for bonds issued and interest thereon, 
  4.24  amounts levied for debt service loans and capital loans, amounts 
  4.25  levied for down payments under section 124.82, subdivision 3; 
  4.26  and 
  4.27     (v) amounts levied under section 124.755. 
  4.28     Notwithstanding the foregoing, the levy recognition 
  4.29  percentage for the referendum levy certified according to 
  4.30  section 124A.03, subdivision 2, is 31 percent. 
  4.31     (3)(i) 6.9 percent in 1997 and 6.6 percent in 1998 and 
  4.32  later years of the lesser of the amount of the general education 
  4.33  levy certified in the prior calendar year according to section 
  4.34  124A.23, subdivision 2, or the difference between the amount of 
  4.35  the total general fund levy certified in the prior calendar year 
  4.36  and the sum of the amounts certified in the prior calendar year 
  5.1   according to sections 124A.03, subdivision 2; 124.315, 
  5.2   subdivisions 2, 3, and 4; 124.916, subdivisions 1, 2, and 3, 
  5.3   paragraphs (4), (5), and (6); and 124.918, subdivision 6; plus 
  5.4      (ii) 31 percent of the referendum levy certified in the 
  5.5   prior calendar year according to section 124A.03, subdivision 2; 
  5.6   plus 
  5.7      (iii) the entire amount of the levy certified in the prior 
  5.8   calendar year according to sections 124.912, subdivisions 1, 
  5.9   paragraph (b), 2, and 3; 124.315, subdivision 4; 124.916, 
  5.10  subdivisions 1, 2, and 3, paragraphs (4), (5), and (6); and 
  5.11  124.918, subdivision 6. 
  5.12     (c) In July of each year, the school district shall 
  5.13  recognize as revenue that portion of the school district tax 
  5.14  settlement revenue received in that calendar year and not 
  5.15  recognized as revenue for the previous fiscal year pursuant to 
  5.16  clause (b).  
  5.17     (d) All other school district tax settlement revenue shall 
  5.18  be recognized as revenue in the fiscal year of the settlement. 
  5.19  Portions of the school district levy assumed by the state, 
  5.20  including prior year adjustments and the amount to fund the 
  5.21  school portion of the reimbursement made pursuant to section 
  5.22  273.425, shall be recognized as revenue in the fiscal year 
  5.23  beginning in the calendar year for which the levy is payable. 
  5.24     Sec. 3.  Minnesota Statutes 1996, section 123.3514, 
  5.25  subdivision 6, is amended to read: 
  5.26     Subd. 6.  [FINANCIAL ARRANGEMENTS.] For a pupil enrolled in 
  5.27  a course under this section, the department of children, 
  5.28  families, and learning shall make payments according to this 
  5.29  subdivision for courses that were taken for secondary credit.  
  5.30     The department shall not make payments to a school district 
  5.31  or post-secondary institution for a course taken for 
  5.32  post-secondary credit only.  The department shall not make 
  5.33  payments to a post-secondary institution for a course from which 
  5.34  a student officially withdraws during the first 14 days of the 
  5.35  quarter or semester or who has been absent from the 
  5.36  post-secondary institution for the first 15 consecutive school 
  6.1   days of the quarter or semester and is not receiving instruction 
  6.2   in the home or hospital. 
  6.3      A post-secondary institution shall receive the following: 
  6.4      (1) for an institution granting quarter credit, the 
  6.5   reimbursement per credit hour shall be an amount equal to 88 
  6.6   percent of the product of the formula allowance, multiplied by 
  6.7   1.3, and divided by 45; or 
  6.8      (2) for an institution granting semester credit, the 
  6.9   reimbursement per credit hour shall be an amount equal to 88 
  6.10  percent of the product of the general revenue formula allowance, 
  6.11  multiplied by 1.3, and divided by 30. 
  6.12     The department of children, families, and learning shall 
  6.13  pay to each post-secondary institution 100 percent of the amount 
  6.14  in clause (1) or (2) within 30 days of receiving initial 
  6.15  enrollment information each quarter or semester.  If changes in 
  6.16  enrollment occur during a quarter or semester, the change shall 
  6.17  be reported by the post-secondary institution at the time the 
  6.18  enrollment information for the succeeding quarter or semester is 
  6.19  submitted.  At any time the department of children, families, 
  6.20  and learning notifies a post-secondary institution that an 
  6.21  overpayment has been made, the institution shall promptly remit 
  6.22  the amount due.  Notwithstanding the amount of the formula 
  6.23  allowance in section 124A.22, subdivision 2, the commissioner 
  6.24  shall use the amount of the formula allowance minus $300 for 
  6.25  fiscal year 1998 and the amount of the formula allowance minus 
  6.26  $176 for fiscal year 1999 and later fiscal years in determining 
  6.27  payments under this subdivision and subdivision 6b. 
  6.28     Sec. 4.  Minnesota Statutes 1996, section 124.155, 
  6.29  subdivision 1, is amended to read: 
  6.30     Subdivision 1.  [AMOUNT OF ADJUSTMENT.] Each year state 
  6.31  aids and credits enumerated in subdivision 2 payable to any 
  6.32  school district for that fiscal year shall be adjusted, in the 
  6.33  order listed, by an amount equal to (1) the amount the district 
  6.34  recognized as revenue for the prior fiscal year pursuant to 
  6.35  section 121.904, subdivision 4a, clause (b), minus (2) the 
  6.36  amount the district recognizes as revenue for the current fiscal 
  7.1   year pursuant to section 121.904, subdivision 4a, clause (b).  
  7.2   For the purposes of making the aid adjustment under this 
  7.3   subdivision, the amount the district recognizes as revenue for 
  7.4   either the prior fiscal year or the current fiscal year pursuant 
  7.5   to section 121.904, subdivision 4a, clause (b), shall not 
  7.6   include any amount levied pursuant to sections 124.226, 
  7.7   subdivision 9, 124.912, subdivisions 1, paragraph (b), 2, and 3, 
  7.8   or a successor provision only for those districts affected, 
  7.9   124.916, subdivisions 1 and, 2, and 3, paragraphs 4, 5, and 6, 
  7.10  124.918, subdivision 6, and 124A.03, subdivision 2; and Laws 
  7.11  1992, chapter 499, articles 1, section 20, and 6, section 36.  
  7.12  Payment from the permanent school fund shall not be adjusted 
  7.13  pursuant to this section.  The school district shall be notified 
  7.14  of the amount of the adjustment made to each payment pursuant to 
  7.15  this section. 
  7.16     Sec. 5.  Minnesota Statutes 1996, section 124.17, 
  7.17  subdivision 1, is amended to read: 
  7.18     Subdivision 1.  [PUPIL UNIT.] Pupil units for each resident 
  7.19  pupil in average daily membership shall be counted according to 
  7.20  this subdivision.  
  7.21     (a) A prekindergarten pupil with a disability who is 
  7.22  enrolled in a program approved by the commissioner and has an 
  7.23  individual education plan is counted as the ratio of the number 
  7.24  of hours of assessment and education service to 825 with a 
  7.25  minimum of 0.28, but not more than one. 
  7.26     (b) A prekindergarten pupil who is assessed but determined 
  7.27  not to be handicapped is counted as the ratio of the number of 
  7.28  hours of assessment service to 825.  
  7.29     (c) A kindergarten pupil with a disability who is enrolled 
  7.30  in a program approved by the commissioner is counted as the 
  7.31  ratio of the number of hours of assessment and education 
  7.32  services required in the fiscal year by the pupil's individual 
  7.33  education program plan to 875, but not more than one. 
  7.34     (d) A kindergarten pupil who is not included in paragraph 
  7.35  (c) is counted as .53 of a pupil unit for fiscal year 1995 1998 
  7.36  and .55 of a pupil unit for fiscal year 1999 and thereafter. 
  8.1      (e) A pupil who is in any of grades 1 to 6 is counted as 
  8.2   1.06 pupil units for fiscal year 1995 and thereafter 1998.  For 
  8.3   fiscal year 1999 and later years, a pupil who is in any of 
  8.4   grades 1 to 3 is counted as 1.1 pupil units. 
  8.5      (f) For fiscal year 1996 and fiscal year 1997, a pupil who 
  8.6   is in any of grades 7 to 12 is counted as 1.3 pupil units.  For 
  8.7   fiscal year 1999 and later years, a pupil who is in any of 
  8.8   grades 4 to 6 is counted as one pupil unit. 
  8.9      (g) For fiscal year 1998, a pupil who is in any of grades 7 
  8.10  to 12 is counted as 1.25 1.3 pupil units.  For fiscal year 1999 
  8.11  and later years, a pupil who is in any of grades 7 to 12 is 
  8.12  counted as 1.2 1.22 pupil units. 
  8.13     (g) (h) For fiscal year 1996 and fiscal year 1997, a pupil 
  8.14  who is in the post-secondary enrollment options program is 
  8.15  counted as 1.3 pupil units.  For fiscal year 1998, a pupil who 
  8.16  is in the post-secondary enrollment options program is counted 
  8.17  as 1.25 1.3 pupil units.  For fiscal year 1999 and later years, 
  8.18  a pupil who is in the post-secondary enrollment options program 
  8.19  is counted as 1.2 1.22 pupil units. 
  8.20     (h) In fiscal year 1998, the pupil units used in computing 
  8.21  a district's general education revenue and referendum revenue 
  8.22  may not be reduced by more than two percent due to the reduction 
  8.23  in the secondary pupil weight from 1.3 as specified in 
  8.24  paragraphs (f) and (g).  In fiscal year 1999 and later years, 
  8.25  the pupil units used in computing a district's general education 
  8.26  revenue and referendum revenue may not be decreased by more than 
  8.27  four percent due to the reduction in the secondary weight from 
  8.28  1.3 as specified in paragraphs (f) and (g). 
  8.29     Sec. 6.  Minnesota Statutes 1996, section 124.17, 
  8.30  subdivision 1d, is amended to read: 
  8.31     Subd. 1d.  [FISCAL YEAR 1998 AFDC PUPIL UNITS.] AFDC pupil 
  8.32  units for fiscal year 1993 and thereafter 1998 must be computed 
  8.33  according to this subdivision.  
  8.34     (a) The AFDC concentration percentage for a district equals 
  8.35  the product of 100 times the ratio of:  
  8.36     (1) the number of pupils enrolled in the district from 
  9.1   families receiving aid to families with dependent children 
  9.2   according to subdivision 1e; to 
  9.3      (2) the number of pupils in average daily membership 
  9.4   according to subdivision 1e enrolled in the district. 
  9.5      (b) The AFDC pupil weighting factor for a district equals 
  9.6   the lesser of one or the quotient obtained by dividing the 
  9.7   district's AFDC concentration percentage by 11.5.  
  9.8      (c) The AFDC pupil units for a district for fiscal year 
  9.9   1993 and thereafter equals the product of:  
  9.10     (1) the number of pupils enrolled in the district from 
  9.11  families receiving aid to families with dependent children 
  9.12  according to subdivision 1e; times 
  9.13     (2) the AFDC pupil weighting factor for the district; times 
  9.14     (3) .67. 
  9.15     Sec. 7.  Minnesota Statutes 1996, section 124.17, 
  9.16  subdivision 1e, is amended to read: 
  9.17     Subd. 1e.  [FISCAL YEAR 1998 AFDC PUPIL COUNTS.] AFDC pupil 
  9.18  counts and average daily membership for subdivisions 1b 
  9.19  and subdivision 1d shall be determined according to this 
  9.20  subdivision: 
  9.21     (a) For districts where the number of pupils from families 
  9.22  receiving aid to families with dependent children has increased 
  9.23  over the preceding year for each of the two previous years, the 
  9.24  number of pupils enrolled in the district from families 
  9.25  receiving aid to families with dependent children shall be those 
  9.26  counted on October 1 of the previous school year.  The average 
  9.27  daily membership used shall be from the previous school year. 
  9.28     (b) For districts that do not meet the requirement of 
  9.29  paragraph (a), the number of pupils enrolled in the district 
  9.30  from families receiving aid to families with dependent children 
  9.31  shall be the average number of pupils on October 1 of the second 
  9.32  previous school year and October 1 of the previous school year.  
  9.33  The average daily membership used shall be the average number 
  9.34  enrolled in the previous school year and the second previous 
  9.35  school year. 
  9.36     (c) Notwithstanding paragraphs (a) and (b), for charter 
 10.1   schools in the first three years of operation, and for tribal 
 10.2   contract schools, the number of pupils enrolled from families 
 10.3   receiving AFDC shall be those counted on October 1 of the 
 10.4   current school year.  The average daily membership used shall be 
 10.5   from the current school year.  
 10.6      Sec. 8.  Minnesota Statutes 1996, section 124.17, is 
 10.7   amended by adding a subdivision to read: 
 10.8      Subd. 1g.  [AFDC PUPIL UNITS.] AFDC pupil units for fiscal 
 10.9   year 1999 and thereafter must be computed according to this 
 10.10  subdivision. 
 10.11     (a) The AFDC concentration percentage for a district equals 
 10.12  the product of 100 times the ratio of: 
 10.13     (1) the number of pupils residing in the district from 
 10.14  families receiving aid to families with dependent children 
 10.15  according to subdivision 1h, paragraph (a); to 
 10.16     (2) the number of pupils in average daily membership 
 10.17  according to subdivision 1h, paragraph (a), residing in the 
 10.18  district. 
 10.19     (b) The AFDC pupil weighting factor for AFDC pupils 
 10.20  residing in a district equals the lesser of one or the quotient 
 10.21  obtained by dividing the district's AFDC concentration 
 10.22  percentage by 11.5. 
 10.23     (c) The AFDC pupil units for a district for fiscal year 
 10.24  1999 and thereafter for each pupil enrolled in the district from 
 10.25  a family receiving aid to families with dependent children 
 10.26  according to subdivision 1h, paragraph (b), equals the product 
 10.27  of: 
 10.28     (1) the AFDC pupil weighting factor for pupil's district of 
 10.29  residence; times 
 10.30     (2) .67. 
 10.31     Sec. 9.  Minnesota Statutes 1996, section 124.17, is 
 10.32  amended by adding a subdivision to read: 
 10.33     Subd. 1h.  [AFDC PUPIL COUNTS.] (a) AFDC pupil counts and 
 10.34  average daily membership for subdivision 1g, paragraph (a), 
 10.35  shall be determined according to this paragraph. 
 10.36     (i) For districts where the number of resident pupils from 
 11.1   families receiving aid to families with dependent children has 
 11.2   increased over the preceding year for each of the two previous 
 11.3   years, the number of pupils residing in the district from 
 11.4   families receiving aid to families with dependent children shall 
 11.5   be those counted on October 1 of the previous school year.  The 
 11.6   average daily membership used shall be from the previous school 
 11.7   year. 
 11.8      (ii) For districts that do not meet the requirement of 
 11.9   paragraph (i), the number of pupils residing in the district 
 11.10  from families receiving aid to families with dependent children 
 11.11  shall be the average number of pupils on October 1 of the second 
 11.12  previous school year and October 1 of the previous school year.  
 11.13     The average daily membership used shall be the average 
 11.14  number of pupils residing in the district in the previous school 
 11.15  year and the second previous school year. 
 11.16     (b) AFDC pupil counts for subdivision 1g, paragraph (c), 
 11.17  shall be determined according to this paragraph. 
 11.18     (i) For districts where the number of pupils from families 
 11.19  receiving aid to families with dependent children enrolled in 
 11.20  the district has increased over the preceding year for each of 
 11.21  the two previous years, the pupils enrolled in the district from 
 11.22  families receiving aid to families with dependent children shall 
 11.23  be those counted on October 1 of the previous school year. 
 11.24     (ii) For districts that do not meet the requirement of 
 11.25  paragraph (i), pupils enrolled in the district from families 
 11.26  receiving aid to families with dependent children shall be those 
 11.27  counted on October 1 of the previous school year times one-half, 
 11.28  plus those counted on October 1 of the second previous school 
 11.29  year times one-half.  
 11.30     Notwithstanding clauses (i) and (ii), for charter schools 
 11.31  in the first three years of operation, the number of pupils 
 11.32  enrolled from families receiving aid to families with dependent 
 11.33  children shall be those counted on October 1 of the current 
 11.34  school year. 
 11.35     Sec. 10.  Minnesota Statutes 1996, section 124.17, 
 11.36  subdivision 4, is amended to read: 
 12.1      Subd. 4.  [LEARNING YEAR PUPIL UNITS.] (a) When a pupil is 
 12.2   enrolled in a learning year program according to section 
 12.3   121.585, an area learning center according to sections 124C.45 
 12.4   and 124C.46, or an alternative program approved by the 
 12.5   commissioner, for more than 1,020 hours in a school year for a 
 12.6   secondary student and for, more than 935 hours in a school year 
 12.7   for an elementary student, or more than 425 hours in a school 
 12.8   year for a kindergarten student without a disability, that pupil 
 12.9   may be counted as more than one pupil in average daily 
 12.10  membership.  The amount in excess of one pupil must be 
 12.11  determined by the ratio of the number of hours of instruction 
 12.12  provided to that pupil in excess of:  (i) the greater of 1,020 
 12.13  hours or the number of hours required for a full-time secondary 
 12.14  pupil in the district to 1,020 for a secondary pupil and of; 
 12.15  (ii) the greater of 935 hours or the number of hours required 
 12.16  for a full-time elementary pupil in the district to 935 for an 
 12.17  elementary pupil in grades 1 through 6; and (iii) the greater of 
 12.18  425 hours or the number of hours required for a full-time 
 12.19  kindergarten student in the district for a kindergarten student 
 12.20  without a disability.  Hours that occur after the close of the 
 12.21  instructional year in June shall be attributable to the 
 12.22  following fiscal year. 
 12.23     (b)(i) To receive general education revenue for a pupil in 
 12.24  an alternative program that has an independent study component, 
 12.25  a school district must meet the requirements in this paragraph.  
 12.26  The school district must develop with the pupil a continual 
 12.27  learning plan for the pupil.  A district must allow a minor 
 12.28  pupil's parent or guardian to participate in developing the 
 12.29  plan, if the parent or guardian wants to participate.  The plan 
 12.30  must identify the learning experiences and expected outcomes 
 12.31  needed for satisfactory credit for the year and for graduation.  
 12.32  The plan must be updated each year. 
 12.33     (ii) General education revenue for a pupil in an approved 
 12.34  alternative program without an independent study component must 
 12.35  be prorated for a pupil participating for less than a full year, 
 12.36  or its equivalent. 
 13.1      (iii) General education revenue for a pupil in an approved 
 13.2   alternative program that has an independent study component must 
 13.3   be paid for each hour of teacher contact time and each hour of 
 13.4   independent study time completed toward a credit necessary for 
 13.5   graduation.  Average daily membership for a pupil shall equal 
 13.6   the number of hours of teacher contact time and independent 
 13.7   study time divided by 1,020. 
 13.8      (iv) For an alternative program having an independent study 
 13.9   component, the commissioner shall require a description of the 
 13.10  courses in the program, the kinds of independent study involved, 
 13.11  the expected learning outcomes of the courses, and the means of 
 13.12  measuring student performance against the expected outcomes. 
 13.13     Sec. 11.  Minnesota Statutes 1996, section 124.225, 
 13.14  subdivision 1, is amended to read: 
 13.15     Subdivision 1.  [DEFINITIONS.] For purposes of this section 
 13.16  and section 124.3201, the terms defined in this subdivision have 
 13.17  the meanings given to them. 
 13.18     (a) "FTE" means a full-time equivalent pupil whose 
 13.19  transportation is authorized for aid purposes by section 124.223.
 13.20     (b) "Authorized cost for regular transportation" 
 13.21  means "Actual expenditure per pupil transported in the regular 
 13.22  and excess transportation categories" means the quotient 
 13.23  obtained by dividing: 
 13.24     (1) the sum of: 
 13.25     (1) (i) all expenditures for transportation in the regular 
 13.26  category, as defined in paragraph (c) (b), clause (1), for which 
 13.27  aid is authorized in section 124.223 and the excess category, as 
 13.28  defined in paragraph (b), clause (2), plus 
 13.29     (2) (ii) an amount equal to one year's depreciation on the 
 13.30  district's school bus fleet and mobile units computed on a 
 13.31  straight line basis at the rate of 15 percent per year for 
 13.32  districts operating a program under section 121.585 for grades 1 
 13.33  to 12 for all students in the district and 12-1/2 percent per 
 13.34  year for other districts of the cost of the fleet, plus 
 13.35     (3) an amount equal to one year's depreciation on district 
 13.36  school buses reconditioned by the department of corrections 
 14.1   computed on a straight line basis at the rate of 33-1/3 percent 
 14.2   per year of the cost to the district of the reconditioning, plus 
 14.3      (4) (iii) an amount equal to one year's depreciation on the 
 14.4   district's type three school buses, as defined in section 
 14.5   169.01, subdivision 6, clause (5), which must be used a majority 
 14.6   of the time for the pupil transportation purposes in sections 
 14.7   124.223 and 124.226, subdivisions 5, 8, and 9, and were 
 14.8   purchased after July 1, 1982, for authorized transportation of 
 14.9   pupils, computed on a straight line basis at the rate of 20 
 14.10  percent per year of the cost of the type three school buses by: 
 14.11     (2) the number of pupils eligible for transportation in the 
 14.12  regular category, as defined in paragraph (b), clause (1), and 
 14.13  the excess category, as defined in paragraph (b), clause (2).  
 14.14     (c) (b) "Transportation category" means a category of 
 14.15  transportation service provided to pupils as follows:  
 14.16     (1) Regular transportation is transportation services 
 14.17  provided during the regular school year under section 124.223, 
 14.18  subdivisions 1 and 2, excluding the following transportation 
 14.19  services provided under section 124.223, subdivision 1:  
 14.20  transportation between schools; transportation to and from 
 14.21  service-learning programs; noon transportation to and from 
 14.22  school for kindergarten pupils attending half-day sessions; 
 14.23  transportation of pupils to and from schools located outside 
 14.24  their normal attendance areas under the provisions of a plan for 
 14.25  desegregation mandated by the state board of education or under 
 14.26  court order; and transportation of elementary pupils to and from 
 14.27  school within a mobility zone.: 
 14.28     (i) transportation to and from school during the regular 
 14.29  school year for resident elementary pupils residing one mile or 
 14.30  more from the public or nonpublic school they attend, and 
 14.31  resident secondary pupils residing two miles or more from the 
 14.32  public or nonpublic school they attend, excluding desegregation 
 14.33  transportation and noon kindergarten transportation; but with 
 14.34  respect to transportation of pupils to and from nonpublic 
 14.35  schools, only to the extent permitted by sections 123.76 to 
 14.36  123.79; 
 15.1      (ii) transportation of resident pupils to and from language 
 15.2   immersion programs; 
 15.3      (iii) transportation of a pupil who is a custodial parent 
 15.4   and that pupil's child between the pupil's home and the child 
 15.5   care provider and between the provider and the school, if the 
 15.6   home and provider are within the attendance area of the school; 
 15.7   and 
 15.8      (iv) transportation to and from or board and lodging in 
 15.9   another district, of resident pupils of a district without a 
 15.10  secondary school. 
 15.11     For the purposes of this paragraph, a district may 
 15.12  designate a licensed day care facility, respite care facility, 
 15.13  the residence of a relative, or the residence of a person chosen 
 15.14  by the pupil's parent or guardian as the home of a pupil for 
 15.15  part or all of the day, if requested by the pupil's parent or 
 15.16  guardian, and if that facility or residence is within the 
 15.17  attendance area of the school the pupil attends. 
 15.18     (2) Nonregular transportation is transportation services 
 15.19  provided under section 124.223, subdivision 1, that are excluded 
 15.20  from the regular category and transportation services provided 
 15.21  under section 124.223, subdivisions 3, 4, 5, 6, 7, 8, 9, and 10. 
 15.22     (3) Excess transportation is transportation to and from 
 15.23  school during the regular school year for secondary pupils 
 15.24  residing at least one mile but less than two miles from the 
 15.25  public school they could attend or from the nonpublic school 
 15.26  actually attended they attend, and transportation to and from 
 15.27  school for pupils residing less than one mile from school who 
 15.28  are transported because of extraordinary traffic, drug, or crime 
 15.29  hazards. 
 15.30     (4) (3) Desegregation transportation is transportation 
 15.31  within and outside of the district during the regular school 
 15.32  year of pupils to and from schools located outside their normal 
 15.33  attendance areas under a plan for desegregation mandated by the 
 15.34  state board or under court order.  
 15.35     (5) Handicapped transportation is transportation provided 
 15.36  under section 124.223, subdivision 4, for pupils with a 
 16.1   disability between home or a respite care facility and school or 
 16.2   other buildings where special instruction required by sections 
 16.3   120.17 and 120.1701 is provided. 
 16.4      (4) "Transportation services for pupils with disabilities" 
 16.5   is: 
 16.6      (i) transportation of pupils with disabilities who cannot 
 16.7   be transported on a regular school bus between home or a respite 
 16.8   care facility and school; 
 16.9      (ii) necessary transportation of pupils with disabilities 
 16.10  from home or from school to other buildings, including centers 
 16.11  such as developmental achievement centers, hospitals, and 
 16.12  treatment centers where special instruction or services required 
 16.13  by sections 120.17 and 120.1701 are provided, within or outside 
 16.14  the district where services are provided; 
 16.15     (iii) necessary transportation for resident pupils with 
 16.16  disabilities required by sections 120.17, subdivision 4a, and 
 16.17  120.1701; 
 16.18     (iv) board and lodging for pupils with disabilities in a 
 16.19  district maintaining special classes; 
 16.20     (v) transportation from one educational facility to another 
 16.21  within the district for resident pupils enrolled on a 
 16.22  shared-time basis in educational programs, and necessary 
 16.23  transportation required by sections 120.17, subdivision 9, and 
 16.24  120.1701, for resident pupils with disabilities who are provided 
 16.25  special instruction and services on a shared-time basis; 
 16.26     (vi) transportation for resident pupils with disabilities 
 16.27  to and from board and lodging facilities when the pupil is 
 16.28  boarded and lodged for educational purposes; and 
 16.29     (vii) services described in clauses (i) to (vi), when 
 16.30  provided for pupils with disabilities in conjunction with a 
 16.31  summer instructional program that relates to the pupil's 
 16.32  individual education plan or in conjunction with a learning year 
 16.33  program established under section 121.585. 
 16.34     (5) "Nonpublic nonregular transportation" is: 
 16.35     (i) transportation from one educational facility to another 
 16.36  within the district for resident pupils enrolled on a 
 17.1   shared-time basis in educational programs, excluding 
 17.2   transportation for nonpublic pupils with disabilities under 
 17.3   clause (4); 
 17.4      (ii) transportation within district boundaries between a 
 17.5   nonpublic school and a public school or a neutral site for 
 17.6   nonpublic school pupils who are provided pupil support services 
 17.7   pursuant to section 123.935; and 
 17.8      (iii) late transportation home from school or between 
 17.9   schools within a district for nonpublic school pupils involved 
 17.10  in after-school activities. 
 17.11     (d) (c) "Mobile unit" means a vehicle or trailer designed 
 17.12  to provide facilities for educational programs and services, 
 17.13  including diagnostic testing, guidance and counseling services, 
 17.14  and health services.  A mobile unit located off nonpublic school 
 17.15  premises is a neutral site as defined in section 123.932, 
 17.16  subdivision 9. 
 17.17     (e) "Current year" means the school year for which aid will 
 17.18  be paid.  
 17.19     (f) "Base year" means the second school year preceding the 
 17.20  school year for which aid will be paid.  
 17.21     (g) "Base cost" means the ratio of: 
 17.22     (1) the sum of the authorized cost in the base year for 
 17.23  regular transportation as defined in paragraph (b) plus the 
 17.24  actual cost in the base year for excess transportation as 
 17.25  defined in paragraph (c); 
 17.26     (2) to the sum of the number of weighted FTE's in the 
 17.27  regular and excess categories in the base year. 
 17.28     (h) "Pupil weighting factor" for the excess transportation 
 17.29  category for a school district means the lesser of one, or the 
 17.30  result of the following computation: 
 17.31     (1) Divide the square mile area of the school district by 
 17.32  the number of FTE's in the regular and excess categories in the 
 17.33  base year. 
 17.34     (2) Raise the result in clause (1) to the one-fifth power. 
 17.35     (3) Divide four-tenths by the result in clause (2). 
 17.36     The pupil weighting factor for the regular transportation 
 18.1   category is one.  
 18.2      (i) "Weighted FTE's"  means the number of FTE's in each 
 18.3   transportation category multiplied by the pupil weighting factor 
 18.4   for that category. 
 18.5      (j) "Sparsity index" for a school district means the 
 18.6   greater of .005 or the ratio of the square mile area of the 
 18.7   school district to the sum of the number of weighted FTE's by 
 18.8   the district in the regular and excess categories in the base 
 18.9   year. 
 18.10     (k) "Density index" for a school district means the greater 
 18.11  of one or the result obtained by subtracting the product of the 
 18.12  district's sparsity index times 20 from two. 
 18.13     (l) "Contract transportation index" for a school district 
 18.14  means the greater of one or the result of the following 
 18.15  computation: 
 18.16     (1) Multiply the district's sparsity index by 20. 
 18.17     (2) Select the lesser of one or the result in clause (1). 
 18.18     (3) Multiply the district's percentage of regular FTE's in 
 18.19  the current year using vehicles that are not owned by the school 
 18.20  district by the result in clause (2). 
 18.21     (m) "Adjusted predicted base cost" means the predicted base 
 18.22  cost as computed in subdivision 3a as adjusted under subdivision 
 18.23  7a. 
 18.24     (n) "Regular transportation allowance" means the adjusted 
 18.25  predicted base cost, inflated and adjusted under subdivision 7b. 
 18.26     Sec. 12.  Minnesota Statutes 1996, section 124.225, 
 18.27  subdivision 7f, is amended to read: 
 18.28     Subd. 7f.  [RESERVED REVENUE FOR TRANSPORTATION SAFETY.] A 
 18.29  district shall reserve an amount equal to the greater of $500 
 18.30  or $1.50 $1.56 times the number of fund balance pupil units, for 
 18.31  that school year to provide student transportation safety 
 18.32  programs under section 123.799.  This revenue may only be used 
 18.33  if the district complies with the reporting requirements of 
 18.34  section 123.7991, 123.805, 169.452, 169.4582, or 171.321, 
 18.35  subdivision 5. 
 18.36     Sec. 13.  Minnesota Statutes 1996, section 124.225, 
 19.1   subdivision 13, is amended to read: 
 19.2      Subd. 13.  [TARGETED NEEDS TRANSPORTATION REVENUE.] A 
 19.3   district's targeted needs transportation revenue for the 
 19.4   1996-1997 and later 1997-1998 school years equals the sum of the 
 19.5   special programs transportation revenue according to subdivision 
 19.6   14, the integration transportation revenue according to 
 19.7   subdivision 15, and the nonpublic pupil transportation revenue 
 19.8   aid according to subdivision 16. 
 19.9      Sec. 14.  Minnesota Statutes 1996, section 124.225, 
 19.10  subdivision 14, is amended to read: 
 19.11     Subd. 14.  [SPECIAL PROGRAMS TRANSPORTATION REVENUE.] A 
 19.12  district's special programs transportation revenue for the 
 19.13  1996-1997 and later 1997-1998 school years equals the sum of: 
 19.14     (a) the district's actual cost in the base year for 
 19.15  transportation services for children with disabilities under 
 19.16  section 124.223, subdivisions 4, 5, 7, and 8 subdivision 1, 
 19.17  paragraph (b), clause (4), times the ratio of the district's 
 19.18  average daily membership for the current school year to the 
 19.19  district's average daily membership for the base year; plus 
 19.20     (b) the greater of zero or 80 percent of the difference 
 19.21  between: 
 19.22     (1) the district's actual cost in the current year for 
 19.23  transportation services for children with disabilities under 
 19.24  section 124.223, subdivisions 4, 5, 7, and 8 subdivision 1, 
 19.25  paragraph (b), clause (4); and 
 19.26     (2) the amount computed in paragraph (a). 
 19.27     Sec. 15.  Minnesota Statutes 1996, section 124.225, 
 19.28  subdivision 15, is amended to read: 
 19.29     Subd. 15.  [INTEGRATION TRANSPORTATION REVENUE.] A 
 19.30  district's integration transportation revenue for the 1996-1997 
 19.31  and later 1997-1998 school years equals the following amounts: 
 19.32     (a) for independent school district No. 709, Duluth, $4 
 19.33  times the actual pupil units for the school year; 
 19.34     (b) for independent school district No. 625, St. Paul, $73 
 19.35  times the actual pupil units for the school year; and 
 19.36     (c) for special school district No. 1, Minneapolis, $158 
 20.1   times the actual pupil units for the school year. 
 20.2      Sec. 16.  Minnesota Statutes 1996, section 124.225, 
 20.3   subdivision 16, is amended to read: 
 20.4      Subd. 16.  [NONPUBLIC PUPIL TRANSPORTATION REVENUE AID.] 
 20.5   (a) A district's nonpublic pupil transportation revenue aid for 
 20.6   the 1996-1997 and later school years for transportation services 
 20.7   for nonpublic school pupils according to sections 123.39, 123.76 
 20.8   to 123.78, 124.223, and 124.226 this section, equals the sum of 
 20.9   the amounts computed in paragraphs (b) and (c).  This revenue 
 20.10  aid does not limit the obligation to transport pupils under 
 20.11  sections 123.76 to 123.79. 
 20.12     (b) For regular and excess transportation according to 
 20.13  section 124.225, subdivision 1, paragraph (c) (b), clauses (1) 
 20.14  and (3) (2), an amount equal to the product of: 
 20.15     (1) the district's actual expenditure per pupil transported 
 20.16  in the regular and excess transportation categories during the 
 20.17  second preceding school year; times 
 20.18     (2) the number of nonpublic school pupils residing in the 
 20.19  district who receive regular or excess transportation service or 
 20.20  reimbursement for the current school year; times 
 20.21     (3) the ratio of the formula allowance pursuant to section 
 20.22  124A.22, subdivision 2, for the current school year to the 
 20.23  formula allowance pursuant to section 124A.22, subdivision 2, 
 20.24  for the second preceding school year. 
 20.25     (c) For nonpublic nonregular transportation according to 
 20.26  section 124.225, subdivision 1, paragraph (c) (b), 
 20.27  clause (2) (5), excluding transportation services for children 
 20.28  with disabilities under section 124.223, subdivisions 4, 5, 7, 
 20.29  and 8, and late activity transportation according to section 
 20.30  124.226, subdivision 9, an amount equal to the product of: 
 20.31     (1) the district's actual expenditure for nonpublic 
 20.32  nonregular and late activity transportation for nonpublic school 
 20.33  pupils during the second preceding school year; times 
 20.34     (2) the ratio of the formula allowance pursuant to section 
 20.35  124A.22, subdivision 2, for the current school year to the 
 20.36  formula allowance pursuant to section 124A.22, subdivision 2, 
 21.1   for the second preceding school year. 
 21.2      (d) Notwithstanding the amount of the formula allowance for 
 21.3   fiscal years 1997 and 1998 in section 124A.22, subdivision 2, 
 21.4   the commissioner shall use the amount of the formula 
 21.5   allowance for the current year less $300 in determining the 
 21.6   nonpublic pupil transportation revenue in paragraphs (b) and (c) 
 21.7   for fiscal years 1997 and 1998, and the amount of the formula 
 21.8   allowance for the current year less $84 in determining the 
 21.9   nonpublic pupil transportation aid in paragraphs (b) and (c) for 
 21.10  fiscal years 1999 and 2000. 
 21.11     Sec. 17.  Minnesota Statutes 1996, section 124.225, 
 21.12  subdivision 17, is amended to read: 
 21.13     Subd. 17.  [TARGETED NEEDS TRANSPORTATION AID.] (a) For 
 21.14  fiscal years 1997 and 1998, a district's targeted needs 
 21.15  transportation aid is the difference between its targeted needs 
 21.16  transportation revenue under subdivision 13 and its targeted 
 21.17  needs transportation levy under section 124.226, subdivision 10. 
 21.18     (b) If a district does not levy the entire amount 
 21.19  permitted, aid must be reduced in proportion to the actual 
 21.20  amount levied. 
 21.21     Sec. 18.  Minnesota Statutes 1996, section 124.226, 
 21.22  subdivision 10, is amended to read: 
 21.23     Subd. 10.  [TARGETED NEEDS TRANSPORTATION LEVY.] A school 
 21.24  district may make a levy for targeted needs transportation costs 
 21.25  according to this subdivision.  The amount of the levy shall be 
 21.26  the result of the following computation: 
 21.27     (1) For fiscal year years 1997 and later 1998, targeted 
 21.28  needs transportation levy equalization revenue equals 28 percent 
 21.29  of the sum of the district's special programs transportation 
 21.30  revenue under section 124.225, subdivision 14, and the 
 21.31  district's integration transportation revenue under section 
 21.32  124.225, subdivision 15. 
 21.33     (2) The targeted needs transportation levy equals the 
 21.34  result in clause (1) times the lesser of one or the ratio of (i) 
 21.35  the quotient derived by dividing the adjusted net tax capacity 
 21.36  of the district for the year before the year the levy is 
 22.1   certified by the actual pupil units in the district for the 
 22.2   school year to which the levy is attributable, to (ii) $3,540. 
 22.3      Sec. 19.  Minnesota Statutes 1996, section 124.2445, is 
 22.4   amended to read: 
 22.5      124.2445 [PURCHASE OF CERTAIN EQUIPMENT.] 
 22.6      The board of a school district may issue certificates of 
 22.7   indebtedness or capital notes subject to the school district 
 22.8   debt limits to purchase vehicles, computers, telephone systems, 
 22.9   cable equipment, photocopy and office equipment, technological 
 22.10  equipment for instruction, and other capital equipment having an 
 22.11  expected useful life at least as long as the terms of the 
 22.12  certificates or notes.  The certificates or notes must be 
 22.13  payable in not more than five years and must be issued on the 
 22.14  terms and in the manner determined by the board.  The 
 22.15  certificates or notes may be issued by resolution and without 
 22.16  the requirement for an election.  The certificates or notes are 
 22.17  general obligation bonds for purposes of section 124.755.  A tax 
 22.18  levy must be made for the payment of the principal and interest 
 22.19  on the certificates or notes, in accordance with section 475.61, 
 22.20  as in the case of bonds.  The sum of the tax levies under this 
 22.21  section and section 124.2455 for each year must not exceed the 
 22.22  amount of the district's total operating capital revenue for the 
 22.23  year the initial debt service levies are certified.  The 
 22.24  district's general education levy for each year must be reduced 
 22.25  by the sum of (1) the amount of the tax levies for debt service 
 22.26  certified for each year for payment of the principal and 
 22.27  interest on the certificates or notes as required by section 
 22.28  475.61., and (2) any excess amount in the debt redemption fund 
 22.29  used to retire certificates or notes issued after February 1, 
 22.30  1997.  A district using an excess amount in the debt redemption 
 22.31  fund to retire the certificates or notes shall report the amount 
 22.32  used for this purpose to the commissioner by July 15 of the 
 22.33  following fiscal year.  A district having an outstanding capital 
 22.34  loan under section 124.431 or an outstanding debt service loan 
 22.35  under section 124.42 must not use an excess amount in the debt 
 22.36  redemption fund to retire the certificates or notes. 
 23.1      Sec. 20.  Minnesota Statutes 1996, section 124.2455, is 
 23.2   amended to read: 
 23.3      124.2455 [BONDS FOR CERTAIN CAPITAL FACILITIES.] 
 23.4      (a) In addition to other bonding authority, with approval 
 23.5   of the commissioner, a school district may issue general 
 23.6   obligation bonds for certain capital projects under this 
 23.7   section.  The bonds must be used only to make capital 
 23.8   improvements including: 
 23.9      (1) under section 124A.22, subdivision 11, total operating 
 23.10  capital revenue uses specified in clauses (4), (6), (7), (8), 
 23.11  (9), and (10); 
 23.12     (2) the cost of energy modifications; 
 23.13     (3) improving handicap accessibility to school buildings; 
 23.14  and 
 23.15     (4) bringing school buildings into compliance with life and 
 23.16  safety codes and fire codes.  
 23.17     (b) Before a district issues bonds under this subdivision, 
 23.18  it must publish notice of the intended projects, the amount of 
 23.19  the bond issue, and the total amount of district indebtedness.  
 23.20     (c) A bond issue tentatively authorized by the board under 
 23.21  this subdivision becomes finally authorized unless a petition 
 23.22  signed by more than 15 percent of the registered voters of the 
 23.23  school district is filed with the school board within 30 days of 
 23.24  the board's adoption of a resolution stating the board's 
 23.25  intention to issue bonds.  The percentage is to be determined 
 23.26  with reference to the number of registered voters in the school 
 23.27  district on the last day before the petition is filed with the 
 23.28  school board.  The petition must call for a referendum on the 
 23.29  question of whether to issue the bonds for the projects under 
 23.30  this section.  The approval of 50 percent plus one of those 
 23.31  voting on the question is required to pass a referendum 
 23.32  authorized by this section. 
 23.33     (d) The bonds must be paid off within ten years of 
 23.34  issuance.  The bonds must be issued in compliance with chapter 
 23.35  475, except as otherwise provided in this section.  A tax levy 
 23.36  must be made for the payment of principal and interest on the 
 24.1   bonds in accordance with section 475.61.  The sum of the tax 
 24.2   levies under this section and section 124.2455 for each year 
 24.3   must not exceed the amount of the district's total operating 
 24.4   capital revenue for the year the initial debt service levies are 
 24.5   certified.  The district's general education levy for each year 
 24.6   must be reduced by the sum of (1) the amount of the tax levies 
 24.7   for debt service certified for each year for payment of the 
 24.8   principal and interest on the bonds., and (2) any excess amount 
 24.9   in the debt redemption fund used to retire bonds issued after 
 24.10  February 1, 1997.  A district using an excess amount in the debt 
 24.11  redemption fund to retire the bonds shall report the amount used 
 24.12  for this purpose to the commissioner by July 15 of the following 
 24.13  fiscal year.  A district having an outstanding capital loan 
 24.14  under section 124.431 or an outstanding debt service loan under 
 24.15  section 124.42 must not use an excess amount in the debt 
 24.16  redemption fund to retire the bonds. 
 24.17     (e) Notwithstanding paragraph (d), bonds issued by a 
 24.18  district within the first five years following voter approval of 
 24.19  a combination according to section 122.243, subdivision 2, must 
 24.20  be paid off within 20 years of issuance.  All the other 
 24.21  provisions and limitation of paragraph (d) apply. 
 24.22     Sec. 21.  Minnesota Statutes 1996, section 124.248, 
 24.23  subdivision 1a, is amended to read: 
 24.24     Subd. 1a.  [TRANSPORTATION REVENUE.] Transportation revenue 
 24.25  shall be paid to a charter school that provides transportation 
 24.26  services according to section 120.064, subdivision 15, according 
 24.27  to this subdivision.  Transportation aid shall equal 
 24.28  transportation revenue.  
 24.29     (a) In addition to the revenue under subdivision 1, a 
 24.30  charter school providing transportation services shall receive 
 24.31  general education aid for each pupil unit equal to the sum of 
 24.32  $170 $176, plus the transportation sparsity allowance for the 
 24.33  school district in which the charter school is located, plus the 
 24.34  transportation transition allowance for the school district in 
 24.35  which the charter school is located.  
 24.36     (b) For the first two years that a charter school is 
 25.1   providing transportation services, the adjusted special programs 
 25.2   transportation education base revenue equals according to 
 25.3   section 124.3202, subdivision 3, shall be increased by the 
 25.4   amount of the charter school's actual cost in the current school 
 25.5   year for transportation services for children with disabilities 
 25.6   under section 124.223, subdivisions 4, 5, 7, and 8.  For the 
 25.7   third year of transportation services and later fiscal years, 
 25.8   the special programs transportation revenue shall be computed 
 25.9   according to section 124.225, subdivision 14 1, paragraph (b), 
 25.10  clause (4).  
 25.11     Sec. 22.  Minnesota Statutes 1996, section 124.248, 
 25.12  subdivision 3, is amended to read: 
 25.13     Subd. 3.  [SPECIAL EDUCATION AND LIMITED ENGLISH 
 25.14  PROFICIENCY AID.] Except as provided in subdivision 1a, 
 25.15  paragraph (b), special education aid shall be paid to a charter 
 25.16  school according to sections 124.3201 and 124.3202, as though it 
 25.17  were a school district.  The charter school may charge tuition 
 25.18  to the district of residence as provided in section 120.17, 
 25.19  subdivision 4.  Limited English proficiency programs aid shall 
 25.20  be paid to a charter school according to section 124.273 as 
 25.21  though it were a school district.  The charter school shall 
 25.22  allocate its special education levy equalization revenue to the 
 25.23  resident districts of the pupils attending the charter school.  
 25.24  The districts of residence shall levy as though they were 
 25.25  participating in a cooperative, as provided in section 124.321, 
 25.26  subdivision 3. 
 25.27     Sec. 23.  Minnesota Statutes 1996, section 124.42, 
 25.28  subdivision 4, is amended to read: 
 25.29     Subd. 4.  Each district receiving a debt service loan shall 
 25.30  levy for debt service in that year and each year thereafter, 
 25.31  until all its debts to the fund are paid, (a) the amount of its 
 25.32  maximum effort debt service levy, or (b) the amount of its 
 25.33  required debt service levy less the amount of any debt service 
 25.34  loan in that year, whichever is greater.  Whenever the maximum 
 25.35  effort debt service levy is greater the district shall remit to 
 25.36  the commissioner, within ten days after its receipt of the last 
 26.1   regular tax distribution in the year in which it is collected, 
 26.2   that portion of the maximum effort debt service tax collections, 
 26.3   including penalties and interest, which exceeds the required 
 26.4   debt service levy.  The district shall remit payments to the 
 26.5   commissioner according to section 124.45.  On or before 
 26.6   September 1 30 in each year the commissioner shall notify the 
 26.7   county auditor of each county containing taxable property 
 26.8   situated within the school district of the amount of the maximum 
 26.9   effort debt service levy of the district for that year, and said 
 26.10  county auditor or auditors shall extend upon the tax rolls an ad 
 26.11  valorem tax upon all taxable property within the district in the 
 26.12  aggregate amount so certified.  
 26.13     Sec. 24.  Minnesota Statutes 1996, section 124.431, 
 26.14  subdivision 11, is amended to read: 
 26.15     Subd. 11.  [CONTRACT.] (a) Each capital loan must be 
 26.16  evidenced by a contract between the school district and the 
 26.17  state acting through the commissioner.  The contract must 
 26.18  obligate the state to reimburse the district, from the maximum 
 26.19  effort school loan fund, for eligible capital expenses for 
 26.20  construction of the facility for which the loan is granted, an 
 26.21  amount computed as provided in subdivision 8.  The commissioner 
 26.22  must receive from the school district a certified resolution of 
 26.23  the school board estimating the costs of construction and 
 26.24  reciting that contracts for construction of the facilities for 
 26.25  which the loan is granted have been awarded and that bonds of 
 26.26  the district have been issued and sold in the amount necessary 
 26.27  to pay all estimated costs of construction in excess of the 
 26.28  amount of the loan.  The contract must obligate the district to 
 26.29  repay the loan out of the excesses of its maximum effort debt 
 26.30  service levy over its required debt service levy, including 
 26.31  interest at a rate equal to the weighted average annual rate 
 26.32  payable on Minnesota state school loan bonds issued for the 
 26.33  project and disbursed to the districts on a reimbursement basis, 
 26.34  but in no event less than 3-1/2 percent per year on the 
 26.35  principal amount from time to time unpaid. 
 26.36     (b) The district shall each year, as long as it is indebted 
 27.1   to the state, levy for debt service (a) (i) the amount of its 
 27.2   maximum effort debt service levy or (b) (ii) the amount of its 
 27.3   required debt service levy, whichever is greater, except as the 
 27.4   required debt service levy may be reduced by a loan under 
 27.5   section 124.42.  On November 20 of each year each district 
 27.6   having an outstanding capital loan shall compute the excess 
 27.7   amount in the debt redemption fund.  The commissioner shall 
 27.8   prescribe the form and calculation to be used in computing the 
 27.9   excess amount.  A completed copy of this form shall be sent to 
 27.10  the commissioner before December 1 of each year.  The 
 27.11  commissioner may recompute the excess amount and shall promptly 
 27.12  notify the district of the recomputed amount.  On December 15 of 
 27.13  each year, the district shall remit to the commissioner an 
 27.14  amount equal to the excess amount in the debt redemption fund.  
 27.15  When the maximum effort debt service levy is greater, the 
 27.16  district shall remit to the commissioner within ten days after 
 27.17  its receipt of the last regular tax distribution in each year, 
 27.18  that part of the debt service tax collections, including 
 27.19  penalties and interest that exceeded the required debt service 
 27.20  levy.  The district shall remit payments to the commissioner 
 27.21  according to section 124.45. 
 27.22     (c) The commissioner shall supervise the collection of 
 27.23  outstanding accounts due the fund and may, by notice to the 
 27.24  proper county auditor, require the maximum levy to be made as 
 27.25  required in this subdivision.  Interest on capital loans must be 
 27.26  paid on December 15 of the year after the year the loan is 
 27.27  granted and annually in later years.  On or before September 1 
 27.28  30 in each year the commissioner shall notify the county auditor 
 27.29  of each county containing taxable property situated within the 
 27.30  school district of the amount of the maximum effort debt service 
 27.31  levy of the district for that year.  The county auditor or 
 27.32  auditors shall extend upon the tax rolls an ad valorem tax upon 
 27.33  all taxable property within the district in the aggregate amount 
 27.34  so certified. 
 27.35     Sec. 25.  Minnesota Statutes 1996, section 124.45, is 
 27.36  amended to read: 
 28.1      124.45 [PAYMENT AND APPLICATIONS OF PAYMENT.] 
 28.2      Subdivision 1.  [PAYMENT.] (a) On November 20 of each year, 
 28.3   each district having an outstanding capital loan or debt service 
 28.4   loan shall compute the excess amount in the debt redemption 
 28.5   fund.  The commissioner shall prescribe the form and calculation 
 28.6   to be used in computing the excess amount.  A completed copy of 
 28.7   this form shall be sent to the commissioner before December 1 of 
 28.8   each year.  The commissioner may recompute the excess amount and 
 28.9   shall promptly notify the district of the recomputed amount. 
 28.10     (b) On December 15 of each year, the district shall remit 
 28.11  to the commissioner an amount equal to the greater of: 
 28.12     (i) the excess amount in the debt redemption fund; or 
 28.13     (ii) the amount by which the maximum effort debt service 
 28.14  levy exceeds the required debt service levy for that calendar 
 28.15  year. 
 28.16  Any late payments shall be assessed an interest charge using the 
 28.17  interest rates specified for the debt service notes and capital 
 28.18  loan contracts. 
 28.19     (c) If a payment required under the maximum effort school 
 28.20  aid law is not made within 30 days, the commissioner may reduce 
 28.21  any subsequent payments due the district under chapters 124 and 
 28.22  124A by the amount due, after providing written notice to the 
 28.23  district. 
 28.24     Subd. 2.  [APPLICATION OF PAYMENTS.] The commissioner shall 
 28.25  apply payments received from collections of maximum effort debt 
 28.26  service levies in excess of required debt service levies of a 
 28.27  district on its debt service notes and capital loan 
 28.28  contracts under the maximum effort school aid law and aids 
 28.29  withheld according to subdivision 1, paragraph (b), as follows:  
 28.30  First, to payment of interest accrued on its notes, if any; 
 28.31  second, to interest on its contracts, if any; third, toward 
 28.32  principal of its notes, if any; and last, toward principal of 
 28.33  its contracts, if any.  While more than one note or more than 
 28.34  one contract is held, priority of payment of interest shall be 
 28.35  given to the one of earliest date, and after interest accrued on 
 28.36  all notes is paid, similar priority shall be given in the 
 29.1   application of any remaining amount to the payment of 
 29.2   principal.  In any year when the receipts from a district are 
 29.3   not sufficient to pay the interest accrued on any of its notes 
 29.4   or contracts, the deficiency shall be added to the principal, 
 29.5   and the commissioner shall notify the district and each county 
 29.6   auditor concerned of the new amount of principal of the note or 
 29.7   contract.  
 29.8      Sec. 26.  Minnesota Statutes 1996, section 124.83, 
 29.9   subdivision 4, is amended to read: 
 29.10     Subd. 4.  [HEALTH AND SAFETY LEVY.] To receive health and 
 29.11  safety revenue, a district may levy an amount equal to the 
 29.12  district's health and safety revenue as defined in subdivision 3 
 29.13  multiplied by the lesser of one, or the ratio of the quotient 
 29.14  derived by dividing the adjusted net tax capacity of the 
 29.15  district for the year preceding the year the levy is certified 
 29.16  by the actual pupil units in the district for the school year to 
 29.17  which the levy is attributable, to $4,707.50 $4,883. 
 29.18     Sec. 27.  Minnesota Statutes 1996, section 124.91, 
 29.19  subdivision 1, is amended to read: 
 29.20     Subdivision 1.  [TO LEASE BUILDING OR LAND.] (a) When a 
 29.21  district finds it economically advantageous to rent or lease a 
 29.22  building or land for any instructional purposes or for school 
 29.23  storage or furniture repair, and it determines that 
 29.24  the operating capital expenditure facilities revenues revenue 
 29.25  authorized under sections 124.243 and section 124A.22, 
 29.26  subdivision 10, are insufficient for this purpose, it may apply 
 29.27  to the commissioner for permission to make an additional capital 
 29.28  expenditure levy for this purpose.  An application for 
 29.29  permission to levy under this subdivision must contain financial 
 29.30  justification for the proposed levy, the terms and conditions of 
 29.31  the proposed lease, and a description of the space to be leased 
 29.32  and its proposed use.  
 29.33     (b) The criteria for approval of applications to levy under 
 29.34  this subdivision must include:  the reasonableness of the price, 
 29.35  the appropriateness of the space to the proposed activity, the 
 29.36  feasibility of transporting pupils to the leased building or 
 30.1   land, conformity of the lease to the laws and rules of the state 
 30.2   of Minnesota, and the appropriateness of the proposed lease to 
 30.3   the space needs and the financial condition of the district.  
 30.4   The commissioner must not authorize a levy under this 
 30.5   subdivision in an amount greater than the cost to the district 
 30.6   of renting or leasing a building or land for approved purposes.  
 30.7   The proceeds of this levy must not be used for custodial or 
 30.8   other maintenance services.  A district may not levy under this 
 30.9   subdivision for the purpose of leasing or renting a 
 30.10  district-owned building to itself. 
 30.11     (c) For agreements finalized after July 1, 1997, a district 
 30.12  may not levy under this subdivision for the purpose of:  (i) 
 30.13  leasing a building or land with an option to purchase under 
 30.14  section 465.71; or (ii) leasing a building or land used 
 30.15  primarily for purposes other than special or alternative 
 30.16  education instruction from a cooperative unit of government, as 
 30.17  defined in section 123.35, subdivision 19b, paragraph (d), that 
 30.18  the cooperative unit is leasing with an option to purchase under 
 30.19  section 465.71, if the commissioner determines that the payment 
 30.20  required for the purchase at the end of the term of the lease is 
 30.21  less than the projected market value of the property. 
 30.22     Sec. 28.  Minnesota Statutes 1996, section 124.912, 
 30.23  subdivision 1, is amended to read: 
 30.24     Subdivision 1.  [STATUTORY OBLIGATIONS.] (a) A school 
 30.25  district may levy: 
 30.26     (1) the amount authorized for liabilities of dissolved 
 30.27  districts pursuant to section 122.45; 
 30.28     (2) the amounts necessary to pay the district's obligations 
 30.29  under section 268.06, subdivision 25; and the amounts necessary 
 30.30  to pay for job placement services offered to employees who may 
 30.31  become eligible for benefits pursuant to section 268.08 for the 
 30.32  fiscal year the levy is certified; 
 30.33     (3) the amounts necessary to pay the district's obligations 
 30.34  under section 127.05; 
 30.35     (4) the amounts authorized by section 122.531; 
 30.36     (5) the amounts necessary to pay the district's obligations 
 31.1   under section 122.533; and 
 31.2      (6) for severance pay required by sections 120.08, 
 31.3   subdivision 3, and 122.535, subdivision 6. 
 31.4      (b) Each year, a member district of an education district 
 31.5   that levies under this subdivision must transfer the amount of 
 31.6   revenue certified under paragraph (b) to the education district 
 31.7   board according to this subdivision.  By June 20 and November 30 
 31.8   of each year, an amount must be transferred equal to: 
 31.9      (1) 50 percent times 
 31.10     (2) the amount certified in paragraph (b) minus homestead 
 31.11  and agricultural credit aid allocated for that levy according to 
 31.12  section 273.1398, subdivision 6. 
 31.13     Sec. 29.  Minnesota Statutes 1996, section 124.912, 
 31.14  subdivision 2, is amended to read: 
 31.15     Subd. 2.  [DESEGREGATION.] Each year, special school 
 31.16  district No. 1, Minneapolis, may levy an amount not to exceed 
 31.17  $197 times its actual pupil units for that fiscal year; 
 31.18  independent school district No. 625, St. Paul, may levy an 
 31.19  amount not to exceed $197 times its actual pupil units for that 
 31.20  fiscal year; and independent school district No. 709, Duluth, 
 31.21  may levy an amount not to exceed the sum of $660,000 and the 
 31.22  amount raised by a tax rate of 2.0 percent times the adjusted 
 31.23  net tax capacity of the district.  Notwithstanding section 
 31.24  121.904, the entire amount of this levy shall be recognized as 
 31.25  revenue for the fiscal year in which the levy is certified.  
 31.26  This levy shall not be considered in computing the aid reduction 
 31.27  under section 124.155. 
 31.28     Sec. 30.  Minnesota Statutes 1996, section 124.912, 
 31.29  subdivision 3, is amended to read: 
 31.30     Subd. 3.  [RULE COMPLIANCE.] Each year a district that is 
 31.31  required to implement a plan according to the requirements of 
 31.32  Minnesota Rules, parts 3535.0200 to 3535.2200, may levy an 
 31.33  amount not to exceed a net tax rate of 2.0 percent times the 
 31.34  adjusted net tax capacity of the district for taxes payable in 
 31.35  1991 and thereafter.  A district that levies according to 
 31.36  subdivision 2 may not levy according to this subdivision.  
 32.1   Notwithstanding section 121.904, the entire amount of this levy 
 32.2   shall be recognized as revenue for the fiscal year in which the 
 32.3   levy is certified.  This levy shall not be considered in 
 32.4   computing the aid reduction under section 124.155.  
 32.5      Sec. 31.  Minnesota Statutes 1996, section 124.916, 
 32.6   subdivision 1, is amended to read: 
 32.7      Subdivision 1.  [HEALTH INSURANCE.] (a) A school district 
 32.8   may levy the amount necessary to make employer contributions for 
 32.9   insurance for retired employees under this 
 32.10  subdivision.  Notwithstanding section 121.904, 50 percent of the 
 32.11  amount levied shall be recognized as revenue for the fiscal year 
 32.12  in which the levy is certified.  This levy shall not be 
 32.13  considered in computing the aid reduction under section 124.155. 
 32.14     (b) The school board of a joint vocational technical 
 32.15  district formed under sections 136C.60 to 136C.69 and the school 
 32.16  board of a school district may provide employer-paid hospital, 
 32.17  medical, and dental benefits to a person who: 
 32.18     (1) is eligible for employer-paid insurance under 
 32.19  collective bargaining agreements or personnel plans in effect on 
 32.20  June 30, 1992; 
 32.21     (2) has at least 25 years of service credit in the public 
 32.22  pension plan of which the person is a member on the day before 
 32.23  retirement or, in the case of a teacher, has a total of at least 
 32.24  25 years of service credit in the teachers retirement 
 32.25  association, a first-class city teacher retirement fund, or any 
 32.26  combination of these; 
 32.27     (3) upon retirement is immediately eligible for a 
 32.28  retirement annuity; 
 32.29     (4) is at least 55 and not yet 65 years of age; and 
 32.30     (5) retires on or after May 15, 1992, and before July 21, 
 32.31  1992. 
 32.32     A school board paying insurance under this subdivision may 
 32.33  not exclude any eligible employees. 
 32.34     (c) An employee who is eligible both for the health 
 32.35  insurance benefit under this subdivision and for an early 
 32.36  retirement incentive under a collective bargaining agreement or 
 33.1   personnel plan established by the employer must select either 
 33.2   the early retirement incentive provided under the collective 
 33.3   bargaining agreement personnel plan or the incentive provided 
 33.4   under this subdivision, but may not receive both.  For purposes 
 33.5   of this subdivision, a person retires when the person terminates 
 33.6   active employment and applies for retirement benefits.  The 
 33.7   retired employee is eligible for single and dependent coverages 
 33.8   and employer payments to which the person was entitled 
 33.9   immediately before retirement, subject to any changes in 
 33.10  coverage and employer and employee payments through collective 
 33.11  bargaining or personnel plans, for employees in positions 
 33.12  equivalent to the position from which the employee retired.  The 
 33.13  retired employee is not eligible for employer-paid life 
 33.14  insurance.  Eligibility ceases when the retired employee attains 
 33.15  the age of 65, or when the employee chooses not to receive the 
 33.16  retirement benefits for which the employee has applied, or when 
 33.17  the employee is eligible for employer-paid health insurance from 
 33.18  a new employer.  Coverages must be coordinated with relevant 
 33.19  health insurance benefits provided through the federally 
 33.20  sponsored Medicare program.  
 33.21     (d) Unilateral implementation of this section by a public 
 33.22  employer is not an unfair labor practice for purposes of chapter 
 33.23  179A.  The authority provided in this subdivision for an 
 33.24  employer to pay health insurance costs for certain retired 
 33.25  employees is not subject to the limits in section 179A.20, 
 33.26  subdivision 2a. 
 33.27     (e) If a school district levies according to this 
 33.28  subdivision, it may not also levy according to section 122.531, 
 33.29  subdivision 9, for eligible employees. 
 33.30     Sec. 32.  Minnesota Statutes 1996, section 124.916, 
 33.31  subdivision 2, is amended to read: 
 33.32     Subd. 2.  [RETIRED EMPLOYEE HEALTH BENEFITS.] For taxes 
 33.33  payable in 1996, 1997, 1998, and 1999 only, a school district 
 33.34  may levy an amount up to the amount the district is required by 
 33.35  the collective bargaining agreement in effect on March 30, 1992, 
 33.36  to pay for health insurance or unreimbursed medical expenses for 
 34.1   licensed and nonlicensed employees who have terminated services 
 34.2   in the employing district and withdrawn from active teaching 
 34.3   service or other active service, as applicable, before July 1, 
 34.4   1992.  The total amount of the levy each year may not exceed 
 34.5   $300,000.  
 34.6      Notwithstanding section 121.904, 50 percent of the proceeds 
 34.7   of this levy shall be recognized in the fiscal year in which it 
 34.8   is certified. 
 34.9      Sec. 33.  Minnesota Statutes 1996, section 124.916, 
 34.10  subdivision 3, is amended to read: 
 34.11     Subd. 3.  [RETIREMENT LEVIES.] (1) In addition to the 
 34.12  excess levy authorized in 1976 any district within a city of the 
 34.13  first class which was authorized in 1975 to make a retirement 
 34.14  levy under Minnesota Statutes 1974, section 275.127 and chapter 
 34.15  422A may levy an amount per pupil unit which is equal to the 
 34.16  amount levied in 1975 payable 1976, under Minnesota Statutes 
 34.17  1974, section 275.127 and chapter 422A, divided by the number of 
 34.18  pupil units in the district in 1976-1977. 
 34.19     (2) In 1979 and each year thereafter, any district which 
 34.20  qualified in 1976 for an extra levy under paragraph (1) shall be 
 34.21  allowed to levy the same amount as levied for retirement in 1978 
 34.22  under this clause reduced each year by ten percent of the 
 34.23  difference between the amount levied for retirement in 1971 
 34.24  under Minnesota Statutes 1971, sections 275.127 and 422.01 to 
 34.25  422.54 and the amount levied for retirement in 1975 under 
 34.26  Minnesota Statutes 1974, section 275.127 and chapter 422A. 
 34.27     (3) In 1991 and each year thereafter, a district to which 
 34.28  this subdivision applies may levy an additional amount required 
 34.29  for contributions to the Minneapolis employees retirement fund 
 34.30  as a result of the maximum dollar amount limitation on state 
 34.31  contributions to the fund imposed under section 422A.101, 
 34.32  subdivision 3.  The additional levy shall not exceed the most 
 34.33  recent amount certified by the board of the Minneapolis 
 34.34  employees retirement fund as the district's share of the 
 34.35  contribution requirement in excess of the maximum state 
 34.36  contribution under section 422A.101, subdivision 3.  
 35.1      (4) For taxes payable in 1994 and thereafter, special 
 35.2   school district No. 1, Minneapolis, and independent school 
 35.3   district No. 625, St. Paul, may levy for the increase in the 
 35.4   employer retirement fund contributions, under Laws 1992, chapter 
 35.5   598, article 5, section 1.  Notwithstanding section 121.904, the 
 35.6   entire amount of this levy may be recognized as revenue for the 
 35.7   fiscal year in which the levy is certified.  This levy shall not 
 35.8   be considered in computing the aid reduction under section 
 35.9   124.155. 
 35.10     (5) If the employer retirement fund contributions under 
 35.11  section 354A.12, subdivision 2a, are increased for fiscal year 
 35.12  1994 or later fiscal years, special school district No. 1, 
 35.13  Minneapolis, and independent school district No. 625, St. Paul, 
 35.14  may levy in payable 1994 or later an amount equal to the amount 
 35.15  derived by applying the net increase in the employer retirement 
 35.16  fund contribution rate of the respective teacher retirement fund 
 35.17  association between fiscal year 1993 and the fiscal year 
 35.18  beginning in the year after the levy is certified to the total 
 35.19  covered payroll of the applicable teacher retirement fund 
 35.20  association.  Notwithstanding section 121.904, the entire amount 
 35.21  of this levy may be recognized as revenue for the fiscal year in 
 35.22  which the levy is certified.  This levy shall not be considered 
 35.23  in computing the aid reduction under section 124.155.  If an 
 35.24  applicable school district levies under this paragraph, they may 
 35.25  not levy under paragraph (4). 
 35.26     (6) In addition to the levy authorized under paragraph (5), 
 35.27  special school district No. 1, Minneapolis, may also levy 
 35.28  payable in 1997 or later an amount equal to the contributions 
 35.29  under section 423A.02, subdivision 3, and may also levy in 
 35.30  payable 1994 or later an amount equal to the state aid 
 35.31  contribution under section 354A.12, subdivision 3b.  Independent 
 35.32  school district No. 625, St. Paul, may levy payable in 1997 or 
 35.33  later an amount equal to the supplemental contributions under 
 35.34  section 423A.02, subdivision 3.  Notwithstanding section 
 35.35  121.904, the entire amount of these levies may be recognized as 
 35.36  revenue for the fiscal year in which the levy is certified.  
 36.1   These levies shall not be considered in computing the aid 
 36.2   reduction under section 124.155. 
 36.3      Sec. 34.  Minnesota Statutes 1996, section 124.918, 
 36.4   subdivision 6, is amended to read: 
 36.5      Subd. 6.  [ADJUSTMENTS FOR LAW CHANGES.] Whenever a change 
 36.6   enacted in law changes the levy authority for a school district 
 36.7   or an intermediate school district for a fiscal year after the 
 36.8   levy for that fiscal year has been certified by the district 
 36.9   under section 275.07, the department of children, families, and 
 36.10  learning shall adjust the next levy certified by the district by 
 36.11  the amount of the change in levy authority for that fiscal year 
 36.12  resulting from the change.  Notwithstanding section 121.904, the 
 36.13  entire amount for fiscal year 1992 and 50 percent for fiscal 
 36.14  years thereafter of the levy adjustment must be recognized as 
 36.15  revenue in the fiscal year the levy is certified, if sufficient 
 36.16  levy resources are available under generally accepted accounting 
 36.17  principles in the district fund where the adjustment is to 
 36.18  occur.  School districts that do not have sufficient levy 
 36.19  resources available in the fund where the adjustment is to occur 
 36.20  shall recognize in the fiscal year the levy is certified an 
 36.21  amount equal to the levy resources available.  The remaining 
 36.22  adjustment amount shall be recognized as revenue in the fiscal 
 36.23  year after the levy is certified. 
 36.24     Sec. 35.  Minnesota Statutes 1996, section 124.95, 
 36.25  subdivision 4, is amended to read: 
 36.26     Subd. 4.  [EQUALIZED DEBT SERVICE LEVY.] To obtain debt 
 36.27  service equalization revenue, a district must levy an amount not 
 36.28  to exceed the district's debt service equalization revenue times 
 36.29  the lesser of one or the ratio of: 
 36.30     (1) the quotient derived by dividing the adjusted net tax 
 36.31  capacity of the district for the year before the year the levy 
 36.32  is certified by the actual pupil units in the district for the 
 36.33  school year ending in the year prior to the year the levy is 
 36.34  certified; to 
 36.35     (2) $4,707.50 $4,883. 
 36.36     Sec. 36.  Minnesota Statutes 1996, section 124.961, is 
 37.1   amended to read: 
 37.2      124.961 [DEBT SERVICE APPROPRIATION.] 
 37.3      (a) $30,054,000 $35,348,000 in fiscal year 
 37.4   1996 1998, $28,162,000 $37,770,000 in fiscal year 1997 1999, 
 37.5   and $33,948,000 $38,000,000 in fiscal year 1998 2000 and each 
 37.6   year thereafter is appropriated from the general fund to the 
 37.7   commissioner of children, families, and learning for payment of 
 37.8   debt service equalization aid under section 124.95.  The 1998 
 37.9   2000 appropriation includes $4,970,000 $34,200,000 for 1997 
 37.10  1999 and $28,978,000 $3,800,000 for 1998 2000. 
 37.11     (b) The appropriations in paragraph (a) must be reduced by 
 37.12  the amount of any money specifically appropriated for the same 
 37.13  purpose in any year from any state fund. 
 37.14     Sec. 37.  Minnesota Statutes 1996, section 124A.02, 
 37.15  subdivision 21, is amended to read: 
 37.16     Subd. 21.  [SHARED TIME AID.] For fiscal year 1998, aid for 
 37.17  shared time pupils shall equal the formula allowance minus $300 
 37.18  times the full-time equivalent actual pupil units for shared 
 37.19  time pupils.  For fiscal year 1999 and later, aid for shared 
 37.20  time pupils shall equal the formula allowance minus $176 times 
 37.21  the full-time equivalent actual pupil units for shared time 
 37.22  pupils.  Aid for shared time pupils shall be in addition to any 
 37.23  other aid to which the district is otherwise entitled.  Shared 
 37.24  time average daily membership shall not be used in the 
 37.25  computation of pupil units under section 124.17, subdivision 1, 
 37.26  for any purpose other than the computation of shared time aid 
 37.27  pursuant to subdivisions 20 to 22 and section 124A.034, 
 37.28  subdivisions 1 to 1b. 
 37.29     Sec. 38.  Minnesota Statutes 1996, section 124A.029, 
 37.30  subdivision 1, is amended to read: 
 37.31     Subdivision 1.  [REVENUE CONVERSION.] Except as provided 
 37.32  under subdivision subdivisions 4 and 5, the referendum authority 
 37.33  under section 124A.03 and the levy authority under section 
 37.34  124.912, subdivisions 2 and 3, of a school district must be 
 37.35  converted by the department according to this section. 
 37.36     Sec. 39.  Minnesota Statutes 1996, section 124A.029, 
 38.1   subdivision 3, is amended to read: 
 38.2      Subd. 3.  [RATE ADJUSTMENT.] The department shall adjust a 
 38.3   school district's referendum authority for a referendum approved 
 38.4   before July 1, 1991, excluding authority based on a dollar 
 38.5   amount, and the levy authority under section 124.912, 
 38.6   subdivisions 2 and 3, by multiplying the sum of the rates 
 38.7   authorized by a district under section 124A.03 and the rates in 
 38.8   section 124.912, subdivisions 2 and 3, by the ratio determined 
 38.9   under subdivision 2 for the assessment year for which the 
 38.10  revenue is attributable.  The adjusted rates for assessment year 
 38.11  1993 shall apply to later years for which the revenue is 
 38.12  authorized. 
 38.13     Sec. 40.  Minnesota Statutes 1996, section 124A.029, is 
 38.14  amended by adding a subdivision to read: 
 38.15     Subd. 5.  [PUPIL UNIT WEIGHTING ADJUSTMENT.] The department 
 38.16  shall convert the portion of each district's referendum 
 38.17  authority for fiscal year 1999 and later years that is based on 
 38.18  an allowance per pupil unit by multiplying the referendum 
 38.19  allowance according to section 124A.03, subdivision 1b, by the 
 38.20  ratio of the actual pupil units for fiscal year 1999, recomputed 
 38.21  using the pupil units weights in effect for fiscal year 1998 
 38.22  under section 124.17, subdivision 1, to the actual pupil units 
 38.23  for fiscal year 1999. 
 38.24     Sec. 41.  Minnesota Statutes 1996, section 124A.03, 
 38.25  subdivision 1c, is amended to read: 
 38.26     Subd. 1c.  [REFERENDUM ALLOWANCE LIMIT.] Notwithstanding 
 38.27  subdivision 1b, a district's referendum allowance must not 
 38.28  exceed the greater of:  
 38.29     (1) the district's referendum allowance for fiscal year 
 38.30  1994 times the ratio of the actual pupil units for fiscal year 
 38.31  1999, recomputed using the pupil units weights in effect for 
 38.32  fiscal year 1998 under section 124.17, subdivision 1, to the 
 38.33  actual pupil units for fiscal year 1999; or 
 38.34     (2) the district's referendum allowance for fiscal year 
 38.35  1998 times the ratio of the actual pupil units for fiscal year 
 38.36  1999, recomputed using the pupil units weights in effect for 
 39.1   fiscal year 1998 under section 124.17, subdivision 1, to the 
 39.2   actual pupil units for fiscal year 1999; or 
 39.3      (3) 25 percent of the formula allowance minus $300 $246 for 
 39.4   fiscal year 1997 1999 and later. 
 39.5      Sec. 42.  Minnesota Statutes 1996, section 124A.03, 
 39.6   subdivision 1f, is amended to read: 
 39.7      Subd. 1f.  [REFERENDUM EQUALIZATION REVENUE.] A district's 
 39.8   referendum equalization revenue equals $315 $327 times the 
 39.9   district's actual pupil units for that year. 
 39.10     Referendum equalization revenue must not exceed a 
 39.11  district's total referendum revenue for that year. 
 39.12     Sec. 43.  Minnesota Statutes 1996, section 124A.03, 
 39.13  subdivision 1g, is amended to read: 
 39.14     Subd. 1g.  [REFERENDUM EQUALIZATION LEVY.] (a) For fiscal 
 39.15  year 1996, a district's referendum equalization levy equals the 
 39.16  district's referendum equalization revenue times the lesser of 
 39.17  one or the ratio of the district's adjusted net tax capacity per 
 39.18  actual pupil unit to 100 percent of the equalizing factor as 
 39.19  defined in section 124A.02, subdivision 8. 
 39.20     (b) For fiscal year 1997 1999 and thereafter, a district's 
 39.21  referendum equalization levy for a referendum levied against the 
 39.22  referendum market value of all taxable property as defined in 
 39.23  section 124A.02, subdivision 3b, equals the district's 
 39.24  referendum equalization revenue times the lesser of one or the 
 39.25  ratio of the district's referendum market value per actual pupil 
 39.26  unit to $476,000 $493,700. 
 39.27     (c) For fiscal year 1997 1999 and thereafter, a district's 
 39.28  referendum equalization levy for a referendum levied against the 
 39.29  net tax capacity of all taxable property equals the district's 
 39.30  referendum equalization revenue times the lesser of one or the 
 39.31  ratio of the district's adjusted net tax capacity per actual 
 39.32  pupil unit to 100 percent of the equalizing factor for that 
 39.33  year $10,447. 
 39.34     Sec. 44.  Minnesota Statutes 1996, section 124A.03, 
 39.35  subdivision 3c, is amended to read: 
 39.36     Subd. 3c.  [REFERENDUM ALLOWANCE REDUCTION.] For fiscal 
 40.1   year 1998 1999 and later, a district's referendum allowance for 
 40.2   referendum authority under subdivision 1c is reduced as provided 
 40.3   in this subdivision.  
 40.4      (a) For referendum revenue authority approved before June 
 40.5   1, 1996, and effective for fiscal year 1997, the reduction 
 40.6   equals the amount of the reduction computed for fiscal year 1997 
 40.7   under subdivision 3b. times the ratio of the actual pupil units 
 40.8   for fiscal year 1999, recomputed using the pupil units weights 
 40.9   in effect for fiscal year 1998 under section 124.17, subdivision 
 40.10  1, to the actual pupil units for fiscal year 1999; or 
 40.11     (b) For referendum revenue authority approved before June 
 40.12  1, 1996, and effective beginning in fiscal year 1998, the 
 40.13  reduction equals the amount of the reduction computed for fiscal 
 40.14  year 1998 under subdivision 3b. times the ratio of the actual 
 40.15  pupil units for fiscal year 1999, recomputed using the pupil 
 40.16  units weights in effect for fiscal year 1998 under section 
 40.17  124.17, subdivision 1, to the actual pupil units for fiscal year 
 40.18  1999; or 
 40.19     (c) For referendum revenue authority approved after May 31, 
 40.20  1996, there is no reduction.  
 40.21     (d) For districts with more than one referendum authority, 
 40.22  the reduction shall be computed separately for each authority.  
 40.23  The reduction shall be applied first to authorities levied 
 40.24  against tax capacity, and then to authorities levied against 
 40.25  referendum market value.  For districts with more than one 
 40.26  authority levied against net tax capacity or against referendum 
 40.27  market value, the referendum allowance reduction shall be 
 40.28  applied first to the authority with the earliest expiration date.
 40.29     (e) For a newly reorganized district created after July 1, 
 40.30  1996, the referendum revenue reduction equals the lesser of the 
 40.31  amount calculated for the combined district, or the sum of the 
 40.32  amounts by which each of the reorganizing district's 
 40.33  supplemental revenue reduction exceeds its respective 
 40.34  supplemental revenue allowances calculated for the year 
 40.35  preceding the year of reorganization. 
 40.36     Sec. 45.  Minnesota Statutes 1996, section 124A.036, 
 41.1   subdivision 5, is amended to read: 
 41.2      Subd. 5.  [ALTERNATIVE ATTENDANCE PROGRAMS.] The general 
 41.3   education aid for districts must be adjusted for each pupil 
 41.4   attending a nonresident district under sections 120.062, 
 41.5   120.075, 120.0751, 120.0752, 124C.45 to 124C.48, and 126.22.  
 41.6   The adjustments must be made according to this subdivision. 
 41.7      (a) General education aid paid to a resident district must 
 41.8   be reduced by an amount equal to the sum of: 
 41.9      (1) the general education revenue exclusive of compensatory 
 41.10  basic skills revenue; and 
 41.11     (2) the referendum equalization revenue approved or renewed 
 41.12  after July 1, 1997, attributable to the pupil in the resident 
 41.13  district. 
 41.14     (b) General education aid paid to a district serving a 
 41.15  pupil in programs listed in this subdivision shall be increased 
 41.16  by an amount equal to the sum of: 
 41.17     (1) the general education revenue exclusive of compensatory 
 41.18  basic skills revenue; and 
 41.19     (2) the referendum equalization revenue approved or renewed 
 41.20  after July 1, 1997, attributable to the pupil in the nonresident 
 41.21  district.  
 41.22     (c) If the amount of the reduction to be made from the 
 41.23  general education aid of the resident district is greater than 
 41.24  the amount of general education aid otherwise due the district, 
 41.25  the excess reduction must be made from other state aids due the 
 41.26  district. 
 41.27     (d) The district of residence shall pay tuition to a 
 41.28  district or an area learning center, operated according to 
 41.29  paragraph (e), providing special instruction and services to a 
 41.30  pupil with a disability, as defined in section 120.03, or a 
 41.31  pupil, as defined in section 120.181, who is enrolled in a 
 41.32  program listed in this subdivision.  The tuition shall be equal 
 41.33  to (1) the actual cost of providing special instruction and 
 41.34  services to the pupil, including a proportionate amount for debt 
 41.35  service and for capital expenditure facilities and equipment, 
 41.36  and debt service but not including any amount for 
 42.1   transportation, minus (2) the amount of general education aid, 
 42.2   the amount of capital expenditure facilities aid and capital 
 42.3   expenditure equipment aid received under section 124.245, 
 42.4   subdivision 6, and special education aid, attributable to that 
 42.5   pupil, that is received by the district providing special 
 42.6   instruction and services. 
 42.7      (e) An area learning center operated by a service 
 42.8   cooperative, intermediate district, education district, or a 
 42.9   joint powers cooperative may elect through the action of the 
 42.10  constituent boards to charge tuition for pupils rather than to 
 42.11  calculate general education aid adjustments under paragraph (a), 
 42.12  (b), or (c).  The tuition must be equal to the greater of the 
 42.13  average general education revenue per pupil unit attributable to 
 42.14  the pupil, or the actual cost of providing the instruction, 
 42.15  excluding transportation costs, if the pupil meets the 
 42.16  requirements of section 120.03 or 120.181. 
 42.17     Sec. 46.  Minnesota Statutes 1996, section 124A.036, 
 42.18  subdivision 6, is amended to read: 
 42.19     Subd. 6.  [CHARTER SCHOOLS.] (a) The general education aid 
 42.20  for districts must be adjusted for each pupil attending a 
 42.21  charter school under section 120.064.  The adjustments must be 
 42.22  made according to this subdivision. 
 42.23     (b) General education aid paid to a resident district must 
 42.24  be reduced by an amount equal to the sum of: 
 42.25     (1) the general education revenue exclusive of compensatory 
 42.26  basic skills revenue; and 
 42.27     (2) the referendum equalization revenue approved or renewed 
 42.28  after July 1, 1997. 
 42.29     (c) General education aid paid to a district in which a 
 42.30  charter school not providing transportation according to section 
 42.31  120.064, subdivision 15, is located shall be increased by an 
 42.32  amount equal to the product of:  (1) the sum of $170 $176, plus 
 42.33  the transportation sparsity allowance for the district, plus the 
 42.34  transportation transition allowance for the district; times (2) 
 42.35  the pupil units attributable to the pupil.  
 42.36     (d) If the amount of the reduction to be made from the 
 43.1   general education aid of the resident district is greater than 
 43.2   the amount of general education aid otherwise due the district, 
 43.3   the excess reduction must be made from other state aids due the 
 43.4   district. 
 43.5      Sec. 47.  Minnesota Statutes 1996, section 124A.04, 
 43.6   subdivision 2, is amended to read: 
 43.7      Subd. 2.  [1993 1999 AND LATER.] The training and 
 43.8   experience index for fiscal year 1999 and later must be 
 43.9   constructed in the following manner:  
 43.10     (a) The department shall construct a matrix that classifies 
 43.11  teachers by the extent of training received in accredited 
 43.12  institutions of higher education and by the years of experience 
 43.13  that districts take into account in determining teacher salaries.
 43.14     (b) The average salary for each cell of the matrix must be 
 43.15  computed as follows using data from the second year of the 
 43.16  previous biennium fiscal year 1997:  
 43.17     (1) For each school district, multiply the salary paid to 
 43.18  full-time equivalent teachers with that combination of training 
 43.19  and experience according to the district's teacher salary 
 43.20  schedule by the number of actual pupil units in that district.  
 43.21     (2) Add the amounts computed in clause (1) for all 
 43.22  districts in the state and divide the resulting sum by the total 
 43.23  number of actual pupil units in all districts in the state that 
 43.24  employ teachers.  
 43.25     (c) For each cell in the matrix, compute the ratio of the 
 43.26  average salary in that cell to the average salary for all 
 43.27  teachers in the state during fiscal year 1997.  
 43.28     (d) The index for each district that employs teachers 
 43.29  equals the sum of:  (i) for teachers employed in that district 
 43.30  during fiscal year 1997 and the current fiscal year, the ratios 
 43.31  for each teacher computed using data for fiscal year 1997; and 
 43.32  (ii) for teachers employed in that district during the current 
 43.33  fiscal year but not during fiscal year 1997, the ratio for 
 43.34  teachers who are in their first year of teaching and who have no 
 43.35  additional credits or degrees above a bachelor's degree divided 
 43.36  by the number of teachers in that district.  The index for a 
 44.1   district that employs no teachers is zero. 
 44.2      Sec. 48.  Minnesota Statutes 1996, section 124A.22, 
 44.3   subdivision 1, is amended to read: 
 44.4      Subdivision 1.  [GENERAL EDUCATION REVENUE.] (a) For fiscal 
 44.5   year 1996, the general education revenue for each district 
 44.6   equals the sum of the district's basic revenue, compensatory 
 44.7   education revenue, training and experience revenue, secondary 
 44.8   sparsity revenue, elementary sparsity revenue, and supplemental 
 44.9   revenue. 
 44.10     (b) (a) For fiscal year years 1997 and thereafter 1998, 
 44.11  the general education revenue for each district equals the sum 
 44.12  of the district's basic revenue, compensatory education revenue, 
 44.13  secondary sparsity revenue, elementary sparsity revenue, 
 44.14  transportation sparsity revenue, total operating capital 
 44.15  revenue, transition revenue, and supplemental revenue. 
 44.16     (b) For fiscal year 1999 and thereafter, the general 
 44.17  education revenue for each district equals the sum of the 
 44.18  district's basic revenue, basic skills revenue, training and 
 44.19  experience revenue, secondary sparsity revenue, elementary 
 44.20  sparsity revenue, transportation sparsity revenue, total 
 44.21  operating capital revenue, transition revenue, and supplemental 
 44.22  revenue. 
 44.23     Sec. 49.  Minnesota Statutes 1996, section 124A.22, 
 44.24  subdivision 2, is amended to read: 
 44.25     Subd. 2.  [BASIC REVENUE.] The basic revenue for each 
 44.26  district equals the formula allowance times the actual pupil 
 44.27  units for the school year.  The formula allowance for fiscal 
 44.28  year 1995 is $3,150.  The formula allowance for fiscal year 1996 
 44.29  is $3,205.  The formula allowance for fiscal year 1997 is $3,505 
 44.30  and.  The formula allowance for fiscal year 1998 and subsequent 
 44.31  fiscal years the formula allowance is $3,430 $3,505.  The 
 44.32  formula allowance for fiscal year 1999 and subsequent fiscal 
 44.33  years is $3,589. 
 44.34     Sec. 50.  Minnesota Statutes 1996, section 124A.22, 
 44.35  subdivision 3, is amended to read: 
 44.36     Subd. 3.  [FISCAL YEAR 1998 COMPENSATORY EDUCATION 
 45.1   REVENUE.] The compensatory education revenue for each 
 45.2   district for fiscal year 1998 equals the formula allowance less 
 45.3   $300 times the AFDC pupil units computed according to section 
 45.4   124.17, subdivision 1d. 
 45.5      Sec. 51.  Minnesota Statutes 1996, section 124A.22, is 
 45.6   amended by adding a subdivision to read: 
 45.7      Subd. 3a.  [BASIC SKILLS REVENUE.] For fiscal year 1999 and 
 45.8   thereafter, a school district's basic skills revenue equals the 
 45.9   sum of: 
 45.10     (1) the formula allowance less $384 times the AFDC pupil 
 45.11  units computed according to section 124.17, subdivision 1g; plus 
 45.12     (2) the limited English proficiency revenue according to 
 45.13  section 124.273, subdivision 1g; plus 
 45.14     (3) $100 times the limited English proficiency pupil units 
 45.15  according to section 124.17, subdivision 6; plus 
 45.16     (4) the lesser of:  (i) $23 times the number of fund 
 45.17  balance pupil units in kindergarten to grade 8; or (ii) the 
 45.18  amount of district money provided to match basic skills revenue 
 45.19  for the purposes described in section 124A.28. 
 45.20     Sec. 52.  Minnesota Statutes 1996, section 124A.22, 
 45.21  subdivision 6, is amended to read: 
 45.22     Subd. 6.  [SECONDARY SPARSITY REVENUE.] (a) A district's 
 45.23  secondary sparsity revenue for a school year equals the sum of 
 45.24  the results of the following calculation for each qualifying 
 45.25  high school in the district: 
 45.26     (1) the formula allowance for the school year 
 45.27  less $300 $384, multiplied by 
 45.28     (2) the secondary average daily membership of the high 
 45.29  school, multiplied by 
 45.30     (3) the quotient obtained by dividing 400 minus the 
 45.31  secondary average daily membership by 400 plus the secondary 
 45.32  daily membership, multiplied by 
 45.33     (4) the lesser of 1.5 or the quotient obtained by dividing 
 45.34  the isolation index minus 23 by ten. 
 45.35     (b) A newly formed school district that is the result of 
 45.36  districts combining under the cooperation and combination 
 46.1   program or consolidating under section 122.23 shall receive 
 46.2   secondary sparsity revenue equal to the greater of:  (1) the 
 46.3   amount calculated under paragraph (a) for the combined district; 
 46.4   or (2) the sum of the amounts of secondary sparsity revenue the 
 46.5   former school districts had in the year prior to consolidation, 
 46.6   increased for any subsequent changes in the secondary sparsity 
 46.7   formula. 
 46.8      Sec. 53.  Minnesota Statutes 1996, section 124A.22, 
 46.9   subdivision 6a, is amended to read: 
 46.10     Subd. 6a.  [ELEMENTARY SPARSITY REVENUE.] A district's 
 46.11  elementary sparsity revenue equals the sum of the following 
 46.12  amounts for each qualifying elementary school in the district:  
 46.13     (1) the formula allowance for the year less $300 $384, 
 46.14  multiplied by 
 46.15     (2) the elementary average daily membership of the school, 
 46.16  multiplied by 
 46.17     (3) the quotient obtained by dividing 140 minus the 
 46.18  elementary average daily membership by 140 plus the average 
 46.19  daily membership.  
 46.20     Sec. 54.  Minnesota Statutes 1996, section 124A.22, 
 46.21  subdivision 8, is amended to read: 
 46.22     Subd. 8.  [SUPPLEMENTAL REVENUE.] (a) A district's 
 46.23  supplemental revenue allowance for fiscal year 1994 1999 and 
 46.24  later fiscal years equals the district's supplemental revenue 
 46.25  for fiscal year 1993 1998 divided by the district's 
 46.26  1992-1993 1997-1998 actual pupil units times the ratio of the 
 46.27  actual pupil units for fiscal year 1999, recomputed using the 
 46.28  pupil units weights in effect for fiscal year 1998 under section 
 46.29  124.17, subdivision 1, to the actual pupil units for fiscal year 
 46.30  1999. 
 46.31     (b) A district's supplemental revenue allowance is reduced 
 46.32  for fiscal year 1995 and later according to subdivision 9. 
 46.33     (c) A district's supplemental revenue equals the 
 46.34  supplemental revenue allowance, if any, times its actual pupil 
 46.35  units for that year.  
 46.36     (d) A school district may cancel its supplemental revenue 
 47.1   by notifying the commissioner of education prior to June 30, 
 47.2   1994.  A school district that is reorganizing under section 
 47.3   122.22, 122.23, or 122.241 may cancel its supplemental revenue 
 47.4   by notifying the commissioner of children, families, and 
 47.5   learning prior to July 1 of the year of the reorganization.  If 
 47.6   a district cancels its supplemental revenue according to this 
 47.7   paragraph, its supplemental revenue allowance for fiscal year 
 47.8   1993 for purposes of subdivision 9 and section 124A.03, 
 47.9   subdivision 3b, equals zero. 
 47.10     Sec. 55.  Minnesota Statutes 1996, section 124A.22, 
 47.11  subdivision 8a, is amended to read: 
 47.12     Subd. 8a.  [SUPPLEMENTAL LEVY.] To obtain supplemental 
 47.13  revenue, a district may levy an amount not more than the product 
 47.14  of its supplemental revenue for the school year times the lesser 
 47.15  of one or the ratio of its general education levy to its general 
 47.16  education revenue, excluding transition revenue and supplemental 
 47.17  revenue, for the same year adjusted net tax capacity per actual 
 47.18  pupil unit to $10,447. 
 47.19     Sec. 56.  Minnesota Statutes 1996, section 124A.22, 
 47.20  subdivision 10, is amended to read: 
 47.21     Subd. 10.  [TOTAL OPERATING CAPITAL REVENUE.] (a) For 
 47.22  fiscal year 1997 1999 and thereafter, total operating capital 
 47.23  revenue for a district equals the amount determined under 
 47.24  paragraph (b), or (c), (d), (e), or (f), plus $68 $71 times 
 47.25  the actual pupil units for the school year.  The revenue must be 
 47.26  placed in a reserved account in the general fund and may only be 
 47.27  used according to subdivision 11. 
 47.28     (b) For fiscal years 1996 1999 and later, capital revenue 
 47.29  for a district equals $100 $104 times the district's maintenance 
 47.30  cost index times its actual pupil units for the school year. 
 47.31     (c) For 1996 and later fiscal years, the previous formula 
 47.32  revenue for a district equals $128 times its actual pupil units 
 47.33  for fiscal year 1995. 
 47.34     (d) Notwithstanding paragraph (b), for fiscal year 1996, 
 47.35  the revenue for each district equals 25 percent of the amount 
 47.36  determined in paragraph (b) plus 75 percent of the previous 
 48.1   formula revenue. 
 48.2      (e) Notwithstanding paragraph (b), for fiscal year 1997, 
 48.3   the revenue for each district equals 50 percent of the amount 
 48.4   determined in paragraph (b) plus 50 percent of the previous 
 48.5   formula revenue. 
 48.6      (f) Notwithstanding paragraph (b), for fiscal year 1998, 
 48.7   the revenue for each district equals 75 percent of the amount 
 48.8   determined in paragraph (b) plus 25 percent of the previous 
 48.9   formula revenue. 
 48.10     (g) The revenue for a district that operates a program 
 48.11  under section 121.585, is increased by an amount equal 
 48.12  to $15 $16 times the number of actual pupil units at the site 
 48.13  where the program is implemented. 
 48.14     Sec. 57.  Minnesota Statutes 1996, section 124A.22, 
 48.15  subdivision 11, is amended to read: 
 48.16     Subd. 11.  [USES OF TOTAL OPERATING CAPITAL REVENUE.] Total 
 48.17  operating capital revenue may be used only for the following 
 48.18  purposes: 
 48.19     (1) to acquire land for school purposes; 
 48.20     (2) to acquire or construct buildings for school purposes, 
 48.21  up to $400,000; 
 48.22     (3) to rent or lease buildings, including the costs of 
 48.23  building repair or improvement that are part of a lease 
 48.24  agreement; 
 48.25     (4) to improve and repair school sites and buildings, and 
 48.26  equip or reequip school buildings with permanent attached 
 48.27  fixtures; 
 48.28     (5) for a surplus school building that is used 
 48.29  substantially for a public nonschool purpose; 
 48.30     (6) to eliminate barriers or increase access to school 
 48.31  buildings by individuals with a disability; 
 48.32     (7) to bring school buildings into compliance with the 
 48.33  uniform fire code adopted according to chapter 299F; 
 48.34     (8) to remove asbestos from school buildings, encapsulate 
 48.35  asbestos, or make asbestos-related repairs; 
 48.36     (9) to clean up and dispose of polychlorinated biphenyls 
 49.1   found in school buildings; 
 49.2      (10) to clean up, remove, dispose of, and make repairs 
 49.3   related to storing heating fuel or transportation fuels such as 
 49.4   alcohol, gasoline, fuel oil, and special fuel, as defined in 
 49.5   section 296.01; 
 49.6      (11) for energy audits for school buildings and to modify 
 49.7   buildings if the audit indicates the cost of the modification 
 49.8   can be recovered within ten years; 
 49.9      (12) to improve buildings that are leased according to 
 49.10  section 123.36, subdivision 10; 
 49.11     (13) to pay special assessments levied against school 
 49.12  property but not to pay assessments for service charges; 
 49.13     (14) to pay principal and interest on state loans for 
 49.14  energy conservation according to section 216C.37 or loans made 
 49.15  under the northeast Minnesota economic protection trust fund act 
 49.16  according to sections 298.292 to 298.298; 
 49.17     (15) to purchase or lease interactive telecommunications 
 49.18  equipment; 
 49.19     (16) by school board resolution, to transfer money into the 
 49.20  debt redemption fund to:  (i) pay the amounts needed to meet, 
 49.21  when due, principal and interest payments on certain obligations 
 49.22  issued according to chapter 475; or (ii) pay principal and 
 49.23  interest on debt service loans or capital loans according to 
 49.24  section 124.44; 
 49.25     (17) to pay capital expenditure equipment-related 
 49.26  assessments of any entity formed under a cooperative agreement 
 49.27  between two or more districts; 
 49.28     (18) to purchase or lease computers and related materials, 
 49.29  copying machines, telecommunications equipment, and other 
 49.30  noninstructional equipment; 
 49.31     (19) to purchase or lease assistive technology or equipment 
 49.32  for instructional programs; 
 49.33     (20) to purchase textbooks; 
 49.34     (21) to purchase new and replacement library books; 
 49.35     (22) to purchase vehicles; 
 49.36     (23) to purchase or lease telecommunications equipment, 
 50.1   computers, and related equipment for integrated information 
 50.2   management systems for: 
 50.3      (i) managing and reporting learner outcome information for 
 50.4   all students under a results-oriented graduation rule; 
 50.5      (ii) managing student assessment, services, and achievement 
 50.6   information required for students with individual education 
 50.7   plans; and 
 50.8      (iii) other classroom information management needs; and 
 50.9      (24) to pay personnel costs directly related to the 
 50.10  acquisition, operation, and maintenance of telecommunications 
 50.11  systems, computers, related equipment, and network and 
 50.12  applications software. 
 50.13     Sec. 58.  Minnesota Statutes 1996, section 124A.22, 
 50.14  subdivision 13, is amended to read: 
 50.15     Subd. 13.  [TRANSPORTATION SPARSITY DEFINITIONS.] The 
 50.16  definitions in this subdivision apply to subdivisions 13a and 
 50.17  13b. 
 50.18     (a) "Sparsity index" for a school district means the 
 50.19  greater of .2 or the ratio of the square mile area of the school 
 50.20  district to the actual pupil units of the school district. 
 50.21     (b) "Density index" for a school district means the ratio 
 50.22  of the square mile area of the school district to the actual 
 50.23  pupil units of the school district.  However, the density index 
 50.24  for a school district cannot be greater than .2 or less than 
 50.25  .005. 
 50.26     (c) For fiscal year 1998, "fiscal year 1996 base allowance" 
 50.27  for a school district means the result of the following 
 50.28  computation: 
 50.29     (1) sum the following amounts: 
 50.30     (i) the fiscal year 1996 regular transportation revenue for 
 50.31  the school district according to section 124.225, subdivision 
 50.32  7d, paragraph (a), excluding the revenue attributable nonpublic 
 50.33  school pupils and to pupils with disabilities receiving special 
 50.34  transportation services; plus 
 50.35     (ii) the fiscal year 1996 nonregular transportation revenue 
 50.36  for the school district according to section 124.225, 
 51.1   subdivision 7d, paragraph (b), excluding the revenue for 
 51.2   desegregation transportation according to section 124.225, 
 51.3   subdivision 1, paragraph (c), clause (4), and the revenue 
 51.4   attributable to nonpublic school pupils and to pupils with 
 51.5   disabilities receiving special transportation services or board 
 51.6   and lodging; plus 
 51.7      (iii) the fiscal year 1996 excess transportation levy for 
 51.8   the school district according to section 124.226, subdivision 5, 
 51.9   excluding the levy attributable to nonpublic school pupils; plus 
 51.10     (iv) the fiscal year 1996 late activity bus levy for the 
 51.11  school district according to section 124.226, subdivision 9, 
 51.12  excluding the levy attributable to nonpublic school pupils; plus 
 51.13     (v) an amount equal to one-third of the fiscal year 1996 
 51.14  bus depreciation for the school district according to section 
 51.15  124.225, subdivision 1, paragraph (b), clauses (2), (3), and (4).
 51.16     (2) divide the result in clause (1) by the school districts 
 51.17  district's 1995-1996 actual fund balance pupil units. 
 51.18  For fiscal year 1999 and later years, "fiscal year 1996 base 
 51.19  allowance" means the fiscal year base allowance computed for 
 51.20  fiscal year 1998, times the ratio of the actual pupil units for 
 51.21  fiscal year 1999, recomputed using the pupil units weights in 
 51.22  effect for fiscal year 1998 under section 124.17, subdivision 1, 
 51.23  to the actual pupil units for fiscal year 1999. 
 51.24     Sec. 59.  Minnesota Statutes 1996, section 124A.22, 
 51.25  subdivision 13a, is amended to read: 
 51.26     Subd. 13a.  [TRANSPORTATION SPARSITY REVENUE ALLOWANCE.] 
 51.27  (a) A district's transportation sparsity allowance equals the 
 51.28  greater of zero or the result of the following computation: 
 51.29     (i) Multiply the formula allowance according to section 
 51.30  124A.22, subdivision 2, by .1469 .1481. 
 51.31     (ii) Multiply the result in clause (i) by the district's 
 51.32  sparsity index raised to the 26/100 power. 
 51.33     (iii) Multiply the result in clause (ii) by the district's 
 51.34  density index raised to the 13/100 power. 
 51.35     (iv) Multiply the formula allowance according to section 
 51.36  124A.22, subdivision 2, by .0485 .0489. 
 52.1      (v) Subtract the result in clause (iv) from the result in 
 52.2   clause (iii). 
 52.3      (b) Transportation sparsity revenue is equal to the 
 52.4   transportation sparsity allowance times the actual pupil units. 
 52.5      Sec. 60.  Minnesota Statutes 1996, section 124A.22, 
 52.6   subdivision 13b, is amended to read: 
 52.7      Subd. 13b.  [TRANSITION ALLOWANCE.] (a) A district's 
 52.8   transportation transition allowance for fiscal year 1997 equals 
 52.9   the result of the following computation: 
 52.10     (1) if the result in subdivision 13a, paragraph (a), clause 
 52.11  (iii), for fiscal year 1997 is less than the fiscal year 1996 
 52.12  base allowance, the transportation transition allowance equals 
 52.13  the fiscal year 1996 base allowance minus the result in 
 52.14  subdivision 13a, paragraph (a), clause (iii). 
 52.15     (2) if the result in subdivision 13a, paragraph (b), for 
 52.16  fiscal year 1997 is greater than the fiscal year 1996 base 
 52.17  allowance and less than 110 percent of the fiscal year 1996 base 
 52.18  allowance, the transportation transition allowance equals zero. 
 52.19     (3) if the result in subdivision 13a, paragraph (b), for 
 52.20  fiscal year 1997 is greater than 110 percent of the fiscal year 
 52.21  1996 base allowance, the transportation transition allowance 
 52.22  equals 110 percent of the fiscal year 1996 base allowance minus 
 52.23  the result in subdivision 13a, paragraph (a), clause (iii). 
 52.24     (b) A district's transportation transition allowance for 
 52.25  fiscal year 1998 and thereafter equals the result of the 
 52.26  following: 
 52.27     (1) if the result in subdivision 13a, paragraph (a), clause 
 52.28  (iii), for fiscal year 1998 is less than the fiscal year 1996 
 52.29  base allowance, the transportation transition allowance equals 
 52.30  the fiscal year 1996 base allowance minus the result in 
 52.31  subdivision 13a, paragraph (a), clause (iii); or 
 52.32     (2) if the result in subdivision 13a, paragraph (a), clause 
 52.33  (iii), for fiscal year 1998 is greater than or equal to the 
 52.34  fiscal year 1996 base allowance, the transportation transition 
 52.35  allowance equals zero. 
 52.36     (c) (b) For fiscal years 1997 and 1998, a district's 
 53.1   training and experience transition allowance is equal to the 
 53.2   training and experience revenue the district would have received 
 53.3   for fiscal year 1997 under Minnesota Statutes 1994, section 
 53.4   124A.22, subdivision 4, divided by the actual pupil units for 
 53.5   fiscal year 1997 minus $130.  For fiscal year 1999 and later, a 
 53.6   district's training and experience transition allowance equals 
 53.7   zero.  
 53.8      If the training and experience transition allowance is less 
 53.9   than zero, the reduction shall be determined according to the 
 53.10  following schedule: 
 53.11     (i) for fiscal year 1997, the reduction is equal to .9 
 53.12  times the amount initially determined; and 
 53.13     (ii) for fiscal year 1998, the reduction is equal to .75 
 53.14  times the amount initially determined; 
 53.15     (iii) for fiscal year 1999, the reduction is equal to .50 
 53.16  times the amount initially determined; 
 53.17     (iv) for fiscal year 2000, the reduction is equal to .25 
 53.18  times the amount initially determined; and 
 53.19     (v) for fiscal year 2001 and thereafter, the transition 
 53.20  allowance shall not be less than zero.  
 53.21     (c) A district's formula change transition allowance for 
 53.22  fiscal year 1999 and thereafter equals the greater of zero or 
 53.23  the result of the following: 
 53.24     (i) compute the sum of the district cooperation revenue for 
 53.25  fiscal year 1998 according to section 124.2727, subdivision 6a, 
 53.26  and the general education revenue for fiscal year 1998 according 
 53.27  to subdivision 1, excluding an amount equal to the product of 
 53.28  the 1997-1998 actual pupil units times the sum of $130 plus the 
 53.29  training and experience transition allowance for fiscal year 
 53.30  1998 according to this subdivision; 
 53.31     (ii) divide the result in clause (i) by the 1997-1998 
 53.32  average daily membership according to section 124.17, 
 53.33  subdivision 2; 
 53.34     (iii) compute an amount equal to the general education 
 53.35  revenue for fiscal year 1999 according to subdivision 1, 
 53.36  excluding the training and experience revenue according to 
 54.1   subdivision 13f and excluding the portion of basic skills 
 54.2   revenue according to subdivision 3a, clauses (2), (3), and (4); 
 54.3      (iv) divide the result in clause (iii) by the 1998-1999 
 54.4   average daily membership according to section 124.17, 
 54.5   subdivision 2; 
 54.6      (v) subtract the result in clause (iv) from the result in 
 54.7   clause (ii); and 
 54.8      (vi) multiply the result in clause (v) by the ratio of the 
 54.9   1998-1999 average daily membership to the 1998-1999 actual pupil 
 54.10  units. 
 54.11     (d) A district's transition allowance for fiscal year years 
 54.12  1997 and thereafter 1998 is equal to the sum of its 
 54.13  transportation transition allowance and its training and 
 54.14  experience transition allowance.  A district's transition 
 54.15  allowance for fiscal year 1999 and thereafter is equal to the 
 54.16  sum of its transportation transition allowance and its formula 
 54.17  change transition allowance. 
 54.18     Sec. 61.  Minnesota Statutes 1996, section 124A.22, 
 54.19  subdivision 13d, is amended to read: 
 54.20     Subd. 13d.  [TRANSITION LEVY ADJUSTMENT.] A district's 
 54.21  general education levy shall be adjusted by an amount equal to 
 54.22  the district's transition revenue times the lesser of 1 or the 
 54.23  ratio of the district's general education levy to its general 
 54.24  education revenue, excluding transition revenue and supplemental 
 54.25  revenue its adjusted net tax capacity per actual pupil unit to 
 54.26  $10,447. 
 54.27     Sec. 62.  Minnesota Statutes 1996, section 124A.22, 
 54.28  subdivision 13f, is amended to read: 
 54.29     Subd. 13f.  [TRAINING AND EXPERIENCE REVENUE.] Training and 
 54.30  experience revenue for each district equals the greater of zero 
 54.31  or the result of the following computation: 
 54.32     (1) subtract .8 from the training and experience index; 
 54.33     (2) multiply the result in clause (1) by the product of 
 54.34  $660 $685 times the actual pupil units for that school year. 
 54.35     Sec. 63.  Minnesota Statutes 1996, section 124A.225, 
 54.36  subdivision 1, is amended to read: 
 55.1      Subdivision 1.  [REVENUE.] (a) Of a district's general 
 55.2   education revenue for fiscal year 1998, an amount equal to the 
 55.3   sum of the number of elementary fund balance pupils in average 
 55.4   daily membership defined in section 124.17, subdivision 1h, and 
 55.5   one-half of the number of kindergarten fund balance pupils in 
 55.6   average daily membership as defined in section 124.17, 
 55.7   subdivision 1h 1f, times .06 for fiscal year 1995 and thereafter 
 55.8   times the formula allowance must be reserved according to this 
 55.9   section. 
 55.10     (b) Of a district's general education revenue for fiscal 
 55.11  year 1999 and thereafter, an amount equal to the sum of the 
 55.12  number of fund balance pupils in grades 1 to 3 in average daily 
 55.13  membership defined in section 124.17, subdivision 1h, and 
 55.14  one-half of the number of kindergarten fund balance pupils in 
 55.15  average daily membership as defined in section 124.17, 
 55.16  subdivision 1f, times .11 times the formula allowance must be 
 55.17  reserved according to this section. 
 55.18     Sec. 64.  Minnesota Statutes 1996, section 124A.23, 
 55.19  subdivision 1, is amended to read: 
 55.20     Subdivision 1.  [GENERAL EDUCATION TAX RATE.] The 
 55.21  commissioner shall establish the general education tax rate by 
 55.22  July 1 of each year for levies payable in the following year.  
 55.23  The general education tax capacity rate shall be a rate, rounded 
 55.24  up to the nearest tenth hundredth of a percent, that, when 
 55.25  applied to the adjusted net tax capacity for all districts, 
 55.26  raises the amount specified in this subdivision.  The general 
 55.27  education tax rate shall be the rate that raises $1,054,000,000 
 55.28  for fiscal year 1996 and $1,359,000,000 for fiscal year 1997 
 55.29  1998 and $1,452,865,000 for fiscal year 1999 and later fiscal 
 55.30  years.  The general education tax rate may not be changed due to 
 55.31  changes or corrections made to a district's adjusted net tax 
 55.32  capacity after the tax rate has been established.  
 55.33     Sec. 65.  Minnesota Statutes 1996, section 124A.23, 
 55.34  subdivision 2, is amended to read: 
 55.35     Subd. 2.  [GENERAL EDUCATION LEVY.] To obtain general 
 55.36  education revenue, excluding transition revenue and supplemental 
 56.1   revenue, a district may levy an amount not to exceed the general 
 56.2   education tax rate times the adjusted net tax capacity of the 
 56.3   district for the preceding year.  If the amount of the general 
 56.4   education levy would exceed the general education revenue, 
 56.5   excluding supplemental revenue, the general education levy shall 
 56.6   be determined according to subdivision 3.  
 56.7      Sec. 66.  Minnesota Statutes 1996, section 124A.23, 
 56.8   subdivision 3, is amended to read: 
 56.9      Subd. 3.  [GENERAL EDUCATION LEVY; DISTRICTS OFF THE 
 56.10  FORMULA.] If the amount of the general education levy for a 
 56.11  district exceeds the district's general education revenue, 
 56.12  excluding training and experience transition revenue and 
 56.13  supplemental revenue, the amount of the general education levy 
 56.14  shall be limited to the following: 
 56.15     (1) the district's general education revenue, excluding 
 56.16  training and experience transition revenue and supplemental 
 56.17  revenue; plus 
 56.18     (2) the amount of the aid reduction for the same school 
 56.19  year according to section 124A.24; minus 
 56.20     (3) payments made for the same school year according to 
 56.21  section 124A.035, subdivision 4. 
 56.22     For purposes of statutory cross-reference, a levy made 
 56.23  according to this subdivision shall be construed to be the levy 
 56.24  made according to subdivision 2. 
 56.25     Sec. 67.  Minnesota Statutes 1996, section 124A.23, 
 56.26  subdivision 5, is amended to read: 
 56.27     Subd. 5.  [USES OF REVENUE.] Except as provided in 
 56.28  section sections 124A.22, subdivision 11; 124A.225; and 124A.28, 
 56.29  general education revenue may be used during the regular school 
 56.30  year and the summer for general and special school purposes. 
 56.31     Sec. 68.  Minnesota Statutes 1996, section 124A.26, 
 56.32  subdivision 1, is amended to read: 
 56.33     Subdivision 1.  [REVENUE REDUCTION.] A district's general 
 56.34  education revenue for a school year shall be reduced if the 
 56.35  estimated net unappropriated operating fund balance as of June 
 56.36  30 in the prior school year exceeds 25 percent of the formula 
 57.1   allowance for the current fiscal year times the fund balance 
 57.2   pupil units in the prior year.  For purposes of this subdivision 
 57.3   and section 124.243, subdivision 2, fund balance pupil units 
 57.4   means the number of resident pupil units in average daily 
 57.5   membership, including shared time pupils, according to section 
 57.6   124A.02, subdivision 20, plus 
 57.7      (1) pupils attending the district for which general 
 57.8   education aid adjustments are made according to section 
 57.9   124A.036, subdivision 5; minus 
 57.10     (2) the sum of the resident pupils attending other 
 57.11  districts for which general education aid adjustments are made 
 57.12  according to section 124A.036, subdivision 5, plus pupils for 
 57.13  whom payment is made according to section 126.22, subdivision 8, 
 57.14  or 126.23.  The amount of the reduction shall equal the lesser 
 57.15  of: 
 57.16     (1) the amount of the excess, or 
 57.17     (2) $250 $260 times the actual pupil units for the school 
 57.18  year. 
 57.19     The final adjustment payments made under section 124.195, 
 57.20  subdivision 6, must be adjusted to reflect actual net operating 
 57.21  fund balances as of June 30 of the prior school year. 
 57.22     Sec. 69.  Minnesota Statutes 1996, section 124A.26, 
 57.23  subdivision 2, is amended to read: 
 57.24     Subd. 2.  [LEVY REDUCTION.] If a district's general 
 57.25  education revenue is reduced, the general education levy shall 
 57.26  be reduced by the following amount: 
 57.27     (1) the reduction specified in subdivision 1, times 
 57.28     (2) the lesser of one or the ratio of the district's 
 57.29  general education levy to its general education revenue, 
 57.30  excluding training and experience revenue and supplemental 
 57.31  revenue adjusted net tax capacity per actual pupil unit to 
 57.32  $10,447. 
 57.33     Sec. 70.  Minnesota Statutes 1996, section 124A.28, is 
 57.34  amended to read: 
 57.35     124A.28 [COMPENSATORY EDUCATION BASIC SKILLS REVENUE.] 
 57.36     Subdivision 1.  [USE OF THE REVENUE.] The compensatory 
 58.1   education basic skills revenue under section 124A.22, 
 58.2   subdivision 3 3a, must be used to meet the educational needs of 
 58.3   pupils whose educational achievement progress toward meeting 
 58.4   state or local content or performance standards is below the 
 58.5   level that is appropriate for pupils learners of their age.  
 58.6   These needs may be met by providing the Any of the following may 
 58.7   be provided to meet these learners' needs: 
 58.8      (1) direct instructional services under the assurance of 
 58.9   mastery program according to section 124.311 124.3111; 
 58.10     (2) remedial instruction in reading, language arts, and 
 58.11  mathematics, other content areas, or study skills to improve the 
 58.12  achievement level of these pupils learners; 
 58.13     (3) additional teachers and teacher aides to provide more 
 58.14  individualized instruction to these pupils learners through 
 58.15  individual tutoring, lower instructor-to-learner ratios, or team 
 58.16  teaching; 
 58.17     (4) summer programs that enable these pupils to improve 
 58.18  their achievement or that reemphasize material taught during the 
 58.19  regular school year; 
 58.20     (5) in-service education comprehensive and ongoing staff 
 58.21  development consistent with district and site plans according to 
 58.22  section 126.70, for teachers, teacher aides, principals, and 
 58.23  other personnel to improve their ability to recognize identify 
 58.24  the needs of these pupils learners and provide 
 58.25  appropriate responses to the pupils' needs remediation, 
 58.26  intervention, accommodations, or modifications; 
 58.27     (6) for instructional material for these pupils including:  
 58.28  textbooks, workbooks, periodicals, pamphlets, photographs, 
 58.29  reproductions, filmstrips, prepared slides, prerecorded video 
 58.30  programs, sound recordings, desk charts, games, study prints and 
 58.31  pictures, desk maps, models, learning kits, blocks and cubes, 
 58.32  flashcards, instructional computer software programs, pencils, 
 58.33  pens, crayons, notebooks, duplicating fluids, and 
 58.34  papers materials and technology appropriate for meeting the 
 58.35  individual needs of these learners; 
 58.36     (7) programs to reduce truancy, encourage completion of 
 59.1   high school, enhance self-concept, provide health services, 
 59.2   provide nutrition services, provide a safe and secure learning 
 59.3   environment, provide coordination for pupils receiving services 
 59.4   from other governmental agencies, provide psychological services 
 59.5   to determine the level of social, emotional, cognitive, and 
 59.6   intellectual development, and provide counseling services, 
 59.7   guidance services, and social work services; 
 59.8      (8) bilingual programs, bicultural programs, and programs 
 59.9   for pupils learners of limited English proficiency; 
 59.10     (9) all day kindergarten; 
 59.11     (10) extended school day and extended school year programs; 
 59.12  and 
 59.13     (11) substantial parent involvement in developing and 
 59.14  implementing remedial education or intervention plans for a 
 59.15  learner, including learning contracts between the school, the 
 59.16  learner, and the parent that establish achievement goals and 
 59.17  responsibilities of the learner and the learner's parent or 
 59.18  guardian; and 
 59.19     (12) other methods to increase achievement, as needed.  
 59.20     Subd. 1a.  [BUILDING ALLOCATION.] A district must consider 
 59.21  the concentration of children from low-income families, children 
 59.22  with limited English proficiency, and children whose progress 
 59.23  toward meeting state or local content or performance standards 
 59.24  is below the level that is appropriate for learners of their age 
 59.25  in each school building in the district when allocating 
 59.26  compensatory basic skills revenue. 
 59.27     Subd. 2.  [SEPARATE ACCOUNTS.] Each district that 
 59.28  receives compensatory education basic skills revenue shall 
 59.29  maintain separate accounts to identify expenditures for salaries 
 59.30  and programs related to this revenue. 
 59.31     Subd. 3.  [ANNUAL EXPENDITURE REPORT.] Each year a district 
 59.32  that receives compensatory education basic skills revenue shall 
 59.33  submit a report identifying the expenditures it incurred in 
 59.34  providing compensatory education to the pupils described in to 
 59.35  meet the needs of eligible learners under subdivision 1.  The 
 59.36  report must conform to uniform financial and reporting standards 
 60.1   established for this purpose. 
 60.2      Sec. 71.  Minnesota Statutes 1996, section 126.22, 
 60.3   subdivision 8, is amended to read: 
 60.4      Subd. 8.  [ENROLLMENT VERIFICATION.] (a) For a pupil 
 60.5   attending an eligible program full time under subdivision 3, 
 60.6   paragraph (d), the department of children, families, and 
 60.7   learning shall pay 90 percent of the basic revenue and 100 
 60.8   percent of the portion of basic skills revenue attributable to 
 60.9   AFDC pupil units according to section 124A.22, subdivision 3a, 
 60.10  paragraph (1), of the district to the eligible program and ten 
 60.11  percent of the basic revenue to the resident district within 30 
 60.12  days after the eligible program verifies enrollment using the 
 60.13  form provided by the department.  For a pupil attending an 
 60.14  eligible program part time, basic revenue shall be reduced 
 60.15  proportionately, according to the amount of time the pupil 
 60.16  attends the program, and the payments to the eligible program 
 60.17  and the resident district shall be reduced accordingly.  A pupil 
 60.18  for whom payment is made according to this section may not be 
 60.19  counted by any district for any purpose other than computation 
 60.20  of basic revenue, according to section 124A.22, subdivision 2, 
 60.21  and basic skills revenue, according to section 124A.22, 
 60.22  subdivision 3a, paragraph (1).  If payment is made for a pupil 
 60.23  under this subdivision, a school district shall not reimburse a 
 60.24  program under section 126.23 for the same pupil. 
 60.25     (b) The department of children, families, and learning 
 60.26  shall pay up to 100 percent of the basic revenue to the eligible 
 60.27  program if there is an agreement to that effect between the 
 60.28  school district and the eligible program. 
 60.29     (c) Notwithstanding the amount of the formula allowance in 
 60.30  section 124A.22, subdivision 2, the commissioner shall use the 
 60.31  amount of the formula allowance minus $300 for fiscal year 1998 
 60.32  and the amount of the formula allowance less $176 for fiscal 
 60.33  year 1999 and later years in determining the payments of basic 
 60.34  revenue under this section and section 126.23. 
 60.35     Sec. 72.  Minnesota Statutes 1996, section 126.23, 
 60.36  subdivision 1, is amended to read: 
 61.1      Subdivision 1.  [AID.] If a pupil enrolls in an alternative 
 61.2   program, eligible under section 126.22, subdivision 3, paragraph 
 61.3   (d), or subdivision 3a, operated by a private organization that 
 61.4   has contracted with a school district to provide educational 
 61.5   services for eligible pupils under section 126.22, subdivision 
 61.6   2, the district contracting with the private organization must 
 61.7   reimburse the provider an amount equal to at least 90 percent of 
 61.8   the basic revenue and 100 percent of the portion of basic skills 
 61.9   revenue attributable to AFDC pupil units according to section 
 61.10  124A.22, subdivision 3a, paragraph (1), of the district for each 
 61.11  pupil attending the program full time.  For a pupil attending 
 61.12  the program part time, basic revenue paid to the program shall 
 61.13  be reduced proportionately, according to the amount of time the 
 61.14  pupil attends the program, and basic revenue paid to the 
 61.15  district shall be reduced accordingly.  Pupils for whom a 
 61.16  district provides reimbursement may not be counted by the 
 61.17  district for any purpose other than computation of basic 
 61.18  revenue, according to section 124A.22, subdivision 2, and basic 
 61.19  skills revenue, according to section 124A.22, subdivision 3a, 
 61.20  paragraph (1).  If payment is made to a district or program for 
 61.21  a pupil under this section, the department of children, 
 61.22  families, and learning shall not make a payment for the same 
 61.23  pupil under section 126.22, subdivision 8. 
 61.24     Sec. 73.  Laws 1996, chapter 461, section 3, subdivision 2, 
 61.25  is amended to read: 
 61.26     Subd. 2.  [APPROPRIATION.] $180,000,000 $200,000,000 is 
 61.27  appropriated from the general fund to the commissioner of 
 61.28  children, families, and learning for fiscal year 1997 to reduce 
 61.29  the property tax levy recognition percentage under Minnesota 
 61.30  Statutes, section 121.904, subdivision 4a, paragraph (b), clause 
 61.31  (3).  This appropriation replaces the appropriation for fiscal 
 61.32  year 1997 made under Minnesota Statutes, section 16A.152, 
 61.33  subdivision 2, as a result of the November 1995 forecast. 
 61.34     Sec. 74.  [BUS PURCHASE LEVY.] 
 61.35     For 1997 taxes payable in 1998, a school district may levy 
 61.36  the amount necessary to eliminate the deficit in the reserved 
 62.1   fund balance account for bus purchases in its transportation 
 62.2   fund as of June 30, 1996. 
 62.3      Sec. 75.  [FISCAL YEARS 1996, 1997, AND 1998 FORMULA 
 62.4   REVENUE.] 
 62.5      Notwithstanding Minnesota Statutes 1994, section 124.243, 
 62.6   subdivision 2, paragraph (d), and Minnesota Statutes 1996, 
 62.7   section 124A.22, subdivision 10, paragraph (c), the previous 
 62.8   formula revenue for a school district for fiscal years 1996, 
 62.9   1997, and 1998 equals $128 times its actual pupil units for the 
 62.10  school year to which the revenue is attributable. 
 62.11     Sec. 76.  [APPROPRIATIONS.] 
 62.12     Subdivision 1.  [DEPARTMENT OF CHILDREN, FAMILIES, AND 
 62.13  LEARNING.] The sums indicated in this section are appropriated 
 62.14  from the general fund to the department of children, families, 
 62.15  and learning for the fiscal years designated.  
 62.16     Subd. 2.  [GENERAL AND SUPPLEMENTAL EDUCATION AID.] For 
 62.17  general and supplemental education aid:  
 62.18       $2,461,157,000     .....     1998
 62.19       $2,502,458,000     .....     1999
 62.20     The 1998 appropriation includes $227,214,000 for 1997 and 
 62.21  $2,233,943,000 for 1998.  
 62.22     The 1999 appropriation includes $233,472,000 for 1998 and 
 62.23  $2,268,986,000 for 1999.  
 62.24     Of the 1998 appropriation, the first $113,800,000 is from 
 62.25  the education aids reserve of the general fund. 
 62.26     Subd. 3.  [TRANSPORTATION SAFETY.] For student 
 62.27  transportation safety aid according to Minnesota Statutes, 
 62.28  section 124.225, subdivision 8m: 
 62.29       $1,430,000     .....     1998 
 62.30       $1,458,000     .....     1999
 62.31     The 1998 appropriation includes $129,000 for 1997 and 
 62.32  $1,301,000 for 1998.  
 62.33     The 1999 appropriation includes $144,000 for 1997 and 
 62.34  $1,314,000 for 1998. 
 62.35     Subd. 4.  [TRANSPORTATION AID FOR ENROLLMENT OPTIONS.] For 
 62.36  transportation of pupils attending post-secondary institutions 
 63.1   according to Minnesota Statutes, section 123.3514, or for 
 63.2   transportation of pupils attending nonresident districts 
 63.3   according to Minnesota Statutes, section 120.062: 
 63.4        $102,000     .....     1998
 63.5        $102,000     .....     1999
 63.6      Any balance in the first year does not cancel but is 
 63.7   available in the second year. 
 63.8      Subd. 5.  [WIDE AREA TRANSPORTATION SERVICE PILOT PROJECT.] 
 63.9   To expand the wide area transportation service project: 
 63.10       $100,000      .....      1998 
 63.11       $ 50,000      .....      1999 
 63.12     The purpose is to expand the project for the computerized 
 63.13  mapping and scheduling programs for school districts to jointly 
 63.14  provide transportation services for low-incidence programs in 
 63.15  the metropolitan area.  These services include, but are not 
 63.16  limited to, transportation for special education, nonpublic 
 63.17  pupils, results-oriented charter schools, enrollment options 
 63.18  programs, area learning center programs, and desegregation 
 63.19  programs.  The department shall work with representatives of the 
 63.20  affected programs, transportation managers from both 
 63.21  metropolitan and rural districts, and the metropolitan council.  
 63.22  The department shall contract for services as appropriate.  The 
 63.23  project shall consider the relationship of education 
 63.24  transportation with transportation services provided by 
 63.25  noneducation agencies.  
 63.26     Any balance in the first year does not cancel but is 
 63.27  available in the second year. 
 63.28     Subd. 6.  [INTERDISTRICT DESEGREGATION OR INTEGRATION 
 63.29  TRANSPORTATION GRANTS.] For interdistrict desegregation or 
 63.30  integration transportation grants under Minnesota Statutes, 
 63.31  section 124.227: 
 63.32       $800,000       .....     1998
 63.33       $970,000       .....     1999
 63.34     Any balance in the first year does not cancel but is 
 63.35  available in the second year. 
 63.36     Subd. 7.  [TARGETED NEEDS TRANSPORTATION AID.] For aid 
 64.1   payments for targeted needs transportation aid under Minnesota 
 64.2   Statutes, section 124.225, subdivision 13: 
 64.3        $75,728,000    .....     1998
 64.4        $ 7,619,000    .....     1999
 64.5      The 1998 appropriation includes $7,148,000 for 1997 and 
 64.6   $68,580,000 for 1998. 
 64.7      The 1999 appropriation includes $7,619,000 for 1998 and -0- 
 64.8   for 1999. 
 64.9      Subd. 8.  [HEALTH AND SAFETY AID.] For health and safety 
 64.10  aid according to Minnesota Statutes, section 124.83, subdivision 
 64.11  5: 
 64.12       $12,281,000    .....     1998 
 64.13       $12,179,000    .....     1999 
 64.14     The 1998 appropriation includes $1,131,000 for 1997 and 
 64.15  $11,150,000 for 1998.  
 64.16     The 1999 appropriation includes $1,237,000 for 1998 and 
 64.17  $10,942,000 for 1999.  
 64.18     Subd. 9.  [DEBT SERVICE AID.] For debt service aid 
 64.19  according to Minnesota Statutes, section 124.95, subdivision 5: 
 64.20       $35,452,000     .....     1998
 64.21       $37,680,000     .....     1999
 64.22     The 1998 appropriation includes $3,313,000 for 1997 and 
 64.23  $32,139,000 for 1998. 
 64.24     The 1999 appropriation includes $3,570,000 for 1998 and 
 64.25  $34,110,000 for 1999. 
 64.26     Subd. 10.  [FIRST-GRADE PREPAREDNESS PROGRAM.] For grants 
 64.27  for first-grade preparedness programs under Minnesota statutes, 
 64.28  section 124.2613: 
 64.29       $3,150,000     .....     1998 
 64.30       $3,500,000     .....     1999 
 64.31     The 1998 appropriation includes -0- for 1997 and $3,150,000 
 64.32  for 1998. 
 64.33     The 1999 appropriation includes $350,000 for 1998 and 
 64.34  $3,150,000 for 1999. 
 64.35     Sec. 77.  [REPEALER.] 
 64.36     (a) Minnesota Statutes 1996, sections 124.223; 124.225, 
 65.1   subdivisions 3a, 7a, 7b, 7d, 7e, 8a, and 8k; 124A.02, 
 65.2   subdivision 24; and 124A.22, subdivisions 4, 4a, and 4b, are 
 65.3   repealed effective July 1, 1997. 
 65.4      (b) Minnesota Statutes 1996, sections 124.226; 124A.22, 
 65.5   subdivision 9; and 124A.292, are repealed effective for revenue 
 65.6   for fiscal year 1999. 
 65.7      Sec. 78.  [EFFECTIVE DATE.] 
 65.8      Sections 2, 4, 10, 19, 20, 29 to 34, 57, 73, and 75 are 
 65.9   effective the day following final enactment.  Sections 17, 18, 
 65.10  and 72 are effective July 1, 1998.  Sections 12, 21, 22, 26, 35, 
 65.11  41 to 47, 52 to 56, 59, 62, 68 to 70 are effective for revenue 
 65.12  for fiscal year 1999.  Section 28 is effective for taxes payable 
 65.13  in 1998.  
 65.14                             ARTICLE 2
 65.15                          SPECIAL PROGRAMS
 65.16     Section 1.  Minnesota Statutes 1996, section 124.17, 
 65.17  subdivision 5, is amended to read: 
 65.18     Subd. 5.  [BASIC SKILLS SUMMER SCHOOL PUPIL UNITS.] When a 
 65.19  pupil who has not passed an assessment of basic graduation 
 65.20  standards in reading, writing, or mathematics is enrolled in a 
 65.21  mastery of basic skills summer school program that is not a part 
 65.22  of the regular school term and the student has a total 
 65.23  enrollment time of more than 1,020 hours in a school year, the 
 65.24  pupil may be counted as more than one pupil in average daily 
 65.25  membership for purposes of this subdivision only.  The amount in 
 65.26  excess of one pupil must be determined by the ratio of the 
 65.27  number of hours of instruction provided to that pupil in excess 
 65.28  of 1,020 hours.  For each pupil, only the amount of summer 
 65.29  school enrollment time attributable to basic skills instruction 
 65.30  may be used to calculate the additional hours in the school 
 65.31  year.  Basic skills instruction is defined as in Minnesota's 
 65.32  rules on graduation standards and includes reading, writing, and 
 65.33  mathematics.  Hours that occur after the close of the 
 65.34  instructional year in June shall be attributable to the 
 65.35  following fiscal year.  A pupil for whom payment is made under 
 65.36  this subdivision may be counted by a district only for the 
 66.1   computation of basic revenue, according to section 124A.22, 
 66.2   subdivision 2, minus $300 $176. 
 66.3      Sec. 2.  Minnesota Statutes 1996, section 124.17, is 
 66.4   amended by adding a subdivision to read: 
 66.5      Subd. 6.  [LEP PUPIL UNITS.] (a) Limited English 
 66.6   proficiency pupil units for fiscal year 1999 and thereafter 
 66.7   shall be determined according to this subdivision. 
 66.8      (b) The limited English proficiency concentration 
 66.9   percentage for a district equals the product of 100 times the 
 66.10  ratio of: 
 66.11     (1) the number of pupils of limited English proficiency 
 66.12  residing in the district during the current fiscal year; to 
 66.13     (2) the number of pupils in average daily membership 
 66.14  residing in the district. 
 66.15     (c) The limited English proficiency pupil units for each 
 66.16  pupil enrolled in a program for pupils of limited English 
 66.17  proficiency in accordance with sections 126.261 to 126.269 
 66.18  equals the lesser of one or the quotient obtained by dividing 
 66.19  the limited English proficiency concentration percentage for the 
 66.20  pupil's district of residence by 11.5. 
 66.21     (d) Limited English proficiency pupil units shall be 
 66.22  counted by the district of enrollment. 
 66.23     Sec. 3.  Minnesota Statutes 1996, section 124.2613, 
 66.24  subdivision 6, is amended to read: 
 66.25     Subd. 6.  [PREPAREDNESS REVENUE.] (a) A qualifying school 
 66.26  district is eligible for first-grade preparedness revenue equal 
 66.27  to the basic formula allowance for that year times the number of 
 66.28  pupil units calculated according to paragraph (b) in each 
 66.29  qualifying school site.  If the first-grade preparedness revenue 
 66.30  is insufficient to fully fund the formula amounts, the 
 66.31  commissioner shall prorate the revenue provided to each 
 66.32  qualifying school site. 
 66.33     (b) A pupil enrolled in a half-day first-grade preparedness 
 66.34  program under this section is counted as .53 .55 pupil units.  A 
 66.35  pupil enrolled in a full-day first-grade preparedness program 
 66.36  under this section is counted as a kindergarten pupil under 
 67.1   section 124.17, subdivision 1, plus an additional .53 .55 pupil 
 67.2   units. 
 67.3      (c) This revenue must supplement and not replace 
 67.4   compensatory revenue that the district uses for the same or 
 67.5   similar purposes under chapter 124A. 
 67.6      (d) A pupil enrolled in the first grade preparedness 
 67.7   program at a qualifying school site is eligible for 
 67.8   transportation under section 123.39, subdivision 1.  
 67.9      (e) First grade preparedness revenue paid to a charter 
 67.10  school for which a school district is providing transportation 
 67.11  according to section 120.064, subdivision 15, shall be decreased 
 67.12  by an amount equal to the product of $176 times the pupil units 
 67.13  calculated according to paragraph (b).  This amount shall be 
 67.14  paid to the school district for transportation costs.  
 67.15     Sec. 4.  Minnesota Statutes 1996, section 124.273, 
 67.16  subdivision 1e, is amended to read: 
 67.17     Subd. 1e.  [AID.] A district's limited English proficiency 
 67.18  aid for fiscal year 1996 and later 1998 equals the aid 
 67.19  percentage factor under section 124.3201, subdivision 1, times 
 67.20  the district's limited English proficiency revenue. 
 67.21     Sec. 5.  Minnesota Statutes 1996, section 124.273, 
 67.22  subdivision 1f, is amended to read: 
 67.23     Subd. 1f.  [STATE TOTAL LEP REVENUE.] (a) The state total 
 67.24  limited English proficiency programs revenue for fiscal 
 67.25  year 1996 1998 equals $12,202,000 $14,629,000.  The state total 
 67.26  limited English proficiency programs revenue for fiscal 
 67.27  year 1997 1999 equals $13,299,000 $16,092,000.  
 67.28     (b) The state total limited English proficiency programs 
 67.29  revenue for later fiscal years equals: 
 67.30     (1) the state total limited English proficiency programs 
 67.31  revenue for the preceding fiscal year; times 
 67.32     (2) the program growth factor under section 124.3201, 
 67.33  subdivision 1; times 
 67.34     (3) the ratio of the state total number of pupils with 
 67.35  limited English proficiency for the current fiscal year to the 
 67.36  state total number of pupils with limited English proficiency 
 68.1   for the preceding fiscal year. 
 68.2      Sec. 6.  Minnesota Statutes 1996, section 124.273, 
 68.3   subdivision 5, is amended to read: 
 68.4      Subd. 5.  [NOTIFICATION; AID PAYMENTS REVENUE.] The 
 68.5   department must promptly inform each applicant district of the 
 68.6   amount of aid revenue it will receive pursuant to this section. 
 68.7      Sec. 7.  [124.3111] [ASSURANCE OF MASTERY PROGRAMS.] 
 68.8      Subdivision 1.  [ELIGIBLE DISTRICTS.] A district with a 
 68.9   local process to review curriculum and instruction may provide 
 68.10  an assurance of mastery program to eligible pupils. 
 68.11     Subd. 2.  [ELIGIBLE PUPILS.] A pupil is eligible to receive 
 68.12  services through an assurance of mastery program if the pupil 
 68.13  has not demonstrated progress toward mastering the required 
 68.14  graduation standards, after receiving instruction that was 
 68.15  designed to enable the pupil to make progress toward mastering 
 68.16  the required graduation standards in a regular classroom 
 68.17  setting.  To determine pupil eligibility, a district must use a 
 68.18  process adopted by the school board to review curriculum and 
 68.19  instruction, for the subjects and at the grade level at which 
 68.20  the district uses the revenue. 
 68.21     Subd. 3.  [ELIGIBLE SERVICES.] (a) Assurance of mastery 
 68.22  programs may provide direct instructional services to an 
 68.23  eligible pupil, or a group of eligible pupils, under the 
 68.24  following conditions in paragraphs (b) to (d). 
 68.25     (b) Instruction may be provided at one or more grade levels 
 68.26  from kindergarten to grade 8.  If an assessment of pupils' needs 
 68.27  within a district demonstrates that the eligible pupils in 
 68.28  grades kindergarten to grade 8 are being appropriately served, a 
 68.29  district may serve eligible pupils in grades 9 to 12. 
 68.30     (c) Instruction must be provided under the supervision of 
 68.31  the eligible pupil's regular classroom teacher.  Instruction may 
 68.32  be provided by the eligible pupil's classroom teacher, by 
 68.33  another teacher, by a team of teachers, or by an education 
 68.34  assistant or aide.  A special education teacher may provide 
 68.35  instruction, but instruction that is provided under this section 
 68.36  is not eligible for aid under section 124.3201. 
 69.1      (d) The instruction that is provided must differ from the 
 69.2   initial instruction the pupil received in the regular classroom 
 69.3   setting.  The instruction may differ by presenting different 
 69.4   curriculum than was initially presented in the regular classroom 
 69.5   or by presenting the same curriculum: 
 69.6      (1) at a different rate or in a different sequence than it 
 69.7   was initially presented; 
 69.8      (2) using different teaching methods or techniques than 
 69.9   were used initially; or 
 69.10     (3) using different instructional materials than were used 
 69.11  initially. 
 69.12     Sec. 8.  Minnesota Statutes 1996, section 124.312, 
 69.13  subdivision 4, is amended to read: 
 69.14     Subd. 4.  [INTEGRATION REVENUE.] For fiscal year years 
 69.15  1996, 1997, and later fiscal years 1998, integration revenue 
 69.16  equals the sum of integration aid and integration levy under 
 69.17  section 124.912, subdivision 2. 
 69.18     Sec. 9.  Minnesota Statutes 1996, section 124.312, 
 69.19  subdivision 5, is amended to read: 
 69.20     Subd. 5.  [INTEGRATION AID.] For fiscal year years 1996, 
 69.21  1997, and later fiscal years 1998, integration aid equals the 
 69.22  following amounts: 
 69.23     (1) for independent school district No. 709, Duluth, 
 69.24  $1,385,000; 
 69.25     (2) for independent school district No. 625, St. Paul, 
 69.26  $8,090,700; and 
 69.27     (3) for special school district No. 1, Minneapolis, 
 69.28  $9,368,300. 
 69.29     Sec. 10.  Minnesota Statutes 1996, section 124.313, is 
 69.30  amended to read: 
 69.31     124.313 [TARGETED NEEDS REVENUE.] 
 69.32     For fiscal year years 1996, 1997, and thereafter 1998, a 
 69.33  school district's targeted needs revenue equals the sum of: 
 69.34     (1) assurance of mastery revenue according to section 
 69.35  124.311; plus 
 69.36     (2) the district's limited English proficiency revenue 
 70.1   computed according to section 124.273, subdivision 1d; plus 
 70.2      (3) integration revenue computed according to section 
 70.3   124.312, subdivision 4. 
 70.4      Sec. 11.  Minnesota Statutes 1996, section 124.314, 
 70.5   subdivision 1, is amended to read: 
 70.6      Subdivision 1.  [AID.] For fiscal year years 1996, 1997, 
 70.7   and thereafter 1998, a school district's targeted needs aid 
 70.8   equals the sum of its assurance of mastery aid according to 
 70.9   section 124.311, its limited English proficiency aid according 
 70.10  to section 124.273, subdivision 1e, and its integration aid 
 70.11  according to section 124.312, subdivision 5. 
 70.12     Sec. 12.  Minnesota Statutes 1996, section 124.314, 
 70.13  subdivision 2, is amended to read: 
 70.14     Subd. 2.  [LEVY.] For fiscal year years 1996, 1997, and 
 70.15  thereafter 1998, a school district's targeted needs levy equals 
 70.16  the sum of its integration levy under section 124.912, 
 70.17  subdivision 2, and that portion of its special education levy 
 70.18  attributed to the limited English proficiency program. 
 70.19     Sec. 13.  [124.315] [INTEGRATION REVENUE.] 
 70.20     Subdivision 1.  [USE OF THE REVENUE.] Integration revenue 
 70.21  under this section must be used for programs established under a 
 70.22  desegregation plan mandated by the state board or under court 
 70.23  order, to increase learning opportunities and reduce the 
 70.24  learning gap between learners living in high concentrations of 
 70.25  poverty and their peers. 
 70.26     Subd. 2.  [SEPARATE ACCOUNT.] Integration revenue shall be 
 70.27  maintained in a separate account to identify expenditures for 
 70.28  salaries and programs related to this revenue. 
 70.29     Subd. 3.  [INTEGRATION REVENUE.] For fiscal year 1999 and 
 70.30  later fiscal years, integration revenue equals the following 
 70.31  amounts: 
 70.32     (1) for independent school district No. 709, Duluth, $199 
 70.33  times the actual pupil units for the school year; 
 70.34     (2) for independent school district No. 625, St. Paul, $440 
 70.35  times the actual pupil units for the school year; 
 70.36     (3) for special school district No. 1, Minneapolis, $543 
 71.1   times the actual pupil units for the school year; and 
 71.2      (4) for a district not listed in clause (1), (2), or (3) 
 71.3   that is required to implement a plan according to the 
 71.4   requirements of Minnesota Rules, parts 3535.0200 to 3535.2200, 
 71.5   the lesser of the actual cost of implementing the plan during 
 71.6   the fiscal year or $96 times the actual pupil units for the 
 71.7   school year. 
 71.8      Subd. 4.  [INTEGRATION LEVY.] A district may levy an amount 
 71.9   equal to 46 percent of the district's integration revenue as 
 71.10  defined in subdivision 3. 
 71.11     Subd. 5.  [INTEGRATION AID.] A district's integration aid 
 71.12  equals 54 percent of the district's integration revenue as 
 71.13  defined in subdivision 3. 
 71.14     Subd. 6.  [ALTERNATIVE ATTENDANCE PROGRAMS.] (a) The 
 71.15  integration aid under subdivision 5 must be adjusted for each 
 71.16  pupil attending a nonresident district under sections 120.062, 
 71.17  120.075, 120.0751, 120.0752, 124C.45 to 124C.48, and 126.22.  
 71.18  The adjustments must be made according to this subdivision.  
 71.19     (b) Aid paid to the district of the pupil's residence must 
 71.20  be reduced by an amount equal to the revenue per actual pupil 
 71.21  unit of the resident district times the number of actual pupil 
 71.22  units attributable to the pupil for the time the pupil is 
 71.23  enrolled in a nonresident district. 
 71.24     (c) Aid paid to a district serving nonresidents must be 
 71.25  increased by an amount equal to the aid reduction to the 
 71.26  resident district under paragraphs (b) and (d).  
 71.27     (d) If the amount of the reduction to be made from the aid 
 71.28  of a district is greater than the amount of aid otherwise due 
 71.29  the district, the excess reduction must be made from other state 
 71.30  aids due the district. 
 71.31     Sec. 14.  Minnesota Statutes 1996, section 124.3201, 
 71.32  subdivision 1, is amended to read: 
 71.33     Subdivision 1.  [DEFINITIONS.] For the purposes of this 
 71.34  section and sections 124.3202 and 124.321, the definitions in 
 71.35  this subdivision apply. 
 71.36     (a) "Base year" for fiscal year 1996 and fiscal year 1997 
 72.1   means the 1994 summer program and the 1994-1995 school year.  
 72.2   Base year for 1998 and later fiscal years means the second 
 72.3   fiscal year preceding the fiscal year for which aid will be paid.
 72.4      (b) "Basic revenue" has the meaning given it in section 
 72.5   124A.22, subdivision 2.  For the purposes of computing basic 
 72.6   revenue pursuant to this section, each child with a disability 
 72.7   shall be counted as prescribed in section 124.17, subdivision 1. 
 72.8      (c) "Essential personnel" means teachers, related services, 
 72.9   and support services staff providing direct services to students.
 72.10     (d) "Average daily membership" has the meaning given it in 
 72.11  section 124.17. 
 72.12     (e) "Program growth factor" means 1.00 for fiscal year 1998 
 72.13  2000 and later. 
 72.14     (f) "Aid percentage factor" means 60 percent for fiscal 
 72.15  year 1996, 70 percent for fiscal year 1997, 80 percent for 
 72.16  fiscal year 1998, 90 percent for fiscal year 1999, and 100 
 72.17  percent for fiscal years 2000 and later. 
 72.18     (g) "Levy percentage factor" means 100 minus the aid 
 72.19  percentage factor for that year. 
 72.20     Sec. 15.  Minnesota Statutes 1996, section 124.3201, 
 72.21  subdivision 2, is amended to read: 
 72.22     Subd. 2.  [SPECIAL EDUCATION BASE REVENUE.] The special 
 72.23  education base revenue equals the sum of the following amounts 
 72.24  computed using base year data: 
 72.25     (1) 68 percent of the salary of each essential person 
 72.26  employed in the district's program for children with a 
 72.27  disability during the regular school year, whether the person is 
 72.28  employed by one or more districts; 
 72.29     (2) for the Minnesota state academy for the deaf or the 
 72.30  Minnesota state academy for the blind, 68 percent of the salary 
 72.31  of each instructional aide assigned to a child attending the 
 72.32  academy, if that aide is required by the child's individual 
 72.33  education plan; 
 72.34     (3) for special instruction and services provided to any 
 72.35  pupil by contracting with public, private, or voluntary agencies 
 72.36  other than school districts, in place of special instruction and 
 73.1   services provided by the district, 52 percent of the difference 
 73.2   between the amount of the contract and the basic revenue of the 
 73.3   district for that pupil for the fraction of the school day the 
 73.4   pupil receives services under the contract; 
 73.5      (4) for special instruction and services provided to any 
 73.6   pupil by contracting for services with public, private, or 
 73.7   voluntary agencies other than school districts, that are 
 73.8   supplementary to a full educational program provided by the 
 73.9   school district, 52 percent of the amount of the contract for 
 73.10  that pupil; 
 73.11     (5) for supplies and equipment purchased or rented for use 
 73.12  in the instruction of children with a disability an amount equal 
 73.13  to 47 percent of the sum actually expended by the district but 
 73.14  not to exceed an average of $47 in any one school year for each 
 73.15  child with a disability receiving instruction; and 
 73.16     (6) for fiscal years 1997 and later, special education base 
 73.17  revenue shall include amounts under clauses (1) to (5) for 
 73.18  special education summer programs provided during the base year 
 73.19  for that fiscal year; and 
 73.20     (7) for fiscal years 1999 and later, the cost of providing 
 73.21  transportation services for children with disabilities under 
 73.22  section 124.225, subdivision 1, paragraph (b), clause (4). 
 73.23     Sec. 16.  Minnesota Statutes 1996, section 124.3201, 
 73.24  subdivision 4, is amended to read: 
 73.25     Subd. 4.  [STATE TOTAL SPECIAL EDUCATION REVENUE.] The 
 73.26  state total special education revenue for fiscal year 1996 1998 
 73.27  equals $327,846,000 $358,542,000.  The state total special 
 73.28  education revenue for fiscal year 1997 1999 equals 
 73.29  $347,810,000 $435,322,000.  The state total special education 
 73.30  revenue for later fiscal years equals:  
 73.31     (1) the state total special education revenue for the 
 73.32  preceding fiscal year; times 
 73.33     (2) the program growth factor; times 
 73.34     (3) the ratio of the state total average daily membership 
 73.35  for the current fiscal year to the state total average daily 
 73.36  membership for the preceding fiscal year. 
 74.1      Sec. 17.  Minnesota Statutes 1996, section 124.321, 
 74.2   subdivision 1, is amended to read: 
 74.3      Subdivision 1.  [LEVY EQUALIZATION REVENUE.] (a) For fiscal 
 74.4   years 1996 and later year 1999, special education levy 
 74.5   equalization revenue for a school district, excluding an 
 74.6   intermediate school district, equals the sum of the following 
 74.7   amounts: 
 74.8      (1) the levy percentage factor for that year times the 
 74.9   district's special education revenue under section 124.3201; 
 74.10  plus 
 74.11     (2) the levy percentage factor for that year times the 
 74.12  district's special education summer program revenue under 
 74.13  section 124.3202; plus 
 74.14     (3) the levy percentage factor for that year times the 
 74.15  district's special education excess cost revenue under section 
 74.16  124.323; plus 
 74.17     (4) the levy percentage factor for that year times the 
 74.18  district's secondary vocational education for children with a 
 74.19  disability revenue under section 124.574; plus 
 74.20     (5) the levy percentage factor for that year times the 
 74.21  district's limited English proficiency programs revenue under 
 74.22  section 124.273. 
 74.23     Sec. 18.  Minnesota Statutes 1996, section 124.321, 
 74.24  subdivision 3, is amended to read: 
 74.25     Subd. 3.  [SPECIAL EDUCATION LEVY.] To receive special 
 74.26  education levy revenue, a district may levy an amount equal to 
 74.27  the district's special education levy equalization revenue as 
 74.28  defined in subdivision 1 multiplied by the lesser of one, or the 
 74.29  ratio of: 
 74.30     (1) the quotient derived by dividing the adjusted net tax 
 74.31  capacity of the district for the year preceding the year the 
 74.32  levy is certified by the actual pupil units in the district for 
 74.33  the school year to which the levy is attributable, to 
 74.34     (2) $3,540 $3,672. 
 74.35     Sec. 19.  Minnesota Statutes 1996, section 124.323, 
 74.36  subdivision 1, is amended to read: 
 75.1      Subdivision 1.  [DEFINITIONS.] In this section, the 
 75.2   definitions in this subdivision apply. 
 75.3      (a) "Unreimbursed special education cost" means the sum of 
 75.4   the following: 
 75.5      (1) expenditures for teachers' salaries, contracted 
 75.6   services, supplies, and equipment, and transportation services 
 75.7   eligible for revenue under sections 124.3201 and 124.3202; plus 
 75.8      (2) expenditures for tuition bills received under section 
 75.9   120.17 for services eligible for revenue under sections 
 75.10  124.3201, subdivision 2, and 124.3202, subdivision 1; minus 
 75.11     (3) revenue for teachers' salaries, contracted services, 
 75.12  supplies, and equipment under sections 124.3201 and 124.3202; 
 75.13  minus 
 75.14     (4) tuition receipts under section 120.17 for services 
 75.15  eligible for revenue under sections 124.3201, subdivision 2, and 
 75.16  124.3202, subdivision 1. 
 75.17     (b) "General revenue," for fiscal year 1996, means the sum 
 75.18  of the general education revenue according to section 124A.22, 
 75.19  subdivision 1, as adjusted according to section 124A.036, 
 75.20  subdivision 5, plus the total referendum revenue according to 
 75.21  section 124A.03, subdivision 1e.  For fiscal years 1997 and 
 75.22  later, "general revenue" means the sum of the general education 
 75.23  revenue according to section 124A.22, subdivision 1, as adjusted 
 75.24  according to section 124A.036, subdivision 5, plus the total 
 75.25  referendum revenue minus transportation sparsity revenue minus 
 75.26  total operating capital revenue. 
 75.27     Sec. 20.  Minnesota Statutes 1996, section 124.323, 
 75.28  subdivision 2, is amended to read: 
 75.29     Subd. 2.  [EXCESS COST REVENUE.] For 1996 1997 and later 
 75.30  fiscal years, a district's special education excess cost revenue 
 75.31  equals 70 the greatest of: 
 75.32     (a) 70 percent of the difference between (1) the district's 
 75.33  unreimbursed special education cost and (2) six percent for 
 75.34  fiscal year 1996 and 5.7 percent for fiscal year 1997 and later 
 75.35  years of the district's general revenue; 
 75.36     (b) 70 percent of the difference between (1) the increase 
 76.1   in the district's unreimbursed special education cost between 
 76.2   the base year as defined in section 124.3201, subdivision 1, and 
 76.3   the current year and (2) 1.6 percent of the district's general 
 76.4   revenue; or 
 76.5      (c) zero. 
 76.6      Sec. 21.  Minnesota Statutes 1996, section 124.574, 
 76.7   subdivision 2f, is amended to read: 
 76.8      Subd. 2f.  [STATE TOTAL SECONDARY VOCATIONAL-DISABLED 
 76.9   REVENUE.] The state total secondary vocational-disabled revenue 
 76.10  for fiscal year 1996 1998 equals $8,520,000 $8,924,000.  The 
 76.11  state total secondary vocational-disabled revenue for fiscal 
 76.12  year 1997 1999 equals $8,830,000 $8,976,000.  The state total 
 76.13  secondary vocational-disabled revenue for later fiscal years 
 76.14  equals:  
 76.15     (1) the state total secondary vocational-disabled revenue 
 76.16  for the preceding fiscal year; times 
 76.17     (2) the program growth factor; times 
 76.18     (3) the ratio of the state total average daily membership 
 76.19  for the current fiscal year to the state total average daily 
 76.20  membership for the preceding fiscal year. 
 76.21     Sec. 22.  Minnesota Statutes 1996, section 124.86, 
 76.22  subdivision 2, is amended to read: 
 76.23     Subd. 2.  [REVENUE AMOUNT.] An American Indian-controlled 
 76.24  tribal contract or grant school that is located on a reservation 
 76.25  within the state and that complies with the requirements in 
 76.26  subdivision 1 is eligible to receive tribal contract or grant 
 76.27  school aid.  The amount of aid is derived by: 
 76.28     (1) multiplying the formula allowance under section 
 76.29  124A.22, subdivision 2, less $176, times the difference between 
 76.30  (a) the actual pupil units as defined in section 124A.02, 
 76.31  subdivision 15, in average daily membership, excluding section 
 76.32  124.17, subdivision 2f, and (b) the number of pupils for the 
 76.33  current school year, weighted according to section 124.17, 
 76.34  subdivision 1, receiving benefits under section 123.933 or 
 76.35  123.935 or for which the school is receiving reimbursement under 
 76.36  section 126.23; 
 77.1      (2) adding to the result in clause (1) an amount equal to 
 77.2   the product of the formula allowance under section 124A.22, 
 77.3   subdivision 2, less $384 times the tribal contract AFDC pupil 
 77.4   units; 
 77.5      (3) subtracting from the result in clause (1) (2) the 
 77.6   amount of money allotted to the school by the federal government 
 77.7   through Indian School Equalization Program of the Bureau of 
 77.8   Indian Affairs, according to Code of Federal Regulations, title 
 77.9   25, part 39, subparts A to E, for the basic program as defined 
 77.10  by section 39.11, paragraph (b), for the base rate as applied to 
 77.11  kindergarten through twelfth grade, excluding small school 
 77.12  adjustments and additional weighting, but not money allotted 
 77.13  through subparts F to L for contingency funds, school board 
 77.14  training, student training, interim maintenance and minor 
 77.15  repair, interim administration cost, prekindergarten, and 
 77.16  operation and maintenance, and the amount of money that is 
 77.17  received according to section 126.23; 
 77.18     (3) (4) dividing the result in clause (2) (3) by the sum 
 77.19  of the actual pupil units in average daily membership, excluding 
 77.20  section 124.17, subdivision 2f, plus the tribal contract AFDC 
 77.21  pupil units; and 
 77.22     (4) (5) multiplying the sum of the actual pupil units, 
 77.23  including section 124.17, subdivision 2f, in average daily 
 77.24  membership plus the tribal contract AFDC pupil units by the 
 77.25  lesser of $1,500 or the sum of the result in clause (3) plus 
 77.26  $300 (4). 
 77.27     Sec. 23.  Minnesota Statutes 1996, section 124.86, is 
 77.28  amended by adding a subdivision to read: 
 77.29     Subd. 5.  [TRIBAL CONTRACT PUPIL UNITS.] Pupil units for 
 77.30  pupils enrolled in tribal contract schools shall be used only 
 77.31  for the purpose of computing tribal contract aid according to 
 77.32  this section. 
 77.33     Sec. 24.  [APPROPRIATIONS.] 
 77.34     Subdivision 1.  [DEPARTMENT OF CHILDREN, FAMILIES, AND 
 77.35  LEARNING.] The sums indicated in this section are appropriated 
 77.36  from the general fund to the department of children, families, 
 78.1   and learning for the fiscal years designated.  
 78.2      Subd. 2.  [AMERICAN INDIAN LANGUAGE AND CULTURE PROGRAMS.] 
 78.3   For grants to American Indian language and culture education 
 78.4   programs according to Minnesota Statutes, section 126.54, 
 78.5   subdivision 1: 
 78.6        $591,000     .....     1998
 78.7        $591,000     .....     1999
 78.8      The 1998 appropriation includes $59,000 for 1997 and 
 78.9   $532,000 for 1998.  
 78.10     The 1999 appropriation includes $59,000 for 1998 and 
 78.11  $532,000 for 1999.  
 78.12     Any balance in the first year does not cancel but is 
 78.13  available in the second year. 
 78.14     Subd. 3.  [AMERICAN INDIAN EDUCATION.] (a) For certain 
 78.15  American Indian education programs in school districts: 
 78.16       $175,000       .....     1998
 78.17       $175,000       .....     1999
 78.18     The 1998 appropriation includes $17,000 for 1997 and 
 78.19  $158,000 for 1998.  
 78.20     The 1999 appropriation includes $17,000 for 1998 and 
 78.21  $158,000 for 1999.  
 78.22     (b) These appropriations are available for expenditure with 
 78.23  the approval of the commissioner of the department of children, 
 78.24  families, and learning. 
 78.25     (c) The commissioner must not approve the payment of any 
 78.26  amount to a school district or school under this subdivision 
 78.27  unless that school district or school is in compliance with all 
 78.28  applicable laws of this state. 
 78.29     (d) Up to the following amounts may be distributed to the 
 78.30  following schools and school districts for each fiscal year:  
 78.31  $54,800, Pine Point School; $9,800 to independent school 
 78.32  district No. 166, Cook county; $14,900 to independent school 
 78.33  district No. 432, Mahnomen; $14,200 to independent school 
 78.34  district No. 435, Waubun; $42,200 to independent school district 
 78.35  No. 707, Nett Lake; and $39,100 to independent school district 
 78.36  No. 38, Red Lake.  These amounts must be spent only for the 
 79.1   benefit of American Indian pupils and to meet established state 
 79.2   educational standards or statewide requirements. 
 79.3      (e) Before a district or school can receive money under 
 79.4   this subdivision, the district or school must submit, to the 
 79.5   commissioner, evidence that it has complied with the uniform 
 79.6   financial accounting and reporting standards act, Minnesota 
 79.7   Statutes, sections 121.904 to 121.917. 
 79.8      Subd. 4.  [AMERICAN INDIAN POST-SECONDARY PREPARATION 
 79.9   GRANTS.] For American Indian post-secondary preparation grants 
 79.10  according to Minnesota Statutes, section 124.481: 
 79.11       $857,000     .....     1998
 79.12       $857,000     .....     1999
 79.13     Any balance in the first year does not cancel but is 
 79.14  available in the second year. 
 79.15     Subd. 5.  [AMERICAN INDIAN SCHOLARSHIPS.] For American 
 79.16  Indian scholarships according to Minnesota Statutes, section 
 79.17  124.48: 
 79.18       $1,600,000     .....     1998 
 79.19       $1,600,000     .....     1999 
 79.20     Any balance in the first year does not cancel but is 
 79.21  available in the second year. 
 79.22     Subd. 6.  [INDIAN TEACHER PREPARATION GRANTS.] (a) For 
 79.23  joint grants to assist Indian people to become teachers: 
 79.24       $190,000     .....     1998 
 79.25       $190,000     .....     1999 
 79.26     (b) Up to $70,000 each year is for a joint grant to the 
 79.27  University of Minnesota at Duluth and the Duluth school district.
 79.28     (c) Up to $40,000 each year is for a joint grant to each of 
 79.29  the following: 
 79.30     (1) Bemidji state university and the Red Lake school 
 79.31  district; 
 79.32     (2) Moorhead state university and a school district located 
 79.33  within the White Earth reservation; and 
 79.34     (3) Augsburg college, independent school district No. 625, 
 79.35  St. Paul, and the Minneapolis school district. 
 79.36     (d) Money not used for students at one location may be 
 80.1   transferred for use at another location. 
 80.2      (e) Any balance in the first year does not cancel but is 
 80.3   available in the second year. 
 80.4      Subd. 7.  [TRIBAL CONTRACT SCHOOLS.] For tribal contract 
 80.5   school aid according to Minnesota Statutes, section 124.86: 
 80.6        $2,593,000     .....     1998
 80.7        $2,908,000     .....     1999
 80.8      The 1998 appropriation includes $74,000 for 1997 and 
 80.9   $2,519,000 for 1998. 
 80.10     The 1999 appropriation includes $279,000 for 1998 and 
 80.11  $2,629,000 for 1999. 
 80.12     Subd. 8.  [EARLY CHILDHOOD PROGRAMS AT TRIBAL SCHOOLS.] For 
 80.13  early childhood family education programs at tribal contract 
 80.14  schools: 
 80.15       $68,000     .....     1998 
 80.16       $68,000     .....     1999 
 80.17     Subd. 9.  [AMERICAN SIGN LANGUAGE; TEACHER EDUCATION 
 80.18  HEARING.] To assist school districts in educating teachers in 
 80.19  American sign language: 
 80.20       $13,000     .....     1998
 80.21       $12,000     .....     1999
 80.22     Any balance in the first year does not cancel but is 
 80.23  available in the second year. 
 80.24     Subd. 10.  [MEXICAN ORIGIN EDUCATION GRANTS.] For grants 
 80.25  for a Mexican origin education pilot grant program: 
 80.26       $50,000     .....     1998
 80.27       $25,000     .....     1999
 80.28     Any balance in the first year does not cancel but is 
 80.29  available in the second year. 
 80.30     Subd. 11.  [LAY ADVOCATES.] To pay or reimburse lay 
 80.31  advocates for their time and expense as provided in Minnesota 
 80.32  Statutes, section 120.17: 
 80.33       $10,000     .....     1998
 80.34     This appropriation is available until June 30, 1999. 
 80.35     Subd. 12.  [OPTIONS PLUS PILOT GRANTS.] For grants to 
 80.36  school districts for options plus pilot programs: 
 81.1        $150,000    .....     1998 
 81.2      Each grant shall not exceed $50,000. 
 81.3      This appropriation is available until June 30, 1999.  
 81.4      Subd. 13.  [MAGNET SCHOOL GRANTS.] For magnet school and 
 81.5   program grants: 
 81.6        $1,750,000     .....     1998 
 81.7        $1,750,000     .....     1999 
 81.8      These amounts must be used for planning and developing 
 81.9   magnet schools and magnet programs. 
 81.10     Subd. 14.  [INTEGRATION PROGRAMS.] For grants according to: 
 81.11  minority fellowship grants according to Laws 1994, chapter 647, 
 81.12  article 8, section 29; minority teacher incentives according to 
 81.13  Minnesota Statutes, section 124.278; teachers of color grants 
 81.14  according to Minnesota Statutes, section 125.623; and cultural 
 81.15  exchange grants according to Minnesota Statutes, section 126.43: 
 81.16       $1,000,000     .....     1998
 81.17       $1,000,000     .....     1999
 81.18     Any balance in the first year does not cancel but is 
 81.19  available in the second year. 
 81.20     In awarding teacher of color grants, priority must be given 
 81.21  to districts that have students who are currently in the process 
 81.22  of completing their academic program. 
 81.23     Subd. 15.  [SPECIAL EDUCATION AID.] For special education 
 81.24  aid according to Minnesota Statutes, section 124.32: 
 81.25       $282,508,000     .....     1998 
 81.26       $381,302,000     .....     1999 
 81.27     The 1998 appropriation includes $24,346,000 for 1997 and 
 81.28  $258,162,000 for 1998.  
 81.29     The 1999 appropriation includes $28,684,000 for 1998 and 
 81.30  $352,618,000 for 1999.  
 81.31     Subd. 16.  [AID FOR CHILDREN WITH A DISABILITY.] For aid 
 81.32  according to Minnesota Statutes, section 124.32, subdivision 6, 
 81.33  for children with a disability placed in residential facilities 
 81.34  within the district boundaries for whom no district of residence 
 81.35  can be determined: 
 81.36       $586,000     .....     1998 
 82.1        $644,000     .....     1999 
 82.2      If the appropriation for either year is insufficient, the 
 82.3   appropriation for the other year is available.  Any balance in 
 82.4   the first year does not cancel but is available in the second 
 82.5   year. 
 82.6      Subd. 17.  [TRAVEL FOR HOME-BASED SERVICES.] For aid for 
 82.7   teacher travel for home-based services according to Minnesota 
 82.8   Statutes, section 124.32, subdivision 2b: 
 82.9        $107,000     .....     1998 
 82.10       $111,000     .....     1999 
 82.11     The 1998 appropriation includes $8,000 for 1997 and $99,000 
 82.12  for 1998.  
 82.13     The 1999 appropriation includes $10,000 for 1998 and 
 82.14  $101,000 for 1999.  
 82.15     Subd. 18.  [SPECIAL EDUCATION EXCESS COST AID.] For excess 
 82.16  cost aid: 
 82.17       $16,835,000     .....     1998 
 82.18       $29,127,000     .....     1999 
 82.19     The 1998 appropriation includes $800,000 for 1997 and 
 82.20  $16,035,000 for 1998.  
 82.21     The 1999 appropriation includes $1,781,000 for 1998 and 
 82.22  $27,346,000 for 1999. 
 82.23     Subd. 19.  [TARGETED NEEDS AID.] For targeted needs aid: 
 82.24       $45,590,000     .....     1998 
 82.25       $ 2,717,000     .....     1999 
 82.26     (a) Of the 1998 amount, $930,000 is for 1997 limited 
 82.27  English proficiency aid and $12,197,000 is for 1998 limited 
 82.28  English proficiency aid.  Of the 1998 amount, $1,354,000 is for 
 82.29  1997 assurance of mastery aid and $12,265,000 is for 1998 
 82.30  assurance of mastery aid.  Of the 1998 amount, $18,844,000 is 
 82.31  for 1998 integration aid. 
 82.32     (b) Of the 1999 amount, $1,355,000 is for 1998 limited 
 82.33  English proficiency aid and $0 is for 1999 limited English 
 82.34  proficiency aid.  Of the 1999 amount, $1,362,000 is for 1998 
 82.35  assurance of mastery aid and $0 is for 1999 assurance of mastery 
 82.36  aid.  
 83.1      (c) As a condition of receiving a grant, each district must 
 83.2   continue to report its costs according to the uniform financial 
 83.3   accounting and reporting system.  As a further condition of 
 83.4   receiving a grant, each district must submit a report to the 
 83.5   chairs of the education committees of the legislature about the 
 83.6   actual expenditures it made for integration using the grant 
 83.7   money including achievement results.  These grants may be used 
 83.8   to transport students attending a nonresident district under 
 83.9   Minnesota Statutes, section 120.062, to the border of the 
 83.10  resident district.  A district may allocate a part of the grant 
 83.11  to the transportation fund for this purpose. 
 83.12     Subd. 20.  [SECONDARY VOCATIONAL; STUDENTS WITH 
 83.13  DISABILITIES.] For aid for secondary vocational education for 
 83.14  pupils with disabilities according to Minnesota Statutes, 
 83.15  section 124.574: 
 83.16       $7,044,000     .....     1998 
 83.17       $7,985,000     .....     1999 
 83.18     The 1998 appropriation includes $618,000 for 1997 and 
 83.19  $6,426,000 for 1998.  
 83.20     The 1999 appropriation includes $713,000 for 1998 and 
 83.21  $7,272,000 for 1999.  
 83.22     Subd. 21.  [SPECIAL PROGRAMS EQUALIZATION AID.] For special 
 83.23  education levy equalization aid according to Minnesota Statutes, 
 83.24  section 124.321: 
 83.25       $10,985,000     .....     1998
 83.26       $ 5,612,000     .....     1999
 83.27     The 1998 appropriation includes $1,783,000 for 1997 and 
 83.28  $9,202,000 for 1998.  
 83.29     The 1999 appropriation includes $1,022,000 for 1998 and 
 83.30  $4,590,000 for 1999. 
 83.31     Subd. 22.  [LOW-INCOME CONCENTRATION GRANTS.] For 
 83.32  low-income concentration grants according to Laws 1994, chapter 
 83.33  647, article 8, section 43: 
 83.34       $1,000,000     .....     1998 
 83.35     Subd. 23.  [INTEGRATION AID.] For integration aid: 
 83.36       $26,124,000    .....     1999 
 84.1      This appropriation is based on an entitlement of 
 84.2   $29,026,000. 
 84.3      Subd. 24.  [BASIC SKILLS SUMMER SCHOOL.] For basic skills 
 84.4   summer school programs, according to Minnesota Statutes, section 
 84.5   124.17, subdivision 5: 
 84.6        $3,395,000     .....     1998 
 84.7        $4,549,000     .....     1999 
 84.8      The 1998 appropriation includes $0 for 1997 and $3,395,000 
 84.9   for 1998. 
 84.10     The 1999 appropriation includes $377,000 for 1998 and 
 84.11  $4,172,000 for 1999. 
 84.12     Sec. 25.  [REPEALER.] 
 84.13     Subdivision 1.  [TAXES PAYABLE IN 1998.] Minnesota Statutes 
 84.14  1996, section 124.912, subdivisions 2 and 3, are repealed 
 84.15  effective for taxes payable in 1998. 
 84.16     Subd. 2.  [REVENUE FOR FISCAL YEAR 1999.] Minnesota 
 84.17  Statutes 1996, sections 124.311; 124.312; 124.313; and 124.314; 
 84.18  and Laws 1994, chapter 647, article 8, section 43, are repealed 
 84.19  effective for revenue for fiscal year 1999. 
 84.20     Subd. 3.  [JULY 1, 1996] Minnesota Statutes 1996, section 
 84.21  124.3201, subdivisions 2a and 2b, are repealed effective 
 84.22  retroactively to July 1, 1996. 
 84.23     Sec. 26.  [EFFECTIVE DATE.] 
 84.24     Section 1 is effective for the 1998 basic skills summer 
 84.25  school program.  Sections 3 and 20 are effective retroactively 
 84.26  to July 1, 1996.  Sections 17 and 18 are effective for revenue 
 84.27  for fiscal year 1999.  Section 19 is effective July 1, 1998. 
 84.28                             ARTICLE 3
 84.29                   COMMUNITY AND SCHOOL SERVICES
 84.30     Section 1.  [APPROPRIATIONS.] 
 84.31     Subdivision 1.  [DEPARTMENT OF CHILDREN, FAMILIES, AND 
 84.32  LEARNING.] The sums indicated in this section are appropriated 
 84.33  from the general fund to the department of children, families, 
 84.34  and learning for the fiscal years designated.  
 84.35     Subd. 2.  [ADULT BASIC EDUCATION AID.] For adult basic 
 84.36  education aid according to Minnesota Statutes, sections 124.26 
 85.1   in fiscal year 1998 and 124.2601 in fiscal year 1999:  
 85.2        $9,319,000    .....    1998
 85.3        $9,424,000    .....    1999 
 85.4      The 1998 appropriation includes $837,000 for 1997 and 
 85.5   $8,482,000 for 1998.  
 85.6      The 1999 appropriation includes $942,000 for 1998 and 
 85.7   $8,482,000 for 1999.  
 85.8      Up to $199,000 each year may be used for contracts with 
 85.9   private, nonprofit organizations for approved programs.  
 85.10     Subd. 3.  [ADULT GRADUATION AID.] For adult graduation aid 
 85.11  according to Minnesota Statutes, section 124.261: 
 85.12       $2,245,000     .....     1998
 85.13       $2,245,000     .....     1999
 85.14     The 1998 appropriation includes $224,000 for 1997 and 
 85.15  $2,021,000 for 1998.  
 85.16     The 1999 appropriation includes $224,000 for 1998 and 
 85.17  $2,021,000 for 1999.  
 85.18     Subd. 4.  [ALCOHOL-IMPAIRED DRIVER.] (a) For grants with 
 85.19  funds received under Minnesota Statutes, section 171.29, 
 85.20  subdivision 2, paragraph (b), clause (4): 
 85.21       $514,000     .....     1998
 85.22       $514,000     .....     1999
 85.23     (b) These appropriations are from the alcohol-impaired 
 85.24  driver account of the special revenue fund.  Any funds credited 
 85.25  for the department of children, families, and learning to the 
 85.26  alcohol-impaired driver account of the special revenue fund in 
 85.27  excess of the amounts appropriated in this subdivision are 
 85.28  appropriated to the department of children, families, and 
 85.29  learning and available in fiscal year 1998 and fiscal year 1999. 
 85.30     (c) Up to $226,000 each year may be used by the department 
 85.31  of children, families, and learning to contract for services to 
 85.32  school districts stressing the dangers of driving after 
 85.33  consuming alcohol.  No more than five percent of this amount may 
 85.34  be used for administrative costs by the contract recipients. 
 85.35     (d) Up to $88,000 each year may be used for grants to 
 85.36  support student-centered programs to discourage driving after 
 86.1   consuming alcohol. 
 86.2      (e) Up to $200,000 and any additional funds each year may 
 86.3   be used for chemical abuse prevention grants. 
 86.4      Subd. 5.  [GED TESTS.] For payment of 60 percent of the 
 86.5   costs of GED tests: 
 86.6        $125,000     .....     1998
 86.7        $125,000     .....     1999
 86.8      Any balance in the first year does not cancel but is 
 86.9   available in the second year. 
 86.10     Subd. 6.  [VIOLENCE PREVENTION EDUCATION GRANTS.] For 
 86.11  violence prevention education grants: 
 86.12       $1,500,000      .....     1998
 86.13       $1,500,000      .....     1999
 86.14     Of the amount each year, $50,000 is for program 
 86.15  administration. 
 86.16     Any balance in the first year does not cancel but is 
 86.17  available in the second year. 
 86.18     Subd. 7.  [MALE RESPONSIBILITY.] For male responsibility 
 86.19  grants: 
 86.20       $375,000     .....    1998
 86.21       $375,000     .....    1999
 86.22     The commissioner of children, families, and learning may 
 86.23  enter into cooperative agreements with the commissioner of human 
 86.24  services to access federal money for child support and paternity 
 86.25  education programs. 
 86.26     Any balance in the first year does not cancel but is 
 86.27  available in the second year. 
 86.28     Subd. 8.  [EARLY INTERVENTION GRANTS.] For grants to 
 86.29  intervention programs for 6 to 12 year olds: 
 86.30       $1,500,000   .....     1998
 86.31       $1,500,000   .....     1999
 86.32     Any balance available in the first year does not cancel but 
 86.33  is available in the second year. 
 86.34     Subd. 9.  [AFTER SCHOOL ENRICHMENT GRANTS.] For after 
 86.35  school enrichment grants according to Laws 1996, chapter 412, 
 86.36  article 4, section 30: 
 87.1        $5,000,000   .....     1998
 87.2        $5,000,000   .....     1999
 87.3      The commissioner may use up to five percent of this 
 87.4   appropriation to provide technical assistance and evaluation to 
 87.5   community organizations. 
 87.6      Any balance available in the first year does not cancel but 
 87.7   is available in the second year. 
 87.8      Subd. 10.  [ABUSED CHILDREN.] For abused children programs 
 87.9   according to Minnesota Statutes, section 119A.21: 
 87.10       $1,048,000     .....     1998 
 87.11       $1,079,000     .....     1999
 87.12     Any balance available in the first year does not cancel but 
 87.13  is available in the second year. 
 87.14     Subd. 11.  [DRUG POLICY AND VIOLENCE PREVENTION PROGRAMS.] 
 87.15  For drug policy, violence prevention, and family visitation 
 87.16  programs: 
 87.17       $2,912,000     .....     1998
 87.18       $2,980,000     .....     1999
 87.19     Any balance available in the first year does not cancel but 
 87.20  is available in the second year. 
 87.21     Subd. 12.  [CHILDREN'S TRUST FUND.] For children's trust 
 87.22  fund according to Minnesota Statutes, sections 119A.12 and 
 87.23  119A.13: 
 87.24       $247,000       .....     1998
 87.25       $247,000       .....     1999
 87.26     Any balance available in the first year does not cancel but 
 87.27  is available in the second year. 
 87.28     Subd. 13.  [MINNESOTA ECONOMIC OPPORTUNITY GRANTS.] For 
 87.29  Minnesota economic opportunity grants: 
 87.30       $9,000,000     .....     1998
 87.31       $9,000,000     .....     1999
 87.32     Of this appropriation, the commissioner may use up to 8.7 
 87.33  percent each year for state operations. 
 87.34     Any balance available in the first year does not cancel but 
 87.35  is available in the second year. 
 87.36     Subd. 14.  [TRANSITIONAL HOUSING PROGRAMS.] For 
 88.1   transitional housing programs: 
 88.2        $935,000       .....     1998
 88.3        $935,000       .....     1999
 88.4      Any balance available in the first year does not cancel but 
 88.5   is available in the second year. 
 88.6      Subd. 15.  [EMERGENCY FOOD ASSISTANCE.] For emergency food 
 88.7   assistance according to Laws 1995, chapter 224, section 5, 
 88.8   subdivision 3: 
 88.9        $97,000        .....     1998
 88.10       $97,000        .....     1999
 88.11     Any balance available in the first year does not cancel but 
 88.12  is available in the second year. 
 88.13     Subd. 16.  [FOOD BANK PROGRAM.] For foodshelf programs 
 88.14  according to Minnesota Statutes, section 268.55: 
 88.15       $700,000       .....     1998
 88.16       $700,000       .....     1999
 88.17     Any balance available in the first year does not cancel but 
 88.18  is available in the second year. 
 88.19     Subd. 17.  [HEAD START PROGRAM.] For Head Start programs 
 88.20  according to Minnesota Statutes, section 268.914: 
 88.21       $13,506,000    .....     1998
 88.22       $13,506,000    .....     1999
 88.23     The commissioner may use up to two percent each year for 
 88.24  state operations. 
 88.25     Any balance available in the first year does not cancel but 
 88.26  is available in the second year. 
 88.27                             ARTICLE 4
 88.28                    CHILDREN AMD FAMILY SUPPORT
 88.29     Section 1.  Minnesota Statutes 1996, section 124.2711, 
 88.30  subdivision 1, is amended to read: 
 88.31     Subdivision 1.  [REVENUE.] The revenue for early childhood 
 88.32  family education programs for a school district equals $101.25 
 88.33  for 1993 1998 and $112.70 for 1999 and later fiscal years times 
 88.34  the greater of: 
 88.35     (1) 150; or 
 88.36     (2) the number of people under five years of age residing 
 89.1   in the school district on October 1 of the previous school year. 
 89.2      Sec. 2.  Minnesota Statutes 1996, section 124.2711, 
 89.3   subdivision 2a, is amended to read: 
 89.4      Subd. 2a.  [EARLY CHILDHOOD FAMILY EDUCATION LEVY.] To 
 89.5   obtain early childhood family education revenue, a district may 
 89.6   levy an amount equal to the tax rate of .609 .653 percent times 
 89.7   the adjusted tax capacity of the district for the year preceding 
 89.8   the year the levy is certified.  If the amount of the early 
 89.9   childhood family education levy would exceed the early childhood 
 89.10  family education revenue, the early childhood family education 
 89.11  levy shall equal the early childhood family education revenue. 
 89.12     Sec. 3.  Minnesota Statutes 1996, section 124.2716, 
 89.13  subdivision 3, is amended to read: 
 89.14     Subd. 3.  [EXTENDED DAY LEVY.] To obtain extended day 
 89.15  revenue, a school district may levy an amount equal to the 
 89.16  district's extended day revenue as defined in subdivision 2 
 89.17  multiplied by the lesser of one, or the ratio of the quotient 
 89.18  derived by dividing the adjusted net tax capacity of the 
 89.19  district for the year before the year the levy is certified by 
 89.20  the actual pupil units in the district for the school year to 
 89.21  which the levy is attributable, to $3,700 $3,838.  
 89.22     Sec. 4.  [ADDITIONAL EARLY CHILDHOOD FAMILY EDUCATION AID; 
 89.23  FISCAL YEAR 1998.] 
 89.24     If a district complies with the provisions of Minnesota 
 89.25  Statutes, section 121.882, it shall receive additional early 
 89.26  childhood family education aid for fiscal year 1998 equal to 
 89.27  $6.70 times the greater of: 
 89.28     (1) 150; or 
 89.29     (2) the number of people under five years of age residing 
 89.30  in the school district on October 1 of the previous school 
 89.31  year.  The additional early childhood family education aid may 
 89.32  be used only for early childhood family education programs. 
 89.33     Sec. 5.  [APPROPRIATIONS.] 
 89.34     Subdivision 1.  [DEPARTMENT OF CHILDREN, FAMILIES, AND 
 89.35  LEARNING.] The sums indicated in this section are appropriated 
 89.36  from the general fund to the department of children, families, 
 90.1   and learning for the fiscal years designated.  
 90.2      Subd. 2.  [PART H.] For the department of children, 
 90.3   families, and learning's share of the state's obligation under 
 90.4   Part H according to Minnesota Statutes, section 120.1701: 
 90.5        $400,000     .....     1998 
 90.6      Any balance in the first year does not cancel but is 
 90.7   available for the second year. 
 90.8      Subd. 3.  [ADULTS WITH DISABILITIES PROGRAM AID.] For 
 90.9   adults with disabilities programs according to Minnesota 
 90.10  Statutes, section 124.2715: 
 90.11       $670,000    .....    1998 
 90.12       $670,000    .....    1999 
 90.13     Any balance in the first year does not cancel but is 
 90.14  available for the second year. 
 90.15     Subd. 4.  [COMMUNITY EDUCATION AID.] For community 
 90.16  education aid according to Minnesota Statutes, section 124.2713: 
 90.17       $1,819,000    .....    1998 
 90.18       $1,611,000    .....    1999
 90.19     The 1998 appropriation includes $236,000 for 1997 and 
 90.20  $1,583,000 for 1998.  
 90.21     The 1999 appropriation includes $175,000 for 1998 and 
 90.22  $1,436,000 for 1999.  
 90.23     Subd. 5.  [EARLY CHILDHOOD FAMILY EDUCATION AID.] For early 
 90.24  childhood family education aid according to Minnesota Statutes, 
 90.25  section 124.2711: 
 90.26       $14,554,000    .....    1998 
 90.27       $13,638,000    .....    1999
 90.28     The 1998 appropriation includes $1,357,000 for 1997 and 
 90.29  $13,197,000 for 1998.  
 90.30     The 1999 appropriation includes $1,466,000 for 1998 and 
 90.31  $12,172,000 for 1999.  
 90.32     $10,000 each year may be spent for evaluation of early 
 90.33  childhood family education programs.  
 90.34     Subd. 6.  [EXTENDED DAY AID.] For extended day aid 
 90.35  according to Minnesota Statutes, section 124.2716: 
 90.36       $347,000        .....     1998 
 91.1        $304,000        .....     1999
 91.2      The 1998 appropriation includes $37,000 for 1997 and 
 91.3   $310,000 for 1998. 
 91.4      The 1999 appropriation includes $34,000 for 1998 and 
 91.5   $270,000 for 1999. 
 91.6      Subd. 7.  [FAMILY COLLABORATIVES.] For family 
 91.7   collaboratives according to Laws 1995, First Special Session 
 91.8   chapter 3, article 4, section 29, subdivision 10: 
 91.9        $7,500,000      .....     1998
 91.10       $7,500,000      .....     1999
 91.11     Of the appropriation, $150,000 each year is for grants 
 91.12  targeted to assist in providing collaborative children's library 
 91.13  service programs.  To be eligible, a family collaborative grant 
 91.14  recipient must collaborate with at least one public library and 
 91.15  one children's or family organization.  The public library must 
 91.16  involve the regional public library system and multitype library 
 91.17  system to which it belongs in the planning and provide for an 
 91.18  evaluation of the program. 
 91.19     No more than 2.5 percent of the appropriation is available 
 91.20  to the state to administer and evaluate the grant program. 
 91.21     Any balance in the first year does not cancel but is 
 91.22  available in the second year. 
 91.23     Subd. 8.  [HEALTH AND DEVELOPMENTAL SCREENING AID.] For 
 91.24  health and developmental screening aid according to Minnesota 
 91.25  Statutes, sections 123.702 and 123.7045: 
 91.26       $1,550,000    .....    1998 
 91.27       $1,550,000    .....    1999 
 91.28     The 1998 appropriation includes $155,000 for 1997 and 
 91.29  $1,395,000 for 1998.  
 91.30     The 1999 appropriation includes $155,000 for 1998 and 
 91.31  $1,395,000 for 1999.  
 91.32     Any balance in the first year does not cancel but is 
 91.33  available in the second year.  
 91.34     Subd. 9.  [HEARING IMPAIRED ADULTS.] For programs for 
 91.35  hearing impaired adults according to Minnesota Statutes, section 
 91.36  121.201: 
 92.1        $70,000     .....      1998
 92.2        $70,000      .....     1999
 92.3      Any balance in the first year does not cancel but is 
 92.4   available in the second year. 
 92.5      Subd. 10.  [LEARNING READINESS PROGRAM REVENUE.] For 
 92.6   revenue for learning readiness programs according to Minnesota 
 92.7   Statutes, sections 121.831 and 124.2615: 
 92.8        $10,316,000  .....     1998
 92.9        $10,405,000  .....     1999
 92.10     The 1998 appropriation includes $949,000 for 1997 and 
 92.11  $9,367,000 for 1998. 
 92.12     The 1999 appropriation includes $1,039,000 for 1998 and 
 92.13  $9,366,000 for 1999.  
 92.14     $10,000 each year may be spent for evaluation of learning 
 92.15  readiness programs. 
 92.16     Subd. 11.  [WAY TO GROW.] For grants for existing way to 
 92.17  grow programs according to Minnesota Statutes, section 121.835:  
 92.18       $475,000     .....     1998
 92.19       $475,000     .....     1999
 92.20     Any balance in the first year does not cancel but is 
 92.21  available in the second year. 
 92.22     Subd. 12.  [CHILD CARE ASSISTANCE.] For child care 
 92.23  assistance according to Minnesota Statutes, sections 119B.03 and 
 92.24  119B.05: 
 92.25       $67,065,000    .....     1998 
 92.26       $97,664,000    .....     1999
 92.27     Any balance in the first year does not cancel but is 
 92.28  available in the second year.  
 92.29     Subd. 13.  [CHILD CARE DEVELOPMENT.] For child care 
 92.30  development grants according to Minnesota Statutes, section 
 92.31  119B.21: 
 92.32       $2,865,000     .....     1998
 92.33       $1,865,000     .....     1999
 92.34     Any balance in the first year does not cancel but is 
 92.35  available in the second year.  
 92.36     Sec. 6.  [REPEALER.] 
 93.1      Laws 1995, First Special Session chapter 3, article 4, 
 93.2   section 31, paragraph (a), is repealed. 
 93.3      Sec. 7.  [EFFECTIVE DATE.] 
 93.4      Sections 2 and 3 are effective for revenue for fiscal year 
 93.5   1999. 
 93.6                              ARTICLE 5
 93.7                         LIFEWORK DEVELOPMENT
 93.8      Section 1.  [APPROPRIATIONS.] 
 93.9      Subdivision 1.  [DEPARTMENT OF CHILDREN, FAMILIES, AND 
 93.10  LEARNING.] The sums indicated in this section are appropriated 
 93.11  from the general fund to the department of children, families, 
 93.12  and learning for the fiscal years designated.  
 93.13     Subd. 2.  [SECONDARY VOCATIONAL EDUCATION AID.] For 
 93.14  secondary vocational education aid according to Minnesota 
 93.15  Statutes, section 124.573: 
 93.16       $11,617,000     .....     1998 
 93.17       $11,596,000     .....     1999 
 93.18     The 1998 appropriation includes $1,180,000 for 1997 and 
 93.19  $10,437,000 for 1998.  
 93.20     The 1999 appropriation includes $1,159,000 for 1998 and 
 93.21  $10,437,000 for 1999.  
 93.22     Subd. 3.  [EDUCATION AND EMPLOYMENT TRANSITIONS PROGRAM 
 93.23  GRANTS.] For education and employment transitions program: 
 93.24       $4,000,000      .....      1998 
 93.25       $4,000,000      .....      1999 
 93.26     $500,000 each year is for development of MnCEPs, an 
 93.27  Internet-based education and employment information system.  
 93.28  These are one-time funds. 
 93.29     $1,250,000 each year is for a rebate program for employers 
 93.30  who offer internships and other work experiences to learners. 
 93.31     $400,000 each year is for youth apprenticeship program 
 93.32  grants. 
 93.33     $100,000 each year is for youth entrepreneurship grants 
 93.34  under Minnesota Statutes, section 116J.655. 
 93.35     $100,000 each year is for youth employer grants under 
 93.36  section 28. 
 94.1      $150,000 each year is for parent and community awareness 
 94.2   training. 
 94.3      $1,500,000 each year is for lifework development and 
 94.4   implementation activities and state-level activities, including 
 94.5   the governor's workforce development council. 
 94.6      Any balance in the first year does not cancel but is 
 94.7   available in the second year. 
 94.8      Subd. 4.  [YOUTHWORKS PROGRAM.] For funding youthworks 
 94.9   programs according to Minnesota Statutes, sections 121.701 to 
 94.10  121.710: 
 94.11       $1,863,000     .....     1998 
 94.12       $1,813,000     .....     1999 
 94.13     Of the 1998 appropriation, $50,000 is for implementation 
 94.14  and administration of youthworks programs. 
 94.15     Any balance in the first year does not cancel but is 
 94.16  available in the second year. 
 94.17                             ARTICLE 6
 94.18               EDUCATION ORGANIZATION AND COOPERATION
 94.19     Section 1.  Minnesota Statutes 1996, section 124.2725, 
 94.20  subdivision 2, is amended to read: 
 94.21     Subd. 2.  [COOPERATION AND COMBINATION REVENUE.] For fiscal 
 94.22  year 1999, cooperation and combination revenue equals $100 $104 
 94.23  times the pupil units served in the district.  For purposes of 
 94.24  this section, pupil units served means the number of resident 
 94.25  and nonresident pupil units in average daily membership 
 94.26  receiving instruction in the cooperating or combined district.  
 94.27  A district may not receive revenue under this section if it 
 94.28  levies under section 124.912, subdivision 4.  
 94.29     Sec. 2.  Minnesota Statutes 1996, section 124.2726, 
 94.30  subdivision 2, is amended to read: 
 94.31     Subd. 2.  [AID.] (a) Consolidation transition aid is equal 
 94.32  to $200 for fiscal year 1998 and $208 for fiscal year 1999 and 
 94.33  later times the number of actual pupil units in the newly 
 94.34  created district in the year of consolidation and $100 for 
 94.35  fiscal year 1998 and $104 for fiscal year 1999 and later times 
 94.36  the number of actual pupil units in the first year following the 
 95.1   year of consolidation.  The number of pupil units used to 
 95.2   calculate aid in either year shall not exceed 1,000 for 
 95.3   districts consolidating July 1, 1994, and 1,500 for districts 
 95.4   consolidating July 1, 1995, and thereafter.  
 95.5      (b) If the total appropriation for consolidation transition 
 95.6   aid for any fiscal year, plus any amount transferred under 
 95.7   section 124.14, subdivision 7, is insufficient to pay all 
 95.8   districts the full amount of aid earned, the department of 
 95.9   children, families, and learning shall first pay the districts 
 95.10  in the first year following the year of consolidation the full 
 95.11  amount of aid earned and distribute any remaining funds to the 
 95.12  newly created districts in the first year of consolidation. 
 95.13     Sec. 3.  Minnesota Statutes 1996, section 124.2727, 
 95.14  subdivision 6a, is amended to read: 
 95.15     Subd. 6a.  [FISCAL YEAR 1998 DISTRICT COOPERATION REVENUE.] 
 95.16  A district's cooperation revenue for fiscal year 1998 is equal 
 95.17  to the greater of $67 times the actual pupil units or $25,000. 
 95.18     Sec. 4.  Minnesota Statutes 1996, section 124.2727, 
 95.19  subdivision 6c, is amended to read: 
 95.20     Subd. 6c.  [FISCAL YEAR 1998 DISTRICT COOPERATION AID.] A 
 95.21  district's cooperation aid for fiscal year 1998 is the 
 95.22  difference between its district cooperation revenue and its 
 95.23  district cooperation levy.  If a district does not levy the 
 95.24  entire amount permitted, aid must be reduced in proportion to 
 95.25  the actual amount levied. 
 95.26     Sec. 5.  Minnesota Statutes 1996, section 124.2727, 
 95.27  subdivision 6d, is amended to read: 
 95.28     Subd. 6d.  [REVENUE USES.] (a) A district must place its 
 95.29  district cooperation revenue in a reserved account and may only 
 95.30  use the revenue to purchase goods and services from entities 
 95.31  formed for cooperative purposes or to otherwise provide 
 95.32  educational services in a cooperative manner. 
 95.33     (b) A district that was a member of an intermediate school 
 95.34  district organized pursuant to chapter 136D on July 1, 1994, 
 95.35  must place its district cooperation revenue in a reserved 
 95.36  account and must allocate a portion of the reserved revenue for 
 96.1   instructional services from entities formed for cooperative 
 96.2   services for special education programs and secondary vocational 
 96.3   programs.  The allocated amount is equal to the levy made 
 96.4   according to section 124.2727, subdivision 6, for taxes payable 
 96.5   in 1994 divided by the actual pupil units in the intermediate 
 96.6   school district for fiscal year 1995 times the number of actual 
 96.7   pupil units in the school district in 1995.  The district must 
 96.8   use 5/11 of the revenue for special education and 6/11 of the 
 96.9   revenue for secondary vocational education.  The district must 
 96.10  demonstrate that the revenue is being used to provide each child 
 96.11  has available the full range of special education and secondary 
 96.12  vocational programs and services available to each child served 
 96.13  by the intermediate.  The secondary vocational programs and 
 96.14  service must meet the requirements established in an 
 96.15  articulation agreement developed between the state board of 
 96.16  education and the board of trustees of the Minnesota state 
 96.17  colleges and universities. 
 96.18     (c) A district that was not a member of an intermediate 
 96.19  district organized under chapter 136D on July 1, 1994, must 
 96.20  spend at least $9 per pupil unit of its district cooperation 
 96.21  revenue on secondary vocational programs. 
 96.22     Sec. 6.  [APPROPRIATIONS.] 
 96.23     Subdivision 1.  [DEPARTMENT OF CHILDREN, FAMILIES, AND 
 96.24  LEARNING.] The sums indicated in this section are appropriated 
 96.25  from the general fund to the department of children, families, 
 96.26  and learning for the fiscal years designated.  
 96.27     Subd. 2.  [SPECIAL CONSOLIDATION AID.] For special 
 96.28  consolidation aid under Minnesota Statutes, section 124.2728: 
 96.29       $3,000     .....     1998
 96.30     The 1998 appropriation includes $3,000 for 1997 and -0- for 
 96.31  1998. 
 96.32     Subd. 3.  [CONSOLIDATION TRANSITION AID.] For districts 
 96.33  consolidating under Minnesota Statutes, section 124.2726: 
 96.34       $1,254,000     .....     1998
 96.35       $1,151,000     .....     1999
 96.36     The 1998 appropriation includes $67,000 for 1997 and 
 97.1   $1,187,000 for 1998. 
 97.2      The 1999 appropriation includes $131,000 for 1998 and 
 97.3   $1,020,000 for 1999. 
 97.4      Any balance in the first year does not cancel but is 
 97.5   available in the second year. 
 97.6      Subd. 4.  [COOPERATION AND COMBINATION AID.] For aid for 
 97.7   districts that cooperate and combine according to Minnesota 
 97.8   Statutes, section 124.2725: 
 97.9        $562,000     .....     1998 
 97.10       $ 42,000     .....     1999 
 97.11     The 1998 appropriation includes $178,000 for 1997 and 
 97.12  $384,000 for 1998.  
 97.13     The 1999 appropriation includes $42,000 for 1998 and -0- 
 97.14  for 1999.  
 97.15     Any balance in the first year does not cancel but is 
 97.16  available in the second year. 
 97.17     Subd. 5.  [DISTRICT COOPERATION REVENUE.] For district 
 97.18  cooperation revenue aid: 
 97.19       $9,766,000     .....     1998
 97.20       $  954,000     .....     1999
 97.21     The 1998 appropriation includes $1,172,000 for 1997 and 
 97.22  $8,594,000 for 1998. 
 97.23     The 1999 appropriation includes $954,000 for 1998 and -0- 
 97.24  for 1999. 
 97.25     Subd. 6.  [INTERAGENCY COLLABORATION GRANTS.] For 
 97.26  interagency collaboration grants to plan and implement 
 97.27  collaborative programs between school districts, cities, 
 97.28  counties, and other local units of government in the governance, 
 97.29  administration, and operations of those local public entities: 
 97.30       $500,000       .....     1998 
 97.31     Grants of up to $100,000 shall be awarded to plan and 
 97.32  implement systems of joint governance, management, and delivery 
 97.33  of programs and services which result in more effective and 
 97.34  efficient services for children, families, and adults.  Programs 
 97.35  and services include, but are not limited to: 
 97.36     (1) long-range planning among local governing boards; 
 98.1      (2) transportation and vehicle maintenance; 
 98.2      (3) buildings and grounds management; 
 98.3      (4) food and nutrition services; 
 98.4      (5) business affairs; 
 98.5      (6) technology support; and 
 98.6      (7) library services. 
 98.7      The department of children, families, and learning shall 
 98.8   give preference to local units of government that have 
 98.9   previously demonstrated success in family collaboratives or 
 98.10  other collaborative efforts. 
 98.11     Any balance available in the first year does not cancel but 
 98.12  is available in the second year. 
 98.13     Sec. 7.  [REPEALER.] 
 98.14     Minnesota Statutes 1996, sections 124.2727, subdivisions 
 98.15  6a, 6b, 6c, and 9; and 124.2728, are repealed effective for 
 98.16  revenue for fiscal year 1999. 
 98.17     Sec. 8.  [EFFECTIVE DATE.] 
 98.18     Section 1 is effective for revenue for fiscal year 1999. 
 98.19                             ARTICLE 7
 98.20                        EDUCATION EXCELLENCE
 98.21     Section 1.  Minnesota Statutes 1996, section 120.062, 
 98.22  subdivision 3, is amended to read: 
 98.23     Subd. 3.  [CLOSED DISTRICTS LIMITED ENROLLMENT OF 
 98.24  NONRESIDENT PUPILS.] (a) A school board may, by 
 98.25  resolution, determine that limit the enrollment of nonresident 
 98.26  pupils may not attend any of in its schools or programs 
 98.27  according to this section to a number not less than the lesser 
 98.28  of: 
 98.29     (1) one percent of the total enrollment at each grade level 
 98.30  in the district; or 
 98.31     (2) the number of district residents at that grade level 
 98.32  enrolled in a nonresident district according to this section.  
 98.33     (b) A district that limits enrollment of nonresident pupils 
 98.34  under paragraph (a) shall report to the commissioner by July 15 
 98.35  on the number of nonresident pupils denied admission due to the 
 98.36  limitations on the enrollment of nonresident pupils. 
 99.1      Sec. 2.  Minnesota Statutes 1996, section 120.062, 
 99.2   subdivision 6, is amended to read: 
 99.3      Subd. 6.  [NONRESIDENT DISTRICT PROCEDURES.] A district 
 99.4   that does not exclude nonresident pupils, according to 
 99.5   subdivision 3, shall notify the parent or guardian in writing by 
 99.6   February 15 whether the application has been accepted or 
 99.7   rejected.  If an application is rejected, the district must 
 99.8   state in the notification the reason for rejection.  The parent 
 99.9   or guardian shall notify the nonresident district by March 1 
 99.10  whether the pupil intends to enroll in the nonresident 
 99.11  district.  Notice of intent to enroll in the nonresident 
 99.12  district obligates the pupil to attend the nonresident district 
 99.13  during the following school year, unless the school boards of 
 99.14  the resident and the nonresident districts agree in writing to 
 99.15  allow the pupil to transfer back to the resident district, or 
 99.16  the pupil's parents or guardians change residence to another 
 99.17  district.  If a parent or guardian does not notify the 
 99.18  nonresident district, the pupil may not enroll in that 
 99.19  nonresident district during the following school year, unless 
 99.20  the school boards of the resident and nonresident district agree 
 99.21  otherwise.  The nonresident district shall notify the resident 
 99.22  district by March 15 of the pupil's intent to enroll in the 
 99.23  nonresident district.  The same procedures apply to a pupil who 
 99.24  applies to transfer from one participating nonresident district 
 99.25  to another participating nonresident district. 
 99.26     Sec. 3.  Minnesota Statutes 1996, section 120.062, 
 99.27  subdivision 7, is amended to read: 
 99.28     Subd. 7.  [BASIS FOR DECISIONS.] The school board must 
 99.29  adopt, by resolution, specific standards for acceptance and 
 99.30  rejection of applications.  Standards may include the capacity 
 99.31  of a program, class, grade level, or school building.  The 
 99.32  school board may not reject applications for enrollment in a 
 99.33  particular grade level if the nonresident enrollment at that 
 99.34  grade level does not exceed the limit set by the board under 
 99.35  subdivision 3.  Standards may not include previous academic 
 99.36  achievement, athletic or other extracurricular ability, 
100.1   disabling conditions, proficiency in the English language, or 
100.2   previous disciplinary proceedings, or the student's district of 
100.3   residence.  
100.4      Sec. 4.  Minnesota Statutes 1996, section 120.062, 
100.5   subdivision 11, is amended to read: 
100.6      Subd. 11.  [INFORMATION.] A district that does not exclude 
100.7   nonresident pupils according to subdivision 3 shall make 
100.8   information about the district, schools, programs, policies, and 
100.9   procedures available to all interested people.  
100.10     Sec. 5.  [121.115] [WAIVER OF STATUTORY REQUIREMENTS.] 
100.11     (a) Notwithstanding any law to the contrary, a school 
100.12  district may petition the commissioner in writing to waive or 
100.13  modify any statutory requirement.  
100.14     (b) Before a school district submits its application to the 
100.15  commissioner, the school board of the school district must hold 
100.16  a public hearing to approve or disapprove the application.  
100.17  During the hearing, educators, parents, and students must have 
100.18  an opportunity to testify.  At least seven calendar days before 
100.19  the hearing, the school district must publish notice of the 
100.20  hearing in at least one newspaper of general circulation within 
100.21  the school district.  The notice must set forth the time, date, 
100.22  place, and general subject matter of the hearing. 
100.23     (c) A school district must submit an approved application 
100.24  to the commissioner within 15 days of the date of the district 
100.25  hearing on the application.  The commissioner must review and 
100.26  approve or disapprove the application within 45 days of 
100.27  receipt.  The commissioner may disapprove any application that 
100.28  contains unsound educational practices, endangers the health or 
100.29  safety of students or staff, compromises equal opportunities for 
100.30  learning, or does not remove an impediment to the achievement of 
100.31  educational outcomes.  The commissioner's decision must be in 
100.32  writing and include specific reasons for the approval or 
100.33  disapproval.  If the commissioner fails to act within the 45-day 
100.34  period, the school district may submit the application to the 
100.35  state board for consideration under paragraph (d). 
100.36     (d) The school district may appeal a disapproved 
101.1   application or submit an application the commissioner failed to 
101.2   act on to the state board within 15 days of (1) the date on 
101.3   which the commissioner disapproves the application, or (2) the 
101.4   end of the commissioner's 45-day period for consideration of the 
101.5   application if the commissioner has not made a decision on the 
101.6   application.  The state board must review the application and 
101.7   commissioner's decision, when a decision has been made, within 
101.8   45 days of receipt.  The state board's decision shall be final.  
101.9   If the state board fails to act within the 45-day period, the 
101.10  application shall be regarded as approved. 
101.11     Sec. 6.  Minnesota Statutes 1996, section 121.611, 
101.12  subdivision 1, is amended to read: 
101.13     Subdivision 1.  [AUTHORIZATION.] Notwithstanding any law 
101.14  or, state board of education rule or state board of teaching 
101.15  rule to the contrary, the board of teaching may allow school 
101.16  districts to may hire nonlicensed community experts to teach in 
101.17  the public schools on a limited basis according to this section. 
101.18     Sec. 7.  Minnesota Statutes 1996, section 121.611, 
101.19  subdivision 2, is amended to read: 
101.20     Subd. 2.  [APPLICATIONS; CRITERIA.] The school district 
101.21  shall apply to the board of teaching for approval to hire 
101.22  nonlicensed teaching personnel from the community.  In approving 
101.23  or disapproving the district's application for each community 
101.24  expert, the board Before hiring a nonlicensed community expert, 
101.25  a school district shall consider: 
101.26     (1) the qualifications of the community person whom the 
101.27  district proposes to employ; 
101.28     (2) the reasons for the district's need for a variance from 
101.29  the teacher licensure requirements; 
101.30     (3) the district's efforts to obtain licensed teachers, who 
101.31  are acceptable to the school board, for the particular course or 
101.32  subject area; 
101.33     (4) the amount of teaching time for which the community 
101.34  expert would be hired; 
101.35     (5) the extent to which the district is utilizing other 
101.36  nonlicensed community experts under this section; 
102.1      (6) the nature of the community expert's proposed teaching 
102.2   responsibility; and 
102.3      (7) the proposed level of compensation to the community 
102.4   expert. 
102.5      Sec. 8.  Minnesota Statutes 1996, section 121.611, is 
102.6   amended by adding a subdivision to read: 
102.7      Subd. 4.  [REPORT.] A school district shall report the name 
102.8   of a nonlicensed community expert hired under subdivision 1 
102.9   within two weeks of the date of hire to the board of teaching.  
102.10  Within two weeks of the last date of the community expert's term 
102.11  of employment, the school district shall provide a report on the 
102.12  community expert's performance to the state board of teaching.  
102.13  These reports shall be made available to school districts for 
102.14  the purposes of subdivision 1. 
102.15     Sec. 9.  Minnesota Statutes 1996, section 121.611, is 
102.16  amended by adding a subdivision to read: 
102.17     Subd. 5.  [BACKGROUND CHECK.] Before hiring a nonlicensed 
102.18  community expert, the school district shall conduct a criminal 
102.19  background check of the applicant.  The school district may also 
102.20  conduct the check at any time while the person is an employee of 
102.21  the district.  The check shall consist of a criminal records 
102.22  check of the state criminal records repository.  If the 
102.23  applicant has resided in Minnesota for less than five years, the 
102.24  check shall also include a criminal records check of information 
102.25  from the state law enforcement agencies in the states where the 
102.26  person resided during the five years before moving to Minnesota, 
102.27  and of the national criminal records repository, including the 
102.28  criminal justice data communications network.  The applicant's 
102.29  failure to cooperate with the school district in conducting the 
102.30  records check is reasonable cause to deny an application.  The 
102.31  school district may not release the results of the records check 
102.32  to any person except the applicant. 
102.33     Sec. 10.  [121.973] [STATEWIDE INFORMATION SYSTEM.] 
102.34     (a) The commissioner of children, families, and learning 
102.35  shall annually collect information regarding the performance of 
102.36  Minnesota's learners and other student and system performance 
103.1   indicators at the discretion of the commissioner.  To the extent 
103.2   feasible, the commissioner shall collect the data electronically 
103.3   through the UFARS, MARSS, and STARS reporting systems. 
103.4      (b) The governor and legislature shall appoint an 
103.5   independent entity to report annually to the public on the 
103.6   performance of Minnesota learners and other student and system 
103.7   performance indicators identified in paragraph (a) and on the 
103.8   effectiveness of various enrollment options and learning methods.
103.9      (c) The commissioner shall provide information to the 
103.10  public regarding the various education enrollment options, 
103.11  including but not limited to the following:  post-secondary 
103.12  enrollment options, open enrollment, charter schools and use of 
103.13  tax credits and deductions to enhance learning, ways for parents 
103.14  to effectively be involved with their child's learning to 
103.15  improve performance, and other information to assist parents. 
103.16     Sec. 11.  Minnesota Statutes 1996, section 123.35, is 
103.17  amended by adding a subdivision to read: 
103.18     Subd. 1a.  [CONTRACTS FOR SERVICES.] Notwithstanding any 
103.19  law to the contrary, a school board may contract with a public 
103.20  or private entity to provide instructional and noninstructional 
103.21  services.  The board may reduce its administration accordingly.  
103.22  The board shall not enter into an agreement restricting the 
103.23  powers provided in this subdivision.  
103.24     Sec. 12.  Minnesota Statutes 1996, section 123.35, is 
103.25  amended by adding a subdivision to read: 
103.26     Subd. 1b.  [REORGANIZATION AS A NONPROFIT ENTITY.] A school 
103.27  board may reorganize its school district administration under 
103.28  chapter 317A.  The board and the reorganized administration 
103.29  shall contract for the administration to provide instructional 
103.30  and noninstructional services.  The board shall not enter any 
103.31  agreement restricting the powers provided in this subdivision. 
103.32     Sec. 13.  [123.952] [SITE-BASED FINANCING AND SITE MERIT 
103.33  PAY.] 
103.34     Subdivision 1.  [PURPOSE.] The purpose of this section is 
103.35  to: 
103.36     (1) increase the performance of learners at each education 
104.1   site in the state; 
104.2      (2) reduce trends in dropouts; 
104.3      (3) reduce inappropriate student behavior; 
104.4      (4) increase parental involvement in ways which directly 
104.5   result in improved student performance; 
104.6      (5) enable the principal, teachers, other staff, parents, 
104.7   and students, at the education site to direct resources to 
104.8   education site priorities; and 
104.9      (6) enable a school board to focus on the expectations it 
104.10  has of the education sites throughout the district and to hold 
104.11  sites accountable for results. 
104.12     Subd. 2.  [DEFINITION.] "Education site" means a separate 
104.13  facility or program within a facility having a separate 
104.14  management organization.  This also includes a site with which 
104.15  the district has a contract as defined in section 123.35, 
104.16  subdivision 1a. 
104.17     Subd. 3.  [LEARNING SITE PERFORMANCE EXPECTATION 
104.18  AGREEMENT.] (a) The school board in every district shall develop 
104.19  a written learning site performance expectation agreement with 
104.20  each education site for the purpose of setting learning 
104.21  performance expectations for that site.  The agreement shall 
104.22  include: 
104.23     (1) the previous year baseline information at the site 
104.24  regarding student achievement based on the graduation standards, 
104.25  remediation needs, student attendance and behavior patterns, 
104.26  retention rates, dropout rates where applicable, other 
104.27  nationally normed standardized tests, and other student 
104.28  performance indicators at the site; 
104.29     (2) the expected levels of improvement in each area of 
104.30  student performance during the next year; 
104.31     (3) how student performance will be measured including 
104.32  assessment procedures required by law and rule; 
104.33     (4) other performance expectations and measures determined 
104.34  by the board, including, but not limited to, increased parental 
104.35  involvement in learning activities with students, community 
104.36  involvement, or other areas; 
105.1      (5) frequency of site reporting to the board; and 
105.2      (6) how the performance results will be made available to 
105.3   parents and to the public. 
105.4      (b) The board and site shall determine the method of 
105.5   developing the learning site performance expectations. 
105.6      (c) The learning site performance expectation agreement 
105.7   must be completed not later than July prior to the beginning of 
105.8   the school year. 
105.9      Subd. 4.  [SITE MERIT PAY.] (a) The school board in any 
105.10  district may add a provision to the learning site performance 
105.11  expectation agreement under subdivision 3 which includes the 
105.12  awarding of additional revenue to the site if the site achieves 
105.13  or exceeds the expected levels of improvement.  The decision as 
105.14  to whether to implement a site merit pay system, the operation 
105.15  of the system, and the determination as to which education sites 
105.16  shall qualify for site merit pay shall be made solely at the 
105.17  discretion of the board.  A determination by the board as to 
105.18  whether to make an award to an education site and the amount of 
105.19  the award shall be final.  If site merit pay is to be awarded, 
105.20  the learning site performance expectation agreement shall 
105.21  include the following provisions in addition to the provisions 
105.22  of subdivision 3: 
105.23     (1) the maximum amount of revenue for site merit pay to be 
105.24  awarded that shall not be less than the revenue generated by the 
105.25  site under paragraph (d); 
105.26     (2) the criteria to be used in awarding the site merit pay 
105.27  based on the learning site performance expectation agreement; 
105.28     (3) the information necessary to determine the amount of 
105.29  progress made; 
105.30     (4) the timeline for making awards to the site; and 
105.31     (5) other provisions determined by the board or the site. 
105.32     (b) An education site that receives site merit pay has sole 
105.33  discretion over the use of the revenue as long as it is used for 
105.34  an educational purpose for that site.  This may include staff 
105.35  development, technology, materials or equipment, or other such 
105.36  educational purposes.  It may also be used for additional 
106.1   employee compensation to which the employee would not be 
106.2   entitled to under contract or board policy and shall not be a 
106.3   mandatory subject of bargaining under chapter 179A or any other 
106.4   law, and shall not be a term or condition of employment.  A 
106.5   determination by the education site as to whether to make an 
106.6   award to any individual or group of individuals and the amount 
106.7   of any award shall be final and shall not be subject to review 
106.8   by an arbitrator through any grievance or other process or by a 
106.9   court through any appeal process. 
106.10     (c) Districts entering into site merit pay agreements under 
106.11  this subdivision shall inform the commissioner of this decision 
106.12  not later than June 1 of the year preceding the effective school 
106.13  year except that for the 1997-1998 school year, notice must be 
106.14  submitted by November 1, 1997. 
106.15     (d) Each school district that has established a site merit 
106.16  pay program under this subdivision shall receive site merit pay 
106.17  aid in the amount of $8.70 for fiscal year 1998 and $8.95 for 
106.18  fiscal year 1999 and later years times the actual pupil units 
106.19  enrolled at the sites with a site merit pay program.  The aid 
106.20  may only be used to establish and operate a site merit pay award 
106.21  program.  A district is not required to expend any specific 
106.22  amount of aid in any year.  The district shall deposit the aid 
106.23  in a separate account in the general fund.  
106.24     Subd. 5.  [SITE-BASED FINANCING.] (a) Either the school 
106.25  board or education site decision making team may determine if a 
106.26  site is to operate under the provisions of this subdivision. 
106.27     (b) If a site is to operate under this subdivision, the 
106.28  school board shall enter into an agreement with an education 
106.29  site decision making team which shall include: 
106.30     (1) the specific governance, management, and program 
106.31  responsibilities which will be under the control of the site and 
106.32  those which will be retained by the district; 
106.33     (2) the provisions of subdivision 3; 
106.34     (3) the provisions of subdivision 4, if applicable; 
106.35     (4) the membership of the education site decision making 
106.36  team which shall include the principal or other person having 
107.1   control and supervision of the education site; 
107.2      (5) the amount of revenue that shall be allocated to the 
107.3   site; 
107.4      (6) the reporting from the site which is expected by the 
107.5   board; 
107.6      (7) the consequences which may be taken by the school board 
107.7   if over a three-year period of time, the provisions of the 
107.8   performance expectations agreement under subdivision 3 are not 
107.9   satisfactorily met; and 
107.10     (8) other provisions determined by the board. 
107.11     (c) The agreement, at the option of the education site, may 
107.12  include: 
107.13     (1) a mechanism to implement flexible support systems for 
107.14  improvement in student achievement of education outcomes and for 
107.15  implementation of the graduation rule; 
107.16     (2) a decision making structure that allows teachers to 
107.17  identify instructional problems and control and apply the 
107.18  resources needed to solve them; 
107.19     (3) a mechanism to allow principals or other persons having 
107.20  general control and supervision of the school, to make decisions 
107.21  regarding how financial and personnel resources are best 
107.22  allocated at the site and from whom goods or services are 
107.23  purchased; 
107.24     (4) a mechanism to implement parental involvement programs 
107.25  under section 126.69 and to provide for effective parental 
107.26  communication and feedback on this involvement at the site 
107.27  level; 
107.28     (5) a provision that allows the team to determine who is 
107.29  hired into licensed and nonlicensed positions; 
107.30     (6) a provision that allows direct contact with other 
107.31  agency service providers; 
107.32     (7) in-service training for site decision making team 
107.33  members for financial management of school sites; and 
107.34     (8) any other powers and duties determined appropriate by 
107.35  an education site. 
107.36  The school board of the district remains the legal employer 
108.1   under clauses (5) and (6). 
108.2      (d) Any powers or duties not delegated to the education 
108.3   site management team in the site management agreement shall 
108.4   remain with the school board. 
108.5      (e) Approved agreements shall be filed with the 
108.6   commissioner. 
108.7      (f) Districts entering into site-based financing 
108.8   agreements, whether at the district or site's request, under 
108.9   this section shall inform the commissioner of this decision not 
108.10  later than June 1 of the year preceding the effective school 
108.11  year, except that for 1997-1998, notice must be submitted by 
108.12  November 1, 1997. 
108.13     Subd. 6.  [REVENUE AND COST ALLOCATION.] (a) Revenue for a 
108.14  fiscal year received or receivable by the district shall be 
108.15  allocated to education sites under subdivision 2 with a 
108.16  site-based financing agreement under subdivision 5 according to 
108.17  this subdivision.  Revenue shall remain allocated to each site 
108.18  until used by the site.  The district remains responsible for 
108.19  legally entering into contracts and expending funds. 
108.20     (b) Except as provided in paragraph (c), not less than 80 
108.21  percent of the general education and referendum revenue, 
108.22  excluding total operating capital revenue under section 124A.22, 
108.23  subdivision 10, and not less than 25 percent of the total 
108.24  operating capital revenue under section 124A.22, subdivision 10, 
108.25  shall be allocated to participating education sites in the 
108.26  district.  The allocation shall be based on the number of pupil 
108.27  units served at the site as a portion of total pupil units 
108.28  served in the district. 
108.29     (c) 100 percent of basic skills education revenue shall be 
108.30  allocated to the education sites at which qualifying students 
108.31  were enrolled as determined under sections 124.175, 124.273, and 
108.32  124.3111.  Revenue received under sections 124.3201, 124.321, 
108.33  and 124.323 shall be allocated to the sites where the costs are 
108.34  incurred. 
108.35     (d) The district must charge each participating site the 
108.36  actual cost of teachers at the site by category, and actual 
109.1   costs of goods and services attributable to the general fund, 
109.2   excluding the reserves defined in section 124A.02, subdivision 
109.3   25, and a proportionate share of costs attributable to the total 
109.4   operating capital account incurred at the site. 
109.5      (e) For the purposes of this subdivision, "allocation" 
109.6   means that the determination of the use of the revenue shall be 
109.7   under the control of the site. 
109.8      (f) A district's site-based financing aid is equal to 
109.9   $17.40 for fiscal year 1998 and $17.90 for fiscal year 1999 and 
109.10  later years times the actual pupil units enrolled at sites 
109.11  operating under subdivision 5.  If the school board determines 
109.12  that a site shall be site-based financed, then at least 80 
109.13  percent of this revenue shall be allocated to the school site 
109.14  and the board may use the remaining 20 percent at its discretion 
109.15  for learning improvement.  If a site petitions the board to be 
109.16  site-based financed, 100 percent of the revenue under this 
109.17  subdivision shall be allocated to the site. 
109.18     Sec. 14.  [123.98] [STATEWIDE TESTING.] 
109.19     Subdivision 1.  [TEST.] Each school year, all school 
109.20  districts shall give a test selected by the commissioner to all 
109.21  pupils in grades three, five, and eight.  The test shall be 
109.22  given in the spring of each year consistent with the guidelines 
109.23  established by the commissioner.  The test shall measure 
109.24  academic achievement in core subject areas and shall be 
109.25  referenced to national achievement standards.  This test shall 
109.26  be given in addition to the graduation standards test developed 
109.27  under section 121.11, subdivision 7c.  This test is not a 
109.28  graduation requirement for a student. 
109.29     Subd. 2.  [REPORT.] Each year, the results of the testing 
109.30  shall be reported by site and shall be included in the report 
109.31  required under section 123.972, subdivision 5. 
109.32     Sec. 15.  Minnesota Statutes 1996, section 124.175, is 
109.33  amended to read: 
109.34     124.175 [AFDC PUPIL COUNT.] 
109.35     Each year by March January 1, the department of human 
109.36  services shall certify to the department of children, families, 
110.1   and learning, for each school district, the number of pupils 
110.2   from families receiving aid to families with dependent children 
110.3   who were enrolled in a public school on October 1 of the 
110.4   preceding year.  The department of children, families, and 
110.5   learning shall certify to each school district the number of 
110.6   pupils from families receiving aid to dependent children at each 
110.7   site in the district by March 1 of each year. 
110.8      Sec. 16.  Minnesota Statutes 1996, section 124.248, 
110.9   subdivision 1, is amended to read: 
110.10     Subdivision 1.  [GENERAL EDUCATION AND REFERENDUM 
110.11  REVENUE.] (a) General education revenue and referendum revenue 
110.12  shall be paid to a charter school as though it were a school 
110.13  district. 
110.14     (b) The general education revenue for each pupil unit is 
110.15  the state average general education revenue per pupil unit minus 
110.16  $170 $176, calculated without compensatory basic skills revenue, 
110.17  transportation sparsity revenue, and the transportation portion 
110.18  of the transition revenue adjustment, plus compensatory basic 
110.19  skills revenue as though the school were a school district. 
110.20     (c) The referendum revenue for each pupil unit is the 
110.21  referendum equalization revenue per pupil unit in the resident 
110.22  district according to section 124A.03, subdivision 1f, if 
110.23  approved or renewed after July 1, 1997. 
110.24     Sec. 17.  Minnesota Statutes 1996, section 124.248, is 
110.25  amended by adding a subdivision to read: 
110.26     Subd. 2a.  [BUILDING LEASE AID.] When a charter school 
110.27  finds it economically advantageous to rent or lease a building 
110.28  or land for any instructional purposes and it determines that 
110.29  the total operating capital revenue under section 124A.22, 
110.30  subdivision 10, is insufficient for this purpose, it may apply 
110.31  to the commissioner for building lease aid for this purpose.  
110.32  Criteria for aid approval and revenue uses shall be as defined 
110.33  for the building lease levy in section 124.91, subdivision 1.  
110.34  The amount of building lease aid per pupil unit for a charter 
110.35  school for any year shall not exceed the lesser of (a) 80 
110.36  percent of the approved cost or (b) the product of the actual 
111.1   pupil units for the current school year times the sum of the 
111.2   state average debt redemption fund revenue plus capital revenue, 
111.3   according to section 124.91, per actual pupil unit for the 
111.4   current fiscal year. 
111.5      Sec. 18.  Minnesota Statutes 1996, section 124.248, 
111.6   subdivision 4, is amended to read: 
111.7      Subd. 4.  [OTHER AID, GRANTS, REVENUE.] (a) A charter 
111.8   school is eligible to receive other aids, grants, and revenue 
111.9   according to chapters 120 to 129, as though it were a school 
111.10  district except that, notwithstanding section 124.195, 
111.11  subdivision 3, the payments shall be of an equal amount on each 
111.12  of the 23 payment dates unless a charter school is in its first 
111.13  year of operation in which case it shall receive on its first 
111.14  payment date 15 percent of its cumulative amount guaranteed for 
111.15  the year and 22 payments of an equal amount thereafter the sum 
111.16  of which shall be 85 percent of the cumulative amount 
111.17  guaranteed.  However, it may not receive aid, a grant, or 
111.18  revenue if a levy is required to obtain the money, except as 
111.19  otherwise provided in this section.  Federal aid received by the 
111.20  state must be paid to the school, if it qualifies for the aid as 
111.21  though it were a school district. 
111.22     (b) Any revenue received from any source, other than 
111.23  revenue that is specifically allowed for operational, 
111.24  maintenance, capital facilities revenue under paragraph (c), and 
111.25  capital expenditure equipment costs under this section, may be 
111.26  used only for the planning and operational start-up costs of a 
111.27  charter school.  Any unexpended revenue from any source under 
111.28  this paragraph must be returned to that revenue source or 
111.29  conveyed to the sponsoring school district, at the discretion of 
111.30  the revenue source. 
111.31     (c) A charter school may receive money from any source for 
111.32  capital facilities needs.  Any unexpended capital facilities 
111.33  revenue must be reserved and shall be expended only for future 
111.34  capital facilities purposes. 
111.35     Sec. 19.  [124.253] [CHARTER SCHOOL START-UP LOAN FUND.] 
111.36     (a) A charter school start-up loan fund is created in the 
112.1   general fund in the state treasury.  $2,600,000 shall be 
112.2   deposited in the fund on July 1, 1997, for initial 
112.3   capitalization.  On July 1, 1998, and each year thereafter, an 
112.4   additional $1,500,000 shall be deposited in the fund.  Any 
112.5   interest earned on the principal of the fund shall be retained 
112.6   by the fund and available for distribution.  At the end of every 
112.7   biennium, any balance in the fund in excess of $5,000,000 shall 
112.8   cancel. 
112.9      (b) A charter school operating under section 120.064 or a 
112.10  program which has been granted a charter under section 120.064 
112.11  may apply to the commissioner of children, families, and 
112.12  learning for a loan from the charter school facilities fund. 
112.13     (c) Loans shall be used for curriculum planning, budget 
112.14  planning, development of information for students and parents, 
112.15  purchasing equipment and other uses approved by the commissioner 
112.16  of children, families, and learning.  The funds shall not be 
112.17  used for acquisition, renting, or leasing of facilities. 
112.18     (d) All loan agreements between a charter school and the 
112.19  department of children, families, and learning must include a 
112.20  plan for repayment of the funds over a maximum period of five 
112.21  years.  Additional repayment terms shall be determined by the 
112.22  department of children, families, and learning in consultation 
112.23  with the department of finance.  
112.24     (e) In the event that the repayment terms are violated, the 
112.25  department of children, families, and learning may modify the 
112.26  terms of repayment and require a plan for repayment under the 
112.27  procedures specified in section 124.755, subdivision 8, or 
112.28  recover the funds through the procedures specified in section 
112.29  124.755, subdivision 5.  In the event that the charter school 
112.30  ceases to operate, any assets of the charter school may be 
112.31  claimed and auctioned by the commissioner as payment against the 
112.32  loan. 
112.33     Sec. 20.  [124.254] [CHARTER SCHOOL START-UP GRANTS.] 
112.34     (a) A program that has been granted a charter under section 
112.35  120.064, but has not yet begun operation, may apply to the 
112.36  commissioner for a planning grant. 
113.1      (b) These grants may be used for curriculum planning, 
113.2   budget planning, development of information for students and 
113.3   parents, staff recruitment, and other uses approved by the 
113.4   department.  The funds may not be used for expenses related to 
113.5   the acquisition, improvement, renting, or leasing of capital 
113.6   facilities. 
113.7      (c) Grant criteria and amounts shall be determined by the 
113.8   commissioner. 
113.9      Sec. 21.  Minnesota Statutes 1996, section 126.22, 
113.10  subdivision 3, is amended to read: 
113.11     Subd. 3.  [ELIGIBLE PROGRAMS.] (a) A pupil who is eligible 
113.12  according to subdivision 2 may enroll in area learning centers 
113.13  under sections 124C.45 to 124C.48, or according to section 
113.14  121.11, subdivision 12. 
113.15     (b) A pupil who is eligible according to subdivision 2 and 
113.16  who is between the ages of 16 and 21 may enroll in 
113.17  post-secondary courses under section 123.3514. 
113.18     (c) A pupil who is eligible under subdivision 2, may enroll 
113.19  in any public elementary or secondary education program.  
113.20  However, a person who is eligible according to subdivision 2, 
113.21  clause (b), may enroll only if the school board has adopted a 
113.22  resolution approving the enrollment. 
113.23     (d) A pupil who is eligible under subdivision 2, may enroll 
113.24  in any nonprofit, nonpublic, nonsectarian school that has 
113.25  contracted with the serving school district to provide 
113.26  educational services. 
113.27     (e) A pupil who is between the ages of 16 and 21 may enroll 
113.28  in any adult basic education programs approved under section 
113.29  124.26 and operated under the community education program 
113.30  contained in section 121.88. 
113.31     Sec. 22.  Minnesota Statutes 1996, section 126.22, 
113.32  subdivision 3a, is amended to read: 
113.33     Subd. 3a.  [ADDITIONAL ELIGIBLE PROGRAM.] A pupil who is at 
113.34  least 16 years of age, who is eligible under subdivision 2, 
113.35  clause (a), and who has been enrolled only in a public school, 
113.36  if the pupil has been enrolled in any school, during the year 
114.1   immediately before transferring under this subdivision, may 
114.2   transfer to any nonprofit, nonpublic school that has contracted 
114.3   with the serving school district to provide nonsectarian 
114.4   educational services.  Such a school must enroll every eligible 
114.5   pupil who seeks to transfer to the school under this program 
114.6   subject to available space. 
114.7      Sec. 23.  Minnesota Statutes 1996, section 179A.16, is 
114.8   amended by adding a subdivision to read: 
114.9      Subd. 1a.  [TEACHERS.] (a) For contracts between exclusive 
114.10  representatives of teachers and public employers of teachers 
114.11  other than the state, procedures for negotiation of agreements, 
114.12  mediation and interest arbitration must be as otherwise provided 
114.13  in this chapter until August 15 of the odd-numbered year.  If 
114.14  either the public employer or the exclusive representative of 
114.15  the teachers requests interest arbitration after August 15 of 
114.16  the odd-numbered year, the commissioner shall request necessary 
114.17  information from the parties, shall determine the matters not 
114.18  agreed upon based on the efforts to mediate the dispute and the 
114.19  positions submitted by the parties during negotiations or 
114.20  mediation, and shall prepare a list of the items to be decided 
114.21  by an arbitration panel.  The commissioner shall submit the list 
114.22  of items to be decided by an arbitration panel to the parties.  
114.23  Within 15 days of its receipt of the list of items to be decided 
114.24  by an arbitration panel, the public employer shall notify the 
114.25  commissioner whether it agrees to submission of those items to 
114.26  interest arbitration. 
114.27     (b) If the public employer agrees to submission of those 
114.28  items to interest arbitration, those items must be submitted to 
114.29  final-offer total-package interest arbitration and the result is 
114.30  final and binding on the parties.  The parties may mutually 
114.31  stipulate items to be excluded from arbitration. 
114.32     (c) If the public employer does not respond to the 
114.33  commissioner within 15 days of its receipt of the list of items 
114.34  to be decided by an arbitration panel or if it rejects 
114.35  submission of those items to interest arbitration, the teachers 
114.36  may strike if they have complied with the following: 
115.1      (1) the exclusive representative of the teachers has 
115.2   submitted the last offer of the public employer to a secret vote 
115.3   by the membership of the teacher bargaining unit and it has been 
115.4   rejected; and 
115.5      (2) after the rejection of the public employer's last 
115.6   offer, the teachers have complied with the notice procedures of 
115.7   section 179A.18, subdivision 3. 
115.8      (d) If neither the public employer nor the exclusive 
115.9   representative of the teachers requests interest arbitration, 
115.10  this chapter applies. 
115.11     Sec. 24.  Minnesota Statutes 1996, section 179A.17, 
115.12  subdivision 1, is amended to read: 
115.13     Subdivision 1.  [FOR TEACHERS.] If a new or different 
115.14  exclusive representative of teachers employed by a local school 
115.15  district is certified by the commissioner at any time other than 
115.16  the period between 120 days before the termination date of a 
115.17  contract and the termination date of the contract, or if on July 
115.18  1 of any odd-numbered year a representation proceeding involving 
115.19  the employer and the employer's teachers is before the 
115.20  commissioner, section 179A.18, subdivision 2, clause (1), shall 
115.21  apply.  In those cases, however, the employer and the exclusive 
115.22  representative of the teachers shall execute a written contract 
115.23  or memorandum of contract no later than 60 days after a 
115.24  certification by the commissioner of a new or different 
115.25  exclusive representative or the resolution by the commissioner 
115.26  of a representation proceeding.  Either party may petition the 
115.27  commissioner for assistance in reaching an agreement.  If the 
115.28  employer and the exclusive representative of the teachers fail 
115.29  to execute a contract by 60 days after the certification of a 
115.30  new or different exclusive representative or the resolution by 
115.31  the commissioner of a representation proceeding, they shall be 
115.32  conclusively presumed to be at an impasse after having 
115.33  participated in mediation as specified in section 179A.18, 
115.34  subdivision 2, clause (1)(b).  After the 60 days, section 
115.35  179A.16, subdivision 1a, applies as though agreement had not 
115.36  been reached by August 15 of the odd-numbered year. 
116.1      Sec. 25.  [179A.32] [NOTICE OF LAYOFFS.] 
116.2      Notwithstanding any law to the contrary or governing 
116.3   collective bargaining agreements, school districts and school 
116.4   boards shall not be required to notify teachers or their 
116.5   exclusive representatives of layoffs until 30 days prior to the 
116.6   beginning of the school year. 
116.7      Sec. 26.  [LABORATORY SCHOOL GRANTS.] 
116.8      Subdivision 1.  [ESTABLISHMENT.] The commissioner of 
116.9   children, families, and learning shall make grants to 
116.10  post-secondary institutions to establish at least three 
116.11  laboratory schools that develop innovative teaching techniques 
116.12  to enhance students' learning experiences.  At least one 
116.13  laboratory school must be located in the seven-county 
116.14  metropolitan area and at least one laboratory school must be 
116.15  located in greater Minnesota. 
116.16     Subd. 2.  [GRANT APPLICATION.] An application for a grant 
116.17  may be submitted by a public or private post-secondary 
116.18  institution located in the state.  Each grant application must 
116.19  include: 
116.20     (1) the location of the laboratory school determined in 
116.21  collaboration with a school district or proposed as a charter 
116.22  school; and 
116.23     (2) a five-year fiscal plan demonstrating that the school 
116.24  shall operate with no additional state revenue except for 
116.25  revenue received under Minnesota Statutes, chapters 124 and 
116.26  124A, and the grant money awarded under this section.  
116.27     The commissioner of children, families, and learning shall 
116.28  establish guidelines and an application process for the grants. 
116.29     Subd. 3.  [GRANT MONEY.] The grant money may be used for: 
116.30     (1) transportation of students; 
116.31     (2) technology; 
116.32     (3) equipment; 
116.33     (4) teacher mentorships; 
116.34     (5) building remodeling, renovation, and repair; 
116.35     (6) the dissemination of innovative and effective teaching 
116.36  techniques; 
117.1      (7) education research for the development of teaching 
117.2   methods, assessments, and curriculum design; 
117.3      (8) the development of creative opportunities for parental 
117.4   involvement; and 
117.5      (9) other inventive teaching and learning practices 
117.6   designed to implement the graduation standards.  
117.7      Sec. 27.  [APPROPRIATION.] 
117.8      Subdivision 1.  [DEPARTMENT OF CHILDREN, FAMILIES, AND 
117.9   LEARNING.] The sum indicated in this section is appropriated 
117.10  from the general fund to the department of children, families, 
117.11  and learning for the fiscal year designated. 
117.12     Subd. 2.  [STATEWIDE TESTING.] For the administration of 
117.13  statewide testing under section 14: 
117.14       $2,500,000     .....     1998 
117.15       $2,500,000     .....     1999 
117.16     Of these amounts, $50,000 each year may be used for 
117.17  statewide information systems under section 10.  
117.18     Any balance in the first year does not cancel but is 
117.19  available in the second year. 
117.20     Subd. 3.  [SITE MERIT PAY AID.] For site merit pay aid 
117.21  according to section 13: 
117.22       $7,500,000     .....     1998 
117.23       $8,333,000     .....     1999 
117.24     The 1999 appropriation includes $833,000 for fiscal year 
117.25  1998 and $7,500,000 for fiscal year 1999. 
117.26     Subd. 4.  [SITE-BASED FINANCING AID.] For site-based 
117.27  financing aid according to section 13: 
117.28       $15,000,000     .....     1998 
117.29       $16,667,000     .....     1999 
117.30     The 1999 appropriation includes $1,667,000 for fiscal year 
117.31  1998 and $15,000,000 for fiscal year 1999. 
117.32     Subd. 5.  [CHARTER SCHOOL BUILDING LEASE AID.] For building 
117.33  lease aid according to section 17: 
117.34       $1,078,000     .....     1998 
117.35       $1,577,000     .....     1999 
117.36     The 1999 appropriation includes $120,000 for 1998 and 
118.1   $1,457,000 for 1999. 
118.2      Subd. 6.  [CHARTER SCHOOL START-UP GRANTS.] For charter 
118.3   school start-up grants according to section 20: 
118.4        $1,322,000     .....     1998 
118.5        $1,923,000     .....     1999
118.6      Any balance in the first year does not cancel but is 
118.7   available in the second year.  This appropriation may also be 
118.8   used for grants to convert existing schools into charter schools.
118.9      Subd. 7.  [LABORATORY SCHOOL GRANTS.] For laboratory school 
118.10  grants according to section 26: 
118.11       $10,000,000    .....     1998
118.12     Any balance in the first year does not cancel but is 
118.13  available in the second year. 
118.14     Subd. 8.  [SCHOOL ENRICHMENT PARTNERSHIP PROGRAM.] For 
118.15  school enrichment partnership program aid according to Minnesota 
118.16  Statutes, section 124.255: 
118.17       $500,000      .....      1998 
118.18     Any balance remaining in the first year does not cancel but 
118.19  is available in the second year. 
118.20     Subd. 9.  [ADVANCED PLACEMENT AND INTERNATIONAL 
118.21  BACCALAUREATE PROGRAMS.] For the state advanced placement and 
118.22  international baccalaureate programs, including training 
118.23  programs, support programs, and examination fee subsidies: 
118.24       $875,000       .....     1998
118.25       $875,000       .....     1999
118.26     Of this amount $200,000 each year is for training and 
118.27  support programs under Minnesota Statutes, section 126.239, and 
118.28  the balance is for examination fee subsidies.  Notwithstanding 
118.29  Minnesota Statutes, section 126.239, subdivision 3, in each year 
118.30  to the extent of available appropriations, the commissioner 
118.31  shall pay the fee for the first advanced placement or 
118.32  international baccalaureate examination each student takes.  The 
118.33  commissioner shall pay 50 percent of the fee for each additional 
118.34  examination a student takes or more than 50 percent if the 
118.35  student meets the low-income guidelines established by the 
118.36  commissioner.  If this amount is not adequate, the commissioner 
119.1   may pay less than 50 percent for the additional examinations. 
119.2      Any balance in the first year does not cancel but is 
119.3   available in the second year. 
119.4      Subd. 10.  [SCHOOL RESTRUCTURING GRANT.] For school 
119.5   restructuring: 
119.6        $300,000     .....     1998
119.7        $300,000     .....     1999
119.8      This appropriation is for a grant to a nonstate 
119.9   organization to develop systemic site decision-making models and 
119.10  implement systemic site decision-making in school districts. 
119.11     Any balance in the first year does not cancel but is 
119.12  available in the second year. 
119.13     Subd. 11.  [TEACHER EDUCATION IMPROVEMENT.] For board of 
119.14  teaching responsibilities relating to teacher licensure 
119.15  restructuring and implementation of the teaching residency 
119.16  program: 
119.17       $450,000     .....     1998
119.18       $450,000     .....     1999 
119.19     Any balance in the first year does not cancel but is 
119.20  available in the second year. 
119.21     The board of teaching shall use the funds for further 
119.22  development of the results-oriented teacher licensure system, 
119.23  for pilot site grants and other methods of implementing the 
119.24  teacher residency program, and for programs relating to teacher 
119.25  mentoring. 
119.26     Subd. 12.  [COMMUNITY-BASED CHARTER SCHOOL GRANT.] For a 
119.27  grant for community-based charter schools located in independent 
119.28  school district No. 625, St. Paul: 
119.29       $1,000,000     .....     1998 
119.30       $1,000,000     .....     1999
119.31     The commissioner may establish criteria and any reporting 
119.32  or match requirements for the grant under this section. 
119.33     Subd. 13.  [SCIENCE-MATHEMATICS GRANT.] For continuation of 
119.34  systemic change in science and mathematics education programs: 
119.35       $1,322,000     .....     1998 
119.36       $1,322,000     .....     1999
120.1      $30,000 of the appropriation in 1998 and $30,000 in 1999 is 
120.2   for the south central Minnesota talented youth program. 
120.3      Any balance in the first year does not cancel but is 
120.4   available in the second year. 
120.5      Sec. 28.  [REPEALER.] 
120.6      (a) Minnesota Statutes 1996, sections 121.611, subdivision 
120.7   3; and 123.951, are repealed. 
120.8      (b) Minnesota Statutes 1996, sections 124.276, and 124A.22, 
120.9   subdivision 2a; and Laws 1994, chapter 647, article 7, section 
120.10  18, are repealed. 
120.11     Sec. 29.  [EFFECTIVE DATE.] 
120.12     Section 5 is effective for the 1997-1998 school year and 
120.13  thereafter.  Section 16 is effective for revenue for fiscal year 
120.14  1999.  Sections 23, 24, and 28, paragraph (b), are effective 
120.15  July 1, 1997. 
120.16                             ARTICLE 8
120.17               NUTRITION AND OTHER EDUCATION PROGRAMS
120.18     Section 1.  [APPROPRIATIONS.] 
120.19     Subdivision 1.  [DEPARTMENT OF CHILDREN, FAMILIES, AND 
120.20  LEARNING.] The sums indicated in this section are appropriated 
120.21  from the general fund to the department of children, families, 
120.22  and learning for the fiscal years designated.  
120.23     Subd. 2.  [ABATEMENT AID.] For abatement aid according to 
120.24  Minnesota Statutes, section 124.214:  
120.25       $6,844,000     .....     1998 
120.26       $6,844,000     .....     1999 
120.27     The 1998 appropriation includes $684,000 for 1997 and 
120.28  $6,160,000 for 1998.  
120.29     The 1999 appropriation includes $684,000 for 1998 and 
120.30  $6,160,000 for 1999.  
120.31     Subd. 3.  [NONPUBLIC PUPIL AID.] For nonpublic pupil 
120.32  education aid according to Minnesota Statutes, sections 123.79 
120.33  and 123.931 to 123.947: 
120.34       $9,415,000      .....      1998 
120.35       $9,688,000      .....      1999 
120.36     The 1998 appropriation includes $885,000 for 1997 and 
121.1   $8,530,000 for 1998. 
121.2      The 1999 appropriation includes $947,000 for 1998 and 
121.3   $8,741,000 for 1999. 
121.4      Subd. 4.  [SCHOOL LUNCH AND FOOD STORAGE AID.] (a) For 
121.5   school lunch aid according to Minnesota Statutes, section 
121.6   124.646, and Code of Federal Regulations, title 7, section 
121.7   210.17, and for food storage and transportation costs for United 
121.8   States Department of Agriculture donated commodities; and for a 
121.9   temporary transfer to the commodity processing revolving fund to 
121.10  provide cash flow to permit schools and other recipients of 
121.11  donated commodities to take advantage of volume processing rates 
121.12  and for school milk aid according to Minnesota Statutes, section 
121.13  124.648:  
121.14       $7,254,000     .....     1998 
121.15       $7,254,000     .....     1999 
121.16     (b) Any unexpended balance remaining from the 
121.17  appropriations in this subdivision shall be prorated among 
121.18  participating schools based on the number of free, reduced, and 
121.19  fully paid federally reimbursable student lunches served during 
121.20  that school year.  
121.21     (c) If the appropriation amount attributable to either year 
121.22  is insufficient, the rate of payment for each fully paid student 
121.23  lunch shall be reduced and the aid for that year shall be 
121.24  prorated among participating schools so as not to exceed the 
121.25  total authorized appropriation for that year.  
121.26     (d) Any temporary transfer processed in accordance with 
121.27  this subdivision to the commodity processing fund will be 
121.28  returned by June 30 in each year so that school lunch aid and 
121.29  food storage costs can be fully paid as scheduled.  
121.30     (e) Not more than $800,000 of the amount appropriated each 
121.31  year may be used for school milk aid. 
121.32     Subd. 5.  [SUMMER FOOD SERVICE.] For summer food service: 
121.33       $15,000     .....     1998
121.34       $15,000     .....     1999
121.35     Subd. 6.  [SCHOOL BREAKFAST.] To operate the school 
121.36  breakfast program according to Minnesota Statutes, sections 
122.1   124.6469 and 124.6472: 
122.2        $456,000     .....     1998
122.3        $456,000     .....     1999
122.4      If the appropriation amount attributable to either year is 
122.5   insufficient, the rate of payment for each fully paid student 
122.6   breakfast shall be reduced and the aid for that year shall be 
122.7   prorated among participating schools so as not to exceed the 
122.8   total authorized appropriation for that year.  Any unexpected 
122.9   balance remaining shall be used to subsidize the payments made 
122.10  for school lunch aid per Minnesota Statutes, section 124.646.  
122.11     Up to one percent of the program funding can be used by the 
122.12  department of children, families, and learning for technical and 
122.13  administrative assistance. 
122.14     Subd. 7.  [PSEO REPLACEMENT AID.] For PSEO replacement aid: 
122.15       $12,000       .....     1998 
122.16     The 1998 appropriation includes $12,000 for 1997 and $0 for 
122.17  1998. 
122.18     Sec. 2.  [REPEALER.] 
122.19     (a) Minnesota Statutes 1996, section 124.177, is repealed. 
122.20     (b) Minnesota Statutes 1996, section 124A.292, is repealed. 
122.21     Sec. 3.  [EFFECTIVE DATE.] 
122.22     Section 2, paragraph (b), is effective for revenue for 
122.23  fiscal year 1999. 
122.24                             ARTICLE 9
122.25                             LIBRARIES
122.26     Section 1.  [APPROPRIATIONS.] 
122.27     Subdivision 1.  [DEPARTMENT OF CHILDREN, FAMILIES, AND 
122.28  LEARNING.] The sums indicated in this section are appropriated 
122.29  from the general fund to the department of children, families, 
122.30  and learning for the fiscal years designated.  
122.31     Subd. 2.  [BASIC SUPPORT GRANTS.] For basic support grants 
122.32  according to Minnesota Statutes, sections 134.32 to 134.35: 
122.33       $7,819,000     .....     1998 
122.34       $7,819,000     .....     1999 
122.35     The 1998 appropriation includes $781,000 for 1997 and 
122.36  $7,038,000 for 1998.  
123.1      The 1999 appropriation includes $781,000 for 1998 and 
123.2   $7,038,000 for 1999.  
123.3      Subd. 3.  [LIBRARIANS OF COLOR.] For the librarians of 
123.4   color program according to Minnesota Statutes, section 134.155: 
123.5        $55,000     .....     1998
123.6        $55,000     .....     1999
123.7      Any balance in the first year does not cancel but is 
123.8   available in the second year. 
123.9      Subd. 4.  [CHILDREN'S LIBRARY SERVICES GRANTS.] For grants 
123.10  for collaborative programs to strengthen library services to 
123.11  children, young people, and their families: 
123.12       $50,000     .....     1998
123.13       $50,000     .....     1999
123.14     Any balance in the first year does not cancel but is 
123.15  available in the second year. 
123.16     Subd. 5.  [MULTICOUNTY, MULTITYPE LIBRARY SYSTEMS.] For 
123.17  grants according to Minnesota Statutes, sections 134.353 and 
123.18  134.354, to multicounty, multitype library systems: 
123.19       $527,000     .....     1998 
123.20       $527,000     .....     1999 
123.21     The 1998 appropriation includes $52,000 for 1997 and 
123.22  $475,000 for 1998.  
123.23     The 1999 appropriation includes $52,000 for 1998 and 
123.24  $475,000 for 1999. 
123.25                             ARTICLE 10
123.26                             TECHNOLOGY
123.27     Section 1.  [121.97] [LEARNING ACADEMY.] 
123.28     Subdivision 1.  [ESTABLISHMENT.] The commissioner shall 
123.29  develop standards and requirements and certify courses for a 
123.30  Minnesota learning academy to provide training opportunities for 
123.31  educators, administrators, and librarians in the use of 
123.32  technology and its integration into learning activities.  Only 
123.33  certified classes may be used to fulfill the requirements of the 
123.34  learning academy. 
123.35     Subd. 2.  [PARTICIPANTS.] Teachers, principals, school 
123.36  district administrators, community education directors, and 
124.1   librarians may participate in the learning academy.  A public 
124.2   school teacher who successfully completes the classroom 
124.3   integration requirements of the learning academy is eligible to 
124.4   receive a computer, provided by the school district, for use 
124.5   during school and nonschool hours. 
124.6      Subd. 3.  [DEVELOPMENT OF THE LEARNING ACADEMY.] To develop 
124.7   the learning academy, the commissioner shall consult with 
124.8   representatives of public schools, higher education, teacher 
124.9   organizations, students, private business, state agencies, 
124.10  libraries, and political subdivisions to do the following: 
124.11     (1) set measures for teacher training opportunities on 
124.12  technical skills and technology integration skills; 
124.13     (2) identify and establish outcomes for a series of 
124.14  training courses that provide for technical skills and 
124.15  technology classroom integration skills; 
124.16     (3) recommend tuition costs for participation in training 
124.17  courses; 
124.18     (4) identify existing public or private institutions to 
124.19  develop and provide training courses; 
124.20     (5) establish procedures for school districts to purchase a 
124.21  computer for the use of each teacher during school and nonschool 
124.22  hours who completes the classroom integration skills courses; 
124.23     (6) evaluate prerequisites for the classroom integration 
124.24  skills course; 
124.25     (7) certify classes and courses for inclusion in the 
124.26  learning academy; and 
124.27     (8) coordinate and make certified classes and courses 
124.28  available to eligible participants. 
124.29     Sec. 2.  Minnesota Statutes 1996, section 124.91, 
124.30  subdivision 5, is amended to read: 
124.31     Subd. 5.  [INTERACTIVE TELEVISION.] (a) A school district 
124.32  with its central administrative office located within economic 
124.33  development region one, two, three, four, five, six, seven, 
124.34  eight, nine, and ten may apply to the commissioner of children, 
124.35  families, and learning for ITV revenue up to the greater of .5 
124.36  percent of the adjusted net tax capacity of the district or 
125.1   $25,000 for the construction, maintenance, and lease costs of an 
125.2   interactive television system for instructional purposes.  The 
125.3   approval by the commissioner of children, families, and learning 
125.4   and the application procedures set forth in subdivision 1 shall 
125.5   apply to the revenue in this subdivision.  In granting the 
125.6   approval, the commissioner must consider whether the district is 
125.7   maximizing efficiency through peak use and off-peak use pricing 
125.8   structures. 
125.9      (b) To obtain ITV revenue, a district may levy an amount 
125.10  not to exceed the district's ITV revenue times the lesser of one 
125.11  or the ratio of: 
125.12     (1) the quotient derived by dividing the adjusted net tax 
125.13  capacity of the district for the year before the year the levy 
125.14  is certified by the actual pupil units in the district for the 
125.15  year to which the levy is attributable; to 
125.16     (2) 100 percent of the equalizing factor as defined in 
125.17  section 124A.02, subdivision 8, for the year to which the levy 
125.18  is attributable $10,447. 
125.19     (c) A district's ITV aid is the difference between its ITV 
125.20  revenue and the ITV levy. 
125.21     (d) The revenue in the first year after reorganization for 
125.22  a district that has reorganized under section 122.22, 122.23, or 
125.23  122.241 to 122.247 shall be the greater of: 
125.24     (1) the revenue computed for the reorganized district under 
125.25  paragraph (a), or 
125.26     (2)(i) for two districts that reorganized, 75 percent of 
125.27  the revenue computed as if the districts involved in the 
125.28  reorganization were separate, or 
125.29     (ii) for three or more districts that reorganized, 50 
125.30  percent of the revenue computed as if the districts involved in 
125.31  the reorganization were separate. 
125.32     (e) The revenue in paragraph (d) is increased by the 
125.33  difference between the initial revenue and ITV lease costs for 
125.34  leases that had been entered into by the preexisting districts 
125.35  on the effective date of the consolidation or combination and 
125.36  with a term not exceeding ten years.  This increased revenue is 
126.1   only available for the remaining term of the lease.  However, in 
126.2   no case shall the revenue exceed the amount available had the 
126.3   preexisting districts received revenue separately. 
126.4      Sec. 3.  Laws 1995, First Special Session chapter 3, 
126.5   article 12, section 7, subdivision 1, is amended to read: 
126.6      Subdivision 1.  [STATE COUNCIL MEMBERSHIP.] The membership 
126.7   of the Minnesota education telecommunications council 
126.8   established in Laws 1993, First Special Session chapter 2, is 
126.9   expanded to include representatives of elementary and secondary 
126.10  education.  The membership shall consist of three 
126.11  representatives from the University of Minnesota; three 
126.12  representatives of the board of trustees for Minnesota state 
126.13  colleges and universities; one representative of the higher 
126.14  education services offices; one representative appointed by the 
126.15  private college council; eight representatives selected by the 
126.16  commissioner of education, at least one of which must come from 
126.17  each of the six higher education telecommunication regions; a 
126.18  representative from the information policy office; one member 
126.19  each from the senate and the house of representatives selected 
126.20  by the subcommittee on committees of the committee on rules and 
126.21  administration of the senate and the speaker of the house; and 
126.22  three representatives of libraries, one representing regional 
126.23  public libraries, one representing multitype libraries, and one 
126.24  representing community libraries, selected by the governor.  The 
126.25  council shall: 
126.26     (1) develop a statewide vision and plans for the use of 
126.27  distance learning technologies and provide leadership in 
126.28  implementing the use of such technologies; 
126.29     (2) recommend to the commissioner and the legislature by 
126.30  December 15, 1996, a plan for long-term governance and a 
126.31  proposed structure for statewide and regional 
126.32  telecommunications; 
126.33     (3) recommend educational policy relating to 
126.34  telecommunications; 
126.35     (4) determine priorities for use; 
126.36     (5) oversee coordination of networks for post-secondary 
127.1   campuses, K-12 education, and regional and community libraries; 
127.2      (6) review application for telecommunications access grants 
127.3   under Minnesota Statutes, section 124C.74 and recommend to the 
127.4   department grants for funding; and 
127.5      (7) determine priorities for grant funding proposals; 
127.6      (8) establish technical standards for all Minnesota schools 
127.7   and libraries to ensure interoperability of hardware, software, 
127.8   and telecommunications; and 
127.9      (9) develop technical standards for the operation and 
127.10  maintenance of all Minnesota interactive television cooperatives.
127.11     The council shall consult with representatives of the 
127.12  telecommunication industry in implementing this section.  
127.13     Sec. 4.  Laws 1996, chapter 412, article 12, section 8, is 
127.14  amended to read: 
127.15     The commissioner of the department of children, families, 
127.16  and learning shall work with interested and involved 
127.17  organizations including, but not limited to, representatives of 
127.18  school districts, service cooperatives, TIES, education 
127.19  districts, higher education institutions, public libraries, and 
127.20  other government agencies to develop a technology planning guide 
127.21  for school districts.  The department must distribute the guides 
127.22  to school districts and hold regional meetings to discuss the 
127.23  planning process.  In making technology related funding 
127.24  decisions, the commissioner may consider a school district's 
127.25  technology plan in making technology-related funding 
127.26  decisions and the degree to which it meets the technical 
127.27  standards established by the Minnesota education 
127.28  telecommunication council under Laws 1995, First Special Session 
127.29  chapter 3, article 12, section 7.  
127.30     Sec. 5.  [LEARNING RESOURCE NETWORK.] 
127.31     The commissioner shall establish an electronic learning 
127.32  resource network to support the statewide implementation of the 
127.33  graduation standards.  The learning resource network must be 
127.34  made available to public schools over the learning network 
127.35  established through telecommunication access grants under 
127.36  Minnesota Statutes, section 124C.74.  Products and services 
128.1   available on the learning resource network must be integrated 
128.2   and provide methods to align curriculum with the graduation 
128.3   standards, and to assist teachers in curriculum delivery and 
128.4   integration, student assessment, and classroom recordkeeping.  
128.5   The commissioner shall also identify ways to make the learning 
128.6   resource network available to students and parents to enhance 
128.7   the learning experience.  The commissioner shall develop or 
128.8   contract for the development of all or part of the learning 
128.9   resource network to expand the electronic curriculum library 
128.10  under Laws 1996, chapter 412, article 12, section 15, 
128.11  subdivision 4, paragraph (a).  The commissioner shall consult 
128.12  with representatives from the public and private sector in the 
128.13  development, use, and operation of the learning resource network.
128.14     Sec. 6.  [SITE-BASED TECHNOLOGY LEARNING GRANTS.] 
128.15     Subdivision 1.  [ESTABLISHMENT; PURPOSE.] A matching grant 
128.16  program is established for school sites to fund technology 
128.17  projects in support of learning and to increase and enhance 
128.18  closer ties with the community.  The grants are available to a 
128.19  school site or to a partnership of school sites.  Recipients 
128.20  shall use grant proceeds for technology projects that are 
128.21  consistent with the district's or site's technology plan.  All 
128.22  projects must meet the technology standards established under 
128.23  section 3.  Projects that are eligible for grant funds include, 
128.24  but are not limited to, hardware and software purchases and 
128.25  installation, establishment or expansion of local or wide area 
128.26  networks, and training and staff development in the use of 
128.27  technology and software. 
128.28     Subd. 2.  [APPLICATION; ELIGIBILITY.] The commissioner 
128.29  shall establish a process and application forms for school sites 
128.30  to apply for grant funds.  Eligible applicants must, at a 
128.31  minimum, describe how the proposed project is consistent with 
128.32  the site's or district's technology plan, identify the specific 
128.33  site needs that the project will address, define the project's 
128.34  expected outcomes, and provide the source, type, and amounts of 
128.35  all matching funds.  To be eligible for a site-based technology 
128.36  learning grant, a school site must:  
129.1      (1) be a public school site or partnership of school sites; 
129.2      (2) have each dollar of grant money matched by at least one 
129.3   dollar of school site money, including in-kind contributions; 
129.4      (3) have each dollar of grant money matched by at least one 
129.5   dollar of nonstate and nonschool site money, including in-kind 
129.6   contributions; 
129.7      (4) agree to disseminate and share information about its 
129.8   project; 
129.9      (5) provide a benefit to the greater community; and 
129.10     (6) maintain any ongoing costs of support for the 
129.11  technology project after the initial funding under the grant 
129.12  program. 
129.13     Subd. 3.  [GRANT AWARD.] The commissioner shall establish 
129.14  criteria for awarding grants under this section.  All grant 
129.15  awards must be made directly to a school site or to the 
129.16  designated fiscal agent for a school site or a partnership of 
129.17  school sites.  The commissioner shall consult with 
129.18  representatives of the public and private sectors in 
129.19  establishing criteria and awarding site-based technology 
129.20  learning grants. 
129.21     Sec. 7.  [LIBRARY TECHNOLOGY SITE GRANT PROGRAM.] 
129.22     Subdivision 1.  [ESTABLISHMENT; PURPOSE.] A matching grant 
129.23  program is established for library sites to fund projects to 
129.24  expand and integrate technology into library operations, 
129.25  increase public access to technology, and enhance closer ties 
129.26  with the community.  The grants are available to public or 
129.27  school library sites or to a partnership of library sites.  
129.28  Recipients shall use grant proceeds for technology projects that 
129.29  are consistent with the technology plans and meet the technology 
129.30  standards established under section 3.  Projects that are 
129.31  eligible for grant funds include, but are not limited to, 
129.32  hardware and software purchases and installation, establishment, 
129.33  or expansion of local or wide area networks, and training and 
129.34  staff development in the use of technology and software. 
129.35     Subd. 2.  [APPLICATION; ELIGIBILITY.] The commissioner 
129.36  shall establish a process and application forms for library 
130.1   sites to apply for grant funds.  Eligible applicants must, at a 
130.2   minimum, describe how the proposed project is consistent with 
130.3   the technology plans, identify the specific site needs that the 
130.4   project will address, define the project's expected outcomes, 
130.5   and provide the source, type, and amounts of all matching funds. 
130.6   To be eligible for a site-based technology learning grant, a 
130.7   library site must: 
130.8      (1) be a public library as defined under Minnesota 
130.9   Statutes, section 134.001, subdivision 3, a school library, or a 
130.10  partnership of public and school libraries; 
130.11     (2) have each dollar of grant money matched by at least one 
130.12  dollar of library site money, including in-kind contributions; 
130.13     (3) have each dollar of grant money matched by at least one 
130.14  dollar of nonstate and nonlibrary site money, including in-kind 
130.15  contributions; 
130.16     (4) agree to disseminate and share information about its 
130.17  project; 
130.18     (5) provide a benefit to the greater community; and 
130.19     (6) maintain any ongoing costs of support for the 
130.20  technology project after the initial funding under the grant 
130.21  program. 
130.22     Subd. 3.  [GRANT AWARD.] The commissioner shall establish 
130.23  criteria for awarding grants under this section.  All grant 
130.24  awards must be made directly to the library site, school 
130.25  district, or to the designated fiscal agent for the site or a 
130.26  partnership of sites.  The commissioner shall consult with 
130.27  representatives of the public and private sectors in 
130.28  establishing criteria and awarding site-based technology 
130.29  learning grants. 
130.30     Sec. 8.  [APPROPRIATIONS.] 
130.31     Subdivision 1.  [DEPARTMENT OF CHILDREN, FAMILIES, AND 
130.32  LEARNING.] The sums indicated in this section are appropriated 
130.33  from the general fund to the department of children, families, 
130.34  and learning for the fiscal years designated. 
130.35     Subd. 2.  [TELECOMMUNICATION ACCESS GRANTS.] For one-time 
130.36  grants to school districts and regional public library systems 
131.1   to establish telecommunication connections according to 
131.2   Minnesota Statutes, section 124C.74:  
131.3        $7,750,000   .....     1998 
131.4      Any balance in the first year does not cancel but is 
131.5   available in the second year. 
131.6      This amount is in addition to the amount already included 
131.7   in the 1998-1999 base for the telecommunication access grants.  
131.8   This amount shall not be included as part of the base for fiscal 
131.9   year 2000-2001.  Up to $3,000,000 in 1998 is for completion of 
131.10  district connections.  
131.11     Before a district can receive a grant under this 
131.12  subdivision in fiscal year 1999, the district must submit, to 
131.13  the commissioner, evidence that it has pursued all possible 
131.14  funding options, including ITV revenue under Minnesota Statutes, 
131.15  section 124.91, subdivision 5.  Notwithstanding Minnesota 
131.16  Statutes, section 124.91, subdivision 5, ITV revenue may also be 
131.17  used for the purposes of the telecommunication access grants 
131.18  under Minnesota Statutes, section 124C.74.  This amount shall 
131.19  not be included as part of the base for fiscal year 2000-2001. 
131.20     Expenditure of this appropriation is subject to terms and 
131.21  conditions established by the Minnesota office of technology. 
131.22     Subd. 3.  [INTERACTIVE TELEVISION (ITV) AID.] For 
131.23  interactive television (ITV) aid under Minnesota Statutes, 
131.24  section 124.91, subdivision 5: 
131.25       $ 4,030,000    .....     1998 
131.26       $ 4,051,000    .....     1999 
131.27     The 1998 appropriation includes $384,000 for 1997 and 
131.28  $3,646,000 for 1998. 
131.29     The 1999 appropriation includes $405,000 for 1998 and 
131.30  $3,646,000 for 1999. 
131.31     Subd. 4.  [LEARNING ACADEMY.] For learning academies under 
131.32  section 1: 
131.33       $ 2,000,000    .....     1998 
131.34     This appropriation is available until expended. 
131.35     The commissioner may work with private business partners to 
131.36  facilitate the purchase of computers for teachers who complete 
132.1   the classroom technology integration skills courses.  The 
132.2   commissioner shall use these funds to offset financing charges 
132.3   on purchases by school districts of computers for teachers who 
132.4   complete the course. 
132.5      Expenditure of this appropriation is subject to terms and 
132.6   conditions established by the Minnesota office of technology. 
132.7      Subd. 5.  [LEARNING RESOURCE NETWORK.] For the learning 
132.8   resource network in section 4: 
132.9        $ 7,000,000    .....     1998
132.10     This appropriation is available until June 30, 1999.  These 
132.11  funds are a one-time appropriation. 
132.12     The commissioner shall be responsible for the initial cost 
132.13  of establishing the learning resource network.  A school site 
132.14  choosing to be part of the network shall be responsible for the 
132.15  ongoing costs. 
132.16     Expenditure of this appropriation is subject to terms and 
132.17  conditions established by the Minnesota office of technology. 
132.18     Subd. 6.  [SITE-BASED TECHNOLOGY LEARNING GRANTS.] For 
132.19  one-time site-based learning grants under section 5: 
132.20       $50,000,000    .....     1998 
132.21     This appropriation is available until June 30, 1999. 
132.22     Expenditure of this appropriation is subject to terms and 
132.23  conditions established by the Minnesota office of technology. 
132.24     Subd. 7.  [LIBRARY TECHNOLOGY SITE GRANT PROGRAM.] For 
132.25  one-time library site grants under section 6: 
132.26       $ 4,650,000    .....     1998 
132.27     This appropriation is available until June 30, 1999. 
132.28     Expenditure of this appropriation is subject to terms and 
132.29  conditions established by the Minnesota office of technology. 
132.30     Subd. 8.  [EDUCATION TECHNOLOGY CLEARINGHOUSE AND UPGRADE 
132.31  SYSTEM.] For the education technology clearinghouse and upgrade 
132.32  system under Minnesota Statutes, section 121.95: 
132.33       $  250,000    .....      1998
132.34       $  250,000    .....      1999 
132.35     Sec. 9.  [REPEALER.] 
132.36     Minnesota Statutes 1996, section 134.46, is repealed.  Laws 
133.1   1995, First Special Session chapter 3, article 12, section 8, is 
133.2   repealed. 
133.3      Sec. 10.  [EFFECTIVE DATE.] 
133.4      Section 2 is effective for revenue for fiscal year 1999. 
133.5                              ARTICLE 11
133.6                       TAX DEDUCTION AND CREDIT
133.7      Section 1.  Minnesota Statutes 1996, section 290.01, 
133.8   subdivision 19b, is amended to read: 
133.9      Subd. 19b.  [SUBTRACTIONS FROM FEDERAL TAXABLE INCOME.] For 
133.10  individuals, estates, and trusts, there shall be subtracted from 
133.11  federal taxable income: 
133.12     (1) interest income on obligations of any authority, 
133.13  commission, or instrumentality of the United States to the 
133.14  extent includable in taxable income for federal income tax 
133.15  purposes but exempt from state income tax under the laws of the 
133.16  United States; 
133.17     (2) if included in federal taxable income, the amount of 
133.18  any overpayment of income tax to Minnesota or to any other 
133.19  state, for any previous taxable year, whether the amount is 
133.20  received as a refund or as a credit to another taxable year's 
133.21  income tax liability; 
133.22     (3) the amount paid to others, less the credit allowed 
133.23  under section 290.0672, not to exceed $650 $1,950 for each 
133.24  dependent in grades kindergarten to 6 and $1,000 $3,000 for each 
133.25  dependent in grades 7 to 12, for tuition, textbooks, and 
133.26  transportation of each dependent in attending an elementary or 
133.27  secondary school situated in Minnesota, North Dakota, South 
133.28  Dakota, Iowa, or Wisconsin, wherein a resident of this state may 
133.29  legally fulfill the state's compulsory attendance laws, which is 
133.30  not operated for profit, and which adheres to the provisions of 
133.31  the Civil Rights Act of 1964 and chapter 363.  For the purposes 
133.32  of this clause, "tuition" includes not only tuition and fees for 
133.33  attendance needed to fulfill the requirements of sections 
133.34  120.101 and 120.102, but also fees and tuition paid for a 
133.35  dependent in kindergarten through grade 12 for any study 
133.36  conducted by a person meeting the teaching licensing 
134.1   requirements of section 120.101, subdivision 7, clauses (1) to 
134.2   (5), designed to improve the dependents' knowledge of core 
134.3   curriculum areas and to expand the dependents' knowledge and 
134.4   skills beyond foundational skills pursuant to the graduation 
134.5   rule under section 121.11, subdivision 7c.  As used in this 
134.6   clause, "textbooks" includes books and other instructional 
134.7   materials and equipment used in elementary and secondary schools 
134.8   in teaching only those subjects legally and commonly taught in 
134.9   public elementary and secondary schools in this 
134.10  state.  Equipment qualifying for deduction includes personal 
134.11  computer hardware and educational software that assists a 
134.12  dependent to improve knowledge of core curriculum areas and to 
134.13  expand knowledge and skills pursuant to the graduation rule 
134.14  under section 121.11, subdivision 7c, purchased for use in the 
134.15  taxpayer's home and not used in a trade or business regardless 
134.16  of whether the computer is required by the dependent's school.  
134.17  "Textbooks" does not include instructional books and materials 
134.18  used in the teaching of religious tenets, doctrines, or worship, 
134.19  the purpose of which is to instill such tenets, doctrines, or 
134.20  worship, nor does it include books or materials for, or 
134.21  transportation to, extracurricular activities including sporting 
134.22  events, musical or dramatic events, speech activities, driver's 
134.23  education, or similar programs.  In order to qualify for the 
134.24  subtraction under this clause the taxpayer must elect to itemize 
134.25  deductions under section 63(e) of the Internal Revenue Code; 
134.26     (4) to the extent included in federal taxable income, 
134.27  distributions from a qualified governmental pension plan, an 
134.28  individual retirement account, simplified employee pension, or 
134.29  qualified plan covering a self-employed person that represent a 
134.30  return of contributions that were included in Minnesota gross 
134.31  income in the taxable year for which the contributions were made 
134.32  but were deducted or were not included in the computation of 
134.33  federal adjusted gross income.  The distribution shall be 
134.34  allocated first to return of contributions until the 
134.35  contributions included in Minnesota gross income have been 
134.36  exhausted.  This subtraction applies only to contributions made 
135.1   in a taxable year prior to 1985; 
135.2      (5) income as provided under section 290.0802; 
135.3      (6) the amount of unrecovered accelerated cost recovery 
135.4   system deductions allowed under subdivision 19g; 
135.5      (7) to the extent included in federal adjusted gross 
135.6   income, income realized on disposition of property exempt from 
135.7   tax under section 290.491; 
135.8      (8) to the extent not deducted in determining federal 
135.9   taxable income, the amount paid for health insurance of 
135.10  self-employed individuals as determined under section 162(l) of 
135.11  the Internal Revenue Code, except that the 25 percent limit does 
135.12  not apply.  If the taxpayer deducted insurance payments under 
135.13  section 213 of the Internal Revenue Code of 1986, the 
135.14  subtraction under this clause must be reduced by the lesser of: 
135.15     (i) the total itemized deductions allowed under section 
135.16  63(d) of the Internal Revenue Code, less state, local, and 
135.17  foreign income taxes deductible under section 164 of the 
135.18  Internal Revenue Code and the standard deduction under section 
135.19  63(c) of the Internal Revenue Code; or 
135.20     (ii) the lesser of (A) the amount of insurance qualifying 
135.21  as "medical care" under section 213(d) of the Internal Revenue 
135.22  Code to the extent not deducted under section 162(1) of the 
135.23  Internal Revenue Code or excluded from income or (B) the total 
135.24  amount deductible for medical care under section 213(a); and 
135.25     (9) the exemption amount allowed under Laws 1995, chapter 
135.26  255, article 3, section 2, subdivision 3. 
135.27     Sec. 2.  [290.0672] [MINNESOTA EDUCATION CREDIT.] 
135.28     Subdivision 1.  [CREDIT ALLOWED.] A taxpayer may take as a 
135.29  credit against the tax due from the taxpayer and a spouse, if 
135.30  any, under this chapter in an amount equal to the amount the 
135.31  taxpayer pays in fees or tuition for a dependent of the taxpayer 
135.32  in kindergarten through grade 12 for the instruction of the 
135.33  dependent by a person qualified to be an instructor pursuant to 
135.34  section 120.101, subdivision 7, clauses (1) to (5), in the 
135.35  curriculum core areas and knowledge and skills pursuant to the 
135.36  graduation rule under section 121.11, subdivision 7c. 
136.1      Subd. 2.  [LIMITATIONS.] The credit is limited to $1,000 
136.2   per child and $2,000 per family.  No credit is allowed if the 
136.3   taxpayer's income, as defined in section 290.067, subdivision 
136.4   2a, exceeds $39,000.  In the case of a married taxpayer, the 
136.5   credit is not allowed unless a joint income tax return is 
136.6   filed.  For a nonresident or part-year resident, the credit 
136.7   determined under subdivision 1 and the $1,000 per child and 
136.8   $2,000 per family limits are further limited to amounts 
136.9   determined by multiplying the percentage calculated under 
136.10  section 290.06, subdivision 2c, paragraph (e), by the credit 
136.11  determined by subdivision 1 and the $1,000 per child and $2,000 
136.12  per family limits. 
136.13     Subd. 3.  [HOME SCHOOL.] If a dependent is educated in a 
136.14  school where the taxpayer or spouse provides the instruction 
136.15  necessary to meet the compulsory instruction requirements of 
136.16  sections 120.101 and 120.102 in the taxpayer's home, the family 
136.17  of the dependent is deemed to have incurred $1,000 of fees or 
136.18  tuition qualifying under subdivision 1.  The limit on income 
136.19  under subdivision 2 does not apply to the credit allowed on the 
136.20  deemed amount under this subdivision.  A family is limited to 
136.21  only one deemed amount of $1,000 per year. 
136.22     Subd. 4.  [CREDIT TO BE REFUNDABLE.] If the amount of 
136.23  credit which a taxpayer would be eligible to receive pursuant to 
136.24  this section exceeds the taxpayer's tax liability under this 
136.25  chapter, the excess amount shall be refunded to the taxpayer by 
136.26  the commissioner of revenue. 
136.27     Subd. 5.  [INFLATION ADJUSTMENT.] The dollar amount of the 
136.28  income threshold in subdivision 2 must be adjusted for 
136.29  inflation.  The commissioner shall adjust the threshold amount 
136.30  starting with tax years beginning after December 31, 1997, by 
136.31  the percentage determined under section 290.06, subdivision 2d, 
136.32  for the taxable year. 
136.33     Subd. 6.  [APPROPRIATION.] An amount sufficient to pay the 
136.34  refunds required by this section is appropriated to the 
136.35  commissioner from the general fund. 
136.36     Sec. 3.  [EFFECTIVE DATE.] 
137.1      Sections 1 and 2 are effective for tax years beginning 
137.2   after December 31, 1996. 
137.3                              ARTICLE 12
137.4                         EDUCATION INVESTMENT
137.5      Section 1.  [11A.165] [EDUCATION INVESTMENT FUND.] 
137.6      Subdivision 1.  [ESTABLISHMENT.] A fund called the 
137.7   education investment fund is established in the state treasury 
137.8   for the purpose of investing money for grants to post-secondary 
137.9   students under section 136A.123.  Accounts may be established 
137.10  within the fund for specific fields of study or geographical 
137.11  areas to which a corporation or individual wishes to 
137.12  contribute.  Accounts may not be established that discriminate 
137.13  on the basis of race, ethnicity, or gender. 
137.14     Subd. 2.  [ASSETS.] The assets of the education investment 
137.15  fund shall consist of money contributed by private corporations, 
137.16  foundations, or individuals, and all income from the investment 
137.17  of contributions to the fund.  All assets of the fund are 
137.18  appropriated for the purpose of supporting grants under section 
137.19  136A.123. 
137.20     Subd. 3.  [MANAGEMENT.] The education investment fund shall 
137.21  be managed by the board. 
137.22     Subd. 4.  [INVESTMENTS.] The education investment fund 
137.23  shall be invested subject to the provisions of section 11A.24. 
137.24     Subd. 5.  [DISTRIBUTION OF ASSETS.] The board shall 
137.25  annually transfer appropriations from the fund to the higher 
137.26  education services office for distribution to eligible students 
137.27  under section 136A.123.  Appropriations transferred to the 
137.28  higher education services office which are not spent do not 
137.29  cancel but are available for grants in the following fiscal year.
137.30     Sec. 2.  [136A.123] [EDUCATION INVESTMENT GRANT PROGRAM.] 
137.31     Subdivision 1.  [ESTABLISHMENT.] An education investment 
137.32  grant program is established to provide grants to low-income 
137.33  students who withdraw funds from a qualified savings plan to pay 
137.34  for their post-secondary education. 
137.35     Subd. 2.  [ELIGIBILITY.] To be eligible to receive a grant 
137.36  from an account within the fund, a student must be: 
138.1      (1) a resident of the state of Minnesota; 
138.2      (2) enrolled at least half time in an undergraduate program 
138.3   of instruction at a public or private post-secondary 
138.4   institution; and 
138.5      (3) expend funds withdrawn from a savings plan under 
138.6   section 290.0803 to pay for post-secondary education expenses in 
138.7   the award year. 
138.8      Subd. 3.  [ALLOCATION; AWARDS.] Grants must be awarded on a 
138.9   funds available basis from appropriations transferred to the 
138.10  office by the state board of investment under section 11A.165.  
138.11  The office shall establish rules to govern the size and 
138.12  distribution of grant awards.  If insufficient funds are 
138.13  available to award grants to all eligible applicants, the office 
138.14  shall give priority to applicants who demonstrate the greatest 
138.15  savings effort relative to income.  A grant awarded under this 
138.16  section does not affect a recipient's eligibility for a state 
138.17  grant under section 136A.121. 
138.18     Sec. 3.  Minnesota Statutes 1996, section 290.01, 
138.19  subdivision 19a, is amended to read: 
138.20     Subd. 19a.  [ADDITIONS TO FEDERAL TAXABLE INCOME.] For 
138.21  individuals, estates, and trusts, there shall be added to 
138.22  federal taxable income: 
138.23     (1)(i) interest income on obligations of any state other 
138.24  than Minnesota or a political or governmental subdivision, 
138.25  municipality, or governmental agency or instrumentality of any 
138.26  state other than Minnesota exempt from federal income taxes 
138.27  under the Internal Revenue Code or any other federal statute, 
138.28  and 
138.29     (ii) exempt-interest dividends as defined in section 
138.30  852(b)(5) of the Internal Revenue Code, except the portion of 
138.31  the exempt-interest dividends derived from interest income on 
138.32  obligations of the state of Minnesota or its political or 
138.33  governmental subdivisions, municipalities, governmental agencies 
138.34  or instrumentalities, but only if the portion of the 
138.35  exempt-interest dividends from such Minnesota sources paid to 
138.36  all shareholders represents 95 percent or more of the 
139.1   exempt-interest dividends that are paid by the regulated 
139.2   investment company as defined in section 851(a) of the Internal 
139.3   Revenue Code, or the fund of the regulated investment company as 
139.4   defined in section 851(h) of the Internal Revenue Code, making 
139.5   the payment; and 
139.6      (iii) for the purposes of items (i) and (ii), interest on 
139.7   obligations of an Indian tribal government described in section 
139.8   7871(c) of the Internal Revenue Code shall be treated as 
139.9   interest income on obligations of the state in which the tribe 
139.10  is located; 
139.11     (2) the amount of income taxes paid or accrued within the 
139.12  taxable year under this chapter and income taxes paid to any 
139.13  other state or to any province or territory of Canada, to the 
139.14  extent allowed as a deduction under section 63(d) of the 
139.15  Internal Revenue Code, but the addition may not be more than the 
139.16  amount by which the itemized deductions as allowed under section 
139.17  63(d) of the Internal Revenue Code exceeds the amount of the 
139.18  standard deduction as defined in section 63(c) of the Internal 
139.19  Revenue Code.  For the purpose of this paragraph, the 
139.20  disallowance of itemized deductions under section 68 of the 
139.21  Internal Revenue Code of 1986, income tax is the last itemized 
139.22  deduction disallowed; 
139.23     (3) the capital gain amount of a lump sum distribution to 
139.24  which the special tax under section 1122(h)(3)(B)(ii) of the Tax 
139.25  Reform Act of 1986, Public Law Number 99-514, applies; and 
139.26     (4) the amount of income taxes paid or accrued within the 
139.27  taxable year under this chapter and income taxes paid to any 
139.28  other state or any province or territory of Canada, to the 
139.29  extent allowed as a deduction in determining federal adjusted 
139.30  gross income.  For the purpose of this paragraph, income taxes 
139.31  do not include the taxes imposed by sections 290.0922, 
139.32  subdivision 1, paragraph (b), 290.9727, 290.9728, and 290.9729; 
139.33  and 
139.34     (5) the amount provided by section 290.0803, subdivision 3. 
139.35     Sec. 4.  Minnesota Statutes 1996, section 290.01, 
139.36  subdivision 19b, is amended to read: 
140.1      Subd. 19b.  [SUBTRACTIONS FROM FEDERAL TAXABLE INCOME.] For 
140.2   individuals, estates, and trusts, there shall be subtracted from 
140.3   federal taxable income: 
140.4      (1) interest income on obligations of any authority, 
140.5   commission, or instrumentality of the United States to the 
140.6   extent includable in taxable income for federal income tax 
140.7   purposes but exempt from state income tax under the laws of the 
140.8   United States; 
140.9      (2) if included in federal taxable income, the amount of 
140.10  any overpayment of income tax to Minnesota or to any other 
140.11  state, for any previous taxable year, whether the amount is 
140.12  received as a refund or as a credit to another taxable year's 
140.13  income tax liability; 
140.14     (3) the amount paid to others not to exceed $650 for each 
140.15  dependent in grades kindergarten to 6 and $1,000 for each 
140.16  dependent in grades 7 to 12, for tuition, textbooks, and 
140.17  transportation of each dependent in attending an elementary or 
140.18  secondary school situated in Minnesota, North Dakota, South 
140.19  Dakota, Iowa, or Wisconsin, wherein a resident of this state may 
140.20  legally fulfill the state's compulsory attendance laws, which is 
140.21  not operated for profit, and which adheres to the provisions of 
140.22  the Civil Rights Act of 1964 and chapter 363.  As used in this 
140.23  clause, "textbooks" includes books and other instructional 
140.24  materials and equipment used in elementary and secondary schools 
140.25  in teaching only those subjects legally and commonly taught in 
140.26  public elementary and secondary schools in this state.  
140.27  "Textbooks" does not include instructional books and materials 
140.28  used in the teaching of religious tenets, doctrines, or worship, 
140.29  the purpose of which is to instill such tenets, doctrines, or 
140.30  worship, nor does it include books or materials for, or 
140.31  transportation to, extracurricular activities including sporting 
140.32  events, musical or dramatic events, speech activities, driver's 
140.33  education, or similar programs.  In order to qualify for the 
140.34  subtraction under this clause the taxpayer must elect to itemize 
140.35  deductions under section 63(e) of the Internal Revenue Code; 
140.36     (4) to the extent included in federal taxable income, 
141.1   distributions from a qualified governmental pension plan, an 
141.2   individual retirement account, simplified employee pension, or 
141.3   qualified plan covering a self-employed person that represent a 
141.4   return of contributions that were included in Minnesota gross 
141.5   income in the taxable year for which the contributions were made 
141.6   but were deducted or were not included in the computation of 
141.7   federal adjusted gross income.  The distribution shall be 
141.8   allocated first to return of contributions until the 
141.9   contributions included in Minnesota gross income have been 
141.10  exhausted.  This subtraction applies only to contributions made 
141.11  in a taxable year prior to 1985; 
141.12     (5) income as provided under section 290.0802; 
141.13     (6) the amount of unrecovered accelerated cost recovery 
141.14  system deductions allowed under subdivision 19g; 
141.15     (7) to the extent included in federal adjusted gross 
141.16  income, income realized on disposition of property exempt from 
141.17  tax under section 290.491; 
141.18     (8) to the extent not deducted in determining federal 
141.19  taxable income, the amount paid for health insurance of 
141.20  self-employed individuals as determined under section 162(l) of 
141.21  the Internal Revenue Code, except that the 25 percent limit does 
141.22  not apply.  If the taxpayer deducted insurance payments under 
141.23  section 213 of the Internal Revenue Code of 1986, the 
141.24  subtraction under this clause must be reduced by the lesser of: 
141.25     (i) the total itemized deductions allowed under section 
141.26  63(d) of the Internal Revenue Code, less state, local, and 
141.27  foreign income taxes deductible under section 164 of the 
141.28  Internal Revenue Code and the standard deduction under section 
141.29  63(c) of the Internal Revenue Code; or 
141.30     (ii) the lesser of (A) the amount of insurance qualifying 
141.31  as "medical care" under section 213(d) of the Internal Revenue 
141.32  Code to the extent not deducted under section 162(1) of the 
141.33  Internal Revenue Code or excluded from income or (B) the total 
141.34  amount deductible for medical care under section 213(a); and 
141.35     (9) the exemption amount allowed under Laws 1995, chapter 
141.36  255, article 3, section 2, subdivision 3; and 
142.1      (10) the subtraction provided by section 290.0803, 
142.2   subdivision 2. 
142.3      Sec. 5.  [290.0803] [HIGHER EDUCATION TRUSTS.] 
142.4      Subdivision 1.  [DEFINITIONS.] (a) For the purposes of this 
142.5   section, the following terms have the meanings given them.  
142.6      (b) "Higher education trust" means a grantor trust created 
142.7   or organized in Minnesota for the purpose of funding the 
142.8   qualified education expenses of the grantor, but only if the 
142.9   written governing instrument creating the trust meets the 
142.10  following requirements: 
142.11     (1) No contributions shall be accepted unless it is in 
142.12  cash, and contributions shall not be accepted for the taxable 
142.13  year in excess of $2,000. 
142.14     (2) The trustee is a bank or other person who demonstrates 
142.15  to the satisfaction of the commissioner that the manner in which 
142.16  the other person will administer the trust will be consistent 
142.17  with the requirements of this section. 
142.18     (3) No part of the trust funds shall be invested in life 
142.19  insurance contracts. 
142.20     (4) The interest of an individual in the balance of the 
142.21  individual's account is nonforfeitable. 
142.22     (5) The assets of the trust shall not be commingled with 
142.23  other property except in a common trust fund or common 
142.24  investment fund. 
142.25     (6) The trust is not taxed for federal tax purposes as an 
142.26  individual retirement account under section 408 of the Internal 
142.27  Revenue Code. 
142.28     (c) "Qualified education expense of the grantor" means 
142.29  tuition, books, and fees required for the enrollment or 
142.30  attendance at an eligible education institution of the grantor; 
142.31  the grantor's spouse; or any child, grandchild, or ancestor of 
142.32  the grantor or grantor's spouse.  A qualified education expense 
142.33  of the grantor does not include expenses with respect to any 
142.34  course or other education involving sports, games, or hobbies 
142.35  other than as part of a degree program. 
142.36     The amount of qualified higher education expenses otherwise 
143.1   taken into account under this paragraph with respect to the 
143.2   education of an individual shall be reduced, before the 
143.3   application of this paragraph, by the sum of the amounts 
143.4   received with respect to the individual for the taxable year as: 
143.5      (1) a qualified scholarship which under section 117 of the 
143.6   Internal Revenue Code of 1986 is not includable in gross income; 
143.7      (2) an educational assistance allowance under United States 
143.8   Code, title 38, chapter 30, 31, 32, 34, or 35; 
143.9      (3) a payment, other than a gift, bequest, devise, or 
143.10  inheritance within the meaning of section 102(a) of the Internal 
143.11  Revenue Code for educational expenses, or attributable to 
143.12  attendance at an eligible educational institution, which is 
143.13  exempt from income taxation by any law of the United States; or 
143.14     (4) amounts excluded from federal taxable income under 
143.15  section 135 of the Internal Revenue Code. 
143.16     (d) For the purposes of paragraph (c), "eligible 
143.17  educational institution" means: 
143.18     (1) an institution described in section 1201(a) or 
143.19  subparagraph (C) or (D) of section 481(a)(1) of the Higher 
143.20  Education Act of 1965; or 
143.21     (2) an area vocational education school, as defined in 
143.22  subparagraph (C) or (D) of section 521(3) of the Carl D. 
143.23  Perkins' Vocational Education Act, that is in any state, as 
143.24  defined in section 521(27) of the Carl D. Perkins' Vocational 
143.25  Education Act. 
143.26     Subd. 2.  [SUBTRACTION.] The grantor is allowed a 
143.27  subtraction from federal taxable income in the amount of (1) the 
143.28  contribution made by the grantor to a higher education trust in 
143.29  the grantor's taxable year, and (2) any net income or net 
143.30  capital gain other than income which is excluded from Minnesota 
143.31  tax by section 290.01, subdivision 19b, clause (1), generated by 
143.32  the higher education trust that is included in the grantor's 
143.33  federal taxable income for the year. 
143.34     Subd. 3.  [ADDITION.] The net income or capital loss of a 
143.35  higher education trust for a tax year which is included in the 
143.36  computation of the grantor's federal taxable income must be 
144.1   added to federal taxable income to the extent the loss is 
144.2   included in the grantor's computation of federal taxable income. 
144.3      Subd. 4.  [TAX ON DISTRIBUTION FROM A HIGHER EDUCATION 
144.4   TRUST.] In the event of distribution from a higher education 
144.5   trust within five years of the establishment of the higher 
144.6   education trust or in a year in which the distribution exceeds 
144.7   the qualified education expense of the grantor for the year 
144.8   notwithstanding any provision to the contrary, there is imposed 
144.9   on the grantor or the grantor's estate an additional tax in the 
144.10  amount of (1) two percent plus the highest marginal tax rate 
144.11  applicable to the grantor's net income in the year of 
144.12  distribution under section 290.06, subdivision 2c, paragraph 
144.13  (a), multiplied by the amount of the distribution if the 
144.14  distribution is made within five years of the establishment of 
144.15  the trust; or (2) the percentage determined under clause (1) 
144.16  multiplied by the amount of the distribution which exceeds the 
144.17  qualified education expense of the grantor for the year for 
144.18  distributions from a trust in existence for more than five years.
144.19     This tax applies regardless of whether the true grantor is 
144.20  a resident or nonresident of Minnesota in the year of 
144.21  distribution. 
144.22     In no event shall the cumulative distributions subject to 
144.23  the tax in this subdivision exceed the cumulative amount of 
144.24  subtractions less cumulative additions claimed by the grantor on 
144.25  the grantor's Minnesota individual income tax returns for tax 
144.26  years prior to the year of distribution.  Notwithstanding the 
144.27  filing requirements of section 289A.08, subdivision 1, a grantor 
144.28  is required to file a Minnesota individual tax return for any 
144.29  year in which the tax provided by this subdivision is imposed. 
144.30     Subd. 5.  [RETURNS OF HIGHER EDUCATION TRUSTS.] For each 
144.31  year a higher education trust is in existence, the grantor of 
144.32  the trust is required to file a return with the commissioner by 
144.33  October 15 of the year following the tax year.  The return must 
144.34  include the social security number of the grantor, the amount of 
144.35  the contributions made to the trust by the grantor in the year, 
144.36  the amount of net income or loss of the trust for the year, the 
145.1   amount of distributions made in the year, and the amount of the 
145.2   qualified higher education expense incurred by the grantor in 
145.3   the year. 
145.4      Subd. 6.  [SUNSET OF THE SUBTRACTION AND ADDITION.] If the 
145.5   federal government enacts an income tax provision providing for 
145.6   nondeductible individual retirement accounts similar to the 
145.7   provision proposed by Congress in section 11015 of Revenue 
145.8   Reconciliation and Tax Simplification Provisions from Conference 
145.9   Report on HR 2491, Seven-Year Balanced Budget Reconciliation Act 
145.10  of 1995, filed November 16, 1995, the subtraction and additions 
145.11  provided by subdivisions 2 and 3 will not be allowed for tax 
145.12  years beginning after the year of federal enactment. 
145.13     Subd. 7.  [ROLL-OVER OF DISTRIBUTIONS FROM HIGHER EDUCATION 
145.14  TRUSTS MADE AFTER THE YEAR OF THE SUNSET OF SUBDIVISION 2.] If 
145.15  the federal government enacts a tax provision as provided in 
145.16  subdivision 6, the tax imposed by subdivision 4 will be reduced 
145.17  by 8.5 percent of the amount contributed by the grantor to the 
145.18  nondeductible individual retirement account established by the 
145.19  grantor, other than the roll-over proceeds from an individual 
145.20  retirement account governed by section 407 of the Internal 
145.21  Revenue Code, in the year of distribution. 
145.22     Sec. 6.  Minnesota Statutes 1996, section 290.091, 
145.23  subdivision 2, is amended to read: 
145.24     Subd. 2.  [DEFINITIONS.] For purposes of the tax imposed by 
145.25  this section, the following terms have the meanings given: 
145.26     (a) "Alternative minimum taxable income" means the sum of 
145.27  the following for the taxable year: 
145.28     (1) the taxpayer's federal alternative minimum taxable 
145.29  income as defined in section 55(b)(2) of the Internal Revenue 
145.30  Code; 
145.31     (2) the taxpayer's itemized deductions allowed in computing 
145.32  federal alternative minimum taxable income, but excluding the 
145.33  Minnesota charitable contribution deduction and the medical 
145.34  expense deduction; 
145.35     (3) for depletion allowances computed under section 613A(c) 
145.36  of the Internal Revenue Code, with respect to each property (as 
146.1   defined in section 614 of the Internal Revenue Code), to the 
146.2   extent not included in federal alternative minimum taxable 
146.3   income, the excess of the deduction for depletion allowable 
146.4   under section 611 of the Internal Revenue Code for the taxable 
146.5   year over the adjusted basis of the property at the end of the 
146.6   taxable year (determined without regard to the depletion 
146.7   deduction for the taxable year); 
146.8      (4) to the extent not included in federal alternative 
146.9   minimum taxable income, the amount of the tax preference for 
146.10  intangible drilling cost under section 57(a)(2) of the Internal 
146.11  Revenue Code determined without regard to subparagraph (E); 
146.12     (5) to the extent not included in federal alternative 
146.13  minimum taxable income, the amount of interest income as 
146.14  provided by section 290.01, subdivision 19a, clause (1); 
146.15     less the sum of the amounts determined under the following 
146.16  clauses (1) to (3) (4): 
146.17     (1) interest income as defined in section 290.01, 
146.18  subdivision 19b, clause (1); 
146.19     (2) an overpayment of state income tax as provided by 
146.20  section 290.01, subdivision 19b, clause (2), to the extent 
146.21  included in federal alternative minimum taxable income; and 
146.22     (3) the amount of investment interest paid or accrued 
146.23  within the taxable year on indebtedness to the extent that the 
146.24  amount does not exceed net investment income, as defined in 
146.25  section 163(d)(4) of the Internal Revenue Code.  Interest does 
146.26  not include amounts deducted in computing federal adjusted gross 
146.27  income; and 
146.28     (4) the amount provided in section 290.01, subdivision 19b, 
146.29  clause (10). 
146.30     In the case of an estate or trust, alternative minimum 
146.31  taxable income must be computed as provided in section 59(c) of 
146.32  the Internal Revenue Code. 
146.33     (b) "Investment interest" means investment interest as 
146.34  defined in section 163(d)(3) of the Internal Revenue Code. 
146.35     (c) "Tentative minimum tax" equals seven percent of 
146.36  alternative minimum taxable income after subtracting the 
147.1   exemption amount determined under subdivision 3. 
147.2      (d) "Regular tax" means the tax that would be imposed under 
147.3   this chapter (without regard to this section and section 
147.4   290.032), reduced by the sum of the nonrefundable credits 
147.5   allowed under this chapter.  
147.6      (e) "Net minimum tax" means the minimum tax imposed by this 
147.7   section. 
147.8      (f) "Minnesota charitable contribution deduction" means a 
147.9   charitable contribution deduction under section 170 of the 
147.10  Internal Revenue Code to or for the use of an entity described 
147.11  in section 290.21, subdivision 3, clauses (a) to (e).  When the 
147.12  federal deduction for charitable contributions is limited under 
147.13  section 170(b) of the Internal Revenue Code, the allowable 
147.14  contributions in the year of contribution are deemed to be first 
147.15  contributions to entities described in section 290.21, 
147.16  subdivision 3, clauses (a) to (e). 
147.17     Sec. 7.  Minnesota Statutes 1996, section 290.091, 
147.18  subdivision 6, is amended to read: 
147.19     Subd. 6.  [CREDIT FOR PRIOR YEARS' LIABILITY.] (a) A credit 
147.20  is allowed against the tax imposed by this chapter on 
147.21  individuals, trusts, and estates equal to the minimum tax credit 
147.22  for the taxable year.  The minimum tax credit equals the 
147.23  adjusted net minimum tax for taxable years beginning after 
147.24  December 31, 1988, reduced by the minimum tax credits allowed in 
147.25  a prior taxable year.  The credit may not exceed the excess (if 
147.26  any) for the taxable year of 
147.27     (1) the regular tax, over 
147.28     (2) the greater of (i) the tentative alternative minimum 
147.29  tax, or (ii) zero. 
147.30     (b) The adjusted net minimum tax for a taxable year equals 
147.31  the lesser of the net minimum tax or the excess (if any) of 
147.32     (1) the tentative minimum tax, over 
147.33     (2) seven percent of the sum of 
147.34     (i) adjusted gross income as defined in section 62 of the 
147.35  Internal Revenue Code, 
147.36     (ii) interest income as defined in section 290.01, 
148.1   subdivision 19a, clause (1), 
148.2      (iii) interest on specified private activity bonds, as 
148.3   defined in section 57(a)(5) of the Internal Revenue Code, to the 
148.4   extent not included under clause (ii), 
148.5      (iv) depletion as defined in section 57(a)(1), determined 
148.6   without regard to the last sentence of paragraph (1), of the 
148.7   Internal Revenue Code, less 
148.8      (v) the deductions provided in subdivision 2, paragraph 
148.9   (a), clauses (5), items (i), (ii), and (iii) (1) to (4) of the 
148.10  second series of clauses, and 
148.11     (vi) the exemption amount determined under subdivision 3. 
148.12     In the case of an individual who is not a Minnesota 
148.13  resident for the entire year, adjusted net minimum tax must be 
148.14  multiplied by the fraction defined in section 290.06, 
148.15  subdivision 2c, paragraph (e).  In the case of a trust or 
148.16  estate, adjusted net minimum tax must be multiplied by the 
148.17  fraction defined under subdivision 4, paragraph (b). 
148.18     Sec. 8.  [EFFECTIVE DATE.] 
148.19     Sections 3 to 7 are effective for tax years beginning after 
148.20  December 31, 1996. 
148.21                             ARTICLE 13
148.22                           STATE AGENCIES
148.23     Section 1.  [APPROPRIATIONS; DEPARTMENT OF CHILDREN, 
148.24  FAMILIES, AND LEARNING.] 
148.25     Subdivision 1.  [DEPARTMENT OF CHILDREN, FAMILIES, AND 
148.26  LEARNING.] The sums indicated in this section are appropriated 
148.27  from the general fund to the department of children, families, 
148.28  and learning for the fiscal years designated. 
148.29     Subd. 2.  [DEPARTMENT.] For the department of children, 
148.30  families, and learning: 
148.31        $24,548,000       .....      1998
148.32        $24,166,000       .....      1999
148.33     (a) Any balance in the first year does not cancel but is 
148.34  available in the second year. 
148.35     (b) $21,000 each year is from the trunk highway fund. 
148.36     (c) $622,000 in 1998 and $627,000 in 1999 is for the 
149.1   academic excellence foundation. 
149.2      Up to $50,000 each year is contingent upon the match of $1 
149.3   in the previous year from private sources consisting of either 
149.4   direct monetary contributions or in-kind contributions of 
149.5   related goods or services, for each $1 of the appropriation.  
149.6   The commissioner of children, families, and learning must 
149.7   certify receipt of the money or documentation for the private 
149.8   matching funds or in-kind contributions.  The unencumbered 
149.9   balance from the amount actually appropriated from the 
149.10  contingent amount in 1996 does not cancel but is available in 
149.11  1997.  The amount carried forward must not be used to establish 
149.12  a larger annual base appropriation for later fiscal years. 
149.13     (d) $207,000 in 1998 and $210,000 in 1999 is for the state 
149.14  board of education. 
149.15     (e) $230,000 in 1998 and $234,000 in 1999 is for the board 
149.16  of teaching. 
149.17     (f) $775,000 each year is for educational effectiveness 
149.18  programs according to Minnesota Statutes, sections 121.602 and 
149.19  121.608. 
149.20     (g) $60,000 each year is for contracting with the state 
149.21  fire marshal to provide the services required according to 
149.22  Minnesota Statutes, section 121.1502. 
149.23     (h) $400,000 each year is for health and safety management 
149.24  assistance contracts under Minnesota Statutes, section 124.83. 
149.25     (i) The expenditures of federal grants and aids as shown in 
149.26  the biennial budget document and its supplements are approved 
149.27  and appropriated and shall be spent as indicated. 
149.28     (j) The commissioner shall maintain no more than five total 
149.29  complement in the categories of commissioner, deputy 
149.30  commissioner, assistant commissioner, assistant to the 
149.31  commissioner, and executive assistant. 
149.32     The department of children, families, and learning may 
149.33  establish full-time, part-time, or seasonal positions as 
149.34  necessary to carry out assigned responsibilities and missions.  
149.35  Actual employment levels are limited by the availability of 
149.36  state funds appropriated for salaries, benefits, and agency 
150.1   operations or funds available from other sources for such 
150.2   purposes. 
150.3      (k) The department of children, families, and learning 
150.4   shall develop a performance report on the quality of its 
150.5   programs and services.  The report must be consistent with the 
150.6   process specified in Minnesota Statutes, sections 15.90 to 
150.7   15.92.  The goals, objectives, and measures of this report must 
150.8   be developed in cooperation with the chairs of the finance 
150.9   divisions of the education committees of the house of 
150.10  representatives and senate, the department of finance, and the 
150.11  office of legislative auditor.  The report must include data to 
150.12  indicate the progress of the department in meeting its goals and 
150.13  objectives. 
150.14     The department of children, families, and learning must 
150.15  present a biennial report on the quality and performance of key 
150.16  education programs in Minnesota's public early childhood, 
150.17  elementary, middle, and secondary education programs.  To the 
150.18  extent possible, the plan must be consistent with Minnesota 
150.19  Statutes, sections 15.90 to 15.92 and the provisions of article 
150.20  7, section 10, paragraphs (a) and (b).  The department must 
150.21  consult with the chairs of the finance divisions of the 
150.22  education committees of the house of representatives and senate, 
150.23  the department of finance, and the office of legislative auditor 
150.24  in developing this plan. 
150.25     (l) $188,000 each year is appropriated from the special 
150.26  revenue fund for the graduation rule.  The department 
150.27  appropriation is to be used to fund continued assessment and 
150.28  standards development and piloting; to broaden public 
150.29  understanding through communication; to continue development of 
150.30  learning benchmarks; for ongoing statewide assessment efforts; 
150.31  to develop system performance standards; and to provide 
150.32  technical assistance to schools throughout the state.  The 
150.33  appropriation from the special revenue fund is to be used for 
150.34  appropriate development efforts in health-related standards and 
150.35  assessments.  The commissioner may transfer any portion of this 
150.36  appropriation not needed for the purpose of this paragraph to 
151.1   the Minnesota highway safety center at St. Cloud University.  
151.2   Any amount of this appropriation does not cancel and shall be 
151.3   carried forward to the following fiscal year.  Notwithstanding 
151.4   any law to the contrary, the commissioner may contract for 
151.5   national expertise and related services in each of these 
151.6   development areas.  Notwithstanding Minnesota Statutes, section 
151.7   15.53, subdivision 2, the commissioner of children, families, 
151.8   and learning may contract with a school district for a period no 
151.9   longer than five consecutive years for the services of an 
151.10  educator to work in the development, implementation, or both, of 
151.11  the graduation rule.  The commissioner may contract for services 
151.12  and expertise as necessary for development and implementation of 
151.13  the graduation standards.  Notwithstanding any law to the 
151.14  contrary, the contracts are not subject to the contract 
151.15  certification procedures of the commissioner of administration 
151.16  or of Minnesota Statutes, chapter 16B, and are not subject to or 
151.17  included in any spending limitations on contracts. 
151.18     Sec. 2.  [APPROPRIATIONS; LOLA AND RUDY PERPICH MINNESOTA 
151.19  CENTER FOR ARTS EDUCATION.] 
151.20     The sums indicated in this section are appropriated from 
151.21  the general fund to the center for arts education for the fiscal 
151.22  years designated: 
151.23      $5,541,000     .....     1998
151.24      $6,054,000     .....     1999
151.25     Of the fiscal year 1998 appropriation, $154,000 is to fund 
151.26  artist and arts organization participation in the education 
151.27  residency and education technology projects, $75,000 is for 
151.28  school support for the residency project, and $121,000 is for 
151.29  further development of the partners:  arts and school for 
151.30  students (PASS) program, including pilots.  Of the fiscal year 
151.31  1999 appropriation, $154,000 is to fund artist and arts 
151.32  organizations participation in the education residency project, 
151.33  $75,000 is for school support for the residency project, and 
151.34  $121,000 is to fund the PASS program, including additional 
151.35  pilots.  The guidelines for the education residency project and 
151.36  the pass program shall be developed and defined by the center 
152.1   for arts education in cooperation with the Minnesota arts 
152.2   board.  The Minnesota arts board shall participate in the review 
152.3   and allocation process.  The center for arts education and the 
152.4   Minnesota arts board shall cooperate to fund these projects. 
152.5      The center for arts education may establish full-time, 
152.6   part-time, or seasonal positions as necessary to carry out 
152.7   assigned responsibilities and missions.  Actual employment 
152.8   levels are limited by the availability of state funds 
152.9   appropriated for salaries, benefits and agency operations or 
152.10  funds available from other sources for such purposes.  
152.11     Any balance in the first year does not cancel, but is 
152.12  available in the second year. 
152.13     Sec. 3.  [APPROPRIATIONS; FARIBAULT ACADEMIES.] 
152.14     The sums indicated in this section are appropriated from 
152.15  the general fund to the department of children, families, and 
152.16  learning for the Faribault academies for the fiscal years 
152.17  designated:  
152.18       $8,910,000     .....     1998
152.19       $8,908,000     .....     1999 
152.20     Any balance in the first year does not cancel but is 
152.21  available in the second year. 
152.22     The state board of education may establish full-time, 
152.23  part-time, or seasonal positions as necessary to carry out 
152.24  assigned responsibilities and missions of the Faribault 
152.25  academies.  Actual employment levels are limited by the 
152.26  availability of state funds appropriated for salaries, benefits 
152.27  and agency operations or funds available from other sources for 
152.28  such purposes. 
152.29     In the next biennial budget, the academies must assess 
152.30  their progress in meeting the established performance measures 
152.31  for the Faribault academies and inform the legislature on the 
152.32  content of that assessment.  The information must include an 
152.33  assessment of its progress by consumers and employees.