1.1                          A bill for an act 
  1.2             relating to education; providing for a student-based 
  1.3             system of education finance; amending Minnesota 
  1.4             Statutes 1998, sections 123B.53, subdivision 5; 
  1.5             123B.57, subdivision 4; 123B.64, subdivision 3; 
  1.6             124D.03, subdivision 2; 124D.11, subdivision 1; 
  1.7             124D.22, subdivision 3; 124D.65, by adding a 
  1.8             subdivision; 124D.86, subdivisions 3 and 6; 126C.05, 
  1.9             subdivisions 5 and 7; 126C.10, subdivisions 2, 4, 5, 
  1.10            6, 7, 8, 9, 10, 13, 18, 20, and 21; 126C.12, 
  1.11            subdivision 1; 126C.16, subdivision 3; 126C.17, 
  1.12            subdivisions 1, 2, 4, 5, 6, and 9; 126C.19, 
  1.13            subdivisions 1 and 2; 126C.40, subdivisions 1 and 4; 
  1.14            and 127A.47, subdivisions 1, 7, and 8; proposing 
  1.15            coding for new law in Minnesota Statutes, chapter 126C.
  1.16  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.17     Section 1.  Minnesota Statutes 1998, section 123B.53, 
  1.18  subdivision 5, is amended to read: 
  1.19     Subd. 5.  [EQUALIZED DEBT SERVICE LEVY.] To obtain debt 
  1.20  service equalization revenue, a district must levy an amount not 
  1.21  to exceed the district's debt service equalization revenue times 
  1.22  the lesser of one or the ratio of: 
  1.23     (1) the quotient derived by dividing the adjusted net tax 
  1.24  capacity of the district for the year before the year the levy 
  1.25  is certified by the resident adjusted pupil units in the 
  1.26  district for the school year ending in the year prior to the 
  1.27  year the levy is certified; to 
  1.28     (2) $4,707.50. 
  1.29     Sec. 2.  Minnesota Statutes 1998, section 123B.57, 
  1.30  subdivision 4, is amended to read: 
  2.1      Subd. 4.  [HEALTH AND SAFETY LEVY.] To receive health and 
  2.2   safety revenue, a district may levy an amount equal to the 
  2.3   district's health and safety revenue as defined in subdivision 3 
  2.4   multiplied by the lesser of one, or the ratio of the quotient 
  2.5   derived by dividing the adjusted net tax capacity of the 
  2.6   district for the year preceding the year the levy is certified 
  2.7   by the resident adjusted pupil units in the district for the 
  2.8   school year to which the levy is attributable, to $4,707.50. 
  2.9      Sec. 3.  Minnesota Statutes 1998, section 123B.64, 
  2.10  subdivision 3, is amended to read: 
  2.11     Subd. 3.  [LEVY.] To obtain historic building revenue, a 
  2.12  district may levy an amount, not to exceed the district's 
  2.13  revenue, equal to the district's revenue authority for that year 
  2.14  times the lesser of one or the ratio of the adjusted net tax 
  2.15  capacity divided by its resident adjusted pupil units for that 
  2.16  school year to $10,000. 
  2.17     Sec. 4.  Minnesota Statutes 1998, section 124D.03, 
  2.18  subdivision 2, is amended to read: 
  2.19     Subd. 2.  [LIMITED ENROLLMENT OF NONRESIDENT PUPILS.] (a) A 
  2.20  board may, by resolution, limit the enrollment of nonresident 
  2.21  pupils in its schools or programs according to this section to a 
  2.22  number not less than the lesser greater of: 
  2.23     (1) one percent of the total enrollment at each grade level 
  2.24  in the district; or 
  2.25     (2) the number of district residents at that grade level 
  2.26  enrolled in a nonresident district according to this section.  
  2.27     (b) A district that limits enrollment of nonresident pupils 
  2.28  under paragraph (a) shall report to the commissioner by July 15 
  2.29  on the number of nonresident pupils denied admission due to the 
  2.30  limitations on the enrollment of nonresident pupils. 
  2.31     Sec. 5.  Minnesota Statutes 1998, section 124D.11, 
  2.32  subdivision 1, is amended to read: 
  2.33     Subdivision 1.  [GENERAL EDUCATION REVENUE.] General 
  2.34  education revenue must be paid to a charter school as though it 
  2.35  were a district.  The general education revenue for each pupil 
  2.36  unit is the state average general education revenue per pupil 
  3.1   unit, plus the referendum allowance in the pupil's district of 
  3.2   residence, minus an amount equal to the product of the formula 
  3.3   allowance according to section 126C.10, subdivision 2, times 
  3.4   .0485, calculated without basic skills revenue, transportation 
  3.5   sparsity revenue, and the transportation portion of the 
  3.6   transition revenue adjustment, plus basic skills revenue as 
  3.7   though the school were a school district. 
  3.8      Sec. 6.  Minnesota Statutes 1998, section 124D.22, 
  3.9   subdivision 3, is amended to read: 
  3.10     Subd. 3.  [EXTENDED DAY LEVY.] To obtain extended day 
  3.11  revenue, a school district may levy an amount equal to the 
  3.12  district's extended day revenue as defined in subdivision 2 
  3.13  multiplied by the lesser of one, or the ratio of the quotient 
  3.14  derived by dividing the adjusted net tax capacity of the 
  3.15  district for the year before the year the levy is certified by 
  3.16  the resident adjusted pupil units in the district for the school 
  3.17  year to which the levy is attributable, to $3,767.  
  3.18     Sec. 7.  Minnesota Statutes 1998, section 124D.65, is 
  3.19  amended by adding a subdivision to read: 
  3.20     Subd. 3a.  [LEP AID.] A district's limited English 
  3.21  proficiency programs aid for fiscal year 2001 and later equals 
  3.22  the product of $402 times the greater of 20 or the number of 
  3.23  pupils of limited English proficiency enrolled in the district 
  3.24  during the current fiscal year. 
  3.25     Sec. 8.  Minnesota Statutes 1998, section 124D.86, 
  3.26  subdivision 3, is amended to read: 
  3.27     Subd. 3.  [INTEGRATION REVENUE.] For fiscal year 1999 2001 
  3.28  and later fiscal years, integration revenue equals the following 
  3.29  amounts: 
  3.30     (1) for independent school district No. 709, Duluth, $193 
  3.31  times the resident adjusted pupil units for the school year; 
  3.32     (2) for independent school district No. 625, St. Paul, $427 
  3.33  times the resident adjusted pupil units for the school year; 
  3.34     (3) for special school district No. 1, Minneapolis, $523 
  3.35  times the resident adjusted pupil units for the school year; and 
  3.36     (4) for a district not listed in clause (1), (2), or (3) 
  4.1   that is required to implement a plan according to the 
  4.2   requirements of Minnesota Rules, parts 3535.0200 to 3535.2200, 
  4.3   the lesser of the actual cost of implementing the plan during 
  4.4   the fiscal year or $93 times the resident adjusted pupil units 
  4.5   for the school year. 
  4.6      Sec. 9.  Minnesota Statutes 1998, section 124D.86, 
  4.7   subdivision 6, is amended to read: 
  4.8      Subd. 6.  [ALTERNATIVE ATTENDANCE PROGRAMS.] (a) The 
  4.9   integration aid under subdivision 5 must be adjusted for each 
  4.10  pupil residing in a district eligible for integration revenue 
  4.11  under subdivision 3 and attending a charter school or a 
  4.12  nonresident district not eligible for integration revenue under 
  4.13  sections 123A.05 to 123A.08, 124D.03, 124D.06, 124D.07, and 
  4.14  124D.08 if the enrollment of the pupil in the nonresident 
  4.15  district contributes to desegregation or integration purposes.  
  4.16  The adjustments must be made according to this subdivision.  
  4.17     (b) Aid paid to the charter school or the district of the 
  4.18  pupil's residence serving nonresidents must be reduced increased 
  4.19  by an amount equal to the revenue per resident adjusted pupil 
  4.20  unit of the resident district times the number of resident pupil 
  4.21  units attributable to the pupil for the time the pupil is 
  4.22  enrolled in a charter school or a nonresident district. 
  4.23     (c) Aid paid to a district serving nonresidents must be 
  4.24  increased by an amount equal to the aid reduction to the 
  4.25  resident district under paragraphs (b) and (d).  
  4.26     (d) If the amount of the reduction to be made from the aid 
  4.27  of a district is greater than the amount of aid otherwise due 
  4.28  the district, the excess reduction must be made from other state 
  4.29  aids due the district. 
  4.30     Sec. 10.  Minnesota Statutes 1998, section 126C.05, 
  4.31  subdivision 5, is amended to read: 
  4.32     Subd. 5.  [ADJUSTED PUPIL UNITS.] Adjusted pupil units for 
  4.33  a district or charter school means the sum of: 
  4.34     (1) the number of resident pupil units served, according to 
  4.35  subdivision 1g 7, plus 
  4.36     (2) shared time pupil units, according to section 126C.01, 
  5.1   subdivision 6, plus 
  5.2      (3) pupil units according to subdivision 1 for pupils 
  5.3   attending the district for which general education aid 
  5.4   adjustments are made according to section 127A.47, subdivision 
  5.5   7; minus 
  5.6      (4) pupil units according to subdivision 1 for resident 
  5.7   pupils attending other districts for which general education aid 
  5.8   adjustments are made according to section 127A.47, subdivision 7 
  5.9   whom the district or charter school pays tuition under section 
  5.10  123A.18, 123A.22, 123A.30, 123A.32, 123A.44, 123A.488, 123B.88, 
  5.11  subdivision 4, 124D.04, 124D.05, 125A.03 to 125A.24, 125A.51, or 
  5.12  125A.65, minus 
  5.13     (3) pupil units according to subdivision 1 for whom the 
  5.14  district or charter school receives tuition under section 
  5.15  123A.18, 123A.22, 123A.30, 123A.32, 123A.44, 123A.488, 123B.88, 
  5.16  subdivision 4, 124D.04, 124D.05, 125A.03 to 125A.24, 125A.51, or 
  5.17  125A.65. 
  5.18     Sec. 11.  Minnesota Statutes 1998, section 126C.05, 
  5.19  subdivision 7, is amended to read: 
  5.20     Subd. 7.  [PUPIL UNITS SERVED.] Pupil units served for a 
  5.21  district or charter school means the number of pupil units 
  5.22  according to subdivision 1 enrolled in the district or charter 
  5.23  school. 
  5.24     Sec. 12.  Minnesota Statutes 1998, section 126C.10, 
  5.25  subdivision 2, is amended to read: 
  5.26     Subd. 2.  [BASIC REVENUE.] The basic revenue for each 
  5.27  district equals the formula allowance times the 
  5.28  resident adjusted pupil units for the school year.  The formula 
  5.29  allowance for fiscal year 1997 is $3,505.  The formula allowance 
  5.30  for fiscal year 1998 is $3,581 and the formula allowance for 
  5.31  fiscal year 1999 and fiscal year 2000 is $3,530.  The formula 
  5.32  allowance for fiscal year 2001 and subsequent fiscal years is 
  5.33  $3,597. 
  5.34     Sec. 13.  Minnesota Statutes 1998, section 126C.10, 
  5.35  subdivision 4, is amended to read: 
  5.36     Subd. 4.  [BASIC SKILLS REVENUE.] For fiscal year 1999 2001 
  6.1   and thereafter, a school district's basic skills revenue equals 
  6.2   the sum of: 
  6.3      (1) compensatory revenue under subdivision 3; plus 
  6.4      (2) limited English proficiency revenue according to 
  6.5   section 124D.65, subdivision 5; plus 
  6.6      (3) $190 times the limited English proficiency pupil units 
  6.7   according to section 126C.05, subdivision 17; plus 
  6.8      (4) the lesser of:  (i) $22.50 times the number of adjusted 
  6.9   pupil units in kindergarten to grade 8; or (ii) the amount of 
  6.10  district money provided to match basic skills revenue for the 
  6.11  purposes described in section 126C.15. 
  6.12     Sec. 14.  Minnesota Statutes 1998, section 126C.10, 
  6.13  subdivision 5, is amended to read: 
  6.14     Subd. 5.  [TRAINING AND EXPERIENCE REVENUE.] The training 
  6.15  and experience revenue for each district equals the greater of 
  6.16  zero or the result of the following computation:  
  6.17     (1) subtract .8 from the training and experience index; 
  6.18     (2) multiply the result in clause (1) by the product of 
  6.19  $660 times the resident adjusted pupil units for the school year.
  6.20     Sec. 15.  Minnesota Statutes 1998, section 126C.10, 
  6.21  subdivision 6, is amended to read: 
  6.22     Subd. 6.  [DEFINITIONS.] The definitions in this 
  6.23  subdivision apply only to subdivisions 7 and 8.  
  6.24     (a) "High school" means a secondary school that has pupils 
  6.25  enrolled in at least the 10th, 11th, and 12th grades.  If there 
  6.26  is no secondary school in the district that has pupils enrolled 
  6.27  in at least the 10th, 11th, and 12th grades, and the school is 
  6.28  at least 19 miles from the next nearest school, the commissioner 
  6.29  must designate one school in the district as a high school for 
  6.30  the purposes of this section. 
  6.31     (b) "Secondary average daily membership" means, for a 
  6.32  district that has only one high school, the average daily 
  6.33  membership of resident pupils in grades 7 through 12.  For a 
  6.34  district that has more than one high school, "secondary average 
  6.35  daily membership" for each high school means the product of the 
  6.36  average daily membership of resident pupils served in grades 7 
  7.1   through 12 in the high school, times the ratio of six to the 
  7.2   number of grades in the high school. 
  7.3      (c) "Attendance area" means the total surface area of the 
  7.4   district, in square miles, divided by the number of high schools 
  7.5   in the district.  For a district that does not operate a high 
  7.6   school and is less than 19 miles from the nearest operating high 
  7.7   school, the attendance area equals zero. 
  7.8      (d) "Isolation index" for a high school means the square 
  7.9   root of 55 percent of the attendance area plus the distance in 
  7.10  miles, according to the usually traveled routes, between the 
  7.11  high school and the nearest high school.  For a district in 
  7.12  which there is located land defined in section 84A.01, 84A.20, 
  7.13  or 84A.31, the distance in miles is the sum of: 
  7.14     (1) the square root of one-half of the attendance area; and 
  7.15     (2) the distance from the border of the district to the 
  7.16  nearest high school. 
  7.17     (e) "Qualifying high school" means a high school that has 
  7.18  an isolation index greater than 23 and that has secondary 
  7.19  average daily membership of less than 400.  
  7.20     (f) "Qualifying elementary school" means an elementary 
  7.21  school that is located 19 miles or more from the nearest 
  7.22  elementary school or from the nearest elementary school within 
  7.23  the district and, in either case, has an elementary average 
  7.24  daily membership of an average of 20 or fewer per grade. 
  7.25     (g) "Elementary average daily membership" means, for a 
  7.26  district that has only one elementary school, the average daily 
  7.27  membership of resident pupils served in kindergarten through 
  7.28  grade 6.  For a district that has more than one elementary 
  7.29  school, "average daily membership" for each school means the 
  7.30  average daily membership of pupils served in kindergarten 
  7.31  through grade 6 multiplied by the ratio of seven to the number 
  7.32  of grades in the elementary school.  For a building in a 
  7.33  district where the nearest elementary school is at least 65 
  7.34  miles distant, pupils served must be used to determine average 
  7.35  daily membership. 
  7.36     Sec. 16.  Minnesota Statutes 1998, section 126C.10, 
  8.1   subdivision 7, is amended to read: 
  8.2      Subd. 7.  [SECONDARY SPARSITY REVENUE.] (a) A district's 
  8.3   secondary sparsity revenue for a school year equals the sum of 
  8.4   the results of the following calculation for each qualifying 
  8.5   high school in the district: 
  8.6      (1) the formula allowance for the school year, multiplied 
  8.7   by 
  8.8      (2) the secondary average daily membership of pupils served 
  8.9   in the high school, multiplied by 
  8.10     (3) the quotient obtained by dividing 400 minus the 
  8.11  secondary average daily membership by 400 plus the secondary 
  8.12  daily membership, multiplied by 
  8.13     (4) the lesser of 1.5 or the quotient obtained by dividing 
  8.14  the isolation index minus 23 by ten. 
  8.15     (b) A newly formed district that is the result of districts 
  8.16  combining under the cooperation and combination program or 
  8.17  consolidating under section 123A.48 must receive secondary 
  8.18  sparsity revenue equal to the greater of:  (1) the amount 
  8.19  calculated under paragraph (a) for the combined district; or (2) 
  8.20  the sum of the amounts of secondary sparsity revenue the former 
  8.21  districts had in the year prior to consolidation, increased for 
  8.22  any subsequent changes in the secondary sparsity formula. 
  8.23     Sec. 17.  Minnesota Statutes 1998, section 126C.10, 
  8.24  subdivision 8, is amended to read: 
  8.25     Subd. 8.  [ELEMENTARY SPARSITY REVENUE.] A district's 
  8.26  elementary sparsity revenue equals the sum of the following 
  8.27  amounts for each qualifying elementary school in the district:  
  8.28     (1) the formula allowance for the year, multiplied by 
  8.29     (2) the elementary average daily membership of pupils 
  8.30  served in the school, multiplied by 
  8.31     (3) the quotient obtained by dividing 140 minus the 
  8.32  elementary average daily membership by 140 plus the average 
  8.33  daily membership. 
  8.34     Sec. 18.  Minnesota Statutes 1998, section 126C.10, 
  8.35  subdivision 9, is amended to read: 
  8.36     Subd. 9.  [SUPPLEMENTAL REVENUE.] (a) A district's 
  9.1   supplemental revenue allowance for fiscal year 1994 and later 
  9.2   fiscal years equals the district's supplemental revenue for 
  9.3   fiscal year 1993 divided by the district's 1992-1993 resident 
  9.4   pupil units. 
  9.5      (b) A district's supplemental revenue allowance is reduced 
  9.6   for fiscal year 1995 and later according to subdivision 12. 
  9.7      (c) A district's supplemental revenue equals the 
  9.8   supplemental revenue allowance, if any, times its resident 
  9.9   adjusted pupil units for that year.  
  9.10     (d) A district may cancel its supplemental revenue by 
  9.11  notifying the commissioner of education prior to June 30, 1994.  
  9.12  A district that is reorganizing under section 122A.35, 123A.46, 
  9.13  or 123A.48 may cancel its supplemental revenue by notifying the 
  9.14  commissioner of children, families, and learning before July 1 
  9.15  of the year of the reorganization.  If a district cancels its 
  9.16  supplemental revenue according to this paragraph, its 
  9.17  supplemental revenue allowance for fiscal year 1993 for purposes 
  9.18  of subdivision 12 and section 124A.03, subdivision 3b, equals 
  9.19  zero. 
  9.20     Sec. 19.  Minnesota Statutes 1998, section 126C.10, 
  9.21  subdivision 10, is amended to read: 
  9.22     Subd. 10.  [SUPPLEMENTAL LEVY.] To obtain supplemental 
  9.23  revenue, a district may levy an amount not more than the product 
  9.24  of its supplemental revenue for the school year times the lesser 
  9.25  of one or the ratio of its adjusted net tax capacity per 
  9.26  resident adjusted pupil unit to $10,000. 
  9.27     Sec. 20.  Minnesota Statutes 1998, section 126C.10, 
  9.28  subdivision 13, is amended to read: 
  9.29     Subd. 13.  [TOTAL OPERATING CAPITAL REVENUE.] (a) For 
  9.30  fiscal year 1999 and thereafter, total operating capital revenue 
  9.31  for a district equals the amount determined under paragraph (b) 
  9.32  or (c), plus $68 times the resident adjusted pupil units for the 
  9.33  school year.  The revenue must be placed in a reserved account 
  9.34  in the general fund and may only be used according to 
  9.35  subdivision 14. 
  9.36     (b) For fiscal years 1999 and later, capital revenue for a 
 10.1   district equals $100 times the district's maintenance cost index 
 10.2   times its resident adjusted pupil units for the school year. 
 10.3      (c) For 1996 and later fiscal years, the previous formula 
 10.4   revenue for a district equals $128 times its resident pupil 
 10.5   units for the school year. 
 10.6      (d) For fiscal years 1998 and later, the revenue for a 
 10.7   district that operates a program under section 124D.128, is 
 10.8   increased by an amount equal to $30 times the number of resident 
 10.9   pupil units served at the site where the program is implemented. 
 10.10     Sec. 21.  Minnesota Statutes 1998, section 126C.10, 
 10.11  subdivision 18, is amended to read: 
 10.12     Subd. 18.  [TRANSPORTATION SPARSITY REVENUE ALLOWANCE.] (a) 
 10.13  A district's transportation sparsity allowance equals the 
 10.14  greater of zero or the result of the following computation: 
 10.15     (i) Multiply the formula allowance according to subdivision 
 10.16  2, by .1469. 
 10.17     (ii) Multiply the result in clause (i) by the district's 
 10.18  sparsity index raised to the 26/100 power. 
 10.19     (iii) Multiply the result in clause (ii) by the district's 
 10.20  density index raised to the 13/100 power. 
 10.21     (iv) Multiply the formula allowance according to 
 10.22  subdivision 2, by .0485. 
 10.23     (v) Subtract the result in clause (iv) from the result in 
 10.24  clause (iii). 
 10.25     (b) Transportation sparsity revenue is equal to the 
 10.26  transportation sparsity allowance times the resident adjusted 
 10.27  pupil units. 
 10.28     Sec. 22.  Minnesota Statutes 1998, section 126C.10, 
 10.29  subdivision 20, is amended to read: 
 10.30     Subd. 20.  [TRANSITION REVENUE ADJUSTMENT.] A district's 
 10.31  transition revenue adjustment equals the district's transition 
 10.32  allowance times the resident adjusted pupil units for the school 
 10.33  year. 
 10.34     Sec. 23.  Minnesota Statutes 1998, section 126C.10, 
 10.35  subdivision 21, is amended to read: 
 10.36     Subd. 21.  [TRANSITION LEVY ADJUSTMENT.] A district's 
 11.1   general education levy shall be adjusted by an amount equal to 
 11.2   the district's transition revenue times the lesser of 1 or the 
 11.3   ratio of its adjusted net tax capacity per resident adjusted 
 11.4   pupil unit to $10,000. 
 11.5      Sec. 24.  Minnesota Statutes 1998, section 126C.12, 
 11.6   subdivision 1, is amended to read: 
 11.7      Subdivision 1.  [REVENUE.] Of a district's general 
 11.8   education revenue an amount equal to the sum of the number of 
 11.9   elementary fund balance adjusted pupils in average daily 
 11.10  membership defined in section 126C.05, subdivision 5, and 
 11.11  one-half of the number of kindergarten fund balance adjusted 
 11.12  pupils in average daily membership as defined in section 
 11.13  126C.05, subdivision 5, times .06 for fiscal year 1995 and 
 11.14  thereafter times the formula allowance must be reserved 
 11.15  according to this section. 
 11.16     Sec. 25.  Minnesota Statutes 1998, section 126C.16, 
 11.17  subdivision 3, is amended to read: 
 11.18     Subd. 3.  [PER PUPIL REVENUE CONVERSION.] (a) The 
 11.19  department must convert each district's referendum revenue 
 11.20  authority for fiscal year 2002 2001 and later years to an 
 11.21  allowance per pupil unit as follows:  the revenue allowance 
 11.22  equals the amount determined by dividing the district's maximum 
 11.23  revenue under section 126C.17, for fiscal year 2001 2000 by the 
 11.24  district's 2000-2001 1999-2000 resident pupil units.  A 
 11.25  district's maximum revenue for all later years for which the 
 11.26  revenue is authorized equals the revenue allowance times the 
 11.27  district's resident adjusted pupil units for that year.  
 11.28     (b) The referendum allowance reduction must be applied 
 11.29  first to the authority with the earliest expiration date. 
 11.30     Sec. 26.  Minnesota Statutes 1998, section 126C.17, 
 11.31  subdivision 1, is amended to read: 
 11.32     Subdivision 1.  [REFERENDUM ALLOWANCE.] A district's 
 11.33  referendum revenue allowance equals the referendum revenue 
 11.34  authority for that year divided by its resident adjusted pupil 
 11.35  units for that school year. 
 11.36     Sec. 27.  Minnesota Statutes 1998, section 126C.17, 
 12.1   subdivision 2, is amended to read: 
 12.2      Subd. 2.  [REFERENDUM ALLOWANCE LIMIT.] Notwithstanding 
 12.3   subdivision 1, a district's referendum allowance must not exceed 
 12.4   the greater of:  
 12.5      (1) the district's referendum allowance for fiscal year 
 12.6   1994; 
 12.7      (2) 25 percent of the formula allowance minus $300 for 
 12.8   fiscal year 1997 and later; or 
 12.9      (3) for a newly reorganized district created after July 1, 
 12.10  1994, the sum of the referendum revenue authority for the 
 12.11  reorganizing districts for the fiscal year preceding the 
 12.12  reorganization, divided by the sum of the resident adjusted 
 12.13  pupil units of the reorganizing districts for the fiscal year 
 12.14  preceding the reorganization. 
 12.15     Sec. 28.  Minnesota Statutes 1998, section 126C.17, 
 12.16  subdivision 4, is amended to read: 
 12.17     Subd. 4.  [TOTAL REFERENDUM REVENUE.] The total referendum 
 12.18  revenue for each district equals the district's referendum 
 12.19  allowance times the resident adjusted pupil units for the school 
 12.20  year. 
 12.21     Sec. 29.  Minnesota Statutes 1998, section 126C.17, 
 12.22  subdivision 5, is amended to read: 
 12.23     Subd. 5.  [REFERENDUM EQUALIZATION REVENUE.] A district's 
 12.24  referendum equalization revenue equals the sum of:  (a) $350 
 12.25  times the district's resident adjusted pupil units for that year 
 12.26  , plus (b) the product of the difference between the district's 
 12.27  adjusted pupil units and the district's resident pupil units 
 12.28  times the greater of zero or the difference between the 
 12.29  district's referendum allowance and $350.  Referendum 
 12.30  equalization revenue must not exceed a district's total 
 12.31  referendum revenue for that year. 
 12.32     Sec. 30.  Minnesota Statutes 1998, section 126C.17, 
 12.33  subdivision 6, is amended to read: 
 12.34     Subd. 6.  [REFERENDUM EQUALIZATION LEVY.] (a) For fiscal 
 12.35  year 1999 and thereafter, a district's referendum equalization 
 12.36  levy for a referendum levied against the referendum market value 
 13.1   of all taxable property as defined in section 126C.01, 
 13.2   subdivision 3, equals the district's referendum equalization 
 13.3   revenue under subdivision 5, paragraph (a), times the lesser of 
 13.4   one or the ratio of the district's referendum market value per 
 13.5   resident adjusted pupil unit to $476,000. 
 13.6      (b) For fiscal year 1999 and thereafter, a district's 
 13.7   referendum equalization levy for a referendum levied against the 
 13.8   net tax capacity of all taxable property equals the district's 
 13.9   referendum equalization revenue under subdivision 5, paragraph 
 13.10  (a), times the lesser of one or the ratio of the district's 
 13.11  adjusted net tax capacity per resident adjusted pupil unit to 
 13.12  $10,000. 
 13.13     Sec. 31.  Minnesota Statutes 1998, section 126C.17, 
 13.14  subdivision 9, is amended to read: 
 13.15     Subd. 9.  [REFERENDUM REVENUE.] (a) The revenue authorized 
 13.16  by section 126C.10, subdivision 1, may be increased in the 
 13.17  amount approved by the voters of the district at a referendum 
 13.18  called for the purpose.  The referendum may be called by the 
 13.19  board or shall be called by the board upon written petition of 
 13.20  qualified voters of the district.  The referendum must be 
 13.21  conducted one or two calendar years before the increased levy 
 13.22  authority, if approved, first becomes payable.  Only one 
 13.23  election to approve an increase may be held in a calendar year.  
 13.24  Unless the referendum is conducted by mail under paragraph (g), 
 13.25  the referendum must be held on the first Tuesday after the first 
 13.26  Monday in November.  The ballot must state the maximum amount of 
 13.27  the increased revenue per resident adjusted pupil unit, the 
 13.28  estimated referendum tax rate as a percentage of market value in 
 13.29  the first year it is to be levied, and that the revenue must be 
 13.30  used to finance school operations.  The ballot may state a 
 13.31  schedule, determined by the board, of increased revenue 
 13.32  per resident adjusted pupil units unit that differs from year to 
 13.33  year over the number of years for which the increased revenue is 
 13.34  authorized.  If the ballot contains a schedule showing different 
 13.35  amounts, it must also indicate the estimated referendum tax rate 
 13.36  as a percent of market value for the amount specified for the 
 14.1   first year and for the maximum amount specified in the 
 14.2   schedule.  The ballot may state that existing referendum levy 
 14.3   authority is expiring.  In this case, the ballot may also 
 14.4   compare the proposed levy authority to the existing expiring 
 14.5   levy authority, and express the proposed increase as the amount, 
 14.6   if any, over the expiring referendum levy authority.  The ballot 
 14.7   must designate the specific number of years, not to exceed ten, 
 14.8   for which the referendum authorization applies.  The notice 
 14.9   required under section 275.60 may be modified to read, in cases 
 14.10  of renewing existing levies: 
 14.11     "BY VOTING "YES" ON THIS BALLOT QUESTION, YOU MAY BE VOTING 
 14.12     FOR A PROPERTY TAX INCREASE." 
 14.13     The ballot may contain a textual portion with the 
 14.14  information required in this subdivision and a question stating 
 14.15  substantially the following:  
 14.16     "Shall the increase in the revenue proposed by (petition 
 14.17  to) the board of ........., School District No. .., be approved?"
 14.18     If approved, an amount equal to the approved revenue per 
 14.19  resident adjusted pupil unit times the resident adjusted pupil 
 14.20  units for the school year beginning in the year after the levy 
 14.21  is certified shall be authorized for certification for the 
 14.22  number of years approved, if applicable, or until revoked or 
 14.23  reduced by the voters of the district at a subsequent referendum.
 14.24     (b) The board must prepare and deliver by first class mail 
 14.25  at least 15 days but no more than 30 days before the day of the 
 14.26  referendum to each taxpayer a notice of the referendum and the 
 14.27  proposed revenue increase.  The board need not mail more than 
 14.28  one notice to any taxpayer.  For the purpose of giving mailed 
 14.29  notice under this subdivision, owners must be those shown to be 
 14.30  owners on the records of the county auditor or, in any county 
 14.31  where tax statements are mailed by the county treasurer, on the 
 14.32  records of the county treasurer.  Every property owner whose 
 14.33  name does not appear on the records of the county auditor or the 
 14.34  county treasurer is deemed to have waived this mailed notice 
 14.35  unless the owner has requested in writing that the county 
 14.36  auditor or county treasurer, as the case may be, include the 
 15.1   name on the records for this purpose.  The notice must project 
 15.2   the anticipated amount of tax increase in annual dollars and 
 15.3   annual percentage for typical residential homesteads, 
 15.4   agricultural homesteads, apartments, and commercial-industrial 
 15.5   property within the school district. 
 15.6      The notice for a referendum may state that an existing 
 15.7   referendum levy is expiring and project the anticipated amount 
 15.8   of increase over the existing referendum levy in the first year, 
 15.9   if any, in annual dollars and annual percentage for typical 
 15.10  residential homesteads, agricultural homesteads, apartments, and 
 15.11  commercial-industrial property within the district. 
 15.12     The notice must include the following statement:  "Passage 
 15.13  of this referendum will result in an increase in your property 
 15.14  taxes."  However, in cases of renewing existing levies, the 
 15.15  notice may include the following statement:  "Passage of this 
 15.16  referendum may result in an increase in your property taxes." 
 15.17     (c) A referendum on the question of revoking or reducing 
 15.18  the increased revenue amount authorized pursuant to paragraph 
 15.19  (a) may be called by the board and shall be called by the board 
 15.20  upon the written petition of qualified voters of the district.  
 15.21  A referendum to revoke or reduce the levy amount must be based 
 15.22  upon the dollar amount, local tax rate, or amount per resident 
 15.23  pupil unit, that was stated to be the basis for the initial 
 15.24  authorization.  Revenue approved by the voters of the district 
 15.25  pursuant to paragraph (a) must be received at least once before 
 15.26  it is subject to a referendum on its revocation or reduction for 
 15.27  subsequent years.  Only one revocation or reduction referendum 
 15.28  may be held to revoke or reduce referendum revenue for any 
 15.29  specific year and for years thereafter. 
 15.30     (d) A petition authorized by paragraph (a) or (c) is 
 15.31  effective if signed by a number of qualified voters in excess of 
 15.32  15 percent of the registered voters of the district on the day 
 15.33  the petition is filed with the board.  A referendum invoked by 
 15.34  petition must be held on the date specified in paragraph (a). 
 15.35     (e) The approval of 50 percent plus one of those voting on 
 15.36  the question is required to pass a referendum authorized by this 
 16.1   subdivision. 
 16.2      (f) At least 15 days before the day of the referendum, the 
 16.3   district must submit a copy of the notice required under 
 16.4   paragraph (b) to the commissioner and to the county auditor of 
 16.5   each county in which the district is located.  Within 15 days 
 16.6   after the results of the referendum have been certified by the 
 16.7   board, or in the case of a recount, the certification of the 
 16.8   results of the recount by the canvassing board, the district 
 16.9   must notify the commissioner of the results of the referendum. 
 16.10     (g) Except for a referendum held under subdivision 11, any 
 16.11  referendum under this section held on a day other than the first 
 16.12  Tuesday after the first Monday in November must be conducted by 
 16.13  mail in accordance with section 204B.46.  Notwithstanding 
 16.14  paragraph (b) to the contrary, in the case of a referendum 
 16.15  conducted by mail under this paragraph, the notice required by 
 16.16  paragraph (b) must be prepared and delivered by first class mail 
 16.17  at least 20 days before the referendum. 
 16.18     Sec. 32.  Minnesota Statutes 1998, section 126C.19, 
 16.19  subdivision 1, is amended to read: 
 16.20     Subdivision 1.  [TO RESIDENT DISTRICT OF ATTENDANCE.] Aid 
 16.21  for shared time pupils must be paid to the district of the 
 16.22  pupil's residence.  If a pupil attends shared time classes in 
 16.23  another district, the resident district must pay to the district 
 16.24  of attendance an amount of tuition equal to the ratio in section 
 16.25  126C.01, subdivision 6, times the amount of tuition that would 
 16.26  be charged and paid for a nonresident public school pupil in a 
 16.27  similar circumstance attendance.  The district of residence is 
 16.28  not obligated for tuition except by previous agreement. 
 16.29     Sec. 33.  Minnesota Statutes 1998, section 126C.19, 
 16.30  subdivision 2, is amended to read: 
 16.31     Subd. 2.  [EXCEPTION.] Notwithstanding subdivision 1, the 
 16.32  resident district of a shared time pupil attending shared time 
 16.33  classes in another district may grant the district of 
 16.34  attendance, upon its request, permission to claim the pupil as a 
 16.35  resident for state aid purposes.  In this case, state aid must 
 16.36  be paid to the district of attendance and, Upon agreement, the 
 17.1   district of attendance may bill the resident district for any 
 17.2   unreimbursed education costs, but not for unreimbursed 
 17.3   transportation costs.  The agreement may, however, provide for 
 17.4   the resident district to pay the cost of any of the particular 
 17.5   transportation categories specified in section 123B.92, 
 17.6   subdivision 1, and in this case, aid for those categories must 
 17.7   be paid to the district of residence rather than to the district 
 17.8   of attendance.  
 17.9      Sec. 34.  [126C.23] [ALLOCATION OF GENERAL EDUCATION 
 17.10  REVENUE.] 
 17.11     Subdivision 1.  [DEFINITIONS.] For the purposes of this 
 17.12  section, "building" means education site as defined in section 
 17.13  123B.04, subdivision 1.  
 17.14     Subd. 2.  [BUILDING ALLOCATION.] A district must allocate 
 17.15  its general education and referendum revenue to each building in 
 17.16  the district where the children who have generated the revenue 
 17.17  are served.  General education and referendum revenue generated 
 17.18  by students served at sites not owned and operated by the 
 17.19  district must be allocated to a separate account to be used for 
 17.20  services for pupils who generated the revenue. 
 17.21     Subd. 3.  [ASSESSMENTS FOR DISTRICT-WIDE SERVICES.] A 
 17.22  district may, by board resolution, assess each building its pro 
 17.23  rata share of:  (a) the cost of district-wide services, and (b) 
 17.24  the cost of increases in compensation approved by the board for 
 17.25  teachers and other employees. 
 17.26     Subd. 4.  [SEPARATE ACCOUNTS.] Each district shall maintain 
 17.27  separate accounts to identify revenues, and expenditures and 
 17.28  fund balances for each building. 
 17.29     Sec. 35.  Minnesota Statutes 1998, section 126C.40, 
 17.30  subdivision 1, is amended to read: 
 17.31     Subdivision 1.  [TO LEASE BUILDING OR LAND.] (a) When a 
 17.32  district finds it economically advantageous to rent or lease a 
 17.33  building or land for any instructional purposes or for school 
 17.34  storage or furniture repair, and it determines that the 
 17.35  operating capital revenue authorized under section 126C.10, 
 17.36  subdivision 13, is insufficient for this purpose, it may apply 
 18.1   to the commissioner for permission to make an additional capital 
 18.2   expenditure levy for this purpose.  An application for 
 18.3   permission to levy under this subdivision must contain financial 
 18.4   justification for the proposed levy, the terms and conditions of 
 18.5   the proposed lease, and a description of the space to be leased 
 18.6   and its proposed use.  
 18.7      (b) The criteria for approval of applications to levy under 
 18.8   this subdivision must include:  the reasonableness of the price, 
 18.9   the appropriateness of the space to the proposed activity, the 
 18.10  feasibility of transporting pupils to the leased building or 
 18.11  land, conformity of the lease to the laws and rules of the state 
 18.12  of Minnesota, and the appropriateness of the proposed lease to 
 18.13  the space needs and the financial condition of the district.  
 18.14  The commissioner must not authorize a levy under this 
 18.15  subdivision in an amount greater than the cost to the district 
 18.16  of renting or leasing a building or land for approved purposes.  
 18.17  The proceeds of this levy must not be used for custodial or 
 18.18  other maintenance services.  A district may not levy under this 
 18.19  subdivision for the purpose of leasing or renting a 
 18.20  district-owned building or site to itself. 
 18.21     (c) For agreements finalized after July 1, 1997, a district 
 18.22  may not levy under this subdivision for the purpose of leasing:  
 18.23  (1) a newly constructed building used primarily for regular 
 18.24  kindergarten, elementary, or secondary instruction; or (2) a 
 18.25  newly constructed building addition or additions used primarily 
 18.26  for regular kindergarten, elementary, or secondary instruction 
 18.27  that contains more than 20 percent of the square footage of the 
 18.28  previously existing building. 
 18.29     (d) The total levy under this subdivision for a district 
 18.30  for any year must not exceed $100 times the resident adjusted 
 18.31  pupil units for the fiscal year to which the levy is 
 18.32  attributable. 
 18.33     (e) For agreements for which a review and comment have been 
 18.34  submitted to the department of children, families, and learning 
 18.35  after April 1, 1998, the term "instructional purpose" as used in 
 18.36  this subdivision excludes expenditures on stadiums. 
 19.1      Sec. 36.  Minnesota Statutes 1998, section 126C.40, 
 19.2   subdivision 4, is amended to read: 
 19.3      Subd. 4.  [INTERACTIVE TELEVISION.] (a) A district with its 
 19.4   central administrative office located within economic 
 19.5   development region one, two, three, four, five, six, seven, 
 19.6   eight, nine, and ten may apply to the commissioner for ITV 
 19.7   revenue up to the greater of .5 percent of the adjusted net tax 
 19.8   capacity of the district or $25,000.  Eligible interactive 
 19.9   television expenditures include the construction, maintenance, 
 19.10  and lease costs of an interactive television system for 
 19.11  instructional purposes.  An eligible school district that has 
 19.12  completed the construction of its interactive television system 
 19.13  may also purchase computer hardware and software used primarily 
 19.14  for instructional purposes and access to the Internet provided 
 19.15  that its total expenditures for interactive television 
 19.16  maintenance and lease costs and for computer hardware and 
 19.17  software under this subdivision do not exceed its interactive 
 19.18  television revenue for fiscal year 1998.  The approval by the 
 19.19  commissioner and the application procedures set forth in 
 19.20  subdivision 1 shall apply to the revenue in this subdivision.  
 19.21  In granting the approval, the commissioner shall consider 
 19.22  whether the district is maximizing efficiency through peak use 
 19.23  and off-peak use pricing structures. 
 19.24     (b) To obtain ITV revenue, a district may levy an amount 
 19.25  not to exceed the district's ITV revenue times the lesser of one 
 19.26  or the ratio of: 
 19.27     (1) the quotient derived by dividing the adjusted net tax 
 19.28  capacity of the district for the year before the year the levy 
 19.29  is certified by the resident adjusted pupil units in the 
 19.30  district for the year to which the levy is attributable; to 
 19.31     (2) $10,000.  
 19.32     (c) A district's ITV aid is the difference between its ITV 
 19.33  revenue and the ITV levy. 
 19.34     (d) The revenue in the first year after reorganization for 
 19.35  a district that has reorganized under sections 123A.35 to 
 19.36  123A.41, 123A.46, or 123A.48 shall be the greater of: 
 20.1      (1) the revenue computed for the reorganized district under 
 20.2   paragraph (a), or 
 20.3      (2)(i) for two districts that reorganized, 75 percent of 
 20.4   the revenue computed as if the districts involved in the 
 20.5   reorganization were separate, or 
 20.6      (ii) for three or more districts that reorganized, 50 
 20.7   percent of the revenue computed as if the districts involved in 
 20.8   the reorganization were separate. 
 20.9      (e) The revenue in paragraph (d) is increased by the 
 20.10  difference between the initial revenue and ITV lease costs for 
 20.11  leases that had been entered into by the preexisting districts 
 20.12  on the effective date of the consolidation or combination and 
 20.13  with a term not exceeding ten years.  This increased revenue is 
 20.14  only available for the remaining term of the lease.  However, in 
 20.15  no case shall the revenue exceed the amount available had the 
 20.16  preexisting districts received revenue separately. 
 20.17     (f) Effective for fiscal year 2000, the revenue under this 
 20.18  section shall be 75 percent of the amount determined in 
 20.19  paragraph (a); for fiscal year 2001, 50 percent of the amount in 
 20.20  paragraph (a); and for fiscal year 2002, 25 percent of the 
 20.21  amount in paragraph (a). 
 20.22     (g) This section expires effective for revenue for fiscal 
 20.23  year 2003, or when leases in existence on the effective date of 
 20.24  Laws 1997, First Special Session chapter 4, expire.  
 20.25     Sec. 37.  Minnesota Statutes 1998, section 127A.47, 
 20.26  subdivision 1, is amended to read: 
 20.27     Subdivision 1.  [AID TO SERVING DISTRICT OF RESIDENCE.] (a) 
 20.28  Unless otherwise specifically provided by law, general education 
 20.29  aid must be paid to the district of residence unless otherwise 
 20.30  specifically provided by law according to this subdivision.  
 20.31     (b) Except as provided in paragraph (c), general education 
 20.32  aid must be paid to the serving district.  
 20.33     (c) If the resident district pays tuition for a pupil under 
 20.34  section 123A.18, 123A.22, 123A.30, 123A.32, 123A.44, 123A.488, 
 20.35  123B.88, subdivision 4, 124D.04, 124D.05, 125A.03 to 125A.24, 
 20.36  125A.51, or 125A.65, general education aid, excluding basic 
 21.1   skills revenue under section 126C.10, subdivision 4, must be 
 21.2   paid to the resident district. 
 21.3      Sec. 38.  Minnesota Statutes 1998, section 127A.47, 
 21.4   subdivision 7, is amended to read: 
 21.5      Subd. 7.  [ALTERNATIVE ATTENDANCE PROGRAMS.] The general 
 21.6   education aid for districts must be adjusted for each pupil 
 21.7   attending a nonresident district under sections 123A.05 to 
 21.8   123A.08, 124D.03, 124D.06, 124D.07, 124D.08, and 124D.68.  The 
 21.9   adjustments must be made according to this subdivision. 
 21.10     (a) General education aid paid to a resident district must 
 21.11  be reduced by an amount equal to the general education revenue 
 21.12  exclusive of basic skills revenue attributable to the pupil in 
 21.13  the resident district. 
 21.14     (b) General education aid paid to a district serving a 
 21.15  pupil in programs listed in this subdivision must be increased 
 21.16  by an amount equal to the general education revenue exclusive of 
 21.17  basic skills revenue attributable to the pupil in the 
 21.18  nonresident district.  
 21.19     (c) If the amount of the reduction to be made from the 
 21.20  general education aid of the resident district is greater than 
 21.21  the amount of general education aid otherwise due the district, 
 21.22  the excess reduction must be made from other state aids due the 
 21.23  district. 
 21.24     (d) The district of residence must pay tuition to a 
 21.25  district or an area learning center, operated according to 
 21.26  paragraph (e) (b), providing special instruction and services to 
 21.27  a pupil with a disability, as defined in section 125A.02, or a 
 21.28  pupil, as defined in section 125A.51, who is enrolled in a 
 21.29  program listed in this subdivision.  The tuition must be equal 
 21.30  to (1) the actual cost of providing special instruction and 
 21.31  services to the pupil, including a proportionate amount for debt 
 21.32  service and for capital expenditure facilities and equipment, 
 21.33  and debt service but not including any amount for 
 21.34  transportation, minus (2) the amount of general education aid 
 21.35  and special education aid, attributable to that pupil, that is 
 21.36  received by the district providing special instruction and 
 22.1   services. 
 22.2      (e) (b) An area learning center operated by a service 
 22.3   cooperative, intermediate district, education district, or a 
 22.4   joint powers cooperative may elect through the action of the 
 22.5   constituent boards to charge tuition for pupils rather than to 
 22.6   calculate general education aid adjustments under paragraph (a), 
 22.7   (b), or (c).  The tuition must be equal to the greater of the 
 22.8   average general education revenue per pupil unit attributable to 
 22.9   the pupil, or the actual cost of providing the instruction, 
 22.10  excluding transportation costs, if the pupil meets the 
 22.11  requirements of section 125A.02 or 125A.51. 
 22.12     Sec. 39.  Minnesota Statutes 1998, section 127A.47, 
 22.13  subdivision 8, is amended to read: 
 22.14     Subd. 8.  [CHARTER SCHOOLS.] (a) The general education aid 
 22.15  for districts must be adjusted for each pupil attending a 
 22.16  charter school under section 124D.10.  The adjustments must be 
 22.17  made according to this subdivision. 
 22.18     (b) General education aid paid to a resident district must 
 22.19  be reduced by an amount equal to the general education revenue 
 22.20  exclusive of basic skills revenue. 
 22.21     (c) General education aid paid to a district in which a 
 22.22  charter school not providing transportation according to section 
 22.23  124D.10, subdivision 16, is located must be increased by an 
 22.24  amount equal to the product of:  (1) the sum of an amount equal 
 22.25  to the product of the formula allowance according to section 
 22.26  126C.10, subdivision 2, times .0485, plus the transportation 
 22.27  sparsity allowance for the district, plus the transportation 
 22.28  transition allowance for the district; times (2) the pupil units 
 22.29  attributable to the pupil.  
 22.30     (d) If the amount of the reduction to be made from the 
 22.31  general education aid of the resident district is greater than 
 22.32  the amount of general education aid otherwise due the district, 
 22.33  the excess reduction must be made from other state aids due the 
 22.34  district.