1.1                          A bill for an act 
  1.2             relating to education; providing for kindergarten 
  1.3             through grade 12 education including general 
  1.4             education, education excellence, special programs, 
  1.5             facilities and technology, nutrition, school 
  1.6             accounting, other programs, deficiencies, state 
  1.7             agencies, and academic content standard; providing for 
  1.8             libraries; providing for early childhood and family 
  1.9             education including early childhood family support, 
  1.10            prevention, and self-sufficiency; providing for 
  1.11            technical amendments to certain education provisions; 
  1.12            changing the name of the department of children, 
  1.13            families, and learning to the department of education; 
  1.14            providing for rulemaking; appropriating money; 
  1.15            amending Minnesota Statutes 2002, sections 12.21, 
  1.16            subdivision 3; 15.01; 84A.51, subdivision 4; 119A.01, 
  1.17            subdivision 2; 119A.02, subdivisions 2, 3; 119A.52; 
  1.18            119B.011, subdivisions 8, 10, 20; 120A.02; 120A.05, 
  1.19            subdivisions 4, 7, 9; 120A.24, subdivision 4; 120A.41; 
  1.20            121A.21; 121A.23, subdivision 1, by adding a 
  1.21            subdivision; 121A.41, subdivision 10; 121A.50; 
  1.22            121A.55; 122A.09, subdivision 10; 122A.12, 
  1.23            subdivisions 1, 2; 122A.18, subdivision 7a; 122A.21; 
  1.24            122A.22; 122A.41, subdivision 2; 122A.414, by adding a 
  1.25            subdivision; 122A.415, subdivisions 1, 3; 122A.63, 
  1.26            subdivision 3; 123A.06, subdivision 3; 123A.18, 
  1.27            subdivision 2; 123A.73, subdivisions 3, 4, 5; 123B.02, 
  1.28            subdivisions 1, 14; 123B.36, subdivision 1; 123B.49, 
  1.29            subdivision 4; 123B.51, subdivisions 3, 4; 123B.52, by 
  1.30            adding a subdivision; 123B.53, subdivision 4; 123B.57, 
  1.31            subdivisions 1, 4, 6; 123B.59, subdivisions 1, 2, 3, 
  1.32            5, by adding a subdivision; 123B.63, subdivisions 1, 
  1.33            2, 3, 4; 123B.72, subdivision 3; 123B.88, subdivision 
  1.34            2; 123B.90, subdivisions 2, 3; 123B.91, subdivision 1; 
  1.35            123B.92, subdivisions 1, 3, 9; 123B.93; 124D.03, 
  1.36            subdivision 12; 124D.081, by adding a subdivision; 
  1.37            124D.09, subdivisions 3, 9, 10, 13, 16, 20; 124D.10, 
  1.38            subdivisions 2a, 3, 4, 8, 13, 16, 20, 23a; 124D.11, 
  1.39            subdivisions 1, 2, 4, 6, 9; 124D.118, subdivision 4; 
  1.40            124D.128, subdivisions 3, 6; 124D.13, subdivisions 2, 
  1.41            4, 8, 11; 124D.135, subdivisions 1, 8; 124D.15, 
  1.42            subdivision 7; 124D.16, subdivisions 1, 6; 124D.19, 
  1.43            subdivision 3; 124D.20, subdivisions 3, 5, by adding 
  1.44            subdivisions; 124D.22, subdivision 3; 124D.42, 
  1.45            subdivision 6; 124D.454, subdivisions 1, 2, 3, 8, 10, 
  1.46            by adding a subdivision; 124D.52, subdivisions 1, 3; 
  2.1             124D.531, subdivisions 1, 2, 4, 7; 124D.59, 
  2.2             subdivision 2; 124D.65, subdivision 5; 124D.86, 
  2.3             subdivisions 1a, 3, 4, 5, 6; 125A.05; 125A.12; 
  2.4             125A.21, subdivision 2; 125A.28; 125A.30; 125A.76, 
  2.5             subdivisions 1, 4; 125A.79, subdivisions 1, 6; 
  2.6             125B.21; 126C.05, subdivisions 1, 8, 14, 15, 16, 17; 
  2.7             126C.10, subdivisions 1, 3, 4, 17, 18, 24, 28, by 
  2.8             adding subdivisions; 126C.13, subdivision 4; 126C.15, 
  2.9             subdivision 1; 126C.17, subdivisions 1, 2, 5, 7, 7a, 
  2.10            9, 13; 126C.21, subdivision 3; 126C.40, subdivision 1; 
  2.11            126C.42, subdivision 1; 126C.43, subdivisions 2, 3; 
  2.12            126C.44; 126C.45; 126C.457; 126C.48, subdivision 3; 
  2.13            126C.55, subdivision 5; 126C.63, subdivisions 5, 8; 
  2.14            126C.69, subdivisions 2, 9; 127A.05, subdivisions 1, 
  2.15            3, 4; 127A.45, subdivisions 2, 3, 7a, 10, 12, 13, 14, 
  2.16            14a, 16; 127A.47, subdivisions 7, 8; 127A.49, 
  2.17            subdivisions 2, 3; 128C.05, by adding a subdivision; 
  2.18            128D.11, subdivision 8; 169.26, subdivision 3; 169.28, 
  2.19            subdivision 1; 169.435; 169.449, subdivision 1; 
  2.20            169.4501, subdivisions 3, 4; 169.4503, subdivision 4; 
  2.21            169.454, subdivision 6; 169.973, subdivision 1; 
  2.22            171.321, subdivision 5; 177.42, subdivision 2; 178.02, 
  2.23            subdivision 1; 268.052, subdivisions 2, 4; 273.138, 
  2.24            subdivision 6; 298.28, subdivision 4; 475.61, 
  2.25            subdivisions 1, 3, 4; Laws 1965, chapter 705, as 
  2.26            amended; Laws 2001, First Special Session chapter 6, 
  2.27            article 2, section 64; proposing coding for new law in 
  2.28            Minnesota Statutes, chapters 120B; 121A; 123B; 124D; 
  2.29            125A; repealing Minnesota Statutes 2002, sections 
  2.30            15.014, subdivision 3; 119A.01, subdivision 1; 
  2.31            120B.23; 121A.49; 122A.60; 122A.61; 122A.62; 122A.64; 
  2.32            122A.65; 123A.73, subdivisions 7, 10, 11; 123B.05; 
  2.33            123B.59, subdivisions 6, 7; 123B.81, subdivision 6; 
  2.34            123B.90, subdivision 1; 124D.09, subdivision 15; 
  2.35            124D.115; 124D.1156; 124D.17; 124D.21; 124D.221; 
  2.36            124D.54; 124D.65, subdivision 4; 124D.84, subdivision 
  2.37            2; 124D.89; 124D.93; 125A.023, subdivision 5; 125A.09; 
  2.38            125A.47; 125A.79, subdivision 2; 125B.11; 126C.01, 
  2.39            subdivision 4; 126C.05, subdivision 12; 126C.12; 
  2.40            126C.125; 126C.14; 126C.445; 126C.455; 126C.55, 
  2.41            subdivision 5; 127A.41, subdivision 6; 144.401, 
  2.42            subdivision 5; 169.441, subdivision 4; 239.004; Laws 
  2.43            1993, chapter 224, article 8, section 20, subdivision 
  2.44            2, as amended; Laws 2000, chapter 489, article 2, 
  2.45            section 36, as amended; Laws 2001, First Special 
  2.46            Session chapter 3, article 4, sections 1, 2; Laws 
  2.47            2001, First Special Session chapter 6, article 2, 
  2.48            section 52; Laws 2001, First Special Session chapter 
  2.49            6, article 5, section 12, as amended; Minnesota Rules, 
  2.50            parts 3500.0600; 3520.0400; 3520.1400; 3520.3300; 
  2.51            3530.1500; 3530.2700; 3530.4400; 3530.4500; 3530.4700; 
  2.52            3550.0100. 
  2.53  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  2.54                             ARTICLE 1
  2.55                         GENERAL EDUCATION
  2.56     Section 1.  Minnesota Statutes 2002, section 123A.06, 
  2.57  subdivision 3, is amended to read: 
  2.58     Subd. 3.  [HOURS OF INSTRUCTION EXEMPTION.] Notwithstanding 
  2.59  any law to the contrary, the center programs must be available 
  2.60  throughout the entire year.  Pupils in a center may receive 
  2.61  instruction for more than or less than the daily number of hours 
  3.1   required by the rules of the commissioner of children, families, 
  3.2   and learning.  However, a pupil must receive instruction each 
  3.3   year for at least the total number of instructional hours 
  3.4   required by statutes and rules.  A center may petition the state 
  3.5   board under Minnesota Rules, part 3500.1000, for exemption from 
  3.6   other rules.  
  3.7      Sec. 2.  Minnesota Statutes 2002, section 123A.18, 
  3.8   subdivision 2, is amended to read: 
  3.9      Subd. 2.  [EXTENDED YEAR INSTRUCTION.] The agreement may 
  3.10  provide opportunities for pupils to receive instruction 
  3.11  throughout the entire year and for teachers to coordinate 
  3.12  educational opportunities and provide instruction throughout the 
  3.13  entire year.  Pupils may receive instruction for more than or 
  3.14  less than the daily number of hours required by the rules of the 
  3.15  commissioner of children, families, and learning.  However, the 
  3.16  pupil must receive instruction each year for at least the total 
  3.17  number of instructional hours required by statutes and rules.  A 
  3.18  teacher who is employed for the extended year may develop, in 
  3.19  consultation with pupils and parents, individual educational 
  3.20  programs for not more than 125 pupils.  
  3.21     Sec. 3.  Minnesota Statutes 2002, section 123A.73, 
  3.22  subdivision 3, is amended to read: 
  3.23     Subd. 3.  [VOLUNTARY DISSOLUTION; REFERENDUM REVENUE.] As 
  3.24  of the effective date of the voluntary dissolution of a district 
  3.25  and its attachment to one or more existing districts pursuant to 
  3.26  section 123A.46, the authorization for all referendum revenues 
  3.27  previously approved by the voters of all affected districts for 
  3.28  those districts pursuant to section 126C.17, subdivision 9, or 
  3.29  its predecessor provision, is canceled.  However, if all of the 
  3.30  territory of any independent district is included in the 
  3.31  enlarged district, and if the adjusted net tax capacity of 
  3.32  taxable property in that territory comprises 90 percent or more 
  3.33  of the adjusted net tax capacity of all taxable property in an 
  3.34  enlarged district, the enlarged district's referendum revenue 
  3.35  shall be determined as follows: 
  3.36     If the referendum revenue previously approved in the 
  4.1   preexisting district is authorized as a tax rate, the referendum 
  4.2   revenue in the enlarged district is the tax rate times the net 
  4.3   tax capacity of the enlarged district.  If referendum revenue 
  4.4   previously approved in the preexisting district is authorized as 
  4.5   revenue per resident pupil unit, The referendum revenue shall be 
  4.6   the revenue per resident marginal cost pupil unit times the 
  4.7   number of resident marginal cost pupil units in the enlarged 
  4.8   district.  If referendum revenue in the preexisting district is 
  4.9   authorized both as a tax rate and as revenue per resident pupil 
  4.10  unit, the referendum revenue in the enlarged district shall be 
  4.11  the sum of both plus any referendum revenue in the preexisting 
  4.12  district authorized as a dollar amount.  Any new referendum 
  4.13  revenue shall be authorized only after approval is granted by 
  4.14  the voters of the entire enlarged district in an election 
  4.15  pursuant to section 126C.17, subdivision 9. 
  4.16     Sec. 4.  Minnesota Statutes 2002, section 123A.73, 
  4.17  subdivision 4, is amended to read: 
  4.18     Subd. 4.  [CONSOLIDATION; MAXIMUM AUTHORIZED REFERENDUM 
  4.19  REVENUES.] As of the effective date of a consolidation pursuant 
  4.20  to section 123A.48, if the plan for consolidation so provides, 
  4.21  or if the plan for consolidation makes no provision concerning 
  4.22  referendum revenues, the authorization for all referendum 
  4.23  revenues previously approved by the voters of all affected 
  4.24  districts for those districts pursuant to section 126C.17, 
  4.25  subdivision 9, or its predecessor provision shall be 
  4.26  recalculated as provided in this subdivision.  The referendum 
  4.27  revenue authorization for the newly created district shall be 
  4.28  the net tax capacity rate revenue per resident marginal cost 
  4.29  pupil unit that would raise an amount equal to the combined 
  4.30  dollar amount of the referendum revenues authorized by each of 
  4.31  the component districts for the year preceding the 
  4.32  consolidation, unless the referendum revenue authorization of 
  4.33  the newly created district is subsequently modified pursuant to 
  4.34  section 126C.17, subdivision 9.  If the referendum revenue 
  4.35  authorizations for each of the component districts were limited 
  4.36  to a specified number of years, The referendum revenue 
  5.1   authorization for the newly created district shall continue for 
  5.2   a period of time equal to the longest period authorized for any 
  5.3   component district.  If the referendum revenue authorization of 
  5.4   any component district is not limited to a specified number of 
  5.5   years, the referendum revenue authorization for the newly 
  5.6   created district shall not be limited to a specified number of 
  5.7   years.  
  5.8      Sec. 5.  Minnesota Statutes 2002, section 123A.73, 
  5.9   subdivision 5, is amended to read: 
  5.10     Subd. 5.  [ALTERNATIVE METHOD.] As of the effective date of 
  5.11  a consolidation pursuant to section 123A.48, if the plan for 
  5.12  consolidation so provides, the authorization for all referendum 
  5.13  revenues previously approved by the voters of all affected 
  5.14  districts for those districts pursuant to section 126C.17, 
  5.15  subdivision 9, or its predecessor provision shall be combined as 
  5.16  provided in this subdivision.  The referendum revenue 
  5.17  authorization for the newly created district may be any 
  5.18  allowance per resident marginal cost pupil unit provided in the 
  5.19  plan for consolidation, but may not exceed the allowance per 
  5.20  resident marginal cost pupil unit that would raise an amount 
  5.21  equal to the combined dollar amount of the referendum revenues 
  5.22  authorized by each of the component districts for the year 
  5.23  preceding the consolidation.  If the referendum revenue 
  5.24  authorizations for each of the component districts were limited 
  5.25  to a specified number of years, The referendum revenue 
  5.26  authorization for the newly created district shall continue for 
  5.27  a period of time equal to the longest period authorized for any 
  5.28  component district.  If the referendum revenue authorization of 
  5.29  any component district is not limited to a specified number of 
  5.30  years, the referendum revenue authorization for the newly 
  5.31  created district shall not be limited to a specified number of 
  5.32  years.  The referendum revenue authorization for the newly 
  5.33  created district may be modified pursuant to section 126C.17, 
  5.34  subdivision 9. 
  5.35     Sec. 6.  Minnesota Statutes 2002, section 123B.90, 
  5.36  subdivision 2, is amended to read: 
  6.1      Subd. 2.  [STUDENT TRAINING.] (a) Each district must 
  6.2   provide public school pupils enrolled in grades kindergarten 
  6.3   through grade 10 with age-appropriate school bus safety training.
  6.4   The training must be results-oriented and shall consist of both 
  6.5   classroom instruction and practical training using a school 
  6.6   bus.  Upon completing the training, a student shall be able to 
  6.7   demonstrate knowledge and understanding, as described in this 
  6.8   section, of at least the following competencies and concepts: 
  6.9      (1) transportation by school bus is a privilege and not a 
  6.10  right; 
  6.11     (2) district policies for student conduct and school bus 
  6.12  safety; 
  6.13     (3) appropriate conduct while on the school bus; 
  6.14     (4) the danger zones surrounding a school bus; 
  6.15     (5) procedures for safely boarding and leaving a school 
  6.16  bus; 
  6.17     (6) procedures for safe street or road crossing; and 
  6.18     (7) school bus evacuation and other emergency procedures; 
  6.19  and 
  6.20     (8) appropriate training on the use of lap belts or lap and 
  6.21  shoulder belts, if the district uses buses equipped with lap 
  6.22  belts or lap and shoulder belts. 
  6.23     (b) Each nonpublic school located within the district must 
  6.24  provide all nonpublic school pupils enrolled in grades 
  6.25  kindergarten through grade 10 who are transported by school bus 
  6.26  at public expense and attend school within the district's 
  6.27  boundaries with training as required in paragraph (a).  The 
  6.28  school district shall make a bus available for the practical 
  6.29  training if the district transports the nonpublic students.  
  6.30  Each nonpublic school shall provide the instruction. 
  6.31     (c) All Students enrolled in grades kindergarten through 3 
  6.32  grade 6 who are transported by school bus and are enrolled 
  6.33  during the first or second week of school must demonstrate 
  6.34  achievement of receive the school bus safety training 
  6.35  competencies by the end of the third week of school.  All 
  6.36  Students enrolled in grades 4 7 through 10 who are transported 
  7.1   by school bus and are enrolled during the first or second week 
  7.2   of school and have not received school bus safety training in 
  7.3   kindergarten through grade 6 must demonstrate achievement 
  7.4   of receive the competencies training by the end of the sixth 
  7.5   week of school.  Students in grades 9 and 10 must receive 
  7.6   training in the laws and proper procedures when operating a 
  7.7   motor vehicle in the vicinity of a school bus.  Students 
  7.8   enrolled in grades kindergarten through grade 10 who enroll in a 
  7.9   school after the second week of school and are transported by 
  7.10  school bus and have not received training in their previous 
  7.11  school district shall undergo school bus safety training and 
  7.12  demonstrate achievement of the school bus safety competencies or 
  7.13  receive bus safety instructional materials within four weeks of 
  7.14  the first day of attendance.  The school transportation safety 
  7.15  director in each district must certify to the commissioner 
  7.16  superintendent of schools annually that all students transported 
  7.17  by school bus within the district have satisfactorily 
  7.18  demonstrated knowledge and understanding of received the school 
  7.19  bus safety competencies training according to this section or 
  7.20  provide an explanation for a student's failure to demonstrate 
  7.21  the competencies.  The principal or other chief administrator of 
  7.22  each nonpublic school must certify annually to the school 
  7.23  transportation safety director of the district in which the 
  7.24  school is located that all of the school's students transported 
  7.25  by school bus at public expense have received training according 
  7.26  to this section.  A district may deny transportation to a 
  7.27  student who fails to demonstrate the competencies, unless the 
  7.28  student is unable to achieve the competencies due to a 
  7.29  disability, or to a student who attends a nonpublic school that 
  7.30  fails to provide training as required by this subdivision. 
  7.31     (d) A district and a nonpublic school with students 
  7.32  transported by school bus at public expense must, to the extent 
  7.33  possible, may provide kindergarten pupils with bus safety 
  7.34  training before the first day of school. 
  7.35     (e) A district and a nonpublic school with students 
  7.36  transported by school bus at public expense must may also 
  8.1   provide student safety education for bicycling and pedestrian 
  8.2   safety, for students enrolled in grades kindergarten through 
  8.3   grade 5. 
  8.4      (f) A district and a nonpublic school with students 
  8.5   transported by school bus at public expense must make reasonable 
  8.6   accommodations for the school bus, bicycle, and pedestrian 
  8.7   safety training of pupils known to speak English as a second 
  8.8   language and pupils with disabilities. 
  8.9      (g) The district must provide students enrolled in 
  8.10  kindergarten through grade 3 school bus safety training twice 
  8.11  during the school year.  
  8.12     Sec. 7.  Minnesota Statutes 2002, section 123B.90, 
  8.13  subdivision 3, is amended to read: 
  8.14     Subd. 3.  [MODEL TRAINING PROGRAM.] The commissioner shall 
  8.15  develop a comprehensive model school bus safety training program 
  8.16  for pupils who ride the bus that includes bus safety curriculum 
  8.17  for both classroom and practical instruction, methods for 
  8.18  assessing attainment of school bus safety competencies, and 
  8.19  age-appropriate instructional materials.  The model training 
  8.20  program for students riding buses with lap belts or lap and 
  8.21  shoulder belts must include information on the appropriate use 
  8.22  of lap belts or lap and shoulder belts.  The program must be 
  8.23  adaptable for use by students with disabilities. 
  8.24     Sec. 8.  Minnesota Statutes 2002, section 123B.91, 
  8.25  subdivision 1, is amended to read: 
  8.26     Subdivision 1.  [COMPREHENSIVE POLICY.] (a) Each district 
  8.27  shall develop and implement a comprehensive, written policy 
  8.28  governing pupil transportation safety, including transportation 
  8.29  of nonpublic school students, when applicable.  The policy, at 
  8.30  minimum, must contain: 
  8.31     (1) provisions for appropriate student bus safety training 
  8.32  under section 123B.90; 
  8.33     (2) rules governing student conduct on school buses and in 
  8.34  school bus loading and unloading areas; 
  8.35     (3) a statement of parent or guardian responsibilities 
  8.36  relating to school bus safety; 
  9.1      (4) provisions for notifying students and parents or 
  9.2   guardians of their responsibilities and the rules, including the 
  9.3   district's seat belt policy, if applicable; 
  9.4      (5) an intradistrict system for reporting school bus 
  9.5   accidents or misconduct and a system for dealing with local law 
  9.6   enforcement officials in cases of criminal conduct on a school 
  9.7   bus; 
  9.8      (6) (5) a discipline policy to address violations of school 
  9.9   bus safety rules, including procedures for revoking a student's 
  9.10  bus riding privileges in cases of serious or repeated 
  9.11  misconduct; 
  9.12     (7) (6) a system for integrating school bus misconduct 
  9.13  records with other discipline records; 
  9.14     (8) a statement of bus driver duties; 
  9.15     (9) (7) where applicable, provisions governing bus monitor 
  9.16  qualifications, training, and duties; 
  9.17     (10) (8) rules governing the use and maintenance of type 
  9.18  III vehicles, drivers of type III vehicles, qualifications to 
  9.19  drive a type III vehicle, qualifications for a type III vehicle, 
  9.20  and the circumstances under which a student may be transported 
  9.21  in a type III vehicle; 
  9.22     (11) (9) operating rules and procedures; 
  9.23     (12) provisions for annual bus driver in-service training 
  9.24  and evaluation; 
  9.25     (13) (10) emergency procedures; 
  9.26     (14) (11) a system for maintaining and inspecting 
  9.27  equipment; and 
  9.28     (15) (12) any other requirements of the school district, if 
  9.29  any, that exceed state law minimum requirements for school bus 
  9.30  operations; and 
  9.31     (16) requirements for basic first aid training, which must 
  9.32  include the Heimlich maneuver and procedures for dealing with 
  9.33  obstructed airways, shock, bleeding, and seizures. 
  9.34     (b) Districts are encouraged to use the model policy 
  9.35  developed by the Minnesota school boards association, the 
  9.36  department of public safety, and the department of children, 
 10.1   families, and learning, as well as the current edition of the 
 10.2   "National Standards for School Transportation," in developing 
 10.3   safety policies.  Each district shall review its policy annually 
 10.4   to ensure that it conforms to law. 
 10.5      Sec. 9.  Minnesota Statutes 2002, section 123B.92, 
 10.6   subdivision 1, is amended to read: 
 10.7      Subdivision 1.  [DEFINITIONS.] For purposes of this section 
 10.8   and section 125A.76, the terms defined in this subdivision have 
 10.9   the meanings given to them. 
 10.10     (a) "Actual expenditure per pupil transported in the 
 10.11  regular and excess transportation categories" means the quotient 
 10.12  obtained by dividing: 
 10.13     (1) the sum of: 
 10.14     (i) all expenditures for transportation in the regular 
 10.15  category, as defined in paragraph (b), clause (1), and the 
 10.16  excess category, as defined in paragraph (b), clause (2), plus 
 10.17     (ii) an amount equal to one year's depreciation on the 
 10.18  district's school bus fleet and mobile units computed on a 
 10.19  straight line basis at the rate of 15 percent per year for 
 10.20  districts operating a program under section 124D.128 for grades 
 10.21  1 to 12 for all students in the district and 12-1/2 percent per 
 10.22  year for other districts of the cost of the fleet, plus 
 10.23     (iii) an amount equal to one year's depreciation on the 
 10.24  district's type three school buses, as defined in section 
 10.25  169.01, subdivision 6, clause (5), which must be used a majority 
 10.26  of the time for pupil transportation purposes, computed on a 
 10.27  straight line basis at the rate of 20 percent per year of the 
 10.28  cost of the type three school buses by: 
 10.29     (2) the number of pupils eligible for transportation in the 
 10.30  regular category, as defined in paragraph (b), clause (1), and 
 10.31  the excess category, as defined in paragraph (b), clause (2).  
 10.32     (b) "Transportation category" means a category of 
 10.33  transportation service provided to pupils as follows:  
 10.34     (1) Regular transportation is:  
 10.35     (i) transportation to and from school during the regular 
 10.36  school year for resident elementary pupils residing one mile or 
 11.1   more from the public or nonpublic school they attend, and 
 11.2   resident secondary pupils residing two miles or more from the 
 11.3   public or nonpublic school they attend, excluding desegregation 
 11.4   transportation and noon kindergarten transportation; but with 
 11.5   respect to transportation of pupils to and from nonpublic 
 11.6   schools, only to the extent permitted by sections 123B.84 to 
 11.7   123B.87; 
 11.8      (ii) transportation of resident pupils to and from language 
 11.9   immersion programs; 
 11.10     (iii) transportation of a pupil who is a custodial parent 
 11.11  and that pupil's child between the pupil's home and the child 
 11.12  care provider and between the provider and the school, if the 
 11.13  home and provider are within the attendance area of the school; 
 11.14  and 
 11.15     (iv) transportation to and from or board and lodging in 
 11.16  another district, of resident pupils of a district without a 
 11.17  secondary school; and 
 11.18     (v) transportation to and from school during the regular 
 11.19  school year required under subdivision 3 for nonresident 
 11.20  elementary pupils when the distance from the attendance area 
 11.21  border to the public school is one mile or more, and for 
 11.22  nonresident secondary pupils when the distance from the 
 11.23  attendance area border to the public school is two miles or 
 11.24  more, excluding desegregation transportation and noon 
 11.25  kindergarten transportation. 
 11.26     For the purposes of this paragraph, a district may 
 11.27  designate a licensed day care facility, respite care facility, 
 11.28  the residence of a relative, or the residence of a person chosen 
 11.29  by the pupil's parent or guardian as the home of a pupil for 
 11.30  part or all of the day, if requested by the pupil's parent or 
 11.31  guardian, and if that facility or residence is within the 
 11.32  attendance area of the school the pupil attends. 
 11.33     (2) Excess transportation is: 
 11.34     (i) transportation to and from school during the regular 
 11.35  school year for resident secondary pupils residing at least one 
 11.36  mile but less than two miles from the public or nonpublic school 
 12.1   they attend, and transportation to and from school for resident 
 12.2   pupils residing less than one mile from school who are 
 12.3   transported because of extraordinary traffic, drug, or crime 
 12.4   hazards; and 
 12.5      (ii) transportation to and from school during the regular 
 12.6   school year required under subdivision 3 for nonresident 
 12.7   secondary pupils when the distance from the attendance area 
 12.8   border to the school is at least one mile but less than two 
 12.9   miles from the public school they attend, and for nonresident 
 12.10  pupils when the distance from the attendance area border to the 
 12.11  school is less than one mile from the school and who are 
 12.12  transported because of extraordinary traffic, drug, or crime 
 12.13  hazards. 
 12.14     (3) Desegregation transportation is transportation within 
 12.15  and outside of the district during the regular school year of 
 12.16  pupils to and from schools located outside their normal 
 12.17  attendance areas under a plan for desegregation mandated by the 
 12.18  commissioner or under court order.  
 12.19     (4) "Transportation services for pupils with disabilities" 
 12.20  is: 
 12.21     (i) transportation of pupils with disabilities who cannot 
 12.22  be transported on a regular school bus between home or a respite 
 12.23  care facility and school; 
 12.24     (ii) necessary transportation of pupils with disabilities 
 12.25  from home or from school to other buildings, including centers 
 12.26  such as developmental achievement centers, hospitals, and 
 12.27  treatment centers where special instruction or services required 
 12.28  by sections 125A.03 to 125A.24, 125A.26 to 125A.48, and 125A.65 
 12.29  are provided, within or outside the district where services are 
 12.30  provided; 
 12.31     (iii) necessary transportation for resident pupils with 
 12.32  disabilities required by sections 125A.12, and 125A.26 to 
 12.33  125A.48; 
 12.34     (iv) board and lodging for pupils with disabilities in a 
 12.35  district maintaining special classes; 
 12.36     (v) transportation from one educational facility to another 
 13.1   within the district for resident pupils enrolled on a 
 13.2   shared-time basis in educational programs, and necessary 
 13.3   transportation required by sections 125A.18, and 125A.26 to 
 13.4   125A.48, for resident pupils with disabilities who are provided 
 13.5   special instruction and services on a shared-time basis; 
 13.6      (vi) transportation for resident pupils with disabilities 
 13.7   to and from board and lodging facilities when the pupil is 
 13.8   boarded and lodged for educational purposes; and 
 13.9      (vii) services described in clauses (i) to (vi), when 
 13.10  provided for pupils with disabilities in conjunction with a 
 13.11  summer instructional program that relates to the pupil's 
 13.12  individual education plan or in conjunction with a learning year 
 13.13  program established under section 124D.128. 
 13.14     (5) "Nonpublic nonregular transportation" is: 
 13.15     (i) transportation from one educational facility to another 
 13.16  within the district for resident pupils enrolled on a 
 13.17  shared-time basis in educational programs, excluding 
 13.18  transportation for nonpublic pupils with disabilities under 
 13.19  clause (4); 
 13.20     (ii) transportation within district boundaries between a 
 13.21  nonpublic school and a public school or a neutral site for 
 13.22  nonpublic school pupils who are provided pupil support services 
 13.23  pursuant to section 123B.44; and 
 13.24     (iii) late transportation home from school or between 
 13.25  schools within a district for nonpublic school pupils involved 
 13.26  in after-school activities. 
 13.27     (c) "Mobile unit" means a vehicle or trailer designed to 
 13.28  provide facilities for educational programs and services, 
 13.29  including diagnostic testing, guidance and counseling services, 
 13.30  and health services.  A mobile unit located off nonpublic school 
 13.31  premises is a neutral site as defined in section 123B.41, 
 13.32  subdivision 13. 
 13.33     Sec. 10.  Minnesota Statutes 2002, section 123B.92, 
 13.34  subdivision 3, is amended to read: 
 13.35     Subd. 3.  [ALTERNATIVE ATTENDANCE PROGRAMS.] A district 
 13.36  that enrolls nonresident pupils in programs under sections 
 14.1   124D.03, 124D.06, 124D.07, 124D.08, 123A.05 to 123A.08, and 
 14.2   124D.68, must provide authorized transportation to the pupil 
 14.3   within the attendance area for the school that the pupil attends 
 14.4   at the same level of service that is provided to resident pupils 
 14.5   within the attendance area.  The resident district need not 
 14.6   provide or pay for transportation between the pupil's residence 
 14.7   and the district's border. 
 14.8      Sec. 11.  Minnesota Statutes 2002, section 123B.92, 
 14.9   subdivision 9, is amended to read: 
 14.10     Subd. 9.  [NONPUBLIC PUPIL TRANSPORTATION AID.] (a) A 
 14.11  district's nonpublic pupil transportation aid for the 1996-1997 
 14.12  and later school years for transportation services for nonpublic 
 14.13  school pupils according to sections 123B.88, 123B.84 to 123B.86, 
 14.14  and this section, equals the sum of the amounts computed in 
 14.15  paragraphs (b) and (c).  This aid does not limit the obligation 
 14.16  to transport pupils under sections 123B.84 to 123B.87. 
 14.17     (b) For regular and excess transportation according to 
 14.18  subdivision 1, paragraph (b), clauses (1) and (2), an amount 
 14.19  equal to the product of: 
 14.20     (1) the district's actual expenditure per pupil transported 
 14.21  in the regular and excess transportation categories during the 
 14.22  second preceding school year; times 
 14.23     (2) the number of nonpublic school pupils residing in the 
 14.24  district who receive regular or excess transportation service or 
 14.25  reimbursement for the current school year; times 
 14.26     (3) the ratio of the formula allowance pursuant to section 
 14.27  126C.10, subdivision 2, for the current school year to the 
 14.28  formula allowance pursuant to section 126C.10, subdivision 2, 
 14.29  for the second preceding school year. 
 14.30     (c) For nonpublic nonregular transportation according to 
 14.31  subdivision 1, paragraph (b), clause (5), an amount equal to the 
 14.32  product of: 
 14.33     (1) the district's actual expenditure for nonpublic 
 14.34  nonregular transportation during the second preceding school 
 14.35  year; times 
 14.36     (2) the ratio of the formula allowance pursuant to section 
 15.1   126C.10, subdivision 2, for the current school year to the 
 15.2   formula allowance pursuant to section 126C.10, subdivision 2, 
 15.3   for the second preceding school year. 
 15.4      (d) Notwithstanding the amount of the formula allowance for 
 15.5   fiscal years 2000, 2001, and 2002 year 2004 in section 126C.10, 
 15.6   subdivision 2, the commissioner shall use the amount of the 
 15.7   formula allowance for the current year plus $87 minus $415 in 
 15.8   determining the nonpublic pupil transportation revenue in 
 15.9   paragraphs (b) and (c) for fiscal year 2000, and the amount of 
 15.10  the formula allowance less $110 in determining the nonpublic 
 15.11  pupil transportation revenue in paragraphs (b) and (c) for 
 15.12  fiscal years 2001 and 2002 2004. 
 15.13     <b>[EFFECTIVE DATE.]</b> This section is effective for revenue for 
 15.14  fiscal year 2004. 
 15.15     Sec. 12.  Minnesota Statutes 2002, section 124D.09, 
 15.16  subdivision 13, is amended to read: 
 15.17     Subd. 13.  [FINANCIAL ARRANGEMENTS.] For a pupil enrolled 
 15.18  in a course under this section, the department must make 
 15.19  payments according to this subdivision for courses that were 
 15.20  taken for secondary credit.  
 15.21     The department must not make payments to a school district 
 15.22  or post-secondary institution for a course taken for 
 15.23  post-secondary credit only.  The department must not make 
 15.24  payments to a post-secondary institution for a course from which 
 15.25  a student officially withdraws during the first 14 days of the 
 15.26  quarter or semester or who has been absent from the 
 15.27  post-secondary institution for the first 15 consecutive school 
 15.28  days of the quarter or semester and is not receiving instruction 
 15.29  in the home or hospital. 
 15.30     A post-secondary institution shall receive the following: 
 15.31     (1) for an institution granting quarter credit, the 
 15.32  reimbursement per credit hour shall be an amount equal to 88 
 15.33  percent of the product of the formula allowance minus $415, 
 15.34  multiplied by 1.3, and divided by 45; or 
 15.35     (2) for an institution granting semester credit, the 
 15.36  reimbursement per credit hour shall be an amount equal to 88 
 16.1   percent of the product of the general revenue formula 
 16.2   allowance minus $415, multiplied by 1.3, and divided by 30. 
 16.3      The department must pay to each post-secondary institution 
 16.4   100 percent of the amount in clause (1) or (2) within 30 days of 
 16.5   receiving initial enrollment information each quarter or 
 16.6   semester.  If changes in enrollment occur during a quarter or 
 16.7   semester, the change shall be reported by the post-secondary 
 16.8   institution at the time the enrollment information for the 
 16.9   succeeding quarter or semester is submitted.  At any time the 
 16.10  department notifies a post-secondary institution that an 
 16.11  overpayment has been made, the institution shall promptly remit 
 16.12  the amount due.  
 16.13     Sec. 13.  Minnesota Statutes 2002, section 124D.128, 
 16.14  subdivision 6, is amended to read: 
 16.15     Subd. 6.  [REVENUE COMPUTATION AND REPORTING.] Aid and levy 
 16.16  revenue computations must be based on the total number of hours 
 16.17  of education programs for pupils in average daily membership for 
 16.18  each fiscal year.  Average daily membership shall be computed 
 16.19  under section 126C.05, subdivision 15.  Hours of participation 
 16.20  that occur after the close of the regular 2003-2004 
 16.21  instructional year and before July 1, 2004, must be attributed 
 16.22  to the following fiscal year.  For revenue computation purposes, 
 16.23  the learning year program shall generate revenue based on the 
 16.24  formulas for the fiscal year in which the services are 
 16.25  provided.  The dates a participating pupil is promoted must be 
 16.26  reported in a timely manner to the department. 
 16.27     Sec. 14.  Minnesota Statutes 2002, section 124D.59, 
 16.28  subdivision 2, is amended to read: 
 16.29     Subd. 2.  [PUPIL OF LIMITED ENGLISH PROFICIENCY.] 
 16.30  (a) "Pupil of limited English proficiency" means a pupil in 
 16.31  kindergarten through grade 12 who meets the following 
 16.32  requirements: 
 16.33     (1) the pupil in kindergarten through grade 12, as declared 
 16.34  by a parent or guardian first learned a language other than 
 16.35  English, comes from a home where the language usually spoken is 
 16.36  other than English, or usually speaks a language other than 
 17.1   English; and 
 17.2      (2) for a pupil in kindergarten through grade 2, the pupil 
 17.3   is determined by developmentally appropriate measures, which 
 17.4   might include observations, teacher judgment, parent 
 17.5   recommendations, or developmentally appropriate assessment 
 17.6   instruments, to lack the necessary English skills to participate 
 17.7   fully in classes taught in English; or. 
 17.8      (3) the (b) Notwithstanding paragraph (a), a pupil in 
 17.9   grades 3 4 through 12 scores who was enrolled in a Minnesota 
 17.10  public school on the dates during the previous school year when 
 17.11  a commissioner provided assessment that measures the pupil's 
 17.12  emerging academic English was administered, shall not be counted 
 17.13  as a pupil of limited English proficiency in calculating limited 
 17.14  English proficiency pupil units under section 126C.05, 
 17.15  subdivision 17, and shall not generate state limited English 
 17.16  proficiency aid under section 124D.65, subdivision 5, unless the 
 17.17  pupil scored below the state cutoff score on an assessment 
 17.18  measuring emerging academic English provided by the commissioner 
 17.19  during the previous school year. 
 17.20     (c) Notwithstanding paragraphs (a) and (b), a pupil in 
 17.21  kindergarten through grade 12 shall not be counted as a pupil of 
 17.22  limited English proficiency in calculating limited English 
 17.23  proficiency pupil units under section 126C.05, subdivision 17, 
 17.24  and shall not generate state limited English proficiency aid 
 17.25  under section 124D.65, subdivision 5, if: 
 17.26     (i) the pupil is not enrolled during the current fiscal 
 17.27  year in an educational program for pupils of limited English 
 17.28  proficiency in accordance with sections 124D.58 to 124D.64; or 
 17.29     (ii) the pupil has generated seven or more years of average 
 17.30  daily membership in Minnesota public schools since July 1, 1996. 
 17.31     A pupil that has generated more than four years but less 
 17.32  than five years of average daily membership in Minnesota public 
 17.33  schools since July 1, 1996, counts as .75 pupils.  A pupil that 
 17.34  has generated more than five years but less than six years of 
 17.35  average daily membership in Minnesota schools since July 1, 
 17.36  1996, counts as .50 pupils.  A pupil that has generated more 
 18.1   than six years but less than seven years of average daily 
 18.2   membership in Minnesota schools since July 1, 1996, counts as 
 18.3   .25 pupils.  
 18.4      Sec. 15.  Minnesota Statutes 2002, section 124D.65, 
 18.5   subdivision 5, is amended to read: 
 18.6      Subd. 5.  [SCHOOL DISTRICT LEP REVENUE.] (a) A school 
 18.7   district's limited English proficiency programs revenue for 
 18.8   fiscal year 2000 equals the state total limited English 
 18.9   proficiency programs revenue, minus the amount determined under 
 18.10  paragraph (b), times the ratio of the district's adjusted 
 18.11  limited English proficiency programs base revenue to the state 
 18.12  total adjusted limited English proficiency programs base revenue.
 18.13     (b) Notwithstanding paragraph (a), if the limited English 
 18.14  proficiency programs base revenue for a district equals zero, 
 18.15  the limited English proficiency programs revenue equals the sum 
 18.16  of the following amounts, computed using current year data: 
 18.17     (1) 68 percent of the salary of one full-time equivalent 
 18.18  teacher for each 40 pupils of limited English proficiency 
 18.19  enrolled, or 68 percent of the salary of one-half of a full-time 
 18.20  teacher in a district with 20 or fewer pupils of limited English 
 18.21  proficiency enrolled; and 
 18.22     (2) for supplies and equipment purchased or rented for use 
 18.23  in the instruction of pupils of limited English proficiency an 
 18.24  amount equal to 47 percent of the sum actually spent by the 
 18.25  district but not to exceed an average of $47 in any one school 
 18.26  year for each pupil of limited English proficiency receiving 
 18.27  instruction. 
 18.28     (c) A district's limited English proficiency programs 
 18.29  revenue for fiscal year 2001 and later equals the product 
 18.30  of $584 (1) $650 in fiscal year 2004 and $675 in fiscal year 
 18.31  2005 and later times (2) the greater of 20 or the number of 
 18.32  adjusted marginal cost average daily membership of eligible 
 18.33  pupils of limited English proficiency enrolled in the district 
 18.34  during the current fiscal year. 
 18.35     (d) (b) A pupil ceases to generate state limited English 
 18.36  proficiency aid in the school year following the school year in 
 19.1   which the pupil attains the state cutoff score on a 
 19.2   commissioner-provided assessment that measures the pupil's 
 19.3   emerging academic English. 
 19.4      Sec. 16.  Minnesota Statutes 2002, section 126C.05, 
 19.5   subdivision 1, is amended to read: 
 19.6      Subdivision 1.  [PUPIL UNIT.] Pupil units for each 
 19.7   Minnesota resident pupil in average daily membership enrolled in 
 19.8   the district of residence, in another district under sections 
 19.9   123A.05 to 123A.08, 124D.03, 124D.06, 124D.07, 124D.08, or 
 19.10  124D.68; in a charter school under section 124D.10; or for whom 
 19.11  the resident district pays tuition under section 123A.18, 
 19.12  123A.22, 123A.30, 123A.32, 123A.44, 123A.488, 123B.88, 
 19.13  subdivision 4, 124D.04, 124D.05, 125A.03 to 125A.24, 125A.51, or 
 19.14  125A.65, shall be counted according to this subdivision.  
 19.15     (a) A prekindergarten pupil with a disability who is 
 19.16  enrolled in a program approved by the commissioner and has an 
 19.17  individual education plan is counted as the ratio of the number 
 19.18  of hours of assessment and education service to 825 times 1.25 
 19.19  with a minimum average daily membership of 0.28, but not more 
 19.20  than 1.25 pupil units. 
 19.21     (b) A prekindergarten pupil who is assessed but determined 
 19.22  not to be handicapped is counted as the ratio of the number of 
 19.23  hours of assessment service to 825 times 1.25.  
 19.24     (c) A kindergarten pupil with a disability who is enrolled 
 19.25  in a program approved by the commissioner is counted as the 
 19.26  ratio of the number of hours of assessment and education 
 19.27  services required in the fiscal year by the pupil's individual 
 19.28  education program plan to 875, but not more than one. 
 19.29     (d) A kindergarten pupil who is not included in paragraph 
 19.30  (c) is counted as .557 .50 of a pupil unit for fiscal year 2000 
 19.31  and thereafter. 
 19.32     (e) A pupil who is in any of grades 1 to 3 is counted as 
 19.33  1.115 1.00 pupil units for fiscal year 2000 and thereafter unit. 
 19.34     (f) A pupil who is any of grades 4 to 6 is counted as 1.06 
 19.35  1.00 pupil units for fiscal year 1995 and thereafter unit. 
 19.36     (g) A pupil who is in any of grades 7 to 12 is counted as 
 20.1   1.3 pupil units.  
 20.2      (h) A pupil who is in the post-secondary enrollment options 
 20.3   program is counted as 1.3 pupil units.  
 20.4      <b>[EFFECTIVE DATE.]</b> This section is effective for revenue for 
 20.5   fiscal year 2004. 
 20.6      Sec. 17.  Minnesota Statutes 2002, section 126C.05, 
 20.7   subdivision 8, is amended to read: 
 20.8      Subd. 8.  [AVERAGE DAILY MEMBERSHIP.] (a) Membership for 
 20.9   pupils in grades kindergarten through 12 and for prekindergarten 
 20.10  pupils with disabilities shall mean the number of pupils on the 
 20.11  current roll of the school, counted from the date of entry until 
 20.12  withdrawal.  The date of withdrawal shall mean the day the pupil 
 20.13  permanently leaves the school or the date it is officially known 
 20.14  that the pupil has left or has been legally excused.  However, a 
 20.15  pupil, regardless of age, who has been absent from school for 15 
 20.16  consecutive school days during the regular school year or for 
 20.17  five consecutive school days during summer school or 
 20.18  intersession classes of flexible school year programs without 
 20.19  receiving instruction in the home or hospital shall be dropped 
 20.20  from the roll and classified as withdrawn.  Nothing in this 
 20.21  section shall be construed as waiving the compulsory attendance 
 20.22  provisions cited in section 120A.22.  Average daily membership 
 20.23  equals the sum for all pupils of the number of days of the 
 20.24  school year each pupil is enrolled in the district's schools 
 20.25  divided by the number of days the schools are in session.  Days 
 20.26  of summer school or intersession classes of flexible school year 
 20.27  programs are only included in the computation of membership for 
 20.28  pupils with a disability not appropriately served primarily in 
 20.29  the regular classroom.  A student must not be counted as more 
 20.30  than 1.2 pupils in average daily membership under this section.  
 20.31  When the initial total average daily membership exceeds 1.2 for 
 20.32  a pupil enrolled in more than one school district during the 
 20.33  fiscal year, each district's average daily membership must be 
 20.34  reduced proportionately. 
 20.35     (b) A student must not be counted as more than one pupil in 
 20.36  average daily membership except for purposes of section 126C.10, 
 21.1   subdivision 2a.  
 21.2      Sec. 18.  Minnesota Statutes 2002, section 126C.05, 
 21.3   subdivision 14, is amended to read: 
 21.4      Subd. 14.  [COMPUTING PUPIL UNITS FOR A PRIOR YEAR.] In 
 21.5   computing pupil units for a prior year, the number of pupil 
 21.6   units shall be adjusted to reflect any change for the current 
 21.7   year in relative weightings by grade level or category of 
 21.8   special assistance, any change in measurement from average daily 
 21.9   attendance to average daily membership, any change in the limit 
 21.10  on average daily membership that can be generated by a pupil for 
 21.11  a fiscal year as provided in subdivisions 8 and 15, and any 
 21.12  change in school district boundaries, but not for the addition 
 21.13  for the first time in the current year of a specified category 
 21.14  of special assistance as provided in subdivision 1, clause (4). 
 21.15     Sec. 19.  Minnesota Statutes 2002, section 126C.05, 
 21.16  subdivision 15, is amended to read: 
 21.17     Subd. 15.  [LEARNING YEAR PUPIL UNITS.] (a) When a pupil is 
 21.18  enrolled in a learning year program under section 124D.128, an 
 21.19  area learning center under sections 123A.05 and 123A.06, an 
 21.20  alternative program approved by the commissioner, or a contract 
 21.21  alternative program under section 124D.68, subdivision 3, 
 21.22  paragraph (d), or subdivision 3a, for more than 1,020 hours in a 
 21.23  school year for a secondary student, more than 935 hours in a 
 21.24  school year for an elementary student, or more than 425 hours in 
 21.25  a school year for a kindergarten student without a disability, 
 21.26  that pupil may be counted as more than one pupil in average 
 21.27  daily membership for purposes of section 126C.10, subdivision 
 21.28  2a.  The amount in excess of one pupil must be determined by the 
 21.29  ratio of the number of hours of instruction provided to that 
 21.30  pupil in excess of:  (i) the greater of 1,020 hours or the 
 21.31  number of hours required for a full-time secondary pupil in the 
 21.32  district to 1,020 for a secondary pupil; (ii) the greater of 935 
 21.33  hours or the number of hours required for a full-time elementary 
 21.34  pupil in the district to 935 for an elementary pupil in grades 1 
 21.35  through 6; and (iii) the greater of 425 hours or the number of 
 21.36  hours required for a full-time kindergarten student without a 
 22.1   disability in the district to 425 for a kindergarten student 
 22.2   without a disability.  Hours that occur after the close of the 
 22.3   instructional year in June shall be attributable to the 
 22.4   following fiscal year.  A kindergarten student must not be 
 22.5   counted as more than 1.2 pupils in average daily membership 
 22.6   under this subdivision.  A student in grades 1 through 12 must 
 22.7   not be counted as more than 1.5 1.2 pupils in average daily 
 22.8   membership under this subdivision. 
 22.9      (b)(i) To receive general education revenue for a pupil in 
 22.10  an alternative program that has an independent study component, 
 22.11  a district must meet the requirements in this paragraph.  The 
 22.12  district must develop, for the pupil, a continual learning plan 
 22.13  consistent with section 124D.128, subdivision 3.  Each school 
 22.14  district that has a state-approved public alternative program 
 22.15  must reserve revenue in an amount equal to at least 90 percent 
 22.16  of the district average general education revenue per pupil unit 
 22.17  less compensatory revenue per pupil unit times the number of 
 22.18  pupil units generated by students attending a state-approved 
 22.19  public alternative program.  The amount of reserved revenue 
 22.20  available under this subdivision may only be spent for program 
 22.21  costs associated with the state-approved public alternative 
 22.22  program.  Compensatory revenue must be allocated according to 
 22.23  section 126C.15, subdivision 2. 
 22.24     (ii) General education revenue for a pupil in an approved 
 22.25  alternative program without an independent study component must 
 22.26  be prorated for a pupil participating for less than a full year, 
 22.27  or its equivalent.  The district must develop a continual 
 22.28  learning plan for the pupil, consistent with section 124D.128, 
 22.29  subdivision 3.  Each school district that has a state-approved 
 22.30  public alternative program must reserve revenue in an amount 
 22.31  equal to at least 90 percent of the district average general 
 22.32  education revenue per pupil unit less compensatory revenue per 
 22.33  pupil unit times the number of pupil units generated by students 
 22.34  attending a state-approved public alternative program.  The 
 22.35  amount of reserved revenue available under this subdivision may 
 22.36  only be spent for program costs associated with the 
 23.1   state-approved public alternative program.  Compensatory revenue 
 23.2   must be allocated according to section 126C.15, subdivision 2.  
 23.3      (iii) General education revenue for a pupil in an approved 
 23.4   alternative program that has an independent study component must 
 23.5   be paid for each hour of teacher contact time and each hour of 
 23.6   independent study time completed toward a credit or graduation 
 23.7   standards necessary for graduation.  Average daily membership 
 23.8   for a pupil shall equal the number of hours of teacher contact 
 23.9   time and independent study time divided by 1,020. 
 23.10     (iv) For an alternative program having an independent study 
 23.11  component, the commissioner shall require a description of the 
 23.12  courses in the program, the kinds of independent study involved, 
 23.13  the expected learning outcomes of the courses, and the means of 
 23.14  measuring student performance against the expected outcomes.  
 23.15     Sec. 20.  Minnesota Statutes 2002, section 126C.05, 
 23.16  subdivision 16, is amended to read: 
 23.17     Subd. 16.  [FREE AND REDUCED PRICED LUNCHES.] The 
 23.18  commissioner shall determine the number of children eligible to 
 23.19  receive either a free or reduced priced lunch on October 1 each 
 23.20  year.  Children enrolled in a building on October 1 and 
 23.21  determined to be eligible to receive free or reduced price lunch 
 23.22  by January December 15 of the following that school year shall 
 23.23  be counted as eligible on October 1 for purposes of subdivision 
 23.24  3.  The commissioner may use federal definitions for these 
 23.25  purposes and may adjust these definitions as appropriate.  The 
 23.26  commissioner may adopt reporting guidelines to assure accuracy 
 23.27  of data counts and eligibility.  Districts shall use any 
 23.28  guidelines adopted by the commissioner. 
 23.29     Sec. 21.  Minnesota Statutes 2002, section 126C.05, 
 23.30  subdivision 17, is amended to read: 
 23.31     Subd. 17.  [LEP PUPIL UNITS.] (a) Limited English 
 23.32  proficiency pupil units for fiscal year 1998 2004 and thereafter 
 23.33  shall be determined according to this subdivision. 
 23.34     (b) The limited English proficiency concentration 
 23.35  percentage for a district equals the product of 100 times the 
 23.36  ratio of: 
 24.1      (1) the number of eligible pupils of limited English 
 24.2   proficiency in average daily membership enrolled in the district 
 24.3   during the current fiscal year; to 
 24.4      (2) the number of pupils in average daily membership 
 24.5   enrolled in the district. 
 24.6      (c) The limited English proficiency pupil units for 
 24.7   each eligible pupil enrolled in a program for pupils of limited 
 24.8   English proficiency in accordance with sections 124D.58 to 
 24.9   124D.64 in average daily membership equals the lesser of one or 
 24.10  the quotient obtained by dividing the limited English 
 24.11  proficiency concentration percentage for the pupil's district of 
 24.12  enrollment by 11.5. 
 24.13     (d) Limited English proficiency pupil units shall be 
 24.14  counted by the district of enrollment. 
 24.15     (e) Notwithstanding paragraph (d), for the purposes of this 
 24.16  subdivision, pupils enrolled in a cooperative or intermediate 
 24.17  school district shall be counted by the district of residence. 
 24.18     (f) For the purposes of this subdivision, the terms defined 
 24.19  in section 124D.59 have the same meaning. 
 24.20     Sec. 22.  Minnesota Statutes 2002, section 126C.10, 
 24.21  subdivision 1, is amended to read: 
 24.22     Subdivision 1.  [GENERAL EDUCATION REVENUE.] (a) For fiscal 
 24.23  year 2002, the general education revenue for each district 
 24.24  equals the sum of the district's basic revenue, basic skills 
 24.25  revenue, training and experience revenue, secondary sparsity 
 24.26  revenue, elementary sparsity revenue, transportation sparsity 
 24.27  revenue, total operating capital revenue, equity revenue, 
 24.28  transition revenue, and supplemental revenue. 
 24.29     (b) For fiscal year 2003 and later, the general education 
 24.30  revenue for each district equals the sum of the district's basic 
 24.31  revenue, basic skills revenue, training and experience revenue, 
 24.32  secondary sparsity revenue, elementary sparsity revenue, 
 24.33  transportation sparsity revenue, total operating capital 
 24.34  revenue, and equity revenue. 
 24.35     (b) For fiscal year 2004 and later, the general education 
 24.36  revenue for each district equals the sum of the district's basic 
 25.1   revenue, extended time revenue, class size reduction revenue, 
 25.2   basic skills revenue, secondary sparsity revenue, elementary 
 25.3   sparsity revenue, transportation sparsity revenue, total 
 25.4   operating capital revenue, equity revenue, and transition 
 25.5   revenue. 
 25.6      Sec. 23.  Minnesota Statutes 2002, section 126C.10, is 
 25.7   amended by adding a subdivision to read: 
 25.8      Subd. 2a.  [EXTENDED TIME REVENUE.] (a) A school district's 
 25.9   extended time revenue is equal to the product of $4,601 and the 
 25.10  sum of the adjusted marginal cost pupil units of the district 
 25.11  for each pupil in average daily membership in excess of 1.0 and 
 25.12  less than 1.2 according to section 126C.05, subdivision 8. 
 25.13     (b) A school district's extended time revenue may be used 
 25.14  for extended day programs, extended week programs, summer 
 25.15  school, and other programming authorized under the learning year 
 25.16  program.  
 25.17     Sec. 24.  Minnesota Statutes 2002, section 126C.10, is 
 25.18  amended by adding a subdivision to read: 
 25.19     Subd. 2b.  [CLASS SIZE REDUCTION REVENUE.] For fiscal year 
 25.20  2004 and later, a school district's class size reduction revenue 
 25.21  equals: 
 25.22     (1) $262 times the sum of adjusted marginal cost pupils in 
 25.23  average daily membership, according to section 126C.05, 
 25.24  subdivision 5, in kindergarten; plus 
 25.25     (2) $529 times the sum of adjusted marginal cost pupils in 
 25.26  average daily membership, according to section 126C.05, 
 25.27  subdivision 5, in grades 1 to 3; plus 
 25.28     (3) $276 times the sum of adjusted marginal cost pupils in 
 25.29  average daily membership, according to section 126C.05, 
 25.30  subdivision 5, in grades 4 to 6. 
 25.31     Sec. 25.  Minnesota Statutes 2002, section 126C.10, 
 25.32  subdivision 3, is amended to read: 
 25.33     Subd. 3.  [COMPENSATORY EDUCATION REVENUE.] (a) For fiscal 
 25.34  year 2004 and later, the compensatory education revenue for each 
 25.35  building in the district equals the formula allowance $4,150 
 25.36  times the compensation revenue pupil units computed according to 
 26.1   section 126C.05, subdivision 3.  
 26.2      (b) A district's compensatory education revenue equals the 
 26.3   greater of the amount computed in paragraph (a) or the minimum 
 26.4   compensatory allowance times the number of compensatory pupils 
 26.5   computed according to section 126C.05, subdivision 3, paragraph 
 26.6   (a), clause (1).  For fiscal years 2004 and 2005, the minimum 
 26.7   compensatory allowance equals $500.  The minimum compensatory 
 26.8   allowance for each subsequent year equals the previous year's 
 26.9   allowance plus $50.  
 26.10     (c) Revenue shall be paid to the district and must be 
 26.11  allocated according to section 126C.15, subdivision 2. 
 26.12     Sec. 26.  Minnesota Statutes 2002, section 126C.10, 
 26.13  subdivision 4, is amended to read: 
 26.14     Subd. 4.  [BASIC SKILLS REVENUE.] (a) For fiscal year 2002, 
 26.15  a school district's basic skills revenue equals the sum of: 
 26.16     (1) compensatory revenue under subdivision 3; plus 
 26.17     (2) limited English proficiency revenue according to 
 26.18  section 124D.65, subdivision 5; plus 
 26.19     (3) $190 times the limited English proficiency pupil units 
 26.20  according to section 126C.05, subdivision 17; plus 
 26.21     (4) $22.50 times the number of adjusted marginal cost pupil 
 26.22  units in kindergarten to grade 8. 
 26.23     (b) For fiscal year 2003 and later, A school district's 
 26.24  basic skills revenue equals the sum of: 
 26.25     (1) compensatory revenue under subdivision 3; plus 
 26.26     (2) limited English proficiency revenue under section 
 26.27  124D.65, subdivision 5; plus 
 26.28     (3) $190 (i) $200 in fiscal year 2004 and later, times (ii) 
 26.29  the limited English proficiency pupil units under section 
 26.30  126C.05, subdivision 17. 
 26.31     Sec. 27.  Minnesota Statutes 2002, section 126C.10, 
 26.32  subdivision 17, is amended to read: 
 26.33     Subd. 17.  [TRANSPORTATION SPARSITY DEFINITIONS.] The 
 26.34  definitions in this subdivision apply to subdivisions 18 and 19. 
 26.35     (a) "Sparsity index" for a district means the greater of .2 
 26.36  or the ratio of the square mile area of the district to the 
 27.1   resident pupil units of the district. 
 27.2      (b) "Density index" for a district means the ratio of the 
 27.3   square mile area of the district to the resident pupil units of 
 27.4   the district.  However, the density index for a district cannot 
 27.5   be greater than .2 or less than .005. 
 27.6      (c) "Fiscal year 1996 base allowance" for a district means 
 27.7   the result of the following computation: 
 27.8      (1) sum the following amounts: 
 27.9      (i) the fiscal year 1996 regular transportation revenue for 
 27.10  the district according to Minnesota Statutes 1996, section 
 27.11  124.225, subdivision 7d, paragraph (a), excluding the revenue 
 27.12  attributable nonpublic school pupils and to pupils with 
 27.13  disabilities receiving special transportation services; plus 
 27.14     (ii) the fiscal year 1996 nonregular transportation revenue 
 27.15  for the district according to Minnesota Statutes 1996, section 
 27.16  124.225, subdivision 7d, paragraph (b), excluding the revenue 
 27.17  for desegregation transportation according to Minnesota Statutes 
 27.18  1996, section 124.225, subdivision 1, paragraph (c), clause (4), 
 27.19  and the revenue attributable to nonpublic school pupils and to 
 27.20  pupils with disabilities receiving special transportation 
 27.21  services or board and lodging; plus 
 27.22     (iii) the fiscal year 1996 excess transportation levy for 
 27.23  the district according to Minnesota Statutes 1996, section 
 27.24  124.226, subdivision 5, excluding the levy attributable to 
 27.25  nonpublic school pupils; plus 
 27.26     (iv) the fiscal year 1996 late activity bus levy for the 
 27.27  district according to Minnesota Statutes 1996, section 124.226, 
 27.28  subdivision 9, excluding the levy attributable to nonpublic 
 27.29  school pupils; plus 
 27.30     (v) an amount equal to one-third of the fiscal year 1996 
 27.31  bus depreciation for the district according to Minnesota 
 27.32  Statutes 1996, section 124.225, subdivision 1, paragraph (b), 
 27.33  clauses (2), (3), and (4). 
 27.34     (2) divide the result in clause (1) by the district's 
 27.35  1995-1996 fund balance pupil units. 
 27.36     Sec. 28.  Minnesota Statutes 2002, section 126C.10, 
 28.1   subdivision 18, is amended to read: 
 28.2      Subd. 18.  [TRANSPORTATION SPARSITY REVENUE ALLOWANCE.] (a) 
 28.3   A district's transportation sparsity allowance equals the 
 28.4   greater of zero or the result of the following computation: 
 28.5      (i) Multiply the formula allowance according to subdivision 
 28.6   2 minus $415, by .1469. 
 28.7      (ii) Multiply the result in clause (i) by the district's 
 28.8   sparsity index raised to the 26/100 power. 
 28.9      (iii) Multiply the result in clause (ii) by the district's 
 28.10  density index raised to the 13/100 power. 
 28.11     (iv) Multiply the formula allowance minus $415 according to 
 28.12  subdivision 2, by .0485. 
 28.13     (v) Subtract the result in clause (iv) from the result in 
 28.14  clause (iii). 
 28.15     (b) Transportation sparsity revenue is equal to the 
 28.16  transportation sparsity allowance times the adjusted marginal 
 28.17  cost pupil units. 
 28.18     Sec. 29.  Minnesota Statutes 2002, section 126C.10, 
 28.19  subdivision 24, is amended to read: 
 28.20     Subd. 24.  [EQUITY REVENUE.] (a) A school district 
 28.21  qualifies for equity revenue if: 
 28.22     (1) the school district's adjusted marginal cost pupil unit 
 28.23  amount of basic revenue, supplemental revenue, transition 
 28.24  revenue, and referendum revenue is less than the value of the 
 28.25  school district at or immediately above the 95th percentile of 
 28.26  school districts in its equity region for those revenue 
 28.27  categories; and 
 28.28     (2) the school district's administrative offices are not 
 28.29  located in a city of the first class on July 1, 1999. 
 28.30     (b) Equity revenue for a qualifying district that receives 
 28.31  referendum revenue under section 126C.17, subdivision 4, equals 
 28.32  the product of (1) the district's adjusted marginal cost pupil 
 28.33  units for that year; times (2) the sum of (i) $10 $13, plus (ii) 
 28.34  $55 $75, times the school district's equity index computed under 
 28.35  subdivision 27. 
 28.36     (c) Equity revenue for a qualifying district that does not 
 29.1   receive referendum revenue under section 126C.17, subdivision 4, 
 29.2   equals the product of the district's adjusted marginal cost 
 29.3   pupil units for that year times $10 $13. 
 29.4      <b>[EFFECTIVE DATE.]</b> This section is effective for revenue for 
 29.5   fiscal year 2005.  
 29.6      Sec. 30.  Minnesota Statutes 2002, section 126C.10, is 
 29.7   amended by adding a subdivision to read: 
 29.8      Subd. 29.  [EQUITY LEVY.] To obtain equity revenue for 
 29.9   fiscal year 2005 and later, a district may levy an amount not 
 29.10  more than the product of its equity revenue for the fiscal year 
 29.11  times the lesser of one or the ratio of its referendum market 
 29.12  value per resident marginal cost pupil unit to $476,000. 
 29.13     Sec. 31.  Minnesota Statutes 2002, section 126C.10, is 
 29.14  amended by adding a subdivision to read: 
 29.15     Subd. 30.  [EQUITY AID.] A district's equity aid equals its 
 29.16  equity revenue minus its equity levy times the ratio of the 
 29.17  actual amount levied to the permitted levy. 
 29.18     Sec. 32.  Minnesota Statutes 2002, section 126C.10, is 
 29.19  amended by adding a subdivision to read: 
 29.20     Subd. 31.  [TRANSITION REVENUE.] (a) A district's 
 29.21  transition allowance for fiscal years 2004 through 2008 equals 
 29.22  the greater of zero or the product of the ratio of the number of 
 29.23  adjusted marginal cost pupil units the district would have 
 29.24  counted for fiscal year 2004 under Minnesota Statutes 2002 to 
 29.25  the district's adjusted marginal cost pupil units for fiscal 
 29.26  year 2004, times the difference between:  (1) the lesser of the 
 29.27  district's general education revenue per adjusted marginal cost 
 29.28  pupil unit for fiscal year 2003 or the amount of general 
 29.29  education revenue the district would have received per adjusted 
 29.30  marginal cost pupil unit for fiscal year 2004 according to 
 29.31  Minnesota Statutes 2002, and (2) the district's general 
 29.32  education revenue for fiscal year 2004 excluding transition 
 29.33  revenue divided by the number of adjusted marginal cost pupil 
 29.34  units the district would have counted for fiscal year 2004 under 
 29.35  Minnesota Statutes 2002.  A district's transition allowance for 
 29.36  fiscal year 2009 and later is zero. 
 30.1      (b) A district's transition revenue for fiscal year 2004 
 30.2   and later equals the product of the district's transition 
 30.3   allowance times the district's adjusted marginal cost pupil 
 30.4   units. 
 30.5      Sec. 33.  Minnesota Statutes 2002, section 126C.10, is 
 30.6   amended by adding a subdivision to read: 
 30.7      Subd. 32.  [TRANSITION LEVY.] To obtain transition revenue 
 30.8   for fiscal year 2005 and later, a district may levy an amount 
 30.9   not more than the product of its transition revenue for the 
 30.10  fiscal year times the lesser of one or the ratio of its 
 30.11  referendum market value per resident marginal cost pupil unit to 
 30.12  $476,000. 
 30.13     Sec. 34.  Minnesota Statutes 2002, section 126C.10, is 
 30.14  amended by adding a subdivision to read: 
 30.15     Subd. 33.  [TRANSITION AID.] (a) For fiscal year 2004, a 
 30.16  district's transition aid equals its transition revenue. 
 30.17     (b) For fiscal year 2005 and later, a district's transition 
 30.18  aid equals its transition revenue minus its transition levy 
 30.19  times the ratio of the actual amount levied to the permitted 
 30.20  levy. 
 30.21     Sec. 35.  Minnesota Statutes 2002, section 126C.13, 
 30.22  subdivision 4, is amended to read: 
 30.23     Subd. 4.  [GENERAL EDUCATION AID.] (a) For fiscal year 
 30.24  2004, a district's general education aid is the sum of the 
 30.25  following amounts:  
 30.26     (1) general education revenue; 
 30.27     (2) shared time aid according to section 126C.01, 
 30.28  subdivision 7; and 
 30.29     (3) referendum aid according to section 126C.17. 
 30.30     (b) For fiscal year 2005 and later, a district's general 
 30.31  education aid is the sum of the following amounts: 
 30.32     (1) general education revenue, excluding equity revenue and 
 30.33  transition revenue; 
 30.34     (2) equity aid according to section 126C.10, subdivision 
 30.35  30; 
 30.36     (3) transition aid according to section 126C.10, 
 31.1   subdivision 33; 
 31.2      (4) shared time aid according to section 126C.01, 
 31.3   subdivision 7; and 
 31.4      (5) referendum aid according to section 126C.17. 
 31.5      Sec. 36.  Minnesota Statutes 2002, section 126C.15, 
 31.6   subdivision 1, is amended to read: 
 31.7      Subdivision 1.  [USE OF THE REVENUE.] The basic skills 
 31.8   revenue under section 126C.10, subdivision 4, and the portion of 
 31.9   the transition revenue adjustment under section 126C.10, 
 31.10  subdivision 20, attributable to the compensatory transition 
 31.11  allowance under section 126C.10, subdivision 19, paragraph (b), 
 31.12  must be reserved and used to meet the educational needs of 
 31.13  pupils who enroll under-prepared to learn and whose progress 
 31.14  toward meeting state or local content or performance standards 
 31.15  is below the level that is appropriate for learners of their 
 31.16  age.  Any of the following may be provided to meet these 
 31.17  learners' needs: 
 31.18     (1) direct instructional services under the assurance of 
 31.19  mastery program according to section 124D.66; 
 31.20     (2) remedial instruction in reading, language arts, 
 31.21  mathematics, other content areas, or study skills to improve the 
 31.22  achievement level of these learners; 
 31.23     (3) additional teachers and teacher aides to provide more 
 31.24  individualized instruction to these learners through individual 
 31.25  tutoring, lower instructor-to-learner ratios, or team teaching; 
 31.26     (4) a longer school day or week during the regular school 
 31.27  year or through a summer program that may be offered directly by 
 31.28  the site or under a performance-based contract with a 
 31.29  community-based organization; 
 31.30     (5) comprehensive and ongoing staff development consistent 
 31.31  with district and site plans according to section 122A.60, for 
 31.32  teachers, teacher aides, principals, and other personnel to 
 31.33  improve their ability to identify the needs of these learners 
 31.34  and provide appropriate remediation, intervention, 
 31.35  accommodations, or modifications; 
 31.36     (6) instructional materials and technology appropriate for 
 32.1   meeting the individual needs of these learners; 
 32.2      (7) programs to reduce truancy, encourage completion of 
 32.3   high school, enhance self-concept, provide health services, 
 32.4   provide nutrition services, provide a safe and secure learning 
 32.5   environment, provide coordination for pupils receiving services 
 32.6   from other governmental agencies, provide psychological services 
 32.7   to determine the level of social, emotional, cognitive, and 
 32.8   intellectual development, and provide counseling services, 
 32.9   guidance services, and social work services; 
 32.10     (8) bilingual programs, bicultural programs, and programs 
 32.11  for learners of limited English proficiency; 
 32.12     (9) all day kindergarten; 
 32.13     (10) extended school day and extended school year programs; 
 32.14  and 
 32.15     (11) substantial parent involvement in developing and 
 32.16  implementing remedial education or intervention plans for a 
 32.17  learner, including learning contracts between the school, the 
 32.18  learner, and the parent that establish achievement goals and 
 32.19  responsibilities of the learner and the learner's parent or 
 32.20  guardian. 
 32.21     Sec. 37.  Minnesota Statutes 2002, section 126C.17, 
 32.22  subdivision 1, is amended to read: 
 32.23     Subdivision 1.  [REFERENDUM ALLOWANCE.] (a) For fiscal year 
 32.24  2002, a district's referendum revenue allowance equals the sum 
 32.25  of the allowance under section 126C.16, subdivision 2, plus any 
 32.26  additional allowance per resident marginal cost pupil unit 
 32.27  authorized under subdivision 9 for fiscal year 2002. 
 32.28     (b) For fiscal year 2003 and later, a district's initial 
 32.29  referendum revenue allowance equals the sum of the allowance 
 32.30  under section 126C.16, subdivision 2, plus any additional 
 32.31  allowance per resident marginal cost pupil unit authorized under 
 32.32  subdivision 9 before May 1, 2001, for fiscal year 2002 and 
 32.33  later, plus the referendum conversion allowance approved under 
 32.34  subdivision 13, minus $415.  For districts with more than one 
 32.35  referendum authority, the reduction must be computed separately 
 32.36  for each authority.  The reduction must be applied first to the 
 33.1   referendum conversion allowance and next to the authority with 
 33.2   the earliest expiration date.  A district's initial referendum 
 33.3   revenue allowance may not be less than zero. 
 33.4      (c) For fiscal year 2003 and later, a district's referendum 
 33.5   revenue allowance equals the initial referendum allowance plus 
 33.6   any additional allowance per resident marginal cost pupil unit 
 33.7   authorized under subdivision 9 after between April 30, 2001, and 
 33.8   December 30, 2001, for fiscal year 2003 and later. 
 33.9      (d) For fiscal year 2004 and later, a district's referendum 
 33.10  revenue allowance equals the sum of: 
 33.11     (1) the product of (i) the ratio of the resident marginal 
 33.12  cost pupil units the district would have counted for fiscal year 
 33.13  2004 under Minnesota Statutes 2002, section 126C.05, to the 
 33.14  district's resident marginal cost pupil units for fiscal year 
 33.15  2004, times (ii) the initial referendum allowance plus any 
 33.16  additional allowance per resident marginal cost pupil unit 
 33.17  authorized under subdivision 9 between April 30, 2001, and May 
 33.18  30, 2003, for fiscal year 2003 and later, plus 
 33.19     (2) any additional allowance per resident marginal cost 
 33.20  pupil unit authorized under subdivision 9 after May 30, 2003, 
 33.21  for fiscal year 2005 and later. 
 33.22     Sec. 38.  Minnesota Statutes 2002, section 126C.17, 
 33.23  subdivision 2, is amended to read: 
 33.24     Subd. 2.  [REFERENDUM ALLOWANCE LIMIT.] (a) Notwithstanding 
 33.25  subdivision 1, for fiscal year 2002, a district's referendum 
 33.26  allowance must not exceed the greater of:  
 33.27     (1) the district's referendum allowance for fiscal year 
 33.28  1994; 
 33.29     (2) 25 percent of the formula allowance; or 
 33.30     (3) for a newly reorganized district created after July 1, 
 33.31  1994, the sum of the referendum revenue authority for the 
 33.32  reorganizing districts for the fiscal year preceding the 
 33.33  reorganization, divided by the sum of the resident marginal cost 
 33.34  pupil units of the reorganizing districts for the fiscal year 
 33.35  preceding the reorganization. 
 33.36     (b) Notwithstanding subdivision 1, for fiscal year 2003 and 
 34.1   later fiscal years, a district's referendum allowance must not 
 34.2   exceed the greater of: 
 34.3      (1) the sum of a district's referendum allowance for fiscal 
 34.4   year 1994 times 1.162 plus its referendum conversion allowance 
 34.5   for fiscal year 2003, minus $415; 
 34.6      (2) 18.2 percent of the formula allowance; 
 34.7      (3) for a newly reorganized district created on July 1, 
 34.8   2002, the referendum revenue authority for each reorganizing 
 34.9   district in the year preceding reorganization divided by its 
 34.10  resident marginal cost pupil units for the year preceding 
 34.11  reorganization, minus $415; or 
 34.12     (4) for a newly reorganized district created after July 1, 
 34.13  2002, the referendum revenue authority for each reorganizing 
 34.14  district in the year preceding reorganization divided by its 
 34.15  resident marginal cost pupil units for the year preceding 
 34.16  reorganization. 
 34.17     (b) Notwithstanding subdivision 1, for fiscal year 2004 and 
 34.18  later, a district's referendum allowance must not exceed the 
 34.19  greater of: 
 34.20     (1) the sum of a district's referendum allowance for fiscal 
 34.21  year 1994 times 1.300 plus its referendum conversion allowance 
 34.22  for fiscal year 2003, minus $415; 
 34.23     (2) 21 percent of the formula allowance; or 
 34.24     (3) for a newly reorganized district created after July 1, 
 34.25  2002, the referendum revenue authority for each reorganizing 
 34.26  district in the year preceding reorganization divided by its 
 34.27  resident marginal cost pupil units for the year preceding 
 34.28  reorganization. 
 34.29     Sec. 39.  Minnesota Statutes 2002, section 126C.17, 
 34.30  subdivision 5, is amended to read: 
 34.31     Subd. 5.  [REFERENDUM EQUALIZATION REVENUE.] (a) For fiscal 
 34.32  year 2003 and later, a district's referendum equalization 
 34.33  revenue equals the sum of the first tier referendum equalization 
 34.34  revenue and the second tier referendum equalization revenue. 
 34.35     (b) A district's first tier referendum equalization revenue 
 34.36  equals the district's first tier referendum equalization 
 35.1   allowance times the district's resident marginal cost pupil 
 35.2   units for that year.  
 35.3      (c) For fiscal years 2003 and 2004, a district's first tier 
 35.4   referendum equalization allowance equals the lesser of the 
 35.5   district's referendum allowance under subdivision 1 or 
 35.6   $126.  For fiscal year 2005, a district's first tier referendum 
 35.7   equalization allowance equals the lesser of the district's 
 35.8   referendum allowance under subdivision 1 or $405.  For fiscal 
 35.9   year 2006 and later, a district's first tier referendum 
 35.10  equalization allowance equals the lesser of the district's 
 35.11  referendum allowance under subdivision 1 or $500. 
 35.12     (d) A district's second tier referendum equalization 
 35.13  revenue equals the district's second tier referendum 
 35.14  equalization allowance times the district's resident marginal 
 35.15  cost pupil units for that year. 
 35.16     (e) A district's second tier referendum equalization 
 35.17  allowance equals the lesser of the district's referendum 
 35.18  allowance under subdivision 1 or 18.2 21 percent of the formula 
 35.19  allowance, minus the district's first tier referendum 
 35.20  equalization allowance. 
 35.21     (f) Notwithstanding paragraph (e), the second tier 
 35.22  referendum allowance for a district qualifying for secondary 
 35.23  sparsity revenue under section 126C.10, subdivision 7, or 
 35.24  elementary sparsity revenue under section 126C.10, subdivision 
 35.25  8, equals the district's referendum allowance under subdivision 
 35.26  1 minus the district's first tier referendum equalization 
 35.27  allowance. 
 35.28     Sec. 40.  Minnesota Statutes 2002, section 126C.17, 
 35.29  subdivision 7, is amended to read: 
 35.30     Subd. 7.  [REFERENDUM EQUALIZATION AID.] (a) A district's 
 35.31  referendum equalization aid equals the difference between its 
 35.32  referendum equalization revenue and levy. 
 35.33     (b) If a district's actual levy for first or second tier 
 35.34  referendum equalization revenue is less than its maximum levy 
 35.35  limit for that tier, aid shall be proportionately reduced. 
 35.36     (c) Notwithstanding paragraph (a), the referendum 
 36.1   equalization aid for a district, where the referendum 
 36.2   equalization aid under paragraph (a) exceeds 90 percent of the 
 36.3   referendum revenue, must not exceed 18.2 21 percent of the 
 36.4   formula allowance times the district's resident marginal cost 
 36.5   pupil units.  A district's referendum levy is increased by the 
 36.6   amount of any reduction in referendum aid under this paragraph. 
 36.7      Sec. 41.  Minnesota Statutes 2002, section 126C.17, 
 36.8   subdivision 7a, is amended to read: 
 36.9      Subd. 7a.  [REFERENDUM TAX BASE REPLACEMENT AID.] For each 
 36.10  school district that had a referendum allowance for fiscal year 
 36.11  2002 exceeding $415, for each separately authorized referendum 
 36.12  levy, the commissioner of revenue, in consultation with the 
 36.13  commissioner of children, families, and learning education, 
 36.14  shall certify the amount of the referendum levy in taxes payable 
 36.15  year 2001 attributable to the portion of the referendum 
 36.16  allowance exceeding $415 levied against property classified as 
 36.17  class 2, noncommercial 4c(1), or 4c(4), under section 273.13, 
 36.18  excluding the portion of the tax paid by the portion of class 2a 
 36.19  property consisting of the house, garage, and surrounding one 
 36.20  acre of land.  The resulting amount must be used to reduce the 
 36.21  district's referendum levy amount otherwise determined, and must 
 36.22  be paid to the district each year that the referendum authority 
 36.23  remains in effect.  The aid payable under this subdivision must 
 36.24  be subtracted from the district's referendum equalization aid 
 36.25  under subdivision 7.  The referendum equalization aid after the 
 36.26  subtraction must not be less than zero. 
 36.27     For the purposes of this subdivision, the referendum levy 
 36.28  with the latest year of expiration is assumed to be at the 
 36.29  highest level of equalization, and the referendum levy with the 
 36.30  earliest year of expiration is assumed to be at the lowest level 
 36.31  of equalization. 
 36.32     Sec. 42.  Minnesota Statutes 2002, section 126C.17, 
 36.33  subdivision 9, is amended to read: 
 36.34     Subd. 9.  [REFERENDUM REVENUE.] (a) The revenue authorized 
 36.35  by section 126C.10, subdivision 1, may be increased in the 
 36.36  amount approved by the voters of the district at a referendum 
 37.1   called for the purpose.  The referendum may be called by the 
 37.2   board or shall be called by the board upon written petition of 
 37.3   qualified voters of the district.  The referendum must be 
 37.4   conducted one or two calendar years before the increased levy 
 37.5   authority, if approved, first becomes payable.  Only one 
 37.6   election to approve an increase may be held in a calendar year.  
 37.7   Unless the referendum is conducted by mail under paragraph (g), 
 37.8   the referendum must be held on the first Tuesday after the first 
 37.9   Monday in November.  The ballot must state the maximum amount of 
 37.10  the increased revenue per resident marginal cost pupil unit, the 
 37.11  estimated referendum tax rate as a percentage of referendum 
 37.12  market value in the first year it is to be levied, and that the 
 37.13  revenue must be used to finance school operations.  The ballot 
 37.14  may state a schedule, determined by the board, of increased 
 37.15  revenue per resident marginal cost pupil unit that differs from 
 37.16  year to year over the number of years for which the increased 
 37.17  revenue is authorized.  If the ballot contains a schedule 
 37.18  showing different amounts, it must also indicate the estimated 
 37.19  referendum tax rate as a percent of referendum market value for 
 37.20  the amount specified for the first year and for the maximum 
 37.21  amount specified in the schedule.  The ballot may state that 
 37.22  existing referendum levy authority is expiring.  In this case, 
 37.23  the ballot may also compare the proposed levy authority to the 
 37.24  existing expiring levy authority, and express the proposed 
 37.25  increase as the amount, if any, over the expiring referendum 
 37.26  levy authority.  The ballot must designate the specific number 
 37.27  of years, not to exceed ten, for which the referendum 
 37.28  authorization applies.  The notice required under section 275.60 
 37.29  may be modified to read, in cases of renewing existing levies: 
 37.30     "BY VOTING "YES" ON THIS BALLOT QUESTION, YOU MAY BE VOTING 
 37.31     FOR A PROPERTY TAX INCREASE." 
 37.32     The ballot may contain a textual portion with the 
 37.33  information required in this subdivision and a question stating 
 37.34  substantially the following:  
 37.35     "Shall the increase in the revenue proposed by (petition 
 37.36  to) the board of ........., School District No. .., be approved?"
 38.1      If approved, an amount equal to the approved revenue per 
 38.2   resident marginal cost pupil unit times the resident marginal 
 38.3   cost pupil units for the school year beginning in the year after 
 38.4   the levy is certified shall be authorized for certification for 
 38.5   the number of years approved, if applicable, or until revoked or 
 38.6   reduced by the voters of the district at a subsequent referendum.
 38.7      (b) The board must prepare and deliver by first class mail 
 38.8   at least 15 days but no more than 30 days before the day of the 
 38.9   referendum to each taxpayer a notice of the referendum and the 
 38.10  proposed revenue increase.  The board need not mail more than 
 38.11  one notice to any taxpayer.  For the purpose of giving mailed 
 38.12  notice under this subdivision, owners must be those shown to be 
 38.13  owners on the records of the county auditor or, in any county 
 38.14  where tax statements are mailed by the county treasurer, on the 
 38.15  records of the county treasurer.  Every property owner whose 
 38.16  name does not appear on the records of the county auditor or the 
 38.17  county treasurer is deemed to have waived this mailed notice 
 38.18  unless the owner has requested in writing that the county 
 38.19  auditor or county treasurer, as the case may be, include the 
 38.20  name on the records for this purpose.  The notice must project 
 38.21  the anticipated amount of tax increase in annual dollars and 
 38.22  annual percentage for typical residential homesteads, 
 38.23  agricultural homesteads, apartments, and commercial-industrial 
 38.24  property within the school district. 
 38.25     The notice for a referendum may state that an existing 
 38.26  referendum levy is expiring and project the anticipated amount 
 38.27  of increase over the existing referendum levy in the first year, 
 38.28  if any, in annual dollars and annual percentage for typical 
 38.29  residential homesteads, agricultural homesteads, apartments, and 
 38.30  commercial-industrial property within the district. 
 38.31     The notice must include the following statement:  "Passage 
 38.32  of this referendum will result in an increase in your property 
 38.33  taxes."  However, in cases of renewing existing levies, the 
 38.34  notice may include the following statement:  "Passage of this 
 38.35  referendum may result in an increase in your property taxes." 
 38.36     (c) A referendum on the question of revoking or reducing 
 39.1   the increased revenue amount authorized pursuant to paragraph 
 39.2   (a) may be called by the board and shall be called by the board 
 39.3   upon the written petition of qualified voters of the district.  
 39.4   A referendum to revoke or reduce the levy revenue amount must be 
 39.5   based upon the dollar amount, local tax rate, or state the 
 39.6   amount per resident marginal cost pupil unit, that was stated to 
 39.7   be the basis for the initial authorization by which the 
 39.8   authority is to be reduced.  Revenue authority approved by the 
 39.9   voters of the district pursuant to paragraph (a) must 
 39.10  be received available to the school district at least once 
 39.11  before it is subject to a referendum on its revocation or 
 39.12  reduction for subsequent years.  Only one revocation or 
 39.13  reduction referendum may be held to revoke or reduce referendum 
 39.14  revenue for any specific year and for years thereafter. 
 39.15     (d) A petition authorized by paragraph (a) or (c) is 
 39.16  effective if signed by a number of qualified voters in excess of 
 39.17  15 percent of the registered voters of the district on the day 
 39.18  the petition is filed with the board.  A referendum invoked by 
 39.19  petition must be held on the date specified in paragraph (a). 
 39.20     (e) The approval of 50 percent plus one of those voting on 
 39.21  the question is required to pass a referendum authorized by this 
 39.22  subdivision. 
 39.23     (f) At least 15 days before the day of the referendum, the 
 39.24  district must submit a copy of the notice required under 
 39.25  paragraph (b) to the commissioner and to the county auditor of 
 39.26  each county in which the district is located.  Within 15 days 
 39.27  after the results of the referendum have been certified by the 
 39.28  board, or in the case of a recount, the certification of the 
 39.29  results of the recount by the canvassing board, the district 
 39.30  must notify the commissioner of the results of the referendum. 
 39.31     Sec. 43.  Minnesota Statutes 2002, section 126C.17, 
 39.32  subdivision 13, is amended to read: 
 39.33     Subd. 13.  [REFERENDUM CONVERSION ALLOWANCE.] (a) A school 
 39.34  district that received supplemental or transition revenue in 
 39.35  fiscal year 2002 may convert its supplemental revenue conversion 
 39.36  allowance and transition revenue conversion allowance to 
 40.1   additional referendum allowance under subdivision 1 for fiscal 
 40.2   year 2003 and thereafter.  A majority of the school board must 
 40.3   approve the conversion at a public meeting before November 1, 
 40.4   2001.  For a district with other referendum authority, the 
 40.5   referendum conversion allowance approved by the board continues 
 40.6   until the portion of the district's other referendum authority 
 40.7   with the earliest expiration date after June 30, 2006, expires.  
 40.8   For a district with no other referendum authority, the 
 40.9   referendum conversion allowance approved by the board continues 
 40.10  until June 30, 2012. 
 40.11     (b) A school district that received transition revenue in 
 40.12  fiscal year 2004 may convert all or part of its transition 
 40.13  revenue to referendum revenue with voter approval in a 
 40.14  referendum called for the purpose.  The referendum must be held 
 40.15  in accordance with subdivision 9, except that the ballot may 
 40.16  state that existing transition revenue authority is being 
 40.17  canceled or is expiring.  In this case, the ballot shall compare 
 40.18  the proposed referendum allowance to the canceled or expiring 
 40.19  transition revenue allowance.  For purposes of this comparison, 
 40.20  the canceled or expiring transition revenue allowance per 
 40.21  adjusted marginal cost pupil unit shall be converted to an 
 40.22  allowance per resident marginal cost pupil unit based on the 
 40.23  district's ratio of adjusted marginal cost pupil units to 
 40.24  resident marginal cost pupil units for the preceding fiscal 
 40.25  year.  The referendum must be held on the first Tuesday after 
 40.26  the first Monday in November.  The notice required under section 
 40.27  275.60 may be modified to read:  "BY VOTING 'YES' ON THIS BALLOT 
 40.28  QUESTION, YOU MAY BE VOTING FOR A PROPERTY TAX INCREASE."  
 40.29  Elections under this paragraph must be held in 2007 or earlier.  
 40.30     Sec. 44.  Minnesota Statutes 2002, section 126C.21, 
 40.31  subdivision 3, is amended to read: 
 40.32     Subd. 3.  [COUNTY APPORTIONMENT DEDUCTION.] Each year the 
 40.33  amount of money apportioned to a district for that year pursuant 
 40.34  to section 127A.34, subdivision 2, excluding any district where 
 40.35  the general education levy is determined according to section 
 40.36  126C.13, subdivision 3, must be deducted from the general 
 41.1   education aid earned by that district for the same year or from 
 41.2   aid earned from other state sources.  
 41.3      Sec. 45.  Minnesota Statutes 2002, section 126C.457, is 
 41.4   amended to read: 
 41.5      126C.457 [CAREER AND TECHNICAL LEVY.] 
 41.6      For taxes payable in 2003 only, A school district may levy 
 41.7   an amount equal to the greater of (1) $10,000, or (2) the 
 41.8   district's fiscal year 2001 entitlement for career and technical 
 41.9   aid under section 124D.453.  The district must recognize the 
 41.10  full amount of this levy as revenue for the fiscal year in which 
 41.11  it is certified.  Revenue received under this section must be 
 41.12  reserved and used only for career and technical programs.  
 41.13     <b>[EFFECTIVE DATE.]</b> This section is effective for taxes 
 41.14  payable in 2004.  
 41.15     Sec. 46.  Minnesota Statutes 2002, section 169.28, 
 41.16  subdivision 1, is amended to read: 
 41.17     Subdivision 1.  [STOP REQUIRED.] (a) The driver of any 
 41.18  motor vehicle carrying passengers for hire, or of any school bus 
 41.19  whether carrying passengers or not, or of any Head Start bus 
 41.20  whether carrying passengers or not, or of any vehicle that is 
 41.21  required to stop at railroad grade crossings under Code of 
 41.22  Federal Regulations, title 49, section 392.10, before crossing 
 41.23  at grade any track or tracks of a railroad, shall stop the 
 41.24  vehicle not less than 15 feet nor more than 50 feet from the 
 41.25  nearest rail of the railroad and while so stopped shall listen 
 41.26  and look in both directions along the track for any approaching 
 41.27  train, and for signals indicating the approach of a train, 
 41.28  except as hereinafter provided, and shall not proceed until safe 
 41.29  to do so.  The driver must not shift gears while crossing the 
 41.30  railroad tracks.  
 41.31     (b) A school bus or Head Start bus shall not be flagged 
 41.32  across railroad grade crossings except at those railroad grade 
 41.33  crossings that the local school administrative officer may 
 41.34  designate. 
 41.35     (c) A type III school bus, as defined in section 169.01, is 
 41.36  exempt from the requirement of school buses to stop at railroad 
 42.1   grade crossings. 
 42.2      Sec. 47.  Minnesota Statutes 2002, section 169.4503, 
 42.3   subdivision 4, is amended to read: 
 42.4      Subd. 4.  [CERTIFICATION.] A body manufacturer, school bus 
 42.5   dealer, or certified Minnesota commercial vehicle inspector who 
 42.6   is also an employee of an organization purchasing a school bus 
 42.7   shall certify to the department of public safety that the 
 42.8   product meets Minnesota standards. 
 42.9      Sec. 48.  Minnesota Statutes 2002, section 169.454, 
 42.10  subdivision 6, is amended to read: 
 42.11     Subd. 6.  [IDENTIFICATION.] (a) The vehicle must not have 
 42.12  the words "school bus" in any location on the exterior of the 
 42.13  vehicle, or in any interior location visible to a motorist. 
 42.14     (b) The vehicle must display to the rear of the vehicle 
 42.15  this sign:  "VEHICLE STOPS AT RR CROSSINGS." 
 42.16     (c) The lettering (except for "AT," which may be one inch 
 42.17  smaller) must be a minimum two-inch "Series D" as specified in 
 42.18  standard alphabets for highway signs as specified by the Federal 
 42.19  Highway Administration.  The printing must be in a color giving 
 42.20  a marked contrast with that of the part of the vehicle on which 
 42.21  it is placed. 
 42.22     (d) The sign must have provisions for being covered, or be 
 42.23  of a removable or fold-down type. 
 42.24     Sec. 49.  Minnesota Statutes 2002, section 171.321, 
 42.25  subdivision 5, is amended to read: 
 42.26     Subd. 5.  [ANNUAL EVALUATION AND LICENSE VERIFICATION.] (a) 
 42.27  A school district's pupil transportation safety director, the 
 42.28  chief administrator of a nonpublic school, or a private 
 42.29  contractor shall certify annually to the school board or 
 42.30  governing board of a nonpublic school that, at minimum, each 
 42.31  school bus driver meets the school bus driver training 
 42.32  competencies under subdivision 4.  A school district, nonpublic 
 42.33  school, or private contractor also shall provide in-service 
 42.34  training annually to each school bus driver.  
 42.35     (b) A school district, nonpublic school, or private 
 42.36  contractor shall annually verify the validity of the driver's 
 43.1   license of each person who transports students for the district 
 43.2   with the National Drivers Register or with the department of 
 43.3   public safety. 
 43.4      Sec. 50.  [NONPUBLIC PUPIL MATERIALS AND TESTS.] 
 43.5      Notwithstanding Minnesota Statutes, section 123B.42, 
 43.6   subdivision 3, paragraph (b), the inflation adjustment for 
 43.7   nonpublic pupil textbooks, individualized instructional or 
 43.8   cooperative learning materials, and standardized tests for 
 43.9   fiscal year 2004 must be computed using the fiscal year 2004 
 43.10  formula allowance minus $415. 
 43.11     Sec. 51.  [RECOGNITION OF EXCELLENCE IN EDUCATION.] 
 43.12     The commissioner of education must develop for the 
 43.13  kindergarten through grade 12 task force on school finance 
 43.14  reform a plan that recognizes and financially rewards 
 43.15  outstanding schools and students demonstrating excellence in 
 43.16  education consistent with the provisions on academic excellence 
 43.17  in Minnesota Statutes, chapter 120B. 
 43.18     Sec. 52.  [APPROPRIATIONS.] 
 43.19     Subdivision 1.  [DEPARTMENT OF EDUCATION.] The sums 
 43.20  indicated in this section are appropriated from the general fund 
 43.21  to the department of education for the fiscal years designated.  
 43.22     Subd. 2.  [GENERAL EDUCATION AID.] For general education 
 43.23  aid under Minnesota Statutes, section 126C.13, subdivision 4: 
 43.24       $4,834,653,000 .....     2004
 43.25       $5,137,390,000 .....     2005
 43.26     The 2004 appropriation includes $857,432,000 for 2003 and 
 43.27  $3,977,221,000 for 2004. 
 43.28     The 2005 appropriation includes $1,164,990 for 2004 and 
 43.29  $3,972,400,000 for 2005.  
 43.30     Subd. 3.  [REFERENDUM TAX BASE REPLACEMENT AID.] For 
 43.31  referendum tax base replacement aid under Minnesota Statutes, 
 43.32  section 126C.17, subdivision 7a: 
 43.33       $ 7,600,000    .....     2004 
 43.34       $ 7,971,000    .....     2005 
 43.35     The 2004 appropriation includes $1,419,000 for 2003 and 
 43.36  $6,181,000 for 2004.  
 44.1      The 2005 appropriation includes $1,846,000 for 2004 and 
 44.2   $6,125,000 for 2005. 
 44.3      Subd. 4.  [ENROLLMENT OPTIONS TRANSPORTATION.] For 
 44.4   transportation of pupils attending postsecondary institutions 
 44.5   under Minnesota Statutes, section 124D.09, or for transportation 
 44.6   of pupils attending nonresident districts under Minnesota 
 44.7   Statutes, section 124D.03: 
 44.8        $50,000        .....     2004
 44.9        $55,000        .....     2005
 44.10     Subd. 5.  [ABATEMENT REVENUE.] For abatement aid under 
 44.11  Minnesota Statutes, section 127A.49:  
 44.12       $2,597,000     .....     2004 
 44.13       $2,931,000     .....     2005 
 44.14     The 2004 appropriation includes $472,000 for 2003 and 
 44.15  $2,125,000 for 2004.  
 44.16     The 2005 appropriation includes $643,000 for 2004 and 
 44.17  $2,297,000 for 2005.  
 44.18     Subd. 6.  [CONSOLIDATION TRANSITION.] For districts 
 44.19  consolidating under Minnesota Statutes, section 123A.485: 
 44.20       $200,000        .....     2004 
 44.21       $593,000        .....     2005 
 44.22     The 2004 appropriation includes $35,000 for 2003 and 
 44.23  $165,000 for 2004. 
 44.24     The 2005 appropriation includes $49,000 for 2004 and 
 44.25  $544,000 for 2005. 
 44.26     Subd. 7.  [TORNADO IMPACT; YELLOW MEDICINE EAST.] For a 
 44.27  grant to independent school district No. 2190, Yellow Medicine 
 44.28  East, for tornado impact declining enrollment aid: 
 44.29       $78,000         .....     2004
 44.30       $39,000         .....     2005
 44.31     Subd. 8.  [DECLINING PUPIL AID; ALBERT LEA.] For declining 
 44.32  pupil aid to independent school district No. 241, Albert Lea: 
 44.33       $225,000        .....     2004
 44.34       $150,000        .....     2005
 44.35     Subd. 9.  [DECLINING PUPIL AID; MESABI EAST.] For declining 
 44.36  pupil aid to independent school district No. 2711, Mesabi East: 
 45.1        $150,000        .....     2004
 45.2        $100,000        .....     2005
 45.3      Subd. 10.  [DECLINING PUPIL AID; ROSEAU.] For declining 
 45.4   pupil aid to independent school district No. 682, Roseau: 
 45.5        $30,000         .....     2004
 45.6        $20,000         .....     2005
 45.7      Subd. 11.  [NONPUBLIC PUPIL AID.] For nonpublic pupil 
 45.8   education aid under Minnesota Statutes, sections 123B.40 to 
 45.9   123B.43 and 123B.87: 
 45.10       $14,179,000    .....     2004 
 45.11       $15,568,000    .....     2005 
 45.12     The 2004 appropriation includes $2,715,000 for 2003 and 
 45.13  $11,464,000 for 2004. 
 45.14     The 2005 appropriation includes $3,424,000 for 2004 and 
 45.15  $12,144,000 for 2005. 
 45.16     Subd. 12.  [NONPUBLIC PUPIL TRANSPORTATION.] For nonpublic 
 45.17  pupil transportation aid under Minnesota Statutes, section 
 45.18  123B.92, subdivision 9: 
 45.19       $20,821,000     .....     2004 
 45.20       $21,978,000     .....     2005 
 45.21     The 2004 appropriation includes $3,990,000 for 2003 and 
 45.22  $16,831,000 for 2004. 
 45.23     The 2005 appropriation includes $5,027,000 for 2004 and 
 45.24  $16,951,000 for 2005. 
 45.25     Sec. 53.  [REPEALER.] 
 45.26     (a) Minnesota Statutes 2002, sections 122A.60; 122A.61; 
 45.27  123A.73, subdivisions 7, 10, and 11; 123B.05; 123B.81, 
 45.28  subdivision 6; 124D.65, subdivision 4; 126C.01, subdivision 4; 
 45.29  126C.12; and 126C.125, are repealed.  
 45.30     (b) Minnesota Statutes 2002, section 126C.14, is repealed 
 45.31  effective for revenue for fiscal year 2003. 
 45.32     (c) Minnesota Statutes 2002, sections 122A.62; 126C.445; 
 45.33  and 126C.455, are repealed effective for taxes payable in 2004. 
 45.34     (d) Laws 2001, First Special Session chapter 6, article 5, 
 45.35  section 12, as amended by Laws 2002, chapter 377, article 12, 
 45.36  section 15, is repealed. 
 46.1      (e) Laws 2000, chapter 489, article 2, section 36, as 
 46.2   amended by Laws 2001, First Special Session chapter 6, article 
 46.3   1, section 44, is repealed effective for revenue for fiscal year 
 46.4   2004. 
 46.5                              ARTICLE 2
 46.6                         EDUCATION EXCELLENCE
 46.7      Section 1.  Minnesota Statutes 2002, section 120A.24, 
 46.8   subdivision 4, is amended to read: 
 46.9      Subd. 4.  [REPORTS TO THE STATE.] A superintendent must 
 46.10  make an annual report to the commissioner of children, families, 
 46.11  and learning education.  The report must include the following 
 46.12  information: 
 46.13     (1) the number of children residing in the district 
 46.14  attending nonpublic schools or receiving instruction from 
 46.15  persons or institutions other than a public school; 
 46.16     (2) the number of children in clause (1) who are in 
 46.17  compliance with section 120A.22 and this section; and 
 46.18     (3) the names, ages, and addresses number of children whom 
 46.19  in clause (1) who the superintendent has determined are not in 
 46.20  compliance with section 120A.22 and this section.  
 46.21     Sec. 2.  Minnesota Statutes 2002, section 120A.41, is 
 46.22  amended to read: 
 46.23     120A.41 [LENGTH OF SCHOOL YEAR; DAYS OF INSTRUCTION.] 
 46.24     A school board's annual school calendar must include at 
 46.25  least three additional days of student instruction or staff 
 46.26  development training related to implementing section 120B.031, 
 46.27  subdivision 1, paragraph (f), beyond the number of days of 
 46.28  student instruction the board formally adopted as its school 
 46.29  calendar at the beginning of the 1996-1997 school year. 
 46.30     <b>[EFFECTIVE DATE.]</b> This section is effective for the 
 46.31  2003-2004 school year. 
 46.32     Sec. 3.  Minnesota Statutes 2002, section 121A.23, 
 46.33  subdivision 1, is amended to read: 
 46.34     Subdivision 1.  [SEXUALLY TRANSMITTED INFECTIONS AND 
 46.35  DISEASES PROGRAM.] The commissioner of children, families, and 
 46.36  learning education, in consultation with the commissioner of 
 47.1   health, shall assist districts in developing and implementing a 
 47.2   program to prevent and reduce the risk of sexually transmitted 
 47.3   infections and diseases, including but not exclusive to human 
 47.4   immune deficiency virus and human papilloma virus.  Each 
 47.5   district must have a program that includes at least: 
 47.6      (1) planning materials, guidelines, and other technically 
 47.7   accurate and updated information; 
 47.8      (2) a comprehensive, technically accurate, and updated 
 47.9   curriculum that includes helping students to abstain from sexual 
 47.10  activity until marriage; 
 47.11     (3) cooperation and coordination among districts and SCs; 
 47.12     (4) a targeting of adolescents, especially those who may be 
 47.13  at high risk of contracting sexually transmitted infections and 
 47.14  diseases, for prevention efforts; 
 47.15     (5) involvement of parents and other community members; 
 47.16     (6) in-service training for appropriate district staff and 
 47.17  school board members; 
 47.18     (7) collaboration with state agencies and organizations 
 47.19  having a sexually transmitted infection and disease prevention 
 47.20  or sexually transmitted infection and disease risk reduction 
 47.21  program; 
 47.22     (8) collaboration with local community health services, 
 47.23  agencies and organizations having a sexually transmitted 
 47.24  infection and disease prevention or sexually transmitted 
 47.25  infection and disease risk reduction program; and 
 47.26     (9) participation by state and local student organizations. 
 47.27     The department may provide assistance at a neutral site to 
 47.28  a nonpublic school participating in a district's program.  
 47.29  District programs must not conflict with the health and wellness 
 47.30  curriculum developed under Laws 1987, chapter 398, article 5, 
 47.31  section 2, subdivision 7. 
 47.32     If a district fails to develop and implement a program to 
 47.33  prevent and reduce the risk of sexually transmitted infection 
 47.34  and disease, the department must assist the service cooperative 
 47.35  in the region serving that district to develop or implement the 
 47.36  program.  
 48.1      Sec. 4.  Minnesota Statutes 2002, section 121A.23, is 
 48.2   amended by adding a subdivision to read: 
 48.3      Subd. 1a.  [ABSTINENCE UNTIL MARRIAGE.] A school district 
 48.4   that complies with subdivision 1 must provide students with a 
 48.5   curriculum on and instruction in abstinence until marriage 
 48.6   premised on risk avoidance. 
 48.7      <b>[EFFECTIVE DATE.]</b> This section is effective the day 
 48.8   following final enactment. 
 48.9      Sec. 5.  [121A.24] [NOTICE REQUIREMENTS FOR STUDENT SURVEYS 
 48.10  AND SIMILAR INSTRUMENTS.] 
 48.11     (a) A school district must obtain prior written informed 
 48.12  consent from a student's parent or guardian before administering 
 48.13  an academic or nonacademic student survey, assessment, analysis, 
 48.14  evaluation, or similar instrument that reveals information about 
 48.15  the student or the student's family concerning: 
 48.16     (1) political affiliations or beliefs; 
 48.17     (2) mental or psychological problems; 
 48.18     (3) sexual behavior or attitudes; 
 48.19     (4) illegal, antisocial, self-incriminating, or demeaning 
 48.20  behavior; 
 48.21     (5) critical appraisals of another individual with whom a 
 48.22  student has a close family relationship; 
 48.23     (6) legally recognized privileged or analogous 
 48.24  relationships, such as those with a lawyer, physician, or 
 48.25  minister; 
 48.26     (7) religious practices, affiliations, or beliefs; or 
 48.27     (8) income or other income-related information required by 
 48.28  law to determine eligibility to participate in or receive 
 48.29  financial assistance under a program. 
 48.30     (b) When asking a parent or guardian to provide informed 
 48.31  written consent, the school district must: 
 48.32     (1) make a copy of the instrument readily accessible to the 
 48.33  parent or guardian at a convenient location and reasonable time; 
 48.34  and 
 48.35     (2) specifically identify the information in paragraph (a) 
 48.36  that will be revealed through the instrument. 
 49.1   The district must request the consent of the parent or guardian 
 49.2   at least 14 days before administering the instrument. 
 49.3      (c) A parent or guardian seeking to compel a school 
 49.4   district to comply with this section has available the civil 
 49.5   remedies under section 13.08, subdivision 4, in addition to 
 49.6   other remedies provided by law. 
 49.7      <b>[EFFECTIVE DATE.]</b> This section is effective the day 
 49.8   following final enactment. 
 49.9      Sec. 6.  Minnesota Statutes 2002, section 121A.50, is 
 49.10  amended to read: 
 49.11     121A.50 [JUDICIAL REVIEW.] 
 49.12     The decision of the commissioner of children, families, and 
 49.13  learning school district made under sections 121A.40 to 121A.56 
 49.14  is subject to judicial review under sections 14.63 to 14.69 by 
 49.15  writ of certiorari to the court of appeals.  The school district 
 49.16  may implement its decision during the appeal.  The decision of 
 49.17  the commissioner is stayed pending an appeal under this section. 
 49.18     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
 49.19  following final enactment and applies to all appeals of school 
 49.20  district decisions made after that date. 
 49.21     Sec. 7.  Minnesota Statutes 2002, section 121A.55, is 
 49.22  amended to read: 
 49.23     121A.55 [POLICIES TO BE ESTABLISHED.] 
 49.24     (a) The commissioner of children, families, and 
 49.25  learning education shall promulgate guidelines to assist each 
 49.26  school board.  Each school board shall establish uniform 
 49.27  criteria for dismissal and adopt written policies and rules to 
 49.28  effectuate the purposes of sections 121A.40 to 121A.56.  The 
 49.29  policies shall emphasize preventing dismissals through early 
 49.30  detection of problems and shall be designed to address students' 
 49.31  inappropriate behavior from recurring.  The policies shall 
 49.32  recognize the continuing responsibility of the school for the 
 49.33  education of the pupil during the dismissal period.  The 
 49.34  alternative educational services, if the pupil wishes to take 
 49.35  advantage of them, must be adequate to allow the pupil to make 
 49.36  progress towards meeting the graduation standards adopted under 
 50.1   section 120B.02 and help prepare the pupil for readmission.  
 50.2      (b) Consistent with its policies adopted under paragraph 
 50.3   (a), a school district, in consultation with a student's parent 
 50.4   or guardian, may assign a student to an area learning center or 
 50.5   provide other alternative educational services under section 
 50.6   121A.41, subdivision 11.  An area learning center under section 
 50.7   123A.05 may not prohibit an expelled or excluded pupil from 
 50.8   enrolling solely because a district expelled or excluded the 
 50.9   pupil.  The board of the area learning center may use the 
 50.10  provisions of the Pupil Fair Dismissal Act to exclude a pupil or 
 50.11  to require an admission plan. 
 50.12     (c) The commissioner shall actively encourage and assist 
 50.13  school districts to cooperatively establish alternative 
 50.14  educational services within school buildings or at alternative 
 50.15  program sites that offer instruction to pupils who are dismissed 
 50.16  from school for willfully engaging in dangerous, disruptive, or 
 50.17  violent behavior, including for possessing a firearm in a school 
 50.18  zone. 
 50.19     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
 50.20  following final enactment.  
 50.21     Sec. 8.  Minnesota Statutes 2002, section 122A.414, is 
 50.22  amended by adding a subdivision to read: 
 50.23     Subd. 3.  [REPORT.] Participating districts and school 
 50.24  sites must report on the implementation and effectiveness of the 
 50.25  alternative teacher compensation plan, particularly addressing 
 50.26  each requirement under subdivision 2 and make biennial 
 50.27  recommendations by January 1 to their school boards.  The school 
 50.28  boards shall transmit a summary of the findings and 
 50.29  recommendations of their district to the commissioner. 
 50.30     Sec. 9.  Minnesota Statutes 2002, section 122A.415, 
 50.31  subdivision 1, is amended to read: 
 50.32     Subdivision 1.  [AID AMOUNT.] (a) A school district that 
 50.33  meets the conditions of section 122A.414 and submits an 
 50.34  application approved by the commissioner is eligible for 
 50.35  alternative compensation aid.  The commissioner must consider 
 50.36  only applications submitted jointly by a school district and the 
 51.1   exclusive representative of the teachers for participation in 
 51.2   the program.  The application must contain a formally adopted 
 51.3   collective bargaining agreement, memorandum of understanding, or 
 51.4   other binding agreement that implements an alternative teacher 
 51.5   professional pay system consistent with section 122A.414 and 
 51.6   includes all teachers in a district, all teachers at a school 
 51.7   site, or at least 25 percent of the teachers in a district.  The 
 51.8   commissioner, in approving applications, may give preference to 
 51.9   applications involving entire districts or sites in approving 
 51.10  applications or to applications that align measures of teacher 
 51.11  performance with student academic achievement and progress under 
 51.12  section 120B.35, subdivision 1.  
 51.13     (b) Alternative compensation aid for a qualifying school 
 51.14  district, site, or portion of a district or school site is as 
 51.15  follows: 
 51.16     (1) for a school district in which the school board and the 
 51.17  exclusive representative of the teachers agree to place all 
 51.18  teachers in the district or at the site on the alternative 
 51.19  compensation schedule, alternative compensation aid equals $150 
 51.20  times the district's or the site's number of pupils enrolled on 
 51.21  October 1 of the previous fiscal year; or 
 51.22     (2) for a district in which the school board and the 
 51.23  exclusive representative of the teachers agree that at least 25 
 51.24  percent of the district's licensed teachers will be paid on the 
 51.25  alternative compensation schedule, alternative compensation aid 
 51.26  equals $150 times the percentage of participating teachers times 
 51.27  the district's number of pupils enrolled as of October 1 of the 
 51.28  previous fiscal year.  
 51.29     Sec. 10.  Minnesota Statutes 2002, section 122A.415, 
 51.30  subdivision 3, is amended to read: 
 51.31     Subd. 3.  [AID TIMING.] (a) Districts or sites with 
 51.32  approved applications must receive alternative compensation aid 
 51.33  for each school year that the district or site participates in 
 51.34  the program as described in this subdivision.  Districts or 
 51.35  sites with applications received by the commissioner before June 
 51.36  1 of the first year of a two-year contract shall receive 
 52.1   compensation aid for both years of the contract.  Districts or 
 52.2   sites with applications received by the commissioner after June 
 52.3   1 of the first year of a two-year contract shall receive 
 52.4   compensation aid only for the second year of the contract.  The 
 52.5   commissioner must approve initial applications for school 
 52.6   districts qualifying under subdivision 1, paragraph (b), clause 
 52.7   (1), by January 15 of each year.  If any money remains, the 
 52.8   commissioner must approve aid amounts for school districts 
 52.9   qualifying under subdivision 1, paragraph (b), clause (2), by 
 52.10  February 15 of each year.  
 52.11     (b) The commissioner shall select applicants that qualify 
 52.12  for this program, notify school districts and school sites about 
 52.13  the program, develop and disseminate application materials, and 
 52.14  carry out other activities needed to implement this section.  
 52.15     Sec. 11.  Minnesota Statutes 2002, section 122A.63, 
 52.16  subdivision 3, is amended to read: 
 52.17     Subd. 3.  [REVIEW AND COMMENT.] The commissioner must 
 52.18  submit the joint application to the Minnesota American Indian 
 52.19  scholarship education committee for review and comment. 
 52.20     Sec. 12.  Minnesota Statutes 2002, section 123B.02, 
 52.21  subdivision 14, is amended to read: 
 52.22     Subd. 14.  [EMPLOYEES; CONTRACTS FOR SERVICES.] (a) The 
 52.23  board may employ and discharge necessary employees and may 
 52.24  contract for other services.  Notwithstanding any other law to 
 52.25  the contrary, it shall be an inherent managerial right of the 
 52.26  board to unilaterally contract or subcontract for services 
 52.27  unless the power to contract or subcontract is specifically 
 52.28  prohibited by collective bargaining agreements with all units of 
 52.29  affected employees. 
 52.30     (b) Notwithstanding any law to the contrary, when the 
 52.31  exclusive representative and the employer have been in 
 52.32  negotiation of a contract or subcontract for the services of 
 52.33  nonteachers as set out in the collective bargaining agreement 
 52.34  and have participated in mediation over a period of at least 45 
 52.35  days, either party may declare an impasse and terminate the 
 52.36  negotiation and the collective bargaining agreement shall 
 53.1   conclusively be determined to be expired.  After expiration of 
 53.2   the collective bargaining agreement occurs under this paragraph, 
 53.3   the employer may contract with any other persons and entities 
 53.4   for the services. 
 53.5      (c) For the purposes of paragraph (b), the mediation period 
 53.6   begins on the day following receipt by the commissioner of a 
 53.7   request for mediation.  
 53.8      (d) Paragraph (b) applies to all agreements between the 
 53.9   board and collective bargaining representatives except for 
 53.10  teachers as defined in section 122A.41, subdivision 1, paragraph 
 53.11  (a). 
 53.12     <b>[EFFECTIVE DATE.]</b> This section is effective for contracts 
 53.13  negotiated and entered into on or after July 1, 2003, and 
 53.14  contracts beginning negotiation, but not entered into, before 
 53.15  July 1, 2003.  
 53.16     Sec. 13.  [123B.025] [SCHOOL SPONSORSHIP AND ADVERTISING 
 53.17  REVENUE.] 
 53.18     Subdivision 1.  [BOARD AUTHORITY; CONTRACTS.] A school 
 53.19  board may enter into a contract with advertisers, sponsors, or 
 53.20  others regarding advertising and naming rights to school 
 53.21  facilities and vehicles under the general charge of the 
 53.22  district.  A contract authorized under this section must be 
 53.23  approved by the school board.  The powers granted to a school 
 53.24  board under this section are in addition to any other authority 
 53.25  the school district may have. 
 53.26     Subd. 2.  [AUTHORIZED AGREEMENTS.] A school district may 
 53.27  enter into a contract to: 
 53.28     (1) lease the naming rights for school facilities, 
 53.29  including school buildings, ice arenas, and stadiums; 
 53.30     (2) sell advertising on or in the facilities listed in 
 53.31  clause (1); 
 53.32     (3) sell advertising on or in school buses subject to the 
 53.33  content restrictions of section 123B.93; and 
 53.34     (4) otherwise enter into an agreement with a sponsoring 
 53.35  agent. 
 53.36     Subd. 3.  [REVENUE USES.] Revenue generated under this 
 54.1   section must be used according to a plan specified by the school 
 54.2   board. 
 54.3      Sec. 14.  Minnesota Statutes 2002, section 123B.36, 
 54.4   subdivision 1, is amended to read: 
 54.5      Subdivision 1.  [SCHOOL BOARDS MAY REQUIRE FEES.] (a) For 
 54.6   purposes of this subdivision, "home school" means a home school 
 54.7   as defined in sections 120A.22 and 120A.24 with five or fewer 
 54.8   students receiving instruction.  
 54.9      (b) A school board is authorized to require payment of fees 
 54.10  in the following areas: 
 54.11     (1) in any program where the resultant product, in excess 
 54.12  of minimum requirements and at the pupil's option, becomes the 
 54.13  personal property of the pupil; 
 54.14     (2) admission fees or charges for extra curricular 
 54.15  activities, where attendance is optional and where the admission 
 54.16  fees or charges a student must pay to attend or participate in 
 54.17  an extracurricular activity is the same for all students, 
 54.18  regardless of whether the student is enrolled in a public or a 
 54.19  home school; 
 54.20     (3) a security deposit for the return of materials, 
 54.21  supplies, or equipment; 
 54.22     (4) personal physical education and athletic equipment and 
 54.23  apparel, although any pupil may personally provide it if it 
 54.24  meets reasonable requirements and standards relating to health 
 54.25  and safety established by the board; 
 54.26     (5) items of personal use or products that a student has an 
 54.27  option to purchase such as student publications, class rings, 
 54.28  annuals, and graduation announcements; 
 54.29     (6) fees specifically permitted by any other statute, 
 54.30  including but not limited to section 171.05, subdivision 2; 
 54.31  provided (i) driver education fees do not exceed the actual cost 
 54.32  to the school and school district of providing driver education, 
 54.33  and (ii) the driver education courses are open to enrollment to 
 54.34  persons between the ages of 15 and 18 who reside or attend 
 54.35  school in the school district; 
 54.36     (7) field trips considered supplementary to a district 
 55.1   educational program; 
 55.2      (8) any authorized voluntary student health and accident 
 55.3   benefit plan; 
 55.4      (9) for the use of musical instruments owned or rented by 
 55.5   the district, a reasonable rental fee not to exceed either the 
 55.6   rental cost to the district or the annual depreciation plus the 
 55.7   actual annual maintenance cost for each instrument; 
 55.8      (10) transportation of pupils to and from extra curricular 
 55.9   activities conducted at locations other than school, where 
 55.10  attendance is optional, and transportation of charter school 
 55.11  students participating in extracurricular activities conducted 
 55.12  in the resident school district under section 123B.49, 
 55.13  subdivision 4, paragraph (a), which must be charged to the 
 55.14  charter school; 
 55.15     (11) transportation to and from school of pupils living 
 55.16  within two miles from school and all other transportation 
 55.17  services not required by law.  If a district charges fees for 
 55.18  transportation of pupils, it must establish guidelines for that 
 55.19  transportation to ensure that no pupil is denied transportation 
 55.20  solely because of inability to pay; 
 55.21     (12) motorcycle classroom education courses conducted 
 55.22  outside of regular school hours; provided the charge must not 
 55.23  exceed the actual cost of these courses to the school district; 
 55.24     (13) transportation to and from post-secondary institutions 
 55.25  for pupils enrolled under the post-secondary enrollment options 
 55.26  program under section 123B.88, subdivision 22.  Fees collected 
 55.27  for this service must be reasonable and must be used to reduce 
 55.28  the cost of operating the route.  Families who qualify for 
 55.29  mileage reimbursement under section 124D.09, subdivision 22, may 
 55.30  use their state mileage reimbursement to pay this fee.  If no 
 55.31  fee is charged, districts must allocate costs based on the 
 55.32  number of pupils riding the route. 
 55.33     <b>[EFFECTIVE DATE.]</b> This section is effective for the 
 55.34  2003-2004 school year and later. 
 55.35     Sec. 15.  Minnesota Statutes 2002, section 123B.49, 
 55.36  subdivision 4, is amended to read: 
 56.1      Subd. 4.  [BOARD CONTROL OF EXTRACURRICULAR ACTIVITIES.] 
 56.2   (a) The board may take charge of and control all extracurricular 
 56.3   activities of the teachers and children of the public schools in 
 56.4   the district.  Extracurricular activities means all direct and 
 56.5   personal services for pupils for their enjoyment that are 
 56.6   managed and operated under the guidance of an adult or staff 
 56.7   member.  The board shall allow all resident pupils receiving 
 56.8   instruction in a home school as defined in section 123B.36, 
 56.9   subdivision 1, paragraph (a), and all resident pupils receiving 
 56.10  instruction in a charter school as defined in section 124D.10 to 
 56.11  be eligible to fully participate in extracurricular activities 
 56.12  on the same basis as public school students enrolled in the 
 56.13  district's schools.  Charter school students participating in 
 56.14  extracurricular activities must meet the academic and student 
 56.15  conduct requirements of the charter school and resident district.
 56.16     (b) Extracurricular activities have all of the following 
 56.17  characteristics: 
 56.18     (1) they are not offered for school credit nor required for 
 56.19  graduation; 
 56.20     (2) they are generally conducted outside school hours, or 
 56.21  if partly during school hours, at times agreed by the 
 56.22  participants, and approved by school authorities; 
 56.23     (3) the content of the activities is determined primarily 
 56.24  by the pupil participants under the guidance of a staff member 
 56.25  or other adult. 
 56.26     (c) If the board does not take charge of and control 
 56.27  extracurricular activities, these activities shall be 
 56.28  self-sustaining with all expenses, except direct salary costs 
 56.29  and indirect costs of the use of school facilities, met by dues, 
 56.30  admissions, or other student fund-raising events.  The general 
 56.31  fund must reflect only those salaries directly related to and 
 56.32  readily identified with the activity and paid by public funds.  
 56.33  Other revenues and expenditures for extra curricular activities 
 56.34  must be recorded according to the "Manual of Instruction for 
 56.35  Uniform Student Activities Accounting for Minnesota School 
 56.36  Districts and Area Vocational-Technical Colleges."  
 57.1   Extracurricular activities not under board control must have an 
 57.2   annual financial audit and must also be audited annually for 
 57.3   compliance with this section. 
 57.4      (d) If the board takes charge of and controls 
 57.5   extracurricular activities, any or all costs of these activities 
 57.6   may be provided from school revenues and all revenues and 
 57.7   expenditures for these activities shall be recorded in the same 
 57.8   manner as other revenues and expenditures of the district.  
 57.9      (e) If the board takes charge of and controls 
 57.10  extracurricular activities, the teachers or pupils in the 
 57.11  district must not participate in such activity, nor shall the 
 57.12  school name or any allied name be used in connection therewith, 
 57.13  except by consent and direction of the board.  
 57.14     (f) School districts may charge charter schools their 
 57.15  proportional share of the direct and indirect costs of the 
 57.16  extracurricular activities not covered by student fees under 
 57.17  section 123B.36, subdivision 1. 
 57.18     <b>[EFFECTIVE DATE.]</b> This section is effective for the 
 57.19  2003-2004 school year and later. 
 57.20     Sec. 16.  Minnesota Statutes 2002, section 123B.88, 
 57.21  subdivision 2, is amended to read: 
 57.22     Subd. 2.  [VOLUNTARY SURRENDER OF TRANSPORTATION 
 57.23  PRIVILEGES.] The parent or guardian of a secondary student may 
 57.24  voluntarily surrender the secondary student's to and from school 
 57.25  transportation privileges granted under subdivision 1. 
 57.26     Sec. 17.  Minnesota Statutes 2002, section 124D.081, is 
 57.27  amended by adding a subdivision to read: 
 57.28     Subd. 9.  [RESERVE ACCOUNT.] First grade preparedness 
 57.29  revenue must be placed in a reserve account within the general 
 57.30  fund and may only be used for first grade preparedness programs 
 57.31  at qualifying school sites. 
 57.32     Sec. 18.  Minnesota Statutes 2002, section 124D.09, 
 57.33  subdivision 9, is amended to read: 
 57.34     Subd. 9.  [ENROLLMENT PRIORITY.] A post-secondary 
 57.35  institution shall give priority to its post-secondary students 
 57.36  when enrolling 11th and 12th grade pupils in its courses.  A 
 58.1   post-secondary institution may provide information about its 
 58.2   programs to a secondary school or to a pupil or parent, but it 
 58.3   may not advertise or otherwise recruit or solicit the 
 58.4   participation on financial grounds, of secondary pupils to 
 58.5   enroll in its programs on financial grounds.  An institution 
 58.6   must not enroll secondary pupils, for post-secondary enrollment 
 58.7   options purposes, in remedial, developmental, or other courses 
 58.8   that are not college level.  Once a pupil has been enrolled in a 
 58.9   post-secondary course under this section, the pupil shall not be 
 58.10  displaced by another student.  
 58.11     Sec. 19.  Minnesota Statutes 2002, section 124D.09, 
 58.12  subdivision 10, is amended to read: 
 58.13     Subd. 10.  [COURSES ACCORDING TO AGREEMENTS.] An eligible 
 58.14  pupil, according to subdivision 4 5, may enroll in a 
 58.15  nonsectarian course taught by a secondary teacher or a 
 58.16  post-secondary faculty member and offered at a secondary school, 
 58.17  or another location, according to an agreement between a public 
 58.18  school board and the governing body of an eligible public 
 58.19  post-secondary system or an eligible private post-secondary 
 58.20  institution, as defined in subdivision 3.  All provisions of 
 58.21  this section shall apply to a pupil, public school board, 
 58.22  district, and the governing body of a post-secondary 
 58.23  institution, except as otherwise provided.  
 58.24     Sec. 20.  Minnesota Statutes 2002, section 124D.09, 
 58.25  subdivision 16, is amended to read: 
 58.26     Subd. 16.  [FINANCIAL ARRANGEMENTS FOR COURSES PROVIDED 
 58.27  ACCORDING TO AGREEMENTS.] (a) The agreement between a board and 
 58.28  the governing body of a public post-secondary system or private 
 58.29  post-secondary institution shall set forth the payment amounts 
 58.30  and arrangements, if any, from the board to the post-secondary 
 58.31  institution.  No payments shall be made by the department 
 58.32  according to subdivision 14 13 or 15.  For the purpose of 
 58.33  computing state aids for a district, a pupil enrolled according 
 58.34  to subdivision 10 shall be counted in the average daily 
 58.35  membership of the district as though the pupil were enrolled in 
 58.36  a secondary course that is not offered in connection with an 
 59.1   agreement.  Nothing in this subdivision shall be construed to 
 59.2   prohibit a public post-secondary system or private 
 59.3   post-secondary institution from receiving additional state 
 59.4   funding that may be available under any other law.  
 59.5      (b) If a course is provided under subdivision 10, offered 
 59.6   at a secondary school, and taught by a secondary teacher, the 
 59.7   post-secondary system or institution must not require a payment 
 59.8   from the school board that exceeds the cost to the 
 59.9   post-secondary institution that is directly attributable to 
 59.10  providing that course.  
 59.11     Sec. 21.  Minnesota Statutes 2002, section 124D.09, 
 59.12  subdivision 20, is amended to read: 
 59.13     Subd. 20.  [TEXTBOOKS; MATERIALS.] All textbooks and 
 59.14  equipment provided to a pupil, and paid for under subdivision 
 59.15  13, are the property of the pupil's school district of residence 
 59.16  postsecondary institution.  Each pupil is required to return all 
 59.17  textbooks and equipment to the district postsecondary 
 59.18  institution after the course has ended. 
 59.19     Sec. 22.  [124D.095] [DISTANCE EDUCATION OPTION.] 
 59.20     Subdivision 1.  [CITATION.] This section may be cited as 
 59.21  the "Distance Education Option Act." 
 59.22     Subd. 2.  [DEFINITIONS.] For purposes of this section, the 
 59.23  following terms have the meanings given them. 
 59.24     (a) "Distance education" is an interactive course or 
 59.25  program that delivers instruction to a student by video, audio, 
 59.26  computer, or multimedia communication; is combined with other 
 59.27  traditional delivery methods that include frequent student 
 59.28  assessment and actual teacher contact time; and meets or exceeds 
 59.29  state academic standards. 
 59.30     (b) "Distance education provider" is a school district, an 
 59.31  organization of two or more school districts operating under a 
 59.32  joint powers agreement, or a charter school located in Minnesota 
 59.33  that provides distance education to students. 
 59.34     (c) "Student" is a Minnesota resident enrolled in a school 
 59.35  under section 120A.22, subdivision 4, in kindergarten through 
 59.36  grade 12. 
 60.1      (d) "Distance education student" is a student enrolled in 
 60.2   distance education offered by a distance education provider 
 60.3   under paragraph (b). 
 60.4      Subd. 3.  [AUTHORIZATION; NOTICE; LIMITATIONS ON 
 60.5   ENROLLMENT.] (a) A student, or the parent or guardian of a 
 60.6   student age 17 or younger, may apply to a distance education 
 60.7   provider to enroll the student in distance education.  No school 
 60.8   district or charter school may prohibit a student from applying 
 60.9   to enroll in distance education.  A distance education provider 
 60.10  that accepts a student under this section must, within ten days, 
 60.11  notify the student and the student's school and school district 
 60.12  if the student is not enrolled in the school district or charter 
 60.13  school delivering the distance education.  The notice must 
 60.14  report the student's course or program and hours of instruction. 
 60.15     (b) A distance education provider must notify the 
 60.16  commissioner that it is delivering distance education and report 
 60.17  the number of distance education students it is accepting and 
 60.18  the distance education courses and programs it is delivering.  
 60.19     (c) A distance education provider may limit enrollment if 
 60.20  the provider's school board or board of directors adopts by 
 60.21  resolution specific standards for accepting and rejecting 
 60.22  students' applications. 
 60.23     Subd. 4.  [DISTANCE EDUCATION PARAMETERS.] (a) A distance 
 60.24  education student must receive academic credit for successfully 
 60.25  completing the requirements of a distance education course or 
 60.26  program.  Secondary credits granted to a distance education 
 60.27  student must be counted toward the graduation and subject area 
 60.28  requirements of the school district or charter school in which 
 60.29  the student is enrolled.  
 60.30     (b) A distance education student may: 
 60.31     (1) enroll during a single school year in a maximum of 12 
 60.32  semester-long courses or their equivalent delivered by the 
 60.33  distance education provider or the school district or charter 
 60.34  school in which the distance education student is currently 
 60.35  enrolled; 
 60.36     (2) complete course work at a grade level that is different 
 61.1   from the student's current grade level; and 
 61.2      (3) enroll in additional courses with the distance 
 61.3   education provider under a separate agreement that includes 
 61.4   terms for payment of any tuition or course fees.  
 61.5      (c) A distance education student has the same access to the 
 61.6   computer hardware and education software available in a school 
 61.7   as all other students enrolled in the district or charter 
 61.8   school.  A distance education provider must assist a distance 
 61.9   education student whose family qualifies for the education tax 
 61.10  credit under section 290.0674 to acquire computer hardware and 
 61.11  educational software for distance learning purposes. 
 61.12     Subd. 5.  [PARTICIPATION IN EXTRACURRICULAR ACTIVITIES.] A 
 61.13  distance education student may participate in the 
 61.14  extracurricular activities of the charter school or school 
 61.15  district in which the student is currently enrolled on the same 
 61.16  basis as other students enrolled in the charter school or school 
 61.17  district. 
 61.18     Subd. 6.  [INFORMATION.] School districts and charter 
 61.19  schools must make available information about distance education 
 61.20  to all interested people. 
 61.21     Subd. 7.  [FINANCIAL ARRANGEMENTS.] (a) For a distance 
 61.22  education student enrolled in a distance education course or 
 61.23  program, the department must make payments according to this 
 61.24  subdivision. 
 61.25     (b) The department must not pay a distance education 
 61.26  provider under this section if: 
 61.27     (1) the distance education provider is also the school 
 61.28  district or charter school in which the student is currently 
 61.29  enrolled; or 
 61.30     (2) the distance education student officially withdraws 
 61.31  from the distance education course or program during the first 
 61.32  15 days of the course or program. 
 61.33     (c) For each quarter course, the department must pay a 
 61.34  distance education provider delivering quarter courses under 
 61.35  this section an amount equal to the product of (i) the student 
 61.36  grade level weighting under section 126C.05, subdivision 1, (ii) 
 62.1   .88, and (iii) the formula allowance, all divided by 18. 
 62.2      (d) For each semester course, the department must pay a 
 62.3   distance education provider delivering semester courses under 
 62.4   this section an amount equal to the product of (i) the student 
 62.5   grade level weighting under section 126C.05, subdivision 1, (ii) 
 62.6   .88, and (iii) the formula allowance divided by 12. 
 62.7      (e) The department must pay each distance education 
 62.8   provider 100 percent of the amount in paragraph (c) or (d) 
 62.9   within 30 days of receiving initial enrollment information each 
 62.10  quarter or semester.  If a change in enrollment occurs during a 
 62.11  quarter or semester, the distance education provider must report 
 62.12  the change to the department at the time it submits the 
 62.13  enrollment information for the next quarter or semester. 
 62.14     (f) For students currently enrolled in a public school, the 
 62.15  department shall continue to pay the public school under 
 62.16  chapters 120A to 128, less any amounts paid to the distance 
 62.17  education provider.  
 62.18     Subd. 8.  [PAYMENT PRIORITY.] (a) To the extent funds are 
 62.19  available, the commissioner must pay a distance education 
 62.20  provider according to subdivision 7, in the order in which a 
 62.21  distance education provider notifies the commissioner under 
 62.22  subdivision 3, paragraph (b), that it is delivering distance 
 62.23  education.  The distance education provider must submit to the 
 62.24  commissioner any student information necessary to process 
 62.25  payments under this section. 
 62.26     (b) Before paying other distance education providers under 
 62.27  paragraph (a), the commissioner must pay providers that 
 62.28  delivered distance education in fiscal year 2003.  The amount 
 62.29  paid to these providers equals the amount received per pupil in 
 62.30  fiscal year 2003 times the qualifying number of pupils enrolled 
 62.31  during the current year.  A provider's qualifying number of 
 62.32  pupils may not exceed 110 percent of the previous year's 
 62.33  pupils.  A provider that qualifies under this paragraph may also 
 62.34  submit an application for funding for additional pupils under 
 62.35  paragraph (a). 
 62.36     <b>[EFFECTIVE DATE.]</b> This section is effective for the 
 63.1   2003-2004 school year and later. 
 63.2      Sec. 23.  Minnesota Statutes 2002, section 124D.10, 
 63.3   subdivision 2a, is amended to read: 
 63.4      Subd. 2a.  [CHARTER SCHOOL ADVISORY COUNCIL.] (a) A charter 
 63.5   school advisory council is established under section 
 63.6   15.059 except that the term for each council member shall be 
 63.7   three years.  The advisory council is composed of seven members 
 63.8   from throughout the state who have demonstrated experience with 
 63.9   or interest in charter schools.  The members of the council 
 63.10  shall be appointed by the commissioner.  The advisory council 
 63.11  shall bring to the attention of the commissioner any matters 
 63.12  related to charter schools that the council deems necessary and 
 63.13  shall: 
 63.14     (1) encourage school boards to make full use of charter 
 63.15  school opportunities; 
 63.16     (2) encourage the creation of innovative schools; 
 63.17     (3) provide leadership and support for charter school 
 63.18  sponsors to increase the innovation in and the effectiveness, 
 63.19  accountability, and fiscal soundness of charter schools; 
 63.20     (4) serve an ombudsman function in facilitating the 
 63.21  operations of new and existing charter schools; 
 63.22     (5) promote timely financial management training for newly 
 63.23  elected members of a charter school board of directors and 
 63.24  ongoing training for other members of a charter school board of 
 63.25  directors; and 
 63.26     (6) review charter school applications and recommend 
 63.27  approving or disapproving the applications; and 
 63.28     (7) facilitate compliance with auditing and other reporting 
 63.29  requirements.  The advisory council shall refer all its 
 63.30  proposals to the commissioner who shall provide time for reports 
 63.31  from the council. 
 63.32     (b) The charter school advisory council under this 
 63.33  subdivision expires June 30, 2003 2007. 
 63.34     Sec. 24.  Minnesota Statutes 2002, section 124D.10, 
 63.35  subdivision 3, is amended to read: 
 63.36     Subd. 3.  [SPONSOR.] A school board; intermediate school 
 64.1   district school board; education district organized under 
 64.2   sections 123A.15 to 123A.19; charitable organization under 
 64.3   section 501(c)(3) of the Internal Revenue Code of 1986 that is a 
 64.4   member of the Minnesota council of nonprofits or the Minnesota 
 64.5   council on foundations, registered with the attorney general's 
 64.6   office, and reports an end-of-year fund balance of at least 
 64.7   $2,000,000; Minnesota private college that grants two- or 
 64.8   four-year degrees and is registered with the higher education 
 64.9   services office under chapter 136A; community college, state 
 64.10  university, or technical college, governed by the board of 
 64.11  trustees of the Minnesota state colleges and universities; or 
 64.12  the University of Minnesota may sponsor one or more charter 
 64.13  schools.  A nonprofit corporation subject to chapter 317A, 
 64.14  described in section 317A.905, and exempt from federal income 
 64.15  tax under section 501(c)(6) of the Internal Revenue Code of 
 64.16  1986, may sponsor one or more charter schools if the nonprofit 
 64.17  corporation has existed for at least 25 years.  
 64.18     <b>[EFFECTIVE DATE.]</b> This section is effective for the 
 64.19  2003-2004 school year and later. 
 64.20     Sec. 25.  Minnesota Statutes 2002, section 124D.10, 
 64.21  subdivision 4, is amended to read: 
 64.22     Subd. 4.  [FORMATION OF SCHOOL.] (a) A sponsor may 
 64.23  authorize one or more licensed teachers under section 122A.18, 
 64.24  subdivision 1, to operate a charter school subject to approval 
 64.25  by the commissioner.  A board must vote on charter school 
 64.26  application for sponsorship no later than 90 days after 
 64.27  receiving the application.  After 90 days, the applicant may 
 64.28  apply to the commissioner.  If a board elects not to sponsor a 
 64.29  charter school, the applicant may appeal the board's decision to 
 64.30  the commissioner.  The commissioner may elect to sponsor the 
 64.31  charter school or assist the applicant in finding an eligible 
 64.32  sponsor.  The school must be organized and operated as a 
 64.33  cooperative under chapter 308A or nonprofit corporation under 
 64.34  chapter 317A and the provisions under the applicable chapter 
 64.35  shall apply to the school except as provided in this section.  
 64.36  Notwithstanding sections 465.717 and 465.719, a school district 
 65.1   may create a corporation for the purpose of creating a charter 
 65.2   school.  
 65.3      (b) Before the operators may form and operate a school, the 
 65.4   sponsor must file an affidavit with the commissioner stating its 
 65.5   intent to authorize a charter school.  The affidavit must state 
 65.6   the terms and conditions under which the sponsor would authorize 
 65.7   a charter school.  The commissioner must approve or disapprove 
 65.8   the sponsor's proposed authorization within 60 days of receipt 
 65.9   of the affidavit.  Failure to obtain commissioner approval 
 65.10  precludes a sponsor from authorizing the charter school that was 
 65.11  the subject of the affidavit.  
 65.12     (c) The operators authorized to organize and operate a 
 65.13  school, before entering into a contract or other agreement for 
 65.14  professional or other services, goods, or facilities, must 
 65.15  incorporate as a cooperative under chapter 308A or as a 
 65.16  nonprofit corporation under chapter 317A and must establish a 
 65.17  board of directors composed of at least five members until a 
 65.18  timely election for members of the charter school board of 
 65.19  directors is held according to the school's articles and 
 65.20  bylaws.  A charter school board of directors must be composed of 
 65.21  at least five members.  Any staff members who are employed at 
 65.22  the school, including teachers providing instruction under a 
 65.23  contract with a cooperative, and all parents of children 
 65.24  enrolled in the school may participate in the election for 
 65.25  members of the school's board of directors.  Licensed teachers 
 65.26  employed at the school, including teachers providing instruction 
 65.27  under a contract with a cooperative, must be a majority of the 
 65.28  members of the board of directors before the school completes 
 65.29  its third year of operation, unless the commissioner waives the 
 65.30  requirement for a majority of licensed teachers on the board.  
 65.31  Board of director meetings must comply with chapter 13D. 
 65.32     (d) The granting or renewal of a charter by a sponsoring 
 65.33  entity must not be conditioned upon the bargaining unit status 
 65.34  of the employees of the school.  
 65.35     (e) A sponsor may authorize the operators of a charter 
 65.36  school to expand the operation of the charter school to 
 66.1   additional sites or to add additional grades at the school 
 66.2   beyond those described in the sponsor's application as approved 
 66.3   by the commissioner only after submitting a supplemental 
 66.4   application to the commissioner in a form and manner prescribed 
 66.5   by the commissioner.  The supplemental application must provide 
 66.6   evidence that: 
 66.7      (1) the expansion of the charter school is supported by 
 66.8   need and projected enrollment; 
 66.9      (2) the charter school is fiscally sound; 
 66.10     (3) the sponsor supports the expansion; and 
 66.11     (4) the building of the additional site meets all health 
 66.12  and safety requirements to be eligible for lease aid. 
 66.13     (f) The commissioner annually must provide timely financial 
 66.14  management training to newly elected members of a charter school 
 66.15  board of directors and ongoing training to other members of a 
 66.16  charter school board of directors.  Training must address ways 
 66.17  to: 
 66.18     (1) proactively assess opportunities for a charter school 
 66.19  to maximize all available revenue sources; 
 66.20     (2) establish and maintain complete, auditable records for 
 66.21  the charter school; 
 66.22     (3) establish proper filing techniques; 
 66.23     (4) document formal actions of the charter school, 
 66.24  including meetings of the charter school board of directors; 
 66.25     (5) properly manage and retain charter school and student 
 66.26  records; 
 66.27     (6) comply with state and federal payroll record-keeping 
 66.28  requirements; and 
 66.29     (7) address other similar factors that facilitate 
 66.30  establishing and maintaining complete records on the charter 
 66.31  school's operations.  
 66.32     Sec. 26.  Minnesota Statutes 2002, section 124D.10, 
 66.33  subdivision 8, is amended to read: 
 66.34     Subd. 8.  [STATE AND LOCAL REQUIREMENTS.] (a) A charter 
 66.35  school shall meet all applicable state and local health and 
 66.36  safety requirements. 
 67.1      (b) A school sponsored by a school board may be located in 
 67.2   any district, unless the school board of the district of the 
 67.3   proposed location disapproves by written resolution.  
 67.4      (c) A charter school must be nonsectarian in its programs, 
 67.5   admission policies, employment practices, and all other 
 67.6   operations.  A sponsor may not authorize a charter school or 
 67.7   program that is affiliated with a nonpublic sectarian school or 
 67.8   a religious institution. 
 67.9      (d) Charter schools must not be used as a method of 
 67.10  providing education or generating revenue for students who are 
 67.11  being home-schooled. 
 67.12     (e) The primary focus of a charter school must be to 
 67.13  provide a comprehensive program of instruction for at least one 
 67.14  grade or age group from five through 18 years of age.  
 67.15  Instruction may be provided to people younger than five years 
 67.16  and older than 18 years of age. 
 67.17     (f) A charter school may not charge tuition. 
 67.18     (g) A charter school is subject to and must comply with 
 67.19  chapter 363 and section 121A.04. 
 67.20     (h) A charter school is subject to and must comply with the 
 67.21  Pupil Fair Dismissal Act, sections 121A.40 to 121A.56, and the 
 67.22  Minnesota Public School Fee Law, sections 123B.34 to 123B.39. 
 67.23     (i) A charter school is subject to the same financial 
 67.24  audits, audit procedures, and audit requirements as a district.  
 67.25  Audits must be conducted in compliance with generally accepted 
 67.26  governmental auditing standards, the Federal Single Audit Act, 
 67.27  if applicable, and section 6.65.  A charter school is subject to 
 67.28  and must comply with sections 15.054; 118A.01; 118A.02; 118A.03; 
 67.29  118A.04; 118A.05; 118A.06; 123B.52, subdivision 5; 471.38; 
 67.30  471.391; 471.392; 471.425; 471.87; 471.88, subdivisions 1, 2, 3, 
 67.31  4, 5, 6, 12, 13, and 15; 471.881; and 471.89.  The audit must 
 67.32  comply with the requirements of sections 123B.75 to 123B.83, 
 67.33  except to the extent deviations are necessary because of the 
 67.34  program at the school.  Deviations must be approved by the 
 67.35  commissioner.  The department of children, families, and 
 67.36  learning education, state auditor, or legislative auditor may 
 68.1   conduct financial, program, or compliance audits.  A charter 
 68.2   school determined to be in statutory operating debt under 
 68.3   sections 123B.81 to 123B.83 must submit a plan under section 
 68.4   123B.81, subdivision 4. 
 68.5      (j) A charter school is a district for the purposes of tort 
 68.6   liability under chapter 466. 
 68.7      (k) A charter school must comply with sections 13.32; 
 68.8   120A.22, subdivision 7; 121A.75; and 260B.171, subdivisions 3 
 68.9   and 5.  
 68.10     (l) A charter school where students participate in the 
 68.11  extracurricular activities of the student's resident school 
 68.12  district is subject to sections 123B.36, subdivision 1, clause 
 68.13  (10), and 123B.49, subdivision 4, paragraph (a). 
 68.14     <b>[EFFECTIVE DATE.]</b> This section is effective for the 
 68.15  2003-2004 school year and later. 
 68.16     Sec. 27.  Minnesota Statutes 2002, section 124D.10, 
 68.17  subdivision 16, is amended to read: 
 68.18     Subd. 16.  [TRANSPORTATION.] (a) By July 1 of each year, a 
 68.19  charter school must notify the district in which the school is 
 68.20  located and the department of children, families, and 
 68.21  learning education if it will provide transportation for pupils 
 68.22  enrolled in the school for the fiscal year. 
 68.23     (b) If a charter school elects to provide transportation 
 68.24  for pupils, the transportation must be provided by the charter 
 68.25  school within the district in which the charter school is 
 68.26  located.  The state must pay transportation aid to the charter 
 68.27  school according to section 124D.11, subdivision 2. 
 68.28     For pupils who reside outside the district in which the 
 68.29  charter school is located, the charter school is not required to 
 68.30  provide or pay for transportation between the pupil's residence 
 68.31  and the border of the district in which the charter school is 
 68.32  located.  A parent may be reimbursed by the charter school for 
 68.33  costs of transportation from the pupil's residence to the border 
 68.34  of the district in which the charter school is located if the 
 68.35  pupil is from a family whose income is at or below the poverty 
 68.36  level, as determined by the federal government.  The 
 69.1   reimbursement may not exceed the pupil's actual cost of 
 69.2   transportation or 15 cents per mile traveled, whichever is 
 69.3   less.  Reimbursement may not be paid for more than 250 miles per 
 69.4   week.  
 69.5      At the time a pupil enrolls in a charter school, the 
 69.6   charter school must provide the parent or guardian with 
 69.7   information regarding the transportation.  
 69.8      (c) If a charter school does not elect to provide 
 69.9   transportation, transportation for pupils enrolled at the school 
 69.10  must be provided by the district in which the school is located, 
 69.11  according to sections 123B.88, subdivision 6, and 124D.03, 
 69.12  subdivision 8, for a pupil residing in the same district in 
 69.13  which the charter school is located.  Transportation may be 
 69.14  provided by the district in which the school is located, 
 69.15  according to sections 123B.88, subdivision 6, and 124D.03, 
 69.16  subdivision 8, for a pupil residing in a different district.  If 
 69.17  the district provides the transportation, the scheduling of 
 69.18  routes, manner and method of transportation, control and 
 69.19  discipline of the pupils, and any other matter relating to the 
 69.20  transportation of pupils under this paragraph shall be within 
 69.21  the sole discretion, control, and management of the district. 
 69.22     Sec. 28.  Minnesota Statutes 2002, section 124D.10, 
 69.23  subdivision 20, is amended to read: 
 69.24     Subd. 20.  [LEAVE TO TEACH IN A CHARTER SCHOOL.] If a 
 69.25  teacher employed by a district makes a written request for an 
 69.26  extended leave of absence to teach at a charter school, the 
 69.27  district must grant the leave.  The district must grant a leave 
 69.28  for any number of not to exceed five years requested by the 
 69.29  teacher, and must.  Any request to extend the leave at the 
 69.30  teacher's request shall be granted only at the discretion of the 
 69.31  school board.  The district may require that the request for a 
 69.32  leave or extension of leave be made up to 90 days before the 
 69.33  teacher would otherwise have to report for duty.  Except as 
 69.34  otherwise provided in this subdivision and except for section 
 69.35  122A.46, subdivision 7, the leave is governed by section 
 69.36  122A.46, including, but not limited to, reinstatement, notice of 
 70.1   intention to return, seniority, salary, and insurance. 
 70.2      During a leave, the teacher may continue to aggregate 
 70.3   benefits and credits in the teachers' retirement association 
 70.4   account by paying both the employer and employee contributions 
 70.5   based upon the annual salary of the teacher for the last full 
 70.6   pay period before the leave began.  The retirement association 
 70.7   may impose reasonable requirements to efficiently administer 
 70.8   this subdivision.  
 70.9      <b>[EFFECTIVE DATE.]</b> This section is effective the day 
 70.10  following final enactment and applies to approvals of leaves or 
 70.11  approvals of extensions of leaves made after that date.  
 70.12  Notwithstanding Minnesota Statutes 2002, section 122A.46, 
 70.13  subdivision 2, a school district, upon request, must grant a 
 70.14  one-year extension for the 2003-2004 school year to a teacher on 
 70.15  a leave of absence to teach at a charter school under this 
 70.16  subdivision who has taught five or more years as of the 
 70.17  2003-2004 school year. 
 70.18     Sec. 29.  Minnesota Statutes 2002, section 124D.11, 
 70.19  subdivision 1, is amended to read: 
 70.20     Subdivision 1.  [GENERAL EDUCATION REVENUE.] (a) General 
 70.21  education revenue must be paid to a charter school as though it 
 70.22  were a district.  The general education revenue for each 
 70.23  adjusted marginal cost pupil unit is the state average general 
 70.24  education revenue per pupil unit, plus the referendum 
 70.25  equalization aid allowance in the pupil's district of residence, 
 70.26  minus an amount equal to the product of the formula allowance 
 70.27  according to section 126C.10, subdivision 2, times .0485, 
 70.28  calculated without basic skills revenue, and transportation 
 70.29  sparsity revenue, and the transportation portion of the 
 70.30  transition revenue adjustment, plus basic skills revenue and 
 70.31  transition revenue as though the school were a school district. 
 70.32     (b) Notwithstanding paragraph (a), for charter schools in 
 70.33  the first year of operation, general education revenue shall be 
 70.34  computed using the number of adjusted pupil units in the current 
 70.35  fiscal year.  
 70.36     Sec. 30.  Minnesota Statutes 2002, section 124D.11, 
 71.1   subdivision 2, is amended to read: 
 71.2      Subd. 2.  [TRANSPORTATION REVENUE.] Transportation revenue 
 71.3   must be paid to a charter school that provides transportation 
 71.4   services according to section 124D.10, subdivision 16, according 
 71.5   to this subdivision.  Transportation aid shall equal 
 71.6   transportation revenue.  
 71.7      In addition to the revenue under subdivision 1, a charter 
 71.8   school providing transportation services must receive general 
 71.9   education aid for each pupil unit equal to the sum of an amount 
 71.10  equal to the product of the formula allowance according to 
 71.11  section 126C.10, subdivision 2, times .0485, plus the 
 71.12  transportation sparsity allowance for the school district in 
 71.13  which the charter school is located, plus the transportation 
 71.14  transition allowance for the district in which the charter 
 71.15  school is located.  
 71.16     Sec. 31.  Minnesota Statutes 2002, section 124D.11, 
 71.17  subdivision 4, is amended to read: 
 71.18     Subd. 4.  [BUILDING LEASE AID.] When a charter school finds 
 71.19  it economically advantageous to rent or lease a building or land 
 71.20  for any instructional purposes and it determines that the total 
 71.21  operating capital revenue under section 126C.10, subdivision 13, 
 71.22  is insufficient for this purpose, it may apply to the 
 71.23  commissioner for building lease aid for this purpose.  The 
 71.24  commissioner must review and either approve or deny a lease aid 
 71.25  application using the following criteria: 
 71.26     (1) the reasonableness of the price based on current market 
 71.27  values; 
 71.28     (2) the extent to which the lease conforms to applicable 
 71.29  state laws and rules; and 
 71.30     (3) the appropriateness of the proposed lease in the 
 71.31  context of the space needs and financial circumstances of the 
 71.32  charter school. 
 71.33  A charter school must not use the building lease aid it receives 
 71.34  for custodial, maintenance service, utility, or other operating 
 71.35  costs.  The amount of building lease aid per pupil unit served 
 71.36  for a charter school for any year shall not exceed the lesser of 
 72.1   (a) 90 percent of the approved cost or (b) the product of the 
 72.2   pupil units served for the current school year times $1,500 the 
 72.3   greater of the charter school's building lease aid per pupil 
 72.4   unit served for fiscal year 2003 or $1,200. 
 72.5      <b>[EFFECTIVE DATE.]</b> This section is effective for revenue for 
 72.6   fiscal year 2004. 
 72.7      Sec. 32.  Minnesota Statutes 2002, section 124D.11, 
 72.8   subdivision 6, is amended to read: 
 72.9      Subd. 6.  [OTHER AID, GRANTS, REVENUE.] (a) A charter 
 72.10  school is eligible to receive other aids, grants, and revenue 
 72.11  according to chapters 120A to 129C, as though it were a district.
 72.12     (b) Notwithstanding paragraph (a), a charter school may not 
 72.13  receive aid, a grant, or revenue if a levy is required to obtain 
 72.14  the money, except as otherwise provided in this section.  
 72.15     (c) Federal aid received by the state must be paid to the 
 72.16  school, if it qualifies for the aid as though it were a school 
 72.17  district. 
 72.18     (d) A charter school may receive money from any source for 
 72.19  capital facilities needs.  In the year-end report to the 
 72.20  commissioner of children, families, and learning education, the 
 72.21  charter school shall report the total amount of funds received 
 72.22  from grants and other outside sources. 
 72.23     (e) Notwithstanding paragraph (a) or (b), a charter school 
 72.24  may apply for a grant to receive the aid portion of integration 
 72.25  revenue under section 124D.86, subdivision 3, for enrolled 
 72.26  students who are residents of a district that is eligible for 
 72.27  integration revenue.  The commissioner shall determine grant 
 72.28  recipients and may adopt application guidelines.  The grants 
 72.29  must be competitively determined and must demonstrate that 
 72.30  enrolling pupils in the charter school contributes to 
 72.31  desegregation or integration purposes as determined by the 
 72.32  commissioner.  If the charter school has elected not to provide 
 72.33  transportation under section 124D.10, subdivision 16, the aid 
 72.34  shall be reduced by the amount per pupil unit specified for the 
 72.35  district where the charter school is located under section 
 72.36  123B.92, subdivision 8. 
 73.1      <b>[EFFECTIVE DATE.]</b> This section is effective for revenue for 
 73.2   fiscal year 2004. 
 73.3      Sec. 33.  Minnesota Statutes 2002, section 124D.128, 
 73.4   subdivision 3, is amended to read: 
 73.5      Subd. 3.  [STUDENT PLANNING.] A district must inform all 
 73.6   pupils and their parents about the learning year program and 
 73.7   that participation in the program is optional.  A continual 
 73.8   learning plan must be developed at least annually for each pupil 
 73.9   with the participation of the pupil, parent or guardian, 
 73.10  teachers, and other staff; each participant must sign and date 
 73.11  the plan.  The plan must specify the learning experiences that 
 73.12  must occur during the entire fiscal year and, for secondary 
 73.13  students, for graduation.  The plan must include:  
 73.14     (1) the pupil's learning objectives and experiences, 
 73.15  including courses or credits the pupil plans to complete each 
 73.16  year and, for a secondary pupil, the graduation requirements the 
 73.17  student must complete; 
 73.18     (2) the assessment measurements used to evaluate a pupil's 
 73.19  objectives; 
 73.20     (3) requirements for grade level or other appropriate 
 73.21  progression; and 
 73.22     (4) for pupils generating more than one average daily 
 73.23  membership in a given grade, an indication of which objectives 
 73.24  were unmet. 
 73.25  The plan may be modified to conform to district schedule 
 73.26  changes.  The district may not modify the plan if the 
 73.27  modification would result in delaying the student's time of 
 73.28  graduation.  
 73.29     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
 73.30  following final enactment. 
 73.31     Sec. 34.  Minnesota Statutes 2002, section 124D.42, 
 73.32  subdivision 6, is amended to read: 
 73.33     Subd. 6.  [PROGRAM TRAINING.] (a) The commission must, 
 73.34  within available resources, ensure an opportunity for each 
 73.35  participant to have three weeks of training in a residential 
 73.36  setting.  If offered, each training session must: 
 74.1      (1) orient each participant in the nature, philosophy, and 
 74.2   purpose of the program; 
 74.3      (2) build an ethic of community service through general 
 74.4   community service training; and 
 74.5      (3) provide additional training as it determines necessary, 
 74.6   which may include training in evaluating early literacy skills 
 74.7   and teaching reading to preschool children through the St. Croix 
 74.8   River education district under Laws 2001, First Special Session 
 74.9   chapter 6, article 2, section 70, to assist local Head Start 
 74.10  organizations in establishing and evaluating Head Start programs 
 74.11  for developing children's early literacy skills.  
 74.12     (b) Each grantee organization shall also train participants 
 74.13  in skills relevant to the community service opportunity.  
 74.14     Sec. 35.  Minnesota Statutes 2002, section 124D.86, 
 74.15  subdivision 1a, is amended to read: 
 74.16     Subd. 1a.  [BUDGET APPROVAL PROCESS.] Each year before a 
 74.17  district receives any revenue under subdivision 3, clause (4), 
 74.18  (5), or (6), the district must submit to the department of 
 74.19  children, families, and learning education, for its review and 
 74.20  approval a budget detailing the costs of the 
 74.21  desegregation/integration plan filed under Minnesota Rules, 
 74.22  parts 3535.0100 to 3535.0180.  Notwithstanding chapter 14, the 
 74.23  department may develop criteria for budget approval.  The 
 74.24  department shall consult with the desegregation advisory board 
 74.25  in developing these criteria.  The criteria developed by the 
 74.26  department should address, at a minimum, the following: 
 74.27     (1) budget items cannot be approved unless they are part of 
 74.28  any overall desegregation plan approved by the district for 
 74.29  isolated sites or by the multidistrict collaboration council and 
 74.30  participation individual members; 
 74.31     (2) the budget must indicate how revenue expenditures will 
 74.32  be used specifically to support increased opportunities for 
 74.33  interracial contact; 
 74.34     (3) components of the budget to be considered by the 
 74.35  department, including staffing, curriculum, transportation, 
 74.36  facilities, materials, and equipment and reasonable planning 
 75.1   costs, as determined by the department; and 
 75.2      (4) if plans are proposed to enhance existing programs, the 
 75.3   total budget being appropriated to the program must be included, 
 75.4   indicating what part is to be funded using integration revenue 
 75.5   and what part is to be funded using other revenues.  
 75.6      <b>[EFFECTIVE DATE.]</b> This section is effective retroactively 
 75.7   for revenue for fiscal year 2003. 
 75.8      Sec. 36.  Minnesota Statutes 2002, section 124D.86, 
 75.9   subdivision 3, is amended to read: 
 75.10     Subd. 3.  [INTEGRATION REVENUE.] Integration revenue equals 
 75.11  the following amounts: 
 75.12     (1) for independent school district No. 709, 
 75.13  Duluth, $207 $212 times the adjusted pupil units for the school 
 75.14  year; 
 75.15     (2) for independent school district No. 625, St. 
 75.16  Paul, $446 $464 times the adjusted pupil units for the school 
 75.17  year; 
 75.18     (3) for special school district No. 1, Minneapolis, the sum 
 75.19  of $446 $473 times the adjusted pupil units for the school year 
 75.20  and an additional $35 $40 times the adjusted pupil units for the 
 75.21  school year that is provided entirely through a local levy; 
 75.22     (4) for a district not listed in clause (1), (2), or (3), 
 75.23  that must implement a plan under Minnesota Rules, parts 
 75.24  3535.0100 to 3535.0180, where the district's enrollment of 
 75.25  protected students, as defined under Minnesota Rules, part 
 75.26  3535.0110, exceeds 15 percent, the lesser of (i) the actual cost 
 75.27  of implementing the plan during the fiscal year minus the aid 
 75.28  received under subdivision 6, or (ii) $130 $133 times the 
 75.29  adjusted pupil units for the school year; 
 75.30     (5) for a district not listed in clause (1), (2), (3), or 
 75.31  (4), that is required to implement a plan according to the 
 75.32  requirements of Minnesota Rules, parts 3535.0100 to 3535.0180, 
 75.33  the lesser of 
 75.34     (i) the actual cost of implementing the plan during the 
 75.35  fiscal year minus the aid received under subdivision 6, or 
 75.36     (ii) $93 $94 times the adjusted pupil units for the school 
 76.1   year. 
 76.2      Any money received by districts in clauses (1) to (4) (3) 
 76.3   which exceeds the amount received in fiscal year 2000 shall be 
 76.4   subject to the budget requirements in subdivision 1a; and 
 76.5      (6) for a member district of a multidistrict integration 
 76.6   collaborative that files a plan with the commissioner, but is 
 76.7   not contiguous to a racially isolated district, integration 
 76.8   revenue equals the amount defined in clause (5). 
 76.9      <b>[EFFECTIVE DATE.]</b> This section is effective for revenue for 
 76.10  fiscal year 2004. 
 76.11     Sec. 37.  Minnesota Statutes 2002, section 124D.86, 
 76.12  subdivision 4, is amended to read: 
 76.13     Subd. 4.  [INTEGRATION LEVY.] A district may levy an amount 
 76.14  equal to 37 percent for fiscal year 2003, 22 23 percent for 
 76.15  fiscal year 2004, 29 and 35 percent for fiscal year 2005, and 22 
 76.16  percent for fiscal year 2006 and thereafter of the district's 
 76.17  integration revenue as defined in subdivision 3. 
 76.18     <b>[EFFECTIVE DATE.]</b> This section is effective for revenue for 
 76.19  fiscal year 2004. 
 76.20     Sec. 38.  Minnesota Statutes 2002, section 124D.86, 
 76.21  subdivision 5, is amended to read: 
 76.22     Subd. 5.  [INTEGRATION AID.] A district's integration aid 
 76.23  equals 63 percent for fiscal year 2003, 78 percent for fiscal 
 76.24  year 2004, 71 percent for fiscal year 2005, and 78 percent for 
 76.25  fiscal year 2006 and thereafter of the difference between the 
 76.26  district's integration revenue as defined in subdivision 3 and 
 76.27  its integration levy. 
 76.28     <b>[EFFECTIVE DATE.]</b> This section is effective for revenue for 
 76.29  fiscal year 2004.  
 76.30     Sec. 39.  Minnesota Statutes 2002, section 124D.86, 
 76.31  subdivision 6, is amended to read: 
 76.32     Subd. 6.  [ALTERNATIVE ATTENDANCE PROGRAMS.] (a) The 
 76.33  integration aid under subdivision 5 must be adjusted for each 
 76.34  pupil residing in a district eligible for integration revenue 
 76.35  under subdivision 3, clause (1), (2), or (3), and attending a 
 76.36  nonresident district under sections 123A.05 to 123A.08, 124D.03, 
 77.1   124D.06, 124D.07, and 124D.08, that is not eligible for 
 77.2   integration revenue under subdivision 3, clause (1), (2), or 
 77.3   (3), and has implemented a plan under Minnesota Rules, parts 
 77.4   3535.0100 to 3535.0180, if the enrollment of the pupil in the 
 77.5   nonresident district contributes to desegregation or integration 
 77.6   purposes.  The adjustments must be made according to this 
 77.7   subdivision.  
 77.8      (b) Aid paid to a district serving nonresidents must be 
 77.9   increased by an amount equal to the revenue per pupil unit of 
 77.10  the resident district under subdivision 3, clause (1), (2), or 
 77.11  (3), minus the revenue attributable to the pupil in the 
 77.12  nonresident district under subdivision 3, clause (4), (5), or 
 77.13  (6), for the time the pupil is enrolled in the nonresident 
 77.14  district.  
 77.15     <b>[EFFECTIVE DATE.]</b> This section is effective retroactively 
 77.16  for fiscal year 2003. 
 77.17     Sec. 40.  Minnesota Statutes 2002, section 126C.44, is 
 77.18  amended to read: 
 77.19     126C.44 [SAFE SCHOOLS LEVY.] 
 77.20     Each district may make a levy on all taxable property 
 77.21  located within the district for the purposes specified in this 
 77.22  section.  The maximum amount which may be levied for all costs 
 77.23  under this section shall be equal to $30 $31 multiplied by the 
 77.24  district's adjusted marginal cost pupil units for the school 
 77.25  year.  The proceeds of the levy must be used for directly 
 77.26  funding the following purposes or for reimbursing the cities and 
 77.27  counties who contract with the district for the following 
 77.28  purposes:  (1) to pay the costs incurred for the salaries, 
 77.29  benefits, and transportation costs of peace officers and 
 77.30  sheriffs for liaison in services in the district's schools; (2) 
 77.31  to pay the costs for a drug abuse prevention program as defined 
 77.32  in section 609.101, subdivision 3, paragraph (e), in the 
 77.33  elementary schools; (3) to pay the costs for a gang resistance 
 77.34  education training curriculum in the district's schools; (4) to 
 77.35  pay the costs for security in the district's schools and on 
 77.36  school property; or (5) to pay the costs for other crime 
 78.1   prevention, drug abuse, student and staff safety, and violence 
 78.2   prevention measures taken by the school district.  The district 
 78.3   must initially attempt to contract for services to be provided 
 78.4   by peace officers or sheriffs with the police department of each 
 78.5   city or the sheriff's department of the county within the 
 78.6   district containing the school receiving the services.  If a 
 78.7   local police department or a county sheriff's department does 
 78.8   not wish to provide the necessary services, the district may 
 78.9   contract for these services with any other police or sheriff's 
 78.10  department located entirely or partially within the school 
 78.11  district's boundaries.  The levy authorized under this section 
 78.12  is not included in determining the school district's levy 
 78.13  limitations. 
 78.14     <b>[EFFECTIVE DATE.]</b> This section is effective for taxes 
 78.15  payable in 2004.  
 78.16     Sec. 41.  Minnesota Statutes 2002, section 128C.05, is 
 78.17  amended by adding a subdivision to read: 
 78.18     Subd. 1a.  [SUPERVISED COMPETITIVE HIGH SCHOOL DIVING.] (a) 
 78.19  Notwithstanding Minnesota Rules, part 4717.3750, any pool built 
 78.20  before January 1, 1987, that complies with the swimming and 
 78.21  diving rules of the national federation of state high school 
 78.22  associations may be used for supervised competitive high school 
 78.23  diving.  A school or district using a pool for supervised 
 78.24  competitive high school diving under this provision must provide 
 78.25  appropriate notice to parents and participants. 
 78.26     (b) Paragraph (a) applies only to a school or district that 
 78.27  provided a high school diving program during the 2000-2001 
 78.28  school year. 
 78.29     <b>[EFFECTIVE DATE.]</b> This section is effective for the 
 78.30  2003-2004 school year and later. 
 78.31     Sec. 42.  Laws 2001, First Special Session chapter 6, 
 78.32  article 2, section 64, is amended to read: 
 78.33     Sec. 64.  [SCHOOLS' ACADEMIC AND FINANCIAL PERFORMANCE 
 78.34  EVALUATION; INDEPENDENT CONTRACTOR.] 
 78.35     (a) To assist taxpayers, educators, school board members, 
 78.36  and state and local officials in realizing their commitment to 
 79.1   improving student achievement and the management of school 
 79.2   systems, the commissioner of children, families, and 
 79.3   learning education shall contract with an independent school 
 79.4   evaluation services contractor to evaluate and report on the 
 79.5   academic and financial performance of the state's independent 
 79.6   school districts using, but not limited to, six core categories 
 79.7   of analysis: 
 79.8      (1) school district expenditures; 
 79.9      (2) students' performance outcomes based on multiple 
 79.10  indicia including students' test scores, attendance rates, 
 79.11  dropout rates, and graduation rates; 
 79.12     (3) return on resources to determine the extent to which 
 79.13  student outcomes improve commensurate with increases in district 
 79.14  spending; 
 79.15     (4) school district finances, taxes, and debt to establish 
 79.16  the context for analyzing the district's return on resources 
 79.17  under clause (3); 
 79.18     (5) students' learning environment to establish the context 
 79.19  for analyzing the district's return on resources under clause 
 79.20  (3); and 
 79.21     (6) school district demographics to establish the 
 79.22  socioeconomic context for analyzing the district's return on 
 79.23  resources under clause (3). 
 79.24     (b) In order to compare the regional and socioeconomic 
 79.25  peers of particular school districts, monitor educational 
 79.26  changes over time and identify important educational trends, the 
 79.27  contractor shall use the six core categories of analysis to: 
 79.28     (1) identify allocations of baseline and incremental school 
 79.29  district spending; 
 79.30     (2) connect student achievement with expenditure patterns; 
 79.31     (3) track school district financial health; 
 79.32     (4) observe school district debt and capital spending 
 79.33  levels; and 
 79.34     (5) measure the return on a school district's educational 
 79.35  resources. 
 79.36     (c) The contractor under paragraph (a) shall evaluate and 
 80.1   report on the academic and financial performance of all school 
 80.2   districts. 
 80.3      (d) Consistent with paragraph (a), clause (2), the 
 80.4   evaluation and reporting of test scores must distinguish between:
 80.5      (1) performance-based assessments; and 
 80.6      (2) academic, objective knowledge-based tests. 
 80.7      (e) The contractor must shall complete its written report 
 80.8   and submit it to the commissioner within 360 days of the date on 
 80.9   which the contract is signed.  The commissioner immediately must 
 80.10  make the report available in a readily accessible format to 
 80.11  state and local elected officials, members of the public, 
 80.12  educators, parents, and other interested individuals.  The 
 80.13  commissioner, upon receiving an individual's request, also must 
 80.14  shall make available all draft reports prepared by the 
 80.15  contractor, consistent with Minnesota Statutes, chapter 13. 
 80.16     Sec. 43.  [CHARTER SCHOOL ADVISORY BOARD MEMBER TERMS.] 
 80.17     In order to establish staggered terms for charter school 
 80.18  advisory board members under Minnesota Statutes, section 
 80.19  124D.10, subdivision 2a, the commissioner of education shall, by 
 80.20  lot, determine the length of term for each member serving on the 
 80.21  board on the effective date of this section.  One-third of the 
 80.22  members shall serve a one-year term, one-third shall serve a 
 80.23  two-year term, and one-third shall serve a three-year term.  
 80.24  Thereafter, the term for each member must be three years. 
 80.25     Sec. 44.  [PILOT PROJECT; CARE AND TREATMENT CHARTER 
 80.26  SCHOOL.] 
 80.27     Subdivision 1.  [PILOT PROJECT AUTHORIZED.] A pilot project 
 80.28  is created to evaluate the educational effectiveness of 
 80.29  combining a care and treatment program with a charter school. 
 80.30     Subd. 2.  [APPLICATION.] Northwood Children's Services may 
 80.31  apply to the commissioner of education to form a care and 
 80.32  treatment pilot charter school under the provisions of this 
 80.33  section and Minnesota Statutes, section 124D.10.  Before forming 
 80.34  the care and treatment pilot charter school, Northwood 
 80.35  Children's Services must file an affidavit with the commissioner 
 80.36  stating its intent to form the pilot charter school.  The 
 81.1   affidavit must state the terms and conditions under which the 
 81.2   care and treatment pilot charter school would operate.  The 
 81.3   commissioner must approve or disapprove Northwood Children's 
 81.4   Services' proposed authorization within 60 days of receipt of 
 81.5   the affidavit.  Northwood Children's Services must include in 
 81.6   its application the items required in a charter school's 
 81.7   contract under Minnesota Statutes, section 124D.10, subdivision 
 81.8   6, and any other information the commissioner may request to 
 81.9   approve or disapprove the application. 
 81.10     Subd. 3.  [ENROLLMENT.] Notwithstanding Minnesota Statutes, 
 81.11  section 124D.10, subdivision 9, a care and treatment center 
 81.12  pilot charter school shall give preference for enrollment to 
 81.13  participants in the center's care and treatment programs. 
 81.14     Subd. 4.  [PLACEMENT OF STUDENTS; RESPONSIBILITIES FOR 
 81.15  PROVIDING EDUCATION.] Notwithstanding Minnesota Statutes, 
 81.16  section 125A.515, subdivision 3, a care and treatment center 
 81.17  operating a charter school may notify the department of 
 81.18  education of its intent to provide education services, including 
 81.19  special education if eligible, to all students placed in the 
 81.20  facility for care and treatment. 
 81.21     Subd. 5.  [REVENUE.] A care and treatment center pilot 
 81.22  charter school is eligible for revenue as if it were a charter 
 81.23  school under Minnesota Statutes, section 124D.11, except that it 
 81.24  does not qualify for charter school lease aid under Minnesota 
 81.25  Statutes, section 124D.11, subdivision 4. 
 81.26     Subd. 6.  [FINANCIAL INFORMATION.] A charter school 
 81.27  operating under this section must keep financial records 
 81.28  sufficient to allow audits under Minnesota Statutes, section 
 81.29  124D.10, subdivisions 6a and 8. 
 81.30     Subd. 7.  [REPORT.] Northwood Children's Services must 
 81.31  annually report to the education committees of the legislature 
 81.32  on the charter school's success in integrating educational 
 81.33  services into the students' care and treatment programs. 
 81.34     Subd. 8.  [EXPIRATION.] The authority granted Northwood 
 81.35  Children's Services under this section applies only to the 
 81.36  school's first six years of operation.  This section expires 
 82.1   after the school's sixth year of operation. 
 82.2      <b>[EFFECTIVE DATE.]</b> This section is effective the day 
 82.3   following final enactment. 
 82.4      Sec. 45.  [PROGRAM EFFICACY.] 
 82.5      The commissioner of education must study the efficacy of 
 82.6   American Indian Success for the Future program under Minnesota 
 82.7   Statutes, section 124D.81, to determine the extent to which the 
 82.8   program meets the educational needs of students participating in 
 82.9   the program and achieves the goals and objectives of the program 
 82.10  and its students and of the Minnesota American Indian Education 
 82.11  Act.  The commissioner by February 15, 2004, must present a 
 82.12  written report of the efficacy of the program to the committees 
 82.13  of the legislature having jurisdiction over kindergarten through 
 82.14  grade 12 education policy and finance. 
 82.15     Sec. 46.  [CHARTER SCHOOL START-UP AID.] 
 82.16     A charter school in its first year of operation during 
 82.17  fiscal year 2004 or 2005 is not eligible for charter school 
 82.18  start-up aid under Minnesota Statutes, section 124D.11, 
 82.19  subdivision 8. 
 82.20     Sec. 47.  [ALTERNATIVE ATTENDANCE ADJUSTMENTS FOR FISCAL 
 82.21  YEAR 2003.] 
 82.22     Notwithstanding Minnesota Statutes, section 124D.86, 
 82.23  subdivision 6, for fiscal year 2003 only, integration aid under 
 82.24  Minnesota Statutes 124D.86, subdivision 5, must be adjusted for 
 82.25  each pupil residing in special school district No. 1, 
 82.26  Minneapolis; independent school district No. 625, St. Paul; or 
 82.27  independent school district No. 709, Duluth, and attending a 
 82.28  nonresident district under Minnesota Statutes, sections 123A.05 
 82.29  to 123A.08, 124D.03, 124D.06, and 124D.08, other than 
 82.30  Minneapolis, St. Paul or Duluth that has implemented a plan 
 82.31  under Minnesota Rules, parts 3535.0100 to 3535.0180, if the 
 82.32  enrollment of the pupil in the nonresident district contributes 
 82.33  to desegregation or integration purposes.  The adjustments must 
 82.34  be made according to this subdivision. 
 82.35     (b) Aid paid to a district serving nonresident pupils must 
 82.36  be increased by an amount equal to the revenue per pupil of the 
 83.1   resident district under Minnesota Statutes, section 124D.86, 
 83.2   subdivision 3, minus the revenue attributable to the pupil in 
 83.3   the nonresident district for the time the pupil is enrolled in 
 83.4   the nonresident district. 
 83.5      <b>[EFFECTIVE DATE.]</b> This section is effective the day 
 83.6   following final enactment and applies to fiscal year 2003. 
 83.7      Sec. 48.  [APPROPRIATIONS.] 
 83.8      Subdivision 1.  [DEPARTMENT OF EDUCATION.] The sums 
 83.9   indicated in this section are appropriated from the general fund 
 83.10  to the department of education for the fiscal years designated. 
 83.11     Subd. 2.  [CHARTER SCHOOL BUILDING LEASE AID.] For building 
 83.12  lease aid under Minnesota Statutes, section 124D.11, subdivision 
 83.13  4: 
 83.14       $16,592,000    .....     2004 
 83.15       $20,915,000    .....     2005 
 83.16     The 2004 appropriation includes $2,524,000 for 2003 and 
 83.17  $14,068,000 for 2004. 
 83.18     The 2005 appropriation includes $4,202,000 for 2004 and 
 83.19  $16,713,000 for 2005.  
 83.20     Subd. 3.  [CHARTER SCHOOL STARTUP AID.] For charter school 
 83.21  startup cost aid under Minnesota Statutes, section 124D.11: 
 83.22       $802,000       .....     2004 
 83.23       $173,000       .....     2005 
 83.24     The 2004 appropriation includes $220,000 for 2003 and 
 83.25  $582,000 for 2004.  
 83.26     The 2005 appropriation includes $173,000 for 2004 and $0 
 83.27  for 2005. 
 83.28     Subd. 4.  [CHARTER SCHOOL INTEGRATION GRANTS.] For grants 
 83.29  to charter schools to promote integration and desegregation 
 83.30  under Minnesota Statutes, section 124D.11, subdivision 6, 
 83.31  paragraph (e): 
 83.32       $8,000         .....     2004 
 83.33     This appropriation includes $8,000 for 2003 and $0 for 2004.
 83.34     Subd. 5.  [INTEGRATION AID.] For integration aid under 
 83.35  Minnesota Statutes, section 124D.86, subdivision 5: 
 83.36       $55,169,000    .....     2004 
 84.1        $53,396,000    .....     2005 
 84.2      The 2004 appropriation includes $8,428,000 for 2003 and 
 84.3   $46,741,000 for 2004. 
 84.4      The 2005 appropriation includes $13,961,000 for 2004 and 
 84.5   $39,435,000 for 2005.  
 84.6      Subd. 6.  [MAGNET SCHOOL GRANTS.] For magnet school and 
 84.7   program grants: 
 84.8        $750,000       .....     2004 
 84.9        $750,000       .....     2005 
 84.10     These amounts may be used for magnet school programs under 
 84.11  Minnesota Statutes, section 124D.88. 
 84.12     Subd. 7.  [MAGNET SCHOOL STARTUP AID.] For magnet school 
 84.13  startup aid under Minnesota Statutes, section 124D.88: 
 84.14       $ 37,000       .....     2004 
 84.15       $437,000       .....     2005 
 84.16     The 2004 appropriation includes $37,000 for 2003 and $0 for 
 84.17  2004.  
 84.18     The 2005 appropriation includes $0 for 2004 and $437,000 
 84.19  for 2005. 
 84.20     Subd. 8.  [INTERDISTRICT DESEGREGATION OR INTEGRATION 
 84.21  TRANSPORTATION GRANTS.] For interdistrict desegregation or 
 84.22  integration transportation grants under Minnesota Statutes, 
 84.23  section 124D.87: 
 84.24       $5,796,000     .....     2004 
 84.25       $8,401,000     .....     2005
 84.26     Subd. 9.  [SUCCESS FOR THE FUTURE.] For American Indian 
 84.27  success for the future grants under Minnesota Statutes, section 
 84.28  124D.81: 
 84.29       $2,009,000     .....     2004
 84.30       $2,137,000     .....     2005
 84.31     The 2004 appropriation includes $363,000 for 2003 and 
 84.32  $1,646,000 for 2004. 
 84.33     The 2005 appropriation includes $491,000 for 2004 and 
 84.34  $1,646,000 for 2005. 
 84.35     Subd. 10.  [AMERICAN INDIAN SCHOLARSHIPS.] For American 
 84.36  Indian scholarships under Minnesota Statutes, section 124D.84: 
 85.1        $1,875,000     .....     2004 
 85.2        $1,875,000     .....     2005 
 85.3      Subd. 11.  [AMERICAN INDIAN TEACHER PREPARATION 
 85.4   GRANTS.] For joint grants to assist American Indian people to 
 85.5   become teachers under Minnesota Statutes, section 122A.63: 
 85.6        $190,000       .....     2004 
 85.7        $190,000       .....     2005 
 85.8      Subd. 12.  [TRIBAL CONTRACT SCHOOLS.] For tribal contract 
 85.9   school aid under Minnesota Statutes, section 124D.83: 
 85.10       $2,066,000     .....     2004
 85.11       $2,335,000     .....     2005
 85.12     The 2004 appropriation includes $285,000 for 2003 and 
 85.13  $1,781,000 for 2004. 
 85.14     The 2005 appropriation includes $531,000 for 2004 and 
 85.15  $1,804,000 for 2005. 
 85.16     Subd. 13.  [EARLY CHILDHOOD PROGRAMS AT TRIBAL 
 85.17  SCHOOLS.] For early childhood family education programs at 
 85.18  tribal contract schools under Minnesota Statutes, section 
 85.19  124D.83, subdivision 4: 
 85.20       $68,000        .....     2004 
 85.21       $68,000        .....     2005 
 85.22     Subd. 14.  [STATEWIDE TESTING SUPPORT.] For supporting 
 85.23  implementation of the graduation standards: 
 85.24       $6,500,000     .....     2004 
 85.25       $6,500,000     .....     2005 
 85.26     Subd. 15.  [SEVENTH GRADE TESTING.] For seventh grade 
 85.27  testing under Minnesota Statutes, section 120B.30:  
 85.28       $2,500,000     .....     2004
 85.29       $2,500,000     .....     2005
 85.30     Subd. 16.  [BEST PRACTICES SEMINARS.] For best practices 
 85.31  seminars and other professional development capacity building 
 85.32  activities that assure proficiency in teaching and 
 85.33  implementation of graduation rule standards: 
 85.34       $2,180,000     .....     2004
 85.35       $2,180,000     .....     2005
 85.36     $250,000 per year is for a grant to A Chance to Grow/New 
 86.1   Visions for the Minnesota learning resource center's 
 86.2   comprehensive training program for education professionals 
 86.3   charged with helping children acquire basic reading and math 
 86.4   skills.  
 86.5      Subd. 17.  [SCHOOL PERFORMANCE EVALUATION.] For evaluating 
 86.6   school performance under Laws 2001, First Special Session 
 86.7   chapter 6, article 2, section 64:  
 86.8        $2,000,000     .....     2004
 86.9      This appropriation is available until June 30, 2005.  This 
 86.10  is a onetime appropriation.  
 86.11     Subd. 18.  [ALTERNATIVE TEACHER COMPENSATION.] For 
 86.12  alternative teacher compensation established under Minnesota 
 86.13  Statutes, sections 122A.413 to 122A.415: 
 86.14       $3,700,000     .....     2004
 86.15       $3,700,000     .....     2005
 86.16     If the appropriations under this subdivision are 
 86.17  insufficient to fund all program participants, a participant may 
 86.18  receive less than the maximum per pupil amount available under 
 86.19  Minnesota Statutes, section 122A.415, subdivision 1. 
 86.20     Subd. 19.  [EXAMINATION FEES; TEACHER TRAINING AND SUPPORT 
 86.21  PROGRAMS.] (a) For students' advanced placement and 
 86.22  international baccalaureate examination fees under Minnesota 
 86.23  Statutes, section 120B.13, subdivision 3, and the training and 
 86.24  related costs for teachers and other interested educators under 
 86.25  Minnesota Statutes, section 120B.13, subdivision 1: 
 86.26       $1,000,000     .....     2004 
 86.27       $1,000,000     .....     2005   
 86.28     (b) The advanced placement program shall receive 75 percent 
 86.29  of the appropriation each year and the international 
 86.30  baccalaureate program shall receive 25 percent of the 
 86.31  appropriation each year.  The department, in consultation with 
 86.32  representatives of the advanced placement and international 
 86.33  baccalaureate programs selected by the advanced placement 
 86.34  advisory council and IBMN, respectively, shall determine the 
 86.35  amounts of the expenditures each year for examination fees and 
 86.36  training and support programs for each program. 
 87.1      (c) Notwithstanding Minnesota Statutes, section 120B.13, 
 87.2   subdivision 1, $375,000 each year is for teachers to attend 
 87.3   subject matter summer training programs and follow-up support 
 87.4   workshops approved by the advanced placement or international 
 87.5   baccalaureate programs.  The amount of the subsidy for each 
 87.6   teacher attending an advanced placement or international 
 87.7   baccalaureate summer training program or workshop shall be the 
 87.8   same.  The commissioner shall determine the payment process and 
 87.9   the amount of the subsidy. 
 87.10     (d) The commissioner shall pay all examination fees for all 
 87.11  students of low-income families under Minnesota Statutes, 
 87.12  section 120B.13, subdivision 3, and to the extent of available 
 87.13  appropriations shall also pay examination fees for students 
 87.14  sitting for an advanced placement examination, international 
 87.15  baccalaureate examination, or both.  
 87.16     Any balance in the first year does not cancel but is 
 87.17  available in the second year. 
 87.18     Subd. 20.  [FIRST GRADE PREPAREDNESS.] For first grade 
 87.19  preparedness grants under Minnesota Statutes, section 124D.081: 
 87.20       $7,250,000     .....     2004 
 87.21       $7,250,000     .....     2005
 87.22     Subd. 21.  [YOUTH WORKS PROGRAM.] For funding youth works 
 87.23  programs under Minnesota Statutes, sections 124D.37 to 124D.45: 
 87.24       $900,000     .....     2004 
 87.25       $900,000     .....     2005 
 87.26     (a) $150,000 per year is for training in evaluating early 
 87.27  literacy skills and teaching reading to preschool children under 
 87.28  Minnesota Statutes, section 124D.42, subdivision 6, paragraph 
 87.29  (a), clause (3).  
 87.30     (b) A grantee organization may provide health and child 
 87.31  care coverage to the dependents of each participant enrolled in 
 87.32  a full-time youth works program to the extent such coverage is 
 87.33  not otherwise available. 
 87.34     Subd. 22.  [STUDENT ORGANIZATIONS.] For student 
 87.35  organizations: 
 87.36       $625,000       .....     2004
 88.1        $625,000       .....     2005
 88.2      Subd. 23.  [DISTANCE EDUCATION.] For distance education 
 88.3   under Minnesota Statutes, section 124D.095:  
 88.4        $2,000,000       .....     2004
 88.5        $3,000,000       .....     2005
 88.6      Sec. 49.  [REVISOR'S INSTRUCTION.] 
 88.7      The revisor of statutes shall codify Laws 2001, First 
 88.8   Special Session chapter 6, article 2, section 68, as Minnesota 
 88.9   Statutes, section 120B.305. 
 88.10     Sec. 50.  [REPEALER.] 
 88.11     (a) Minnesota Statutes 2002, sections 122A.64; 122A.65; 
 88.12  124D.84, subdivision 2; and 124D.89, are repealed. 
 88.13     (b) Laws 1993, chapter 224, article 8, section 20, 
 88.14  subdivision 2, as amended by Laws 1994, chapter 647, article 8, 
 88.15  section 29, is repealed. 
 88.16     (c) Minnesota Statutes 2002, section 121A.49, is repealed 
 88.17  the day following final enactment. 
 88.18                             ARTICLE 3
 88.19                          SPECIAL PROGRAMS
 88.20     Section 1.  Minnesota Statutes 2002, section 121A.41, 
 88.21  subdivision 10, is amended to read: 
 88.22     Subd. 10.  [SUSPENSION.] "Suspension" means an action by 
 88.23  the school administration, under rules promulgated by the school 
 88.24  board, prohibiting a pupil from attending school for a period of 
 88.25  no more than ten school days.  If a suspension is longer than 
 88.26  five days, the suspending administrator must provide the 
 88.27  superintendent with a reason for the longer suspension.  This 
 88.28  definition does not apply to dismissal from school for one 
 88.29  school day or less, except as provided in federal law for a 
 88.30  student with a disability.  Each suspension action may include a 
 88.31  readmission plan.  The readmission plan shall include, where 
 88.32  appropriate, a provision for implementing alternative 
 88.33  educational services upon readmission and may not be used to 
 88.34  extend the current suspension.  Consistent with section 125A.09, 
 88.35  subdivision 3, the readmission plan must not obligate a parent 
 88.36  to provide a sympathomimetic medication for the parent's child 
 89.1   as a condition of readmission.  The school administration may 
 89.2   not impose consecutive suspensions against the same pupil for 
 89.3   the same course of conduct, or incident of misconduct, except 
 89.4   where the pupil will create an immediate and substantial danger 
 89.5   to self or to surrounding persons or property, or where the 
 89.6   district is in the process of initiating an expulsion, in which 
 89.7   case the school administration may extend the suspension to a 
 89.8   total of 15 days.  In the case of a student with a disability, 
 89.9   the student's individual education plan team must meet 
 89.10  immediately but not more than ten school days after the date on 
 89.11  which the decision to remove the student from the student's 
 89.12  current education placement is made.  The individual education 
 89.13  plan team and other qualified personnel shall at that meeting:  
 89.14  conduct a review of the relationship between the child's 
 89.15  disability and the behavior subject to disciplinary action; and 
 89.16  determine the appropriateness of the child's education plan. 
 89.17     The requirements of the individual education plan team 
 89.18  meeting apply when: 
 89.19     (1) the parent requests a meeting; 
 89.20     (2) the student is removed from the student's current 
 89.21  placement for five or more consecutive days; or 
 89.22     (3) the student's total days of removal from the student's 
 89.23  placement during the school year exceed ten cumulative days in a 
 89.24  school year.  The school administration shall implement 
 89.25  alternative educational services when the suspension exceeds 
 89.26  five days.  A separate administrative conference is required for 
 89.27  each period of suspension. 
 89.28     Sec. 2.  [124D.452] [DISTRICT REPORT; CAREER AND TECHNICAL 
 89.29  EDUCATION.] 
 89.30     Each district and cooperative center must report data to 
 89.31  the department of education for all career and technical 
 89.32  education programs as required by the department. 
 89.33     Sec. 3.  Minnesota Statutes 2002, section 124D.454, 
 89.34  subdivision 1, is amended to read: 
 89.35     Subdivision 1.  [PURPOSE.] The purpose of this section is 
 89.36  to provide a method to fund transition career and technical 
 90.1   education programs for children with a disability that are 
 90.2   components of the student's transition plan.  As used in this 
 90.3   section, the term "children with a disability" shall have the 
 90.4   meaning ascribed to it in section 125A.02. 
 90.5      Sec. 4.  Minnesota Statutes 2002, section 124D.454, 
 90.6   subdivision 2, is amended to read: 
 90.7      Subd. 2.  [DEFINITIONS.] For the purposes of this section, 
 90.8   the definitions in this subdivision apply. 
 90.9      (a) "Base year" for fiscal year 1996 means fiscal year 1995.
 90.10  Base year for later fiscal years means the second fiscal year 
 90.11  preceding the fiscal year for which aid will be paid. 
 90.12     (b) "Basic revenue" has the meaning given it in section 
 90.13  126C.10, subdivision 2.  For the purposes of computing basic 
 90.14  revenue pursuant to this section, each child with a disability 
 90.15  shall be counted as prescribed in section 126C.05, subdivision 1.
 90.16     (c) "Average daily membership" has the meaning given it in 
 90.17  section 126C.05. 
 90.18     (d) "Program growth factor" means 1.00 for fiscal year 1998 
 90.19  and later. 
 90.20     (e) "Aid percentage factor" means 60 percent for fiscal 
 90.21  year 1996, 70 percent for fiscal year 1997, 80 percent for 
 90.22  fiscal year 1998, 90 percent for fiscal year 1999, and 100 
 90.23  percent for fiscal year 2000 and later. 
 90.24     (f) "Essential personnel" means a licensed teacher, 
 90.25  licensed support services staff person, paraprofessional 
 90.26  providing direct services to students, or licensed personnel 
 90.27  under subdivision 12. 
 90.28     Sec. 5.  Minnesota Statutes 2002, section 124D.454, 
 90.29  subdivision 3, is amended to read: 
 90.30     Subd. 3.  [BASE REVENUE.] (a) The transition 
 90.31  program-disabled transition-disabled program base revenue equals 
 90.32  the sum of the following amounts computed using base year data: 
 90.33     (1) 68 percent of the salary of each essential licensed 
 90.34  person or approved paraprofessional who provides direct 
 90.35  instructional services to students employed during that fiscal 
 90.36  year for services rendered in that district's transition program 
 91.1   for children with a disability; 
 91.2      (2) 47 percent of the costs of necessary equipment for 
 91.3   transition programs for children with a disability; 
 91.4      (3) 47 percent of the costs of necessary travel between 
 91.5   instructional sites by transition program teachers of children 
 91.6   with a disability but not including travel to and from local, 
 91.7   regional, district, state, or national vocational career and 
 91.8   technical student organization meetings; 
 91.9      (4) 47 percent of the costs of necessary supplies for 
 91.10  transition programs for children with a disability but not to 
 91.11  exceed an average of $47 in any one school year for each child 
 91.12  with a disability receiving these services; 
 91.13     (5) for transition programs for children with disabilities 
 91.14  provided by a contract approved by the commissioner with public, 
 91.15  private, or voluntary agencies other than a Minnesota school 
 91.16  district or cooperative center, in place of programs provided by 
 91.17  the district, 52 percent of the difference between the amount of 
 91.18  the contract and the basic revenue of the district for that 
 91.19  pupil for the fraction of the school day the pupil receives 
 91.20  services under the contract; 
 91.21     (6) for transition programs for children with disabilities 
 91.22  provided by a contract approved by the commissioner with public, 
 91.23  private, or voluntary agencies other than a Minnesota school 
 91.24  district or cooperative center, that are supplementary to a full 
 91.25  educational program provided by the school district, 52 percent 
 91.26  of the amount of the contract; and 
 91.27     (7) for a contract approved by the commissioner with 
 91.28  another Minnesota school district or cooperative center for 
 91.29  vocational evaluation services for children with a disability 
 91.30  for children that are not yet enrolled in grade 12, 52 percent 
 91.31  of the amount of the contract. 
 91.32     (b) If requested by a school district for transition 
 91.33  programs during the base year for less than the full school 
 91.34  year, the commissioner may adjust the base revenue to reflect 
 91.35  the expenditures that would have occurred during the base year 
 91.36  had the program been operated for the full year. 
 92.1      Sec. 6.  Minnesota Statutes 2002, section 124D.454, 
 92.2   subdivision 8, is amended to read: 
 92.3      Subd. 8.  [USE OF AID.] The aid provided under this section 
 92.4   shall be paid only for services rendered or for the costs which 
 92.5   are incurred according to this section for transition programs 
 92.6   for children with a disability which are approved by the 
 92.7   commissioner of children, families, and learning education and 
 92.8   operated in accordance with rules promulgated by the 
 92.9   commissioner.  These rules shall be subject to the restrictions 
 92.10  provided in section 124D.453, subdivision 6 12.  The procedure 
 92.11  for application for approval of these programs shall be as 
 92.12  provided in section 125A.75, subdivisions 4 and 6, and the 
 92.13  application review process shall be conducted by the office 
 92.14  division of lifework development federal programs in the 
 92.15  department. 
 92.16     Sec. 7.  Minnesota Statutes 2002, section 124D.454, 
 92.17  subdivision 10, is amended to read: 
 92.18     Subd. 10.  [EXCLUSION.] A district shall not receive aid 
 92.19  pursuant to section 124D.453 or 125A.76 for salaries, supplies, 
 92.20  travel or equipment for which the district receives aid pursuant 
 92.21  to this section. 
 92.22     Sec. 8.  Minnesota Statutes 2002, section 124D.454, is 
 92.23  amended by adding a subdivision to read: 
 92.24     Subd. 12.  [COMPLIANCE WITH RULES.] Aid must be paid under 
 92.25  this section only for services rendered or for costs incurred in 
 92.26  career and technical education programs approved by the 
 92.27  commissioner and operated in accordance with rules promulgated 
 92.28  by the commissioner.  This aid shall be paid only for services 
 92.29  rendered and for costs incurred by essential, licensed personnel 
 92.30  who meet the requirements for licensure pursuant to the rules of 
 92.31  the Minnesota board of teaching.  Licensed personnel means 
 92.32  persons holding a valid career and technical license issued by 
 92.33  the commissioner.  If an average of five or fewer secondary 
 92.34  full-time equivalent students are enrolled per teacher in an 
 92.35  approved postsecondary program at intermediate district No. 287, 
 92.36  916, or 917, licensed personnel means persons holding a valid 
 93.1   vocational license issued by the commissioner or the board of 
 93.2   trustees of the Minnesota state colleges and universities.  
 93.3   Notwithstanding section 127A.42, the commissioner may modify or 
 93.4   withdraw the program or aid approval and withhold aid under this 
 93.5   section without proceeding under section 127A.42 at any time.  
 93.6   To do so, the commissioner must determine that the program does 
 93.7   not comply with rules of the department of education or that any 
 93.8   facts concerning the program or its budget differ from the facts 
 93.9   in the district's approved application. 
 93.10     Sec. 9.  [125A.091] [ALTERNATIVE DISPUTE RESOLUTION AND DUE 
 93.11  PROCESS HEARINGS.] 
 93.12     Subdivision 1.  [DISTRICT OBLIGATION.] A school district 
 93.13  must use the procedures in federal law and state law and rule to 
 93.14  reach decisions about the identification, evaluation, 
 93.15  educational placement, manifestation determination, interim 
 93.16  alternative educational placement, or the provision of a free 
 93.17  appropriate public education to a child with a disability. 
 93.18     Subd. 2.  [PRIOR WRITTEN NOTICE.] A parent must receive 
 93.19  prior written notice a reasonable time before the district 
 93.20  proposes or refuses to initiate or change the identification, 
 93.21  evaluation, educational placement, or the provision of a free 
 93.22  appropriate public education to a child with a disability. 
 93.23     Subd. 3.  [CONTENT OF NOTICE.] The notice under subdivision 
 93.24  2 must: 
 93.25     (1) describe the action the district proposes or refuses; 
 93.26     (2) explain why the district proposes or refuses to take 
 93.27  the action; 
 93.28     (3) describe any other option the district considered and 
 93.29  the reason why it rejected the option; 
 93.30     (4) describe each evaluation procedure, test, record, or 
 93.31  report the district used as a basis for the proposed or refused 
 93.32  action; 
 93.33     (5) describe any other factor affecting the proposal or 
 93.34  refusal of the district to take the action; 
 93.35     (6) state that the parent of a child with a disability is 
 93.36  protected by procedural safeguards and, if this notice is not an 
 94.1   initial referral for evaluation, how a parent can get a 
 94.2   description of the procedural safeguards; and 
 94.3      (7) identify where a parent can get help in understanding 
 94.4   this law. 
 94.5      Subd. 4.  [UNDERSTANDABLE NOTICE.] (a) The written notice 
 94.6   under subdivision 2 must be understandable to the general public 
 94.7   and available in the parent's native language or by another 
 94.8   communication form, unless it is clearly not feasible to do so. 
 94.9      (b) If the parent's native language or other communication 
 94.10  form is not written, the district must take steps to ensure that:
 94.11     (1) the notice is translated orally or by other means to 
 94.12  the parent in the parent's native language or other 
 94.13  communication form; 
 94.14     (2) the parent understands the notice; and 
 94.15     (3) written evidence indicates the requirements in 
 94.16  subdivision 2 are met. 
 94.17     Subd. 5.  [INITIAL ACTION; PARENT CONSENT.] The district 
 94.18  must not proceed with the initial evaluation of a child, the 
 94.19  initial placement of a child in a special education program, or 
 94.20  the initial provision of special education services for a child 
 94.21  without the prior written consent of the child's parent.  A 
 94.22  district may not override the written refusal of a parent to 
 94.23  consent to an initial evaluation or reevaluation. 
 94.24     Subd. 6.  [DISPUTE RESOLUTION PROCESSES; 
 94.25  GENERALLY.] Parties are encouraged to resolve disputes over the 
 94.26  identification, evaluation, educational placement, manifestation 
 94.27  determination, interim alternative educational placement, or the 
 94.28  provision of a free appropriate public education to a child with 
 94.29  a disability through conciliation, mediation, facilitated team 
 94.30  meetings, or other alternative process.  All dispute resolution 
 94.31  options are voluntary on the part of the parent and must not be 
 94.32  used to deny or delay the right to a due process hearing.  All 
 94.33  dispute resolution processes under this section are provided at 
 94.34  no cost to the parent. 
 94.35     Subd. 7.  [CONCILIATION CONFERENCE.] A parent must have an 
 94.36  opportunity to meet with appropriate district staff in at least 
 95.1   one conciliation conference if the parent objects to any 
 95.2   proposal of which the parent receives notice under subdivision 2.
 95.3   If the parent refuses district efforts to conciliate the 
 95.4   dispute, the conciliation requirement is satisfied.  Following a 
 95.5   conciliation conference, the district must prepare and provide 
 95.6   to the parent a conciliation conference memorandum that 
 95.7   describes the district's final proposed offer of service by the 
 95.8   district.  This memorandum is admissible in evidence in any 
 95.9   subsequent proceeding. 
 95.10     Subd. 8.  [VOLUNTARY DISPUTE RESOLUTION OPTIONS.] In 
 95.11  addition to offering at least one conciliation conference, a 
 95.12  district must inform a parent of other dispute resolution 
 95.13  processes, including at least mediation and facilitated team 
 95.14  meetings.  The fact that an alternative dispute resolution 
 95.15  process was used is admissible in evidence at any subsequent 
 95.16  proceeding.  State-provided mediators and team meeting 
 95.17  facilitators shall not be subpoenaed to testify at a due process 
 95.18  hearing or civil action under federal special education law nor 
 95.19  are any records of mediators or state-provided team meeting 
 95.20  facilitators accessible to the parties. 
 95.21     Subd. 9.  [MEDIATION.] Mediation is a dispute resolution 
 95.22  process that involves a neutral party provided by the state to 
 95.23  assist a parent and a district in resolving disputes over the 
 95.24  identification, evaluation, educational placement, manifestation 
 95.25  determination, interim alternative educational placement, or the 
 95.26  provision of a free appropriate public education to a child with 
 95.27  a disability.  A mediation process is available as an informal 
 95.28  alternative to a due process hearing but must not be used to 
 95.29  deny or postpone the opportunity of a parent or district to 
 95.30  obtain a due process hearing.  Mediation is voluntary for all 
 95.31  parties.  All mediation discussions are confidential and 
 95.32  inadmissible in evidence in any subsequent proceeding, unless 
 95.33  the: 
 95.34     (1) parties expressly agree otherwise; 
 95.35     (2) evidence is otherwise available; or 
 95.36     (3) evidence is offered to prove bias or prejudice of a 
 96.1   witness. 
 96.2      Subd. 10.  [MEDIATED AGREEMENTS.] Mediated agreements are 
 96.3   not admissible unless the parties agree otherwise or a party to 
 96.4   the agreement believes the agreement is not being implemented, 
 96.5   in which case the aggrieved party may enter the agreement into 
 96.6   evidence at a due process hearing.  The parties may request 
 96.7   another mediation to resolve a dispute over implementing the 
 96.8   mediated agreement.  After a due process hearing is requested, a 
 96.9   party may request mediation and the commissioner must provide a 
 96.10  mediator who conducts a mediation session no later than the 
 96.11  third business day after the mediation request is made to the 
 96.12  commissioner. 
 96.13     Subd. 11.  [FACILITATED TEAM MEETING.] A facilitated team 
 96.14  meeting is an IEP, IFSP, or IIIP team meeting led by an 
 96.15  impartial state-provided facilitator to promote effective 
 96.16  communication and assist a team in developing an individualized 
 96.17  education plan. 
 96.18     Subd. 12.  [IMPARTIAL DUE PROCESS HEARING.] (a) A parent or 
 96.19  a district is entitled to an impartial due process hearing 
 96.20  conducted by the state when a dispute arises over the 
 96.21  identification, evaluation, educational placement, manifestation 
 96.22  determination, interim alternative educational placement, or the 
 96.23  provision of a free appropriate public education to a child with 
 96.24  a disability.  The hearing must be held in the district 
 96.25  responsible for ensuring that a free appropriate public 
 96.26  education is provided according to state and federal law.  The 
 96.27  proceedings must be recorded and preserved, at state expense, 
 96.28  pending ultimate disposition of the action. 
 96.29     (b) The due process hearing must be conducted according to 
 96.30  the rules of the commissioner and federal law. 
 96.31     (c) A party in a due process hearing may not raise a claim 
 96.32  based upon an alleged violation that occurred more than two 
 96.33  years before the date on which the commissioner received the 
 96.34  hearing request. 
 96.35     Subd. 13.  [HEARING OFFICER QUALIFICATIONS.] The 
 96.36  commissioner must appoint an individual who is qualified under 
 97.1   this subdivision to serve as a hearing officer.  The hearing 
 97.2   officer must: 
 97.3      (1) be knowledgeable and impartial; 
 97.4      (2) have no personal interest in or specific involvement 
 97.5   with the student who is a party to the hearing; 
 97.6      (3) not have been employed as an administrator by the 
 97.7   district that is a party to the hearing; 
 97.8      (4) not have been involved in selecting the district 
 97.9   administrator who is a party to the hearing; 
 97.10     (5) have no personal, economic, or professional interest in 
 97.11  the outcome of the hearing other than properly administering 
 97.12  federal and state laws, rules, and policies; 
 97.13     (6) have no substantial involvement in developing state or 
 97.14  local policies or procedures challenged in the hearing; 
 97.15     (7) not be a current employee or board member of a 
 97.16  Minnesota public school district, education district, 
 97.17  intermediate unit or regional education agency, or the 
 97.18  department if the department is the service provider; and 
 97.19     (8) not be a current employee or board member of a 
 97.20  disability advocacy organization or group. 
 97.21     Subd. 14.  [REQUEST FOR HEARING.] A request for a due 
 97.22  process hearing must: 
 97.23     (1) be in writing; 
 97.24     (2) describe the nature of the issue about providing 
 97.25  special education services to the student including facts 
 97.26  relating to the issue; and 
 97.27     (3) state, to the extent known, the relief sought. 
 97.28     Any school district administrator receiving a request for a 
 97.29  due process hearing must immediately forward the request to the 
 97.30  commissioner.  Within two business days of receiving a request 
 97.31  for a due process hearing, the commissioner must appoint a 
 97.32  hearing officer.  The commissioner must not deny a request for 
 97.33  hearing because the request is incomplete.  A party may 
 97.34  disqualify a hearing officer only by affirmatively showing 
 97.35  prejudice or bias to the commissioner or to the chief 
 97.36  administrative law judge if the hearing officer is an 
 98.1   administrative law judge.  If a party affirmatively shows 
 98.2   prejudice against a hearing officer, the commissioner must 
 98.3   assign another hearing officer to hear the matter. 
 98.4      Subd. 15.  [PREHEARING CONFERENCE.] A prehearing conference 
 98.5   must be held within five business days of the date the 
 98.6   commissioner appoints the hearing officer.  The hearing officer 
 98.7   must initiate the prehearing conference which may be conducted 
 98.8   in person, at a location within the district, or by telephone. 
 98.9   The hearing officer must create a written verbatim record of the 
 98.10  prehearing conference which is available to either party upon 
 98.11  request.  At the prehearing conference, the hearing officer must:
 98.12     (1) identify the questions that must be answered to resolve 
 98.13  the dispute and eliminate claims and complaints that are without 
 98.14  merit; 
 98.15     (2) set a scheduling order for the hearing and additional 
 98.16  prehearing activities; 
 98.17     (3) determine if the hearing can be disposed of without an 
 98.18  evidentiary hearing and, if so, establish the schedule and 
 98.19  procedure for doing so; and 
 98.20     (4) establish the management, control, and location of the 
 98.21  hearing to ensure its fair, efficient, and effective disposition.
 98.22     Subd. 16.  [BURDEN OF PROOF.] The burden of proof at a due 
 98.23  process hearing is on the district to demonstrate, by a 
 98.24  preponderance of the evidence, that it is complying with the law 
 98.25  and offered or provided a free appropriate public education to 
 98.26  the child in the least restrictive environment.  If the district 
 98.27  has not offered or provided a free appropriate public education 
 98.28  in the least restrictive environment and the parent wants the 
 98.29  district to pay for a private placement, the burden of proof is 
 98.30  on the parent to demonstrate, by a preponderance of the 
 98.31  evidence, that the private placement is appropriate. 
 98.32     Subd. 17.  [ADMISSIBLE EVIDENCE.] The hearing officer may 
 98.33  admit all evidence that possesses probative value, including 
 98.34  hearsay, if it is the type of evidence on which reasonable, 
 98.35  prudent persons are accustomed to rely in conducting their 
 98.36  serious affairs.  The hearing officer must give effect to the 
 99.1   rules of privilege recognized by law and exclude evidence that 
 99.2   is incompetent, irrelevant, immaterial, or unduly repetitious. 
 99.3      Subd. 18.  [HEARING OFFICER AUTHORITY.] (a) A hearing 
 99.4   officer must limit an impartial due process hearing to the time 
 99.5   sufficient for each party to present its case.  
 99.6      (b) A hearing officer must establish and maintain control 
 99.7   and manage the hearing.  This authority includes, but is not 
 99.8   limited to: 
 99.9      (1) requiring attorneys representing parties at the 
 99.10  hearing, after notice and an opportunity to be heard, to pay 
 99.11  court reporting and hearing officer costs, or fines payable to 
 99.12  the state, for failing to:  (i) obey scheduling or prehearing 
 99.13  orders, (ii) appear, (iii) be prepared, or (iv) participate in 
 99.14  the hearing process in good faith; 
 99.15     (2) administering oaths and affirmations; 
 99.16     (3) issuing subpoenas; 
 99.17     (4) determining the responsible and providing districts and 
 99.18  joining those districts, if not already notified, in the 
 99.19  proceedings; 
 99.20     (5) making decisions involving identification, evaluation, 
 99.21  educational placement, manifestation determination, interim 
 99.22  alternative educational placement, or the provision of a free 
 99.23  appropriate public education to a child with a disability; and 
 99.24     (6) ordering an independent educational evaluation of a 
 99.25  child at district expense. 
 99.26     Subd. 19.  [EXPEDITED DUE PROCESS HEARINGS.] A parent has 
 99.27  the right to an expedited due process hearing when there is a 
 99.28  dispute over a manifestation determination or a proposed or 
 99.29  actual placement in an interim alternative educational setting.  
 99.30  A district has the right to an expedited due process hearing 
 99.31  when proposing or seeking to maintain placement in an interim 
 99.32  alternative educational setting.  A hearing officer must hold an 
 99.33  expedited due process hearing and must issue a decision within 
 99.34  ten calendar days of the request for a hearing.  A hearing 
 99.35  officer may extend by up to five additional calendar days the 
 99.36  time for issuing a decision in an expedited due process 
100.1   hearing.  All policies in this section apply to expedited due 
100.2   process hearings to the extent they do not conflict with federal 
100.3   law. 
100.4      Subd. 20.  [HEARING OFFICER'S DECISION; TIME PERIOD.] (a) 
100.5   The hearing officer must issue a decision within 45 calendar 
100.6   days of the date on which the commissioner receives the hearing 
100.7   request.  A hearing officer is encouraged to accelerate the time 
100.8   line to 30 days for a child under the age of three whose needs 
100.9   change rapidly and who requires quick resolution of a dispute.  
100.10  A hearing officer may not extend the time beyond the 45-day 
100.11  period unless requested by either party for good cause shown on 
100.12  the record.  Extensions of time must not exceed a total of 30 
100.13  calendar days unless both parties and the hearing officer agree 
100.14  or time is needed to complete an independent educational 
100.15  evaluation.  Good cause includes, but is not limited to, the 
100.16  time required for mediation or other settlement discussions, 
100.17  independent educational evaluation, complexity and volume of 
100.18  issues, or finding or changing counsel. 
100.19     (b) The hearing officer's decision must: 
100.20     (1) be in writing; 
100.21     (2) state the controlling and material facts upon which the 
100.22  decision is made in order to apprise the reader of the basis and 
100.23  reason for the decision; and 
100.24     (3) be based on local standards, state statute, the rules 
100.25  of the commissioner, and federal law. 
100.26     Subd. 21.  [COMPENSATORY EDUCATIONAL SERVICES.] The hearing 
100.27  officer may require the resident or responsible district to 
100.28  provide compensatory educational services to the child if the 
100.29  hearing officer finds that the district has not offered or made 
100.30  available to the child a free appropriate public education in 
100.31  the least restrictive environment and the child suffered a loss 
100.32  of educational benefit.  Such services take the form of direct 
100.33  and indirect special education and related services designed to 
100.34  address any loss of educational benefit that may have occurred.  
100.35  The hearing officer's finding must be based on a present 
100.36  determination of whether the child has suffered a loss of 
101.1   educational benefit. 
101.2      Subd. 22.  [CHILD'S EDUCATIONAL PLACEMENT DURING A DUE 
101.3   PROCESS HEARING.] (a) Until a due process hearing under this 
101.4   section is completed or the district and the parent agree 
101.5   otherwise, the child must remain in the child's current 
101.6   educational placement and must not be denied initial admission 
101.7   to school. 
101.8      (b) Until an expedited due process hearing challenging an 
101.9   interim alternative educational placement is completed, the 
101.10  child must remain in the interim alternative educational setting 
101.11  until the decision of the hearing officer or the expiration of 
101.12  the 45 days permitted for an interim alternative educational 
101.13  setting, whichever occurs first, unless the parent and district 
101.14  agree otherwise. 
101.15     Subd. 23.  [IMPLEMENTATION OF HEARING OFFICER ORDER.] (a) 
101.16  That portion of a hearing officer's decision granting relief 
101.17  requested by the parent must be implemented upon issuance. 
101.18     (b) Except as provided under paragraph (a) or the district 
101.19  and parent agree otherwise, following a hearing officer's 
101.20  decision granting relief requested by the district, the child 
101.21  must remain in the current educational placement until the time 
101.22  to request judicial review under subdivision 24 expires or, if 
101.23  judicial review is requested, at the time the Minnesota court of 
101.24  appeals or the federal district court issues its decision, 
101.25  whichever is later.  
101.26     Subd. 24.  [REVIEW OF HEARING OFFICER DECISIONS.] The 
101.27  parent or district may seek review of the hearing officer's 
101.28  decision in the Minnesota court of appeals or in the federal 
101.29  district court, consistent with federal law.  A party must 
101.30  appeal to the Minnesota court of appeals within 60 days of 
101.31  receiving the hearing officer's decision. 
101.32     Subd. 25.  [ENFORCEMENT OF ORDERS.] The commissioner must 
101.33  monitor final hearing officer decisions and ensure enforcement 
101.34  of hearing officer orders. 
101.35     Subd. 26.  [HEARING OFFICER AND PERSON CONDUCTING 
101.36  ALTERNATIVE DISPUTE RESOLUTION ARE STATE EMPLOYEES.] A hearing 
102.1   officer or person conducting alternative dispute resolution 
102.2   under this section is an employee of the state under section 
102.3   3.732 for purposes of section 3.736 only. 
102.4      Subd. 27.  [HEARING OFFICER TRAINING.] A hearing officer 
102.5   must participate in training and follow procedures established 
102.6   by the commissioner.  
102.7      Subd. 28.  [DISTRICT LIABILITY.] A district is not liable 
102.8   for harmless technical violations of this section or rules 
102.9   implementing this section if the school district can demonstrate 
102.10  on a case-by-case basis that the violations did not harm a 
102.11  student's educational progress or the parent's right to notice, 
102.12  participation, or due process. 
102.13     Sec. 10.  Minnesota Statutes 2002, section 125A.21, 
102.14  subdivision 2, is amended to read: 
102.15     Subd. 2.  [THIRD PARTY REIMBURSEMENT.] (a) Beginning July 
102.16  1, 2000, districts shall seek reimbursement from insurers and 
102.17  similar third parties for the cost of services provided by the 
102.18  district whenever the services provided by the district are 
102.19  otherwise covered by the child's health coverage.  Districts 
102.20  shall request, but may not require, the child's family to 
102.21  provide information about the child's health coverage when a 
102.22  child with a disability begins to receive services from the 
102.23  district of a type that may be reimbursable, and shall request, 
102.24  but may not require, updated information after that as needed.  
102.25     (b) For children enrolled in medical assistance under 
102.26  chapter 256B or MinnesotaCare under chapter 256L who have no 
102.27  other health coverage, a district shall provide an initial 
102.28  written notice to the enrolled child's parent or legal 
102.29  representative of its intent to seek reimbursement from medical 
102.30  assistance or MinnesotaCare for the individual education plan 
102.31  health-related services provided by the district. 
102.32     (c) The district shall give the parent or legal 
102.33  representative annual written notice of: 
102.34     (1) the district's intent to seek reimbursement from 
102.35  medical assistance or MinnesotaCare for individual education 
102.36  plan health-related services provided by the district; 
103.1      (2) the right of the parent or legal representative to 
103.2   request a copy of all records concerning individual education 
103.3   plan health-related services disclosed by the district to any 
103.4   third party; and 
103.5      (3) the right of the parent or legal representative to 
103.6   withdraw consent for disclosure of a child's records at any time 
103.7   without consequence. 
103.8   The written notice shall be provided as part of the written 
103.9   notice required by Code of Federal Regulations, title 34, 
103.10  section 300.503 300.504. 
103.11     (d) In order to access the private health care coverage of 
103.12  a child who is covered by private health care coverage in whole 
103.13  or in part, a district must: 
103.14     (1) obtain annual written informed consent from the parent 
103.15  or legal representative, in compliance with subdivision 5; and 
103.16     (2) inform the parent or legal representative that a 
103.17  refusal to permit the district or state Medicaid agency to 
103.18  access their private health care coverage does not relieve the 
103.19  district of its responsibility to provide all services necessary 
103.20  to provide free and appropriate public education at no cost to 
103.21  the parent or legal representative. 
103.22     (e) If the commissioner of human services obtains federal 
103.23  approval to exempt covered individual education plan 
103.24  health-related services from the requirement that private health 
103.25  care coverage refuse payment before medical assistance may be 
103.26  billed, paragraphs (b), (c), and (d) shall also apply to 
103.27  students with a combination of private health care coverage and 
103.28  health care coverage through medical assistance or MinnesotaCare.
103.29     (f) In the event that Congress or any federal agency or the 
103.30  Minnesota legislature or any state agency establishes lifetime 
103.31  limits, limits for any health care services, cost-sharing 
103.32  provisions, or otherwise provides that individual education plan 
103.33  health-related services impact benefits for persons enrolled in 
103.34  medical assistance or MinnesotaCare, the amendments to this 
103.35  subdivision adopted in 2002 are repealed on the effective date 
103.36  of any federal or state law or regulation that imposes the 
104.1   limits.  In that event, districts must obtain informed consent 
104.2   consistent with this subdivision as it existed prior to the 2002 
104.3   amendments and subdivision 5, before seeking reimbursement for 
104.4   children enrolled in medical assistance under chapter 256B or 
104.5   MinnesotaCare under chapter 256L who have no other health care 
104.6   coverage. 
104.7      Sec. 11.  Minnesota Statutes 2002, section 125A.28, is 
104.8   amended to read: 
104.9      125A.28 [STATE INTERAGENCY COORDINATING COUNCIL.] 
104.10     An interagency coordinating council of at least 17, but not 
104.11  more than 25 members is established, in compliance with Public 
104.12  Law Number 102-119, section 682.  The members must be appointed 
104.13  by the governor.  Council members must elect the council chair.  
104.14  The representative of the commissioner may not serve as the 
104.15  chair.  The council must be composed of at least five parents, 
104.16  including persons of color, of children with disabilities under 
104.17  age 12, including at least three parents of a child with a 
104.18  disability under age seven, five representatives of public or 
104.19  private providers of services for children with disabilities 
104.20  under age five, including a special education director, county 
104.21  social service director, local Head Start director, and a 
104.22  community health services or public health nursing 
104.23  administrator, one member of the senate, one member of the house 
104.24  of representatives, one representative of teacher preparation 
104.25  programs in early childhood-special education or other 
104.26  preparation programs in early childhood intervention, at least 
104.27  one representative of advocacy organizations for children with 
104.28  disabilities under age five, one physician who cares for young 
104.29  children with special health care needs, one representative each 
104.30  from the commissioners of commerce, children, families, and 
104.31  learning education, health, human services, a representative 
104.32  from the state agency responsible for child care, and a 
104.33  representative from Indian health services or a tribal council.  
104.34  Section 15.059, subdivisions 2 to 5, apply to the council.  The 
104.35  council must meet at least quarterly.  
104.36     The council must address methods of implementing the state 
105.1   policy of developing and implementing comprehensive, 
105.2   coordinated, multidisciplinary interagency programs of early 
105.3   intervention services for children with disabilities and their 
105.4   families. 
105.5      The duties of the council include recommending policies to 
105.6   ensure a comprehensive and coordinated system of all state and 
105.7   local agency services for children under age five with 
105.8   disabilities and their families.  The policies must address how 
105.9   to incorporate each agency's services into a unified state and 
105.10  local system of multidisciplinary assessment practices, 
105.11  individual intervention plans, comprehensive systems to find 
105.12  children in need of services, methods to improve public 
105.13  awareness, and assistance in determining the role of interagency 
105.14  early intervention committees.  
105.15     By September 1, the council must recommend to the governor 
105.16  and the commissioners of children, families, and learning 
105.17  education, health, human services, commerce, and economic 
105.18  security policies for a comprehensive and coordinated system. 
105.19     Notwithstanding any other law to the contrary, the state 
105.20  interagency coordinating council expires on June 30, 2003 2005.  
105.21     Sec. 12.  Minnesota Statutes 2002, section 125A.30, is 
105.22  amended to read: 
105.23     125A.30 [INTERAGENCY EARLY INTERVENTION COMMITTEES.] 
105.24     (a) A school district, group of districts, or special 
105.25  education cooperative, in cooperation with the health and human 
105.26  service agencies located in the county or counties in which the 
105.27  district or cooperative is located, must establish an 
105.28  interagency early intervention committee for children with 
105.29  disabilities under age five and their families under this 
105.30  section, and for children with disabilities ages three to 22 
105.31  consistent with the requirements under sections 125A.023 and 
105.32  125A.027.  Committees must include representatives of local and 
105.33  regional health, education, and county human service agencies, 
105.34  county boards, school boards, early childhood family education 
105.35  programs, Head Start, parents of young children with 
105.36  disabilities under age 12, child care resource and referral 
106.1   agencies, school readiness programs, current service providers, 
106.2   and may also include representatives from other private or 
106.3   public agencies and school nurses.  The committee must elect a 
106.4   chair from among its members and must meet at least quarterly. 
106.5      (b) The committee must develop and implement interagency 
106.6   policies and procedures concerning the following ongoing duties: 
106.7      (1) develop public awareness systems designed to inform 
106.8   potential recipient families of available programs and services; 
106.9      (2) implement interagency child find systems designed to 
106.10  actively seek out, identify, and refer infants and young 
106.11  children with, or at risk of, disabilities and their families; 
106.12     (3) establish and evaluate the identification, referral, 
106.13  child and family assessment systems, procedural safeguard 
106.14  process, and community learning systems to recommend, where 
106.15  necessary, alterations and improvements; 
106.16     (4) assure the development of individualized family service 
106.17  plans for all eligible infants and toddlers with disabilities 
106.18  from birth through age two, and their families, and individual 
106.19  education plans and individual service plans when necessary to 
106.20  appropriately serve children with disabilities, age three and 
106.21  older, and their families and recommend assignment of financial 
106.22  responsibilities to the appropriate agencies; 
106.23     (5) encourage agencies to develop individual family service 
106.24  plans for children with disabilities, age three and older; 
106.25     (6) implement a process for assuring that services involve 
106.26  cooperating agencies at all steps leading to individualized 
106.27  programs; 
106.28     (7) facilitate the development of a transitional plan if a 
106.29  service provider is not recommended to continue to provide 
106.30  services; 
106.31     (8) identify the current services and funding being 
106.32  provided within the community for children with disabilities 
106.33  under age five and their families; 
106.34     (9) develop a plan for the allocation and expenditure of 
106.35  additional state and federal early intervention funds under 
106.36  United States Code, title 20, section 1471 et seq.  (Part H, 
107.1   Public Law Number 102-119) and United States Code, title 20, 
107.2   section 631, et seq. (Chapter I, Public Law Number 89-313); and 
107.3      (10) develop a policy that is consistent with section 
107.4   13.05, subdivision 9, and federal law to enable a member of an 
107.5   interagency early intervention committee to allow another member 
107.6   access to data classified as not public. 
107.7      (c) The local committee shall also: 
107.8      (1) participate in needs assessments and program planning 
107.9   activities conducted by local social service, health and 
107.10  education agencies for young children with disabilities and 
107.11  their families; and 
107.12     (2) review and comment on the early intervention section of 
107.13  the total special education system for the district, the county 
107.14  social service plan, the section or sections of the community 
107.15  health services plan that address needs of and service 
107.16  activities targeted to children with special health care 
107.17  needs, the section on children with special needs in the county 
107.18  child care fund plan, sections in Head Start plans on 
107.19  coordinated planning and services for children with special 
107.20  needs, any relevant portions of early childhood education plans, 
107.21  such as early childhood family education or school readiness, or 
107.22  other applicable coordinated school and community plans for 
107.23  early childhood programs and services, and the section of the 
107.24  maternal and child health special project grants that address 
107.25  needs of and service activities targeted to children with 
107.26  chronic illness and disabilities. 
107.27     Sec. 13.  Minnesota Statutes 2002, section 125A.76, 
107.28  subdivision 1, is amended to read: 
107.29     Subdivision 1.  [DEFINITIONS.] For the purposes of this 
107.30  section, the definitions in this subdivision apply. 
107.31     (a) "Base year" for fiscal year 1998 and later fiscal years 
107.32  means the second fiscal year preceding the fiscal year for which 
107.33  aid will be paid. 
107.34     (b) "Basic revenue" has the meaning given it in section 
107.35  126C.10, subdivision 2.  For the purposes of computing basic 
107.36  revenue pursuant to this section, each child with a disability 
108.1   shall be counted as prescribed in section 126C.05, subdivision 1.
108.2      (c) "Essential personnel" means teachers, cultural 
108.3   liaisons, related services, and support services staff providing 
108.4   direct services to students.  Essential personnel may also 
108.5   include special education paraprofessionals or clericals 
108.6   providing support to teachers and students by preparing 
108.7   paperwork and making arrangements related to special education 
108.8   compliance requirements, including parent meetings and 
108.9   individual education plans. 
108.10     (d) "Average daily membership" has the meaning given it in 
108.11  section 126C.05. 
108.12     (e) "Program growth factor" means 1.08 for fiscal year 
108.13  2002, and 1.046 for fiscal year 2003, and 1.0 for fiscal year 
108.14  2004 and later. 
108.15     Sec. 14.  Minnesota Statutes 2002, section 125A.76, 
108.16  subdivision 4, is amended to read: 
108.17     Subd. 4.  [STATE TOTAL SPECIAL EDUCATION AID.] The state 
108.18  total special education aid for fiscal year 2000 2004 equals 
108.19  $463,000,000 $530,642,000.  The state total special education 
108.20  aid for fiscal year 2001 2005 equals $474,000,000 $529,164,000.  
108.21  The state total special education aid for later fiscal years 
108.22  equals:  
108.23     (1) the state total special education aid for the preceding 
108.24  fiscal year; times 
108.25     (2) the program growth factor; times 
108.26     (3) the ratio of the state total average daily membership 
108.27  for the current fiscal year to the state total average daily 
108.28  membership for the preceding fiscal year. 
108.29     Sec. 15.  Minnesota Statutes 2002, section 125A.79, 
108.30  subdivision 1, is amended to read: 
108.31     Subdivision 1.  [DEFINITIONS.] For the purposes of this 
108.32  section, the definitions in this subdivision apply. 
108.33     (a) "Unreimbursed special education cost" means the sum of 
108.34  the following: 
108.35     (1) expenditures for teachers' salaries, contracted 
108.36  services, supplies, equipment, and transportation services 
109.1   eligible for revenue under section 125A.76; plus 
109.2      (2) expenditures for tuition bills received under sections 
109.3   125A.03 to 125A.24 and 125A.65 for services eligible for revenue 
109.4   under section 125A.76, subdivision 2; minus 
109.5      (3) revenue for teachers' salaries, contracted services, 
109.6   supplies, and equipment under section 125A.76; minus 
109.7      (4) tuition receipts under sections 125A.03 to 125A.24 and 
109.8   125A.65 for services eligible for revenue under section 125A.76, 
109.9   subdivision 2. 
109.10     (b) "General revenue" means for fiscal year 1996, the sum 
109.11  of the general education revenue according to section 126C.10, 
109.12  subdivision 1, as adjusted according to section 127A.47, 
109.13  subdivision 7, plus the total referendum revenue according to 
109.14  section 126C.17, subdivision 4.  For fiscal years 1997 and 
109.15  later, "general revenue" means the sum of the general education 
109.16  revenue according to section 126C.10, subdivision 1, as adjusted 
109.17  according to section 127A.47, subdivisions 7 and 8, plus the 
109.18  total referendum revenue minus transportation sparsity revenue 
109.19  minus total operating capital revenue.  
109.20     (c) "Average daily membership" has the meaning given it in 
109.21  section 126C.05. 
109.22     (d) "Program growth factor" means 1.044 for fiscal year 
109.23  2002 and 1.02 for fiscal year 2003, and 1.0 for fiscal year 2004 
109.24  and later. 
109.25     Sec. 16.  Minnesota Statutes 2002, section 125A.79, 
109.26  subdivision 6, is amended to read: 
109.27     Subd. 6.  [STATE TOTAL SPECIAL EDUCATION EXCESS COST AID.] 
109.28  The state total special education excess cost aid for fiscal 
109.29  year 2004 equals $92,067,000.  The state total special education 
109.30  aid for fiscal year 2005 equals $91,811,000.  The state total 
109.31  special education excess cost aid for fiscal year 2002 2006 and 
109.32  later fiscal years equals: 
109.33     (1) the state total special education excess cost aid for 
109.34  the preceding fiscal year; times 
109.35     (2) the program growth factor; times 
109.36     (3) the ratio of the state total average daily membership 
110.1   for the current fiscal year to the state total average daily 
110.2   membership for the preceding fiscal year.  
110.3      Sec. 17.  [SPECIAL EDUCATION CROSS-SUBSIDY REDUCTION AID.] 
110.4      (a) For fiscal year 2004, a district shall receive special 
110.5   education cross-subsidy reduction aid equal to $5,000,000 times 
110.6   the ratio of the district's special education excess cost aid 
110.7   for the previous fiscal year according to Minnesota Statutes, 
110.8   section 125A.79, subdivision 7, to the state total special 
110.9   education excess cost aid for the previous fiscal year according 
110.10  to Minnesota Statutes, section 125A.79, subdivision 6. 
110.11     (b) For fiscal year 2005, a district shall receive special 
110.12  education cross-subsidy reduction aid equal to $15,000,000 times 
110.13  the ratio of the district's special education excess cost aid 
110.14  for the previous fiscal year according to Minnesota Statutes, 
110.15  section 125A.79, subdivision 7, to the state total special 
110.16  education excess cost aid for the previous fiscal year according 
110.17  to Minnesota Statutes, section 125A.79, subdivision 6. 
110.18     (c) Special education cross-subsidy reduction aid must be 
110.19  used to pay for a district's unfunded special education costs 
110.20  that would otherwise be cross-subsidized by a district's general 
110.21  education revenue. 
110.22     Sec. 18.  [IMPACT OF WAIVING SPECIFIC SPECIAL EDUCATION 
110.23  REQUIREMENTS THAT EXCEED FEDERAL LAW; THREE-YEAR PILOT PROJECT.] 
110.24     Subdivision 1.  [ESTABLISHMENT; GOAL.] A three-year pilot 
110.25  project is established to permit independent school district No. 
110.26  535, Rochester, and up to three other geographically diverse 
110.27  school districts or cooperative units under Minnesota Statutes, 
110.28  section 125A.11, subdivision 3, selected by the commissioner of 
110.29  education to determine the impact, if any, of waiving specific 
110.30  special education requirements listed in subdivision 3 on the 
110.31  quality and cost-effectiveness of the instructional services and 
110.32  educational outcomes provided to eligible students by the 
110.33  project participant. 
110.34     Subd. 2.  [ELIGIBILITY; APPLICATIONS.] The commissioner 
110.35  must transmit information about the pilot project and make 
110.36  application forms available to interested school districts or 
111.1   cooperative units.  Applications must be submitted to the 
111.2   commissioner by July 1, 2003.  An applicant must identify the 
111.3   specific special education requirements listed in subdivision 3 
111.4   for which the applicant seeks a waiver and indicate how the 
111.5   applicant proposes to modify the activities and procedures 
111.6   affected by the waiver.  The commissioner must approve the 
111.7   applications by August 1, 2003. 
111.8      Subd. 3.  [WAIVERS.] The following state special education 
111.9   requirements are waived for the 2003-2004, 2004-2005, and 
111.10  2005-2006 school years for independent school district No. 535, 
111.11  Rochester, and the other school districts or cooperative units 
111.12  participating in this pilot project: 
111.13     (1) Minnesota Statutes, section 125A.56, governing 
111.14  prereferral interventions; 
111.15     (2) Minnesota Statutes, section 125A.08, paragraph (a), 
111.16  clause (1), governing transitional services for students when 
111.17  reaching age 14 or grade 9, who transition from secondary 
111.18  services to postsecondary education and training, employment, 
111.19  community participation, recreation and leisure, and home 
111.20  living; 
111.21     (3) Minnesota Statutes, section 125A.22, governing 
111.22  community transition interagency committees; and 
111.23     (4) Minnesota Statutes, section 125A.023, governing 
111.24  coordinated interagency services but only affecting eligible 
111.25  children with disabilities age seven or older. 
111.26     Subd. 4.  [STUDENTS' RIGHTS.] Eligible students enrolled in 
111.27  a district or receiving special instruction and services through 
111.28  a cooperative unit that is participating in this pilot project 
111.29  remain entitled to the procedural protections provided under 
111.30  federal law in any matter that affects the students' 
111.31  identification, evaluation, and placement or change in 
111.32  placement, or protections provided under state law in dismissal 
111.33  proceedings that may result in students' suspension, exclusion, 
111.34  or expulsion.  Project participants must ensure that students' 
111.35  civil rights are protected, provide equal educational 
111.36  opportunities, and prohibit discrimination.  Failure to comply 
112.1   with this subdivision will at least cause a district or 
112.2   cooperative unit to become ineligible to participate in the 
112.3   pilot project. 
112.4      Subd. 5.  [TECHNICAL ASSISTANCE.] The commissioner must 
112.5   provide project participants, upon request, assistance in 
112.6   developing and implementing a valid and uniform procedure under 
112.7   subdivision 6 to evaluate the participants' experience. 
112.8      Subd. 6.  [EVALUATION; REPORT.] All participating school 
112.9   districts and cooperative units must evaluate the impact, if 
112.10  any, of waiving specific special education requirements listed 
112.11  in subdivision 3 on the quality and cost-effectiveness of the 
112.12  instructional services and educational outcomes provided to 
112.13  eligible students by the project participant.  Project 
112.14  participants must focus the evaluation on the overall efficacy 
112.15  of modifying the activities and procedures affected by the 
112.16  waiver.  The evaluation must include a mechanism for documenting 
112.17  parents' response to the pilot project.  Project participants 
112.18  must submit to the commissioner a progress report by September 
112.19  1, 2004, and a final report by November 1, 2005.  The 
112.20  commissioner must compile and present the results of the reports 
112.21  to the legislature by February 1, 2006, and recommend 
112.22  appropriate amendments to the statutory requirements listed in 
112.23  subdivision 3. 
112.24     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
112.25  following final enactment. 
112.26     Sec. 19.  [DEPARTMENT RESPONSIBILITY.] 
112.27     By January 1, 2004, the commissioner of education must 
112.28  adopt rules that: 
112.29     (1) establish criteria for selecting hearing officers, the 
112.30  standards of conduct to which a hearing officer must adhere, and 
112.31  a process to evaluate the hearing system; 
112.32     (2) ensure that appropriately trained and knowledgeable 
112.33  persons conduct due process hearings in compliance with federal 
112.34  law; and 
112.35     (3) create standards for expedited due process hearings 
112.36  under federal law. 
113.1      By March 1, 2004, the commissioner of education must 
113.2   develop and make available a notice for participants in 
113.3   state-provided dispute resolution processes that informs 
113.4   participants of their rights concerning dispute resolution. 
113.5      Sec. 20.  [APPROPRIATIONS.] 
113.6      Subdivision 1.  [DEPARTMENT OF EDUCATION.] The sums 
113.7   indicated in this section are appropriated from the general fund 
113.8   to the department of education for the fiscal years designated. 
113.9      Subd. 2.  [SPECIAL EDUCATION; REGULAR.] For special 
113.10  education aid under Minnesota Statutes, section 125A.75: 
113.11       $499,172,000   .....     2004 
113.12       $529,504,000   .....     2005 
113.13     The 2004 appropriation includes $90,577,000 for 2003 and 
113.14  $408,595,000 for 2004. 
113.15     The 2005 appropriation includes $122,047,000 for 2004 and 
113.16  $407,457,000 for 2005. 
113.17     Subd. 3.  [SPECIAL EDUCATION CROSS-SUBSIDY REDUCTION 
113.18  AID.] For special education cross-subsidy reduction aid under 
113.19  section 17: 
113.20       $ 5,000,000    .....     2004 
113.21       $15,000,000    .....     2005 
113.22     This is a onetime appropriation. 
113.23     Subd. 4.  [AID FOR CHILDREN WITH DISABILITIES.] For aid 
113.24  under Minnesota Statutes, section 125A.75, subdivision 3, for 
113.25  children with disabilities placed in residential facilities 
113.26  within the district boundaries for whom no district of residence 
113.27  can be determined: 
113.28       $2,177,000     .....     2004 
113.29       $2,244,000     .....     2005 
113.30     If the appropriation for either year is insufficient, the 
113.31  appropriation for the other year is available.  
113.32     Subd. 5.  [TRAVEL FOR HOME-BASED SERVICES.] For aid for 
113.33  teacher travel for home-based services under Minnesota Statutes, 
113.34  section 125A.75, subdivision 1: 
113.35       $213,000       .....     2004 
113.36       $260,000       .....     2005 
114.1      The 2004 appropriation includes $34,000 for 2003 and 
114.2   $179,000 for 2004. 
114.3      The 2005 appropriation includes $53,000 for 2004 and 
114.4   $207,000 for 2005. 
114.5      Subd. 6.  [SPECIAL EDUCATION; EXCESS COSTS.] For excess 
114.6   cost aid under Minnesota Statutes, section 125A.79, subdivision 
114.7   7: 
114.8        $90,699,000    .....     2004 
114.9        $92,950,000    .....     2005 
114.10     The 2004 appropriation includes $41,754,000 for 2003 and 
114.11  $48,945,000 for 2004. 
114.12     The 2005 appropriation includes $43,122,000 for 2004 and 
114.13  $49,828,000 for 2005.  
114.14     Subd. 7.  [LITIGATION COSTS FOR SPECIAL EDUCATION.] For 
114.15  paying the costs a district incurs under Minnesota Statutes, 
114.16  section 125A.75, subdivision 8: 
114.17       $346,000       .....     2004 
114.18       $356,000       .....     2005 
114.19     Subd. 8.  [TRANSITION FOR DISABLED STUDENTS.] For aid for 
114.20  transition programs for children with disabilities under 
114.21  Minnesota Statutes, section 124D.454: 
114.22       $8,359,000     .....     2004 
114.23       $8,867,000     .....     2005 
114.24     The 2004 appropriation includes $1,516,000 for 2003 and 
114.25  $6,843,000 for 2004.  
114.26     The 2005 appropriation includes $2,043,000 for 2004 and 
114.27  $6,824,000 for 2005.  
114.28     Subd. 9.  [COURT-PLACED SPECIAL EDUCATION REVENUE.] For 
114.29  reimbursing serving school districts for unreimbursed eligible 
114.30  expenditures attributable to children placed in the serving 
114.31  school district by court action under Minnesota Statutes, 
114.32  section 125A.79, subdivision 4: 
114.33       $152,000       .....     2004 
114.34       $160,000       .....     2005 
114.35     Subd. 10.  [OUT-OF-STATE TUITION SPECIAL EDUCATION.] For 
114.36  special education out-of-state tuition according to Minnesota 
115.1   Statutes, section 125A.79, subdivision 8: 
115.2        $250,000       .....     2004 
115.3        $250,000       .....     2005 
115.4      Sec. 21.  [REPEALER.] 
115.5      Minnesota Statutes 2002, sections 125A.023, subdivision 5; 
115.6   125A.09; 125A.47; and 125A.79, subdivision 2, are repealed. 
115.7                              ARTICLE 4
115.8                      FACILITIES AND TECHNOLOGY
115.9      Section 1.  Minnesota Statutes 2002, section 123B.51, 
115.10  subdivision 3, is amended to read: 
115.11     Subd. 3.  [LEASE ROOMS OR BUILDINGS REAL PROPERTY.] When 
115.12  necessary, the board may lease rooms or buildings real property 
115.13  for school purposes. 
115.14     Sec. 2.  Minnesota Statutes 2002, section 123B.51, 
115.15  subdivision 4, is amended to read: 
115.16     Subd. 4.  [LEASE FOR NONSCHOOL PURPOSE.] (a) The board may 
115.17  lease to any person, business, or organization a schoolhouse 
115.18  real property that is not needed for school purposes, or part of 
115.19  a schoolhouse the property that is not needed for school 
115.20  purposes if the board determines that leasing part of a 
115.21  schoolhouse the property does not interfere with the educational 
115.22  programs taking place in the rest of the building on the 
115.23  property.  The board may charge and collect reasonable 
115.24  consideration for the lease and may determine the terms and 
115.25  conditions of the lease. 
115.26     (b) In districts with outstanding bonds, the net proceeds 
115.27  of the lease must be first deposited in the debt retirement fund 
115.28  of the district in an amount sufficient to meet when due that 
115.29  percentage of the principal and interest payments for 
115.30  outstanding bonds that is ascribable to the payment of expenses 
115.31  necessary and incidental to the construction or purchase of the 
115.32  particular building or property that is leased.  Any remaining 
115.33  net proceeds in these districts may be deposited in either the 
115.34  debt redemption fund or operating capital expenditure 
115.35  fund account.  All net proceeds of the lease in districts 
115.36  without outstanding bonds shall be deposited in the operating 
116.1   capital expenditure fund account of the district. 
116.2      (c) The board may make capital improvements, including 
116.3   fixtures, to a schoolhouse or a portion thereof to the real 
116.4   property, not exceeding in cost the replacement value of 
116.5   the schoolhouse property, to facilitate its rental, and the 
116.6   lease of an the improved schoolhouse property, or part of it, 
116.7   shall provide for rentals which will recover the cost of the 
116.8   improvements over the initial term of the lease.  
116.9   Notwithstanding paragraph (b), the portion of the rentals 
116.10  representing the cost of the improvements shall be deposited in 
116.11  the operating capital expenditure fund account of the district 
116.12  and the balance of the rentals shall be used as provided in 
116.13  paragraph (b).  
116.14     Sec. 3.  Minnesota Statutes 2002, section 123B.52, is 
116.15  amended by adding a subdivision to read: 
116.16     Subd. 1a.  [CONSTRUCTION CONTRACTS.] In entering into a 
116.17  contract for, or in calling for bids for, the construction or 
116.18  repair of a facility, a board may not require that any 
116.19  contractor or subcontractor that is not signatory to an 
116.20  agreement with a labor organization at the time it makes a bid 
116.21  or is awarded a contract, do any of the following as a condition 
116.22  of performing work on the construction or repair project: 
116.23     (1) enter into or agree to adhere to or otherwise observe 
116.24  the wage, benefit, or economic terms of, or incur any economic 
116.25  detriment pursuant to, any agreement with any labor organization 
116.26  in connection with the public improvement; or 
116.27     (2) enter into any agreement that requires the employees of 
116.28  that contractor or subcontractor to do either of the following 
116.29  as a condition of employment or continued employment: 
116.30     (i) become members of or become affiliated with a labor 
116.31  organization; or 
116.32     (ii) pay dues or fees to a labor organization. 
116.33     Sec. 4.  Minnesota Statutes 2002, section 123B.53, 
116.34  subdivision 4, is amended to read: 
116.35     Subd. 4.  [DEBT SERVICE EQUALIZATION REVENUE.] (a) The debt 
116.36  service equalization revenue of a district equals the sum of the 
117.1   first tier debt service equalization revenue and the second tier 
117.2   debt service equalization revenue. 
117.3      (b) The first tier debt service equalization revenue of a 
117.4   district equals the greater of zero or the eligible debt service 
117.5   revenue minus the amount raised by a levy of 15 percent times 
117.6   the adjusted net tax capacity of the district minus the second 
117.7   tier debt service equalization revenue of the district. 
117.8      (c) The second tier debt service equalization revenue of a 
117.9   district equals the greater of zero or the eligible debt service 
117.10  revenue, excluding alternative facilities levies under section 
117.11  123B.59, subdivision 5, minus the amount raised by a levy of 25 
117.12  percent times the adjusted net tax capacity of the district. 
117.13     <b>[EFFECTIVE DATE.]</b> This section is effective for revenue for 
117.14  fiscal year 2005. 
117.15     Sec. 5.  Minnesota Statutes 2002, section 123B.57, 
117.16  subdivision 1, is amended to read: 
117.17     Subdivision 1.  [HEALTH AND SAFETY PROGRAM.] (a) To receive 
117.18  health and safety revenue for any fiscal year a district must 
117.19  submit to the commissioner an application for aid and levy by 
117.20  the date determined by the commissioner.  The application may be 
117.21  for hazardous substance removal, fire and life safety code 
117.22  repairs, labor and industry regulated facility and equipment 
117.23  violations, and health, safety, and environmental management, 
117.24  including indoor air quality management.  The application must 
117.25  include a health and safety program adopted by the school 
117.26  district board.  The program must include the estimated cost, 
117.27  per building, of the program by fiscal year.  Upon approval 
117.28  through the adoption of a resolution by each of an intermediate 
117.29  district's member school district boards and the approval of the 
117.30  department of children, families, and learning education, a 
117.31  school district may include its proportionate share of the costs 
117.32  of health and safety projects for an intermediate district in 
117.33  its application. 
117.34     (b) Health and safety projects with an estimated cost of 
117.35  $500,000 or more per site, approved after February 1, 2003, are 
117.36  not eligible for health and safety revenue.  Health and safety 
118.1   projects with an estimated cost of $500,000 or more per site, 
118.2   approved after February 1, 2003, that meet all other 
118.3   requirements for health and safety funding, are eligible for 
118.4   alternative facilities bonding and levy revenue according to 
118.5   section 123B.59.  A school board shall not separate portions of 
118.6   a single project into components to qualify for health and 
118.7   safety revenue, and shall not combine unrelated projects into a 
118.8   single project to qualify for alternative facilities bonding and 
118.9   levy revenue. 
118.10     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
118.11  following final enactment and applies to projects approved after 
118.12  February 1, 2003, for taxes payable in 2004 and later. 
118.13     Sec. 6.  Minnesota Statutes 2002, section 123B.57, 
118.14  subdivision 4, is amended to read: 
118.15     Subd. 4.  [HEALTH AND SAFETY LEVY.] To receive health and 
118.16  safety revenue, a district may levy an amount equal to the 
118.17  district's health and safety revenue as defined in subdivision 3 
118.18  multiplied by the lesser of one, or the ratio of the quotient 
118.19  derived by dividing the adjusted net tax capacity of the 
118.20  district for the year preceding the year the levy is certified 
118.21  by the adjusted marginal cost pupil units in the district for 
118.22  the school year to which the levy is attributable, 
118.23  to $3,956 $2,935. 
118.24     Sec. 7.  Minnesota Statutes 2002, section 123B.57, 
118.25  subdivision 6, is amended to read: 
118.26     Subd. 6.  [USES OF HEALTH AND SAFETY REVENUE.] (a) Health 
118.27  and safety revenue may be used only for approved expenditures 
118.28  necessary to correct fire and life safety hazards, life safety 
118.29  hazards, or for the removal or encapsulation of asbestos from 
118.30  school buildings or property owned or being acquired by the 
118.31  district, asbestos-related repairs, cleanup and disposal of 
118.32  polychlorinated biphenyls found in school buildings or property 
118.33  owned or being acquired by the district, or the cleanup, 
118.34  removal, disposal, and repairs related to storing heating fuel 
118.35  or transportation fuels such as alcohol, gasoline, fuel oil, and 
118.36  special fuel, as defined in section 296A.01, labor and 
119.1   industry Minnesota occupational safety and health administration 
119.2   regulated facility and equipment hazards, indoor air quality 
119.3   mold abatement, upgrades or replacement of mechanical 
119.4   ventilation systems to meet American Society of Heating, 
119.5   Refrigerating and Air Conditioning Engineers standards and state 
119.6   mechanical code, department of health food code and swimming 
119.7   pool hazards excluding depth correction, and health, safety, and 
119.8   environmental management.  Health and safety revenue must not be 
119.9   used to finance a lease purchase agreement, installment purchase 
119.10  agreement, or other deferred payments agreement.  Health and 
119.11  safety revenue must not be used for the construction of new 
119.12  facilities or the purchase of portable classrooms, for interest 
119.13  or other financing expenses, or for energy efficiency projects 
119.14  under section 123B.65.  The revenue may not be used for a 
119.15  building or property or part of a building or property used for 
119.16  post-secondary instruction or administration or for a purpose 
119.17  unrelated to elementary and secondary education. 
119.18     (b) Notwithstanding paragraph (a), health and safety 
119.19  revenue must not be used for replacement of building materials 
119.20  or facilities including roof, walls, windows, internal fixtures 
119.21  and flooring, nonhealth and safety costs associated with 
119.22  demolition of facilities, structural repair or replacement of 
119.23  facilities due to unsafe conditions, violence prevention and 
119.24  facility security, ergonomics, building and heating, ventilating 
119.25  and air conditioning supplies, maintenance, cleaning, testing, 
119.26  and calibration activities.  All assessments, investigations, 
119.27  inventories, and support equipment not leading to the 
119.28  engineering or construction of a project shall be included in 
119.29  the health, safety, and environmental management costs in 
119.30  subdivision 8, paragraph (a). 
119.31     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
119.32  following final enactment and applies to projects approved after 
119.33  February 1, 2003, for taxes payable in 2004 and later. 
119.34     Sec. 8.  Minnesota Statutes 2002, section 123B.59, 
119.35  subdivision 1, is amended to read: 
119.36     Subdivision 1.  [TO QUALIFY.] (a) An independent or special 
120.1   school district qualifies to participate in the alternative 
120.2   facilities bonding and levy program if the district has: 
120.3      (1) more than 66 students per grade; 
120.4      (2) over 1,850,000 square feet of space and the average age 
120.5   of building space is 15 years or older or over 1,500,000 square 
120.6   feet and the average age of building space is 35 years or older; 
120.7      (3) insufficient funds from projected health and safety 
120.8   revenue and capital facilities revenue to meet the requirements 
120.9   for deferred maintenance, to make accessibility improvements, or 
120.10  to make fire, safety, or health repairs; and 
120.11     (4) a ten-year facility plan approved by the commissioner 
120.12  according to subdivision 2. 
120.13     (b) An independent or special school district not eligible 
120.14  to participate in the alternative facilities bonding and levy 
120.15  program under paragraph (a) qualifies for limited participation 
120.16  in the program if the district has: 
120.17     (1) one or more health and safety projects with an 
120.18  estimated cost of $500,000 or more per site that would qualify 
120.19  for health and safety revenue except for the project size 
120.20  limitation in section 123B.57, subdivision 1, paragraph (b); and 
120.21     (2) insufficient funds from capital facilities revenue to 
120.22  fund those projects. 
120.23     <b>[EFFECTIVE DATE.]</b> This section is effective for revenue for 
120.24  fiscal year 2005. 
120.25     Sec. 9.  Minnesota Statutes 2002, section 123B.59, 
120.26  subdivision 2, is amended to read: 
120.27     Subd. 2.  [TEN-YEAR FACILITY PLAN.] (a) A district 
120.28  qualifying district under subdivision 1, paragraph (a), must 
120.29  have a ten-year facility plan approved by the commissioner that 
120.30  includes an inventory of projects and costs that would be 
120.31  eligible for: 
120.32     (1) health and safety revenue, without restriction as to 
120.33  project size; 
120.34     (2) disabled access levy; and 
120.35     (3) deferred capital expenditures and maintenance projects 
120.36  necessary to prevent further erosion of facilities. 
121.1      (b) A district qualifying under subdivision 1, paragraph 
121.2   (b), must have a five-year plan approved by the commissioner 
121.3   that includes an inventory of projects and costs for health and 
121.4   safety projects with an estimated cost of $500,000 or more per 
121.5   site that would qualify for health and safety revenue except for 
121.6   the project size limitation in section 123B.57, subdivision 1, 
121.7   paragraph (b). 
121.8      (c) The school district must: 
121.9      (1) annually update the plan plans; 
121.10     (2) biennially submit a facility maintenance plan; and 
121.11     (3) indicate whether the district will issue bonds to 
121.12  finance the plan or levy for the costs. 
121.13     <b>[EFFECTIVE DATE.]</b> This section is effective for revenue for 
121.14  fiscal year 2005. 
121.15     Sec. 10.  Minnesota Statutes 2002, section 123B.59, 
121.16  subdivision 3, is amended to read: 
121.17     Subd. 3.  [BOND AUTHORIZATION.] (a) A school district, upon 
121.18  approval of its board and the commissioner, may issue general 
121.19  obligation bonds under this section to finance approved 
121.20  facilities plans approved by its board and the commissioner.  
121.21  Chapter 475, except sections 475.58 and 475.59, must be complied 
121.22  with.  The district may levy under subdivision 5 for the debt 
121.23  service revenue.  The authority to issue bonds under this 
121.24  section is in addition to any bonding authority authorized by 
121.25  this chapter, or other law.  The amount of bonding authority 
121.26  authorized under this section must be disregarded in calculating 
121.27  the bonding or net debt limits of this chapter, or any other law 
121.28  other than section 475.53, subdivision 4. 
121.29     (b) Before a district issues bonds under this subdivision, 
121.30  it must publish notice of the intended projects, the amount of 
121.31  the bond issue, and the total amount of district indebtedness. 
121.32     (c) A bond issue tentatively authorized by the board under 
121.33  this subdivision becomes finally authorized unless a petition 
121.34  signed by more than 15 percent of the registered voters of the 
121.35  district is filed with the school board within 30 days of the 
121.36  board's adoption of a resolution stating the board's intention 
122.1   to issue bonds.  The percentage is to be determined with 
122.2   reference to the number of registered voters in the district on 
122.3   the last day before the petition is filed with the board.  The 
122.4   petition must call for a referendum on the question of whether 
122.5   to issue the bonds for the projects under this section.  The 
122.6   approval of 50 percent plus one of those voting on the question 
122.7   is required to pass a referendum authorized by this section. 
122.8      <b>[EFFECTIVE DATE.]</b> This section is effective the day 
122.9   following final enactment and applies to bonds issued after 
122.10  April 1, 2003, for taxes payable in 2004 and later. 
122.11     Sec. 11.  Minnesota Statutes 2002, section 123B.59, is 
122.12  amended by adding a subdivision to read: 
122.13     Subd. 3a.  [LEVY AUTHORIZATION.] (a) A school district may 
122.14  levy under this section to finance the portion of facilities 
122.15  plans approved by its board and the commissioner that are not 
122.16  financed through bond issues according to subdivision 3. 
122.17     (b) Before a district levies under this subdivision, it 
122.18  must publish notice of the intended projects, including the 
122.19  total estimated project cost. 
122.20     (c) A levy tentatively authorized by the board under this 
122.21  subdivision becomes finally authorized unless a petition signed 
122.22  by more than 15 percent of the registered voters of the district 
122.23  is filed with the school board within 30 days of the board's 
122.24  adoption of a resolution stating the board's intention to levy.  
122.25  The percentage is to be determined with reference to the number 
122.26  of registered voters in the district on the last day before the 
122.27  petition is filed with the board.  The petition must call for a 
122.28  referendum on the question of whether to levy for the projects 
122.29  under this section.  The approval of 50 percent plus one of 
122.30  those voting on the question is required to pass a referendum 
122.31  authorized by this section.  The referendum must be held on a 
122.32  date set by the board.  The ballot must provide a general 
122.33  description of the proposed projects and state the estimated 
122.34  total cost of the projects, the specific number of years, not to 
122.35  exceed ten, for which the referendum authorization applies, the 
122.36  maximum amount of the levy for each year, and the estimated tax 
123.1   rate as a percentage of net tax capacity for the amount 
123.2   specified for the first year and for the maximum amount 
123.3   specified in the schedule.  The ballot must contain a textual 
123.4   portion with the information required in this subdivision and a 
123.5   question stating substantially the following: 
123.6      "Shall the alternative facilities levy proposed by the 
123.7   board of ............ School District No. ............ be 
123.8   approved?" 
123.9      If approved, the amount stated for each year may be 
123.10  certified for the number of years approved.  The district must 
123.11  notify the commissioner of the results of the referendum. 
123.12     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
123.13  following final enactment and applies to levies for taxes 
123.14  payable in 2004 and later. 
123.15     Sec. 12.  Minnesota Statutes 2002, section 123B.59, 
123.16  subdivision 5, is amended to read: 
123.17     Subd. 5.  [LEVY AUTHORIZED.] A district, after local board 
123.18  approval, may levy for costs related to an approved facility 
123.19  plan as follows:  
123.20     (a) if the district has indicated to the commissioner that 
123.21  bonds will be issued, the district may levy for the principal 
123.22  and interest payments on outstanding bonds issued according to 
123.23  subdivision 3 after reduction for any alternative facilities aid 
123.24  receivable under subdivision 6; or 
123.25     (b) if the district has indicated to the commissioner that 
123.26  the plan will be funded through levy, the district may levy 
123.27  according to the schedule approved in the plan after reduction 
123.28  for any alternative facilities aid receivable under subdivision 
123.29  6 3a. 
123.30     <b>[EFFECTIVE DATE.]</b> This section is effective for taxes 
123.31  payable in 2004. 
123.32     Sec. 13.  Minnesota Statutes 2002, section 123B.63, 
123.33  subdivision 1, is amended to read: 
123.34     Subdivision 1.  [CREATION OF A DOWN PAYMENT CAPITAL PROJECT 
123.35  REFERENDUM ACCOUNT.] A district may create a down payment 
123.36  capital project referendum account as a separate account in 
124.1   its general fund or its building construction fund.  All 
124.2   proceeds from the down payment capital project levy must be 
124.3   deposited in the capital expenditure fund and transferred to 
124.4   this account project referendum account in its general fund.  
124.5   The portion of the proceeds to be used for building construction 
124.6   must be transferred to the capital project referendum account in 
124.7   its building construction fund.  Interest income attributable to 
124.8   the down payment capital project referendum account must be 
124.9   credited to the account. 
124.10     Sec. 14.  Minnesota Statutes 2002, section 123B.63, 
124.11  subdivision 2, is amended to read: 
124.12     Subd. 2.  [USES OF THE ACCOUNT.] Money in the down payment 
124.13  capital project referendum account must be used as a down 
124.14  payment for the future costs of acquisition and betterment for a 
124.15  project that has been reviewed under section 123B.71 and has 
124.16  been approved according to subdivision 3. 
124.17     Sec. 15.  Minnesota Statutes 2002, section 123B.63, 
124.18  subdivision 3, is amended to read: 
124.19     Subd. 3.  [FACILITIES DOWN PAYMENT CAPITAL PROJECT LEVY 
124.20  REFERENDUM.] A district may levy the local tax rate approved by 
124.21  a majority of the electors voting on the question to provide 
124.22  funds for a down payment for an approved project.  The election 
124.23  must take place no more than five years before the estimated 
124.24  date of commencement of the project.  The referendum must be 
124.25  held on a date set by the board.  A referendum for a project not 
124.26  receiving a positive review and comment by the commissioner 
124.27  under section 123B.71 must be approved by at least 60 percent of 
124.28  the voters at the election.  The referendum may be called by the 
124.29  school board and may be held: 
124.30     (1) separately, before an election for the issuance of 
124.31  obligations for the project under chapter 475; or 
124.32     (2) in conjunction with an election for the issuance of 
124.33  obligations for the project under chapter 475; or 
124.34     (3) notwithstanding section 475.59, as a conjunctive 
124.35  question authorizing both the down payment capital project levy 
124.36  and the issuance of obligations for the project under chapter 
125.1   475.  Any obligations authorized for a project may be issued 
125.2   within five years of the date of the election. 
125.3      The ballot must provide a general description of the 
125.4   proposed project, state the estimated total cost of the project, 
125.5   state whether the project has received a positive or negative 
125.6   review and comment from the commissioner, state the maximum 
125.7   amount of the down payment capital project levy as a percentage 
125.8   of net tax capacity, state the amount that will be raised by 
125.9   that local tax rate in the first year it is to be levied, and 
125.10  state the maximum number of years that the levy authorization 
125.11  will apply. 
125.12     The ballot must contain a textual portion with the 
125.13  information required in this section and a question stating 
125.14  substantially the following: 
125.15     "Shall the down payment capital project levy proposed by 
125.16  the board of .......... School District No. .......... be 
125.17  approved?" 
125.18     If approved, the amount provided by the approved local tax 
125.19  rate applied to the net tax capacity for the year preceding the 
125.20  year the levy is certified may be certified for the number of 
125.21  years approved. 
125.22     In the event a conjunctive question proposes to authorize 
125.23  both the down payment capital project levy and the issuance of 
125.24  obligations for the project, appropriate language authorizing 
125.25  the issuance of obligations must also be included in the 
125.26  question.  
125.27     The district must notify the commissioner of the results of 
125.28  the referendum. 
125.29     Sec. 16.  Minnesota Statutes 2002, section 123B.63, 
125.30  subdivision 4, is amended to read: 
125.31     Subd. 4.  [EXCESS BUILDING CONSTRUCTION FUND LEVY 
125.32  PROCEEDS.] Any funds remaining in the down payment capital 
125.33  project referendum account that are not applied to the payment 
125.34  of the costs of the approved project before its final completion 
125.35  must be transferred to the district's debt redemption fund.  
125.36     Sec. 17.  Minnesota Statutes 2002, section 125B.21, is 
126.1   amended to read: 
126.2      125B.21 [MINNESOTA EDUCATION TELECOMMUNICATIONS COUNCIL.] 
126.3      Subdivision 1.  [STATE COUNCIL MEMBERSHIP.] The membership 
126.4   of the Minnesota education telecommunications council 
126.5   established in Laws 1993, First Special Session chapter 2, is 
126.6   expanded to include representatives of elementary and secondary 
126.7   education.  The membership shall consist of three 
126.8   representatives from the University of Minnesota; three 
126.9   representatives of the board of trustees for Minnesota state 
126.10  colleges and universities; one representative of the higher 
126.11  education services offices; one representative appointed by the 
126.12  private college council; one representative selected by the 
126.13  commissioner of administration; eight representatives selected 
126.14  by the commissioner of children, families, and learning 
126.15  education, at least one of which must come from each of the six 
126.16  higher education telecommunication regions; a representative 
126.17  from the office of technology; two members each from the senate 
126.18  and the house of representatives selected by the subcommittee on 
126.19  committees of the committee on rules and administration of the 
126.20  senate and the speaker of the house, one member from each body 
126.21  must be a member of the minority party; and three 
126.22  representatives of libraries, one representing regional public 
126.23  libraries, one representing multitype libraries, and one 
126.24  representing community libraries, selected by the governor; and 
126.25  two members, one selected from and representing the higher 
126.26  education regional coordinators and one selected from and 
126.27  representing the kindergarten through grade 12 cluster regions.  
126.28  The council shall serve as a forum to establish and advocate for 
126.29  a statewide vision and plans for the use of distance learning 
126.30  technologies, including: 
126.31     (1) the coordination and collaboration of distance learning 
126.32  opportunities; 
126.33     (2) the implementation of the use of distance learning 
126.34  technologies; 
126.35     (3) the collaboration of distance learning users; 
126.36     (4) the implementation of educational policy relating to 
127.1   telecommunications; 
127.2      (5) the exchange of ideas; 
127.3      (6) the communications with state government and related 
127.4   agencies and entities; 
127.5      (7) the coordination of networks for post-secondary 
127.6   campuses, kindergarten through grade 12 education, and regional 
127.7   and community libraries; and 
127.8      (8) the promotion of consistency of the operation of the 
127.9   learning network with standards of an open system architecture. 
127.10     The council expires June 30, 2004. 
127.11     Sec. 18.  Minnesota Statutes 2002, section 126C.40, 
127.12  subdivision 1, is amended to read: 
127.13     Subdivision 1.  [TO LEASE BUILDING OR LAND.] (a) When an 
127.14  independent or a special school district or a group of 
127.15  independent or special school districts finds it economically 
127.16  advantageous to rent or lease a building or land for any 
127.17  instructional purposes or for school storage or furniture 
127.18  repair, and it determines that the operating capital revenue 
127.19  authorized under section 126C.10, subdivision 13, is 
127.20  insufficient for this purpose, it may apply to the commissioner 
127.21  for permission to make an additional capital expenditure levy 
127.22  for this purpose.  An application for permission to levy under 
127.23  this subdivision must contain financial justification for the 
127.24  proposed levy, the terms and conditions of the proposed lease, 
127.25  and a description of the space to be leased and its proposed use.
127.26     (b) The criteria for approval of applications to levy under 
127.27  this subdivision must include:  the reasonableness of the price, 
127.28  the appropriateness of the space to the proposed activity, the 
127.29  feasibility of transporting pupils to the leased building or 
127.30  land, conformity of the lease to the laws and rules of the state 
127.31  of Minnesota, and the appropriateness of the proposed lease to 
127.32  the space needs and the financial condition of the district.  
127.33  The commissioner must not authorize a levy under this 
127.34  subdivision in an amount greater than 90 percent of the cost to 
127.35  the district of renting or leasing a building or land for 
127.36  approved purposes.  The proceeds of this levy must not be used 
128.1   for custodial or other maintenance services.  A district may not 
128.2   levy under this subdivision for the purpose of leasing or 
128.3   renting a district-owned building or site to itself. 
128.4      (c) For agreements finalized after July 1, 1997, a district 
128.5   may not levy under this subdivision for the purpose of leasing:  
128.6   (1) a newly constructed building used primarily for regular 
128.7   kindergarten, elementary, or secondary instruction; or (2) a 
128.8   newly constructed building addition or additions used primarily 
128.9   for regular kindergarten, elementary, or secondary instruction 
128.10  that contains more than 20 percent of the square footage of the 
128.11  previously existing building. 
128.12     (d) Notwithstanding paragraph (b), a district may levy 
128.13  under this subdivision for the purpose of leasing or renting a 
128.14  district-owned building or site to itself only if the amount is 
128.15  needed by the district to make payments required by a lease 
128.16  purchase agreement, installment purchase agreement, or other 
128.17  deferred payments agreement authorized by law, and the levy 
128.18  meets the requirements of paragraph (c).  A levy authorized for 
128.19  a district by the commissioner under this paragraph may be in 
128.20  the amount needed by the district to make payments required by a 
128.21  lease purchase agreement, installment purchase agreement, or 
128.22  other deferred payments agreement authorized by law, provided 
128.23  that any agreement include a provision giving the school 
128.24  districts the right to terminate the agreement annually without 
128.25  penalty. 
128.26     (e) The total levy under this subdivision for a district 
128.27  for any year must not exceed $100 $90 times the resident pupil 
128.28  units for the fiscal year to which the levy is attributable. 
128.29     (f) For agreements for which a review and comment have been 
128.30  submitted to the department of children, families, and 
128.31  learning education after April 1, 1998, the term "instructional 
128.32  purpose" as used in this subdivision excludes expenditures on 
128.33  stadiums. 
128.34     (g) The commissioner of children, families, and 
128.35  learning education may authorize a school district to exceed the 
128.36  limit in paragraph (e) if the school district petitions the 
129.1   commissioner for approval.  The commissioner shall grant 
129.2   approval to a school district to exceed the limit in paragraph 
129.3   (e) for not more than five years if the district meets the 
129.4   following criteria: 
129.5      (1) the school district has been experiencing pupil 
129.6   enrollment growth in the preceding five years; 
129.7      (2) the purpose of the increased levy is in the long-term 
129.8   public interest; 
129.9      (3) the purpose of the increased levy promotes colocation 
129.10  of government services; and 
129.11     (4) the purpose of the increased levy is in the long-term 
129.12  interest of the district by avoiding over construction of school 
129.13  facilities. 
129.14     (h) A school district that is a member of an intermediate 
129.15  school district may include in its authority under this 
129.16  section 90 percent of the costs associated with leases of 
129.17  administrative and classroom space for intermediate school 
129.18  district programs.  This authority must not exceed $25 $22.50 
129.19  times the adjusted marginal cost pupil units of the member 
129.20  districts.  This authority is in addition to any other authority 
129.21  authorized under this section. 
129.22     (i) In addition to the allowable capital levies in 
129.23  paragraph (a), a district that is a member of the "Technology 
129.24  and Information Education Systems" data processing joint board, 
129.25  that finds it economically advantageous to enter into a lease 
129.26  purchase agreement for a building for a group of school 
129.27  districts or special school districts for staff development 
129.28  purposes, may levy for its portion of lease costs attributed to 
129.29  the district within the total levy limit in paragraph (e). 
129.30     <b>[EFFECTIVE DATE.]</b> This section is effective for taxes 
129.31  payable in 2004. 
129.32     Sec. 19.  Minnesota Statutes 2002, section 126C.63, 
129.33  subdivision 5, is amended to read: 
129.34     Subd. 5.  [LEVY.] "Levy" means a district's net debt 
129.35  service levy after the reduction of debt service equalization 
129.36  aid under section 123B.53, subdivision 6.  For taxes payable in 
130.1   1994 2003 and later, each district's maximum effort debt service 
130.2   levy for purposes of subdivision 8, must be reduced by an equal 
130.3   number of percentage points if the commissioner of finance 
130.4   determines that the levy reduction will not result in 
130.5   a statewide property tax payment from the general fund in the 
130.6   state treasury according to section 16A.641, as would be 
130.7   required under Minnesota Statutes 1992, section 124.46 126C.72, 
130.8   subdivision 3.  A district's levy that is adjusted under this 
130.9   section must not be reduced below 22.3 30.1 percent of the 
130.10  district's adjusted net tax capacity. 
130.11     Sec. 20.  Minnesota Statutes 2002, section 126C.63, 
130.12  subdivision 8, is amended to read: 
130.13     Subd. 8.  [MAXIMUM EFFORT DEBT SERVICE LEVY.] (a) "Maximum 
130.14  effort debt service levy" means the lesser of: 
130.15     (1) a levy in whichever of the following amounts is 
130.16  applicable: 
130.17     (a) (i) in any district receiving a debt service loan for a 
130.18  debt service levy payable in 2002 and thereafter, or granted a 
130.19  capital loan after January 1, 2001 2002, a levy in total dollar 
130.20  amount computed at a rate of 30 40 percent of adjusted net tax 
130.21  capacity for taxes payable in 2002 and thereafter; 
130.22     (b) (ii) in any district receiving a debt service loan for 
130.23  a debt service levy payable in 1991 and thereafter 2001 or 
130.24  earlier, or granted a capital loan after before January 1 
130.25  2, 1990 2001, a levy in a total dollar amount computed at a rate 
130.26  of 24 32 percent of adjusted net tax capacity for taxes payable 
130.27  in 1991 2002 and thereafter; 
130.28     (c) in any district granted a debt service loan after July 
130.29  31, 1981, or granted a capital loan which is approved after July 
130.30  31, 1981, a levy in a total dollar amount computed as a tax rate 
130.31  of 21.92 percent on the adjusted net tax capacity for taxes 
130.32  payable in 1991 and thereafter; or 
130.33     (2) a levy in any district for which a capital loan was 
130.34  approved prior to August 1, 1981, a levy in a total dollar 
130.35  amount equal to the sum of the amount of the required debt 
130.36  service levy and an amount which when levied annually will in 
131.1   the opinion of the commissioner be sufficient to retire the 
131.2   remaining interest and principal on any outstanding loans from 
131.3   the state within 30 years of the original date when the capital 
131.4   loan was granted.  
131.5      (b) The board in any district affected by the provisions of 
131.6   paragraph (a), clause (2), may elect instead to determine the 
131.7   amount of its levy according to the provisions of paragraph (a), 
131.8   clause (1).  If a district's capital loan is not paid within 30 
131.9   years because it elects to determine the amount of its levy 
131.10  according to the provisions of paragraph (a), clause (2), the 
131.11  liability of the district for the amount of the difference 
131.12  between the amount it levied under paragraph (a), clause (2), 
131.13  and the amount it would have levied under paragraph (a), clause 
131.14  (1), and for interest on the amount of that difference, must not 
131.15  be satisfied and discharged pursuant to Minnesota Statutes 1988, 
131.16  or an earlier edition of Minnesota Statutes if applicable, 
131.17  section 124.43, subdivision 4. 
131.18     Sec. 21.  Minnesota Statutes 2002, section 126C.69, 
131.19  subdivision 2, is amended to read: 
131.20     Subd. 2.  [CAPITAL LOANS ELIGIBILITY.] Beginning July 1, 
131.21  1999, a district is not eligible for a capital loan unless the 
131.22  district's estimated net debt tax rate as computed by the 
131.23  commissioner after debt service equalization aid would be more 
131.24  than 30 40 percent of adjusted net tax capacity.  The estimate 
131.25  must assume a 20-year maturity schedule for new debt. 
131.26     Sec. 22.  Minnesota Statutes 2002, section 126C.69, 
131.27  subdivision 9, is amended to read: 
131.28     Subd. 9.  [LOAN AMOUNT LIMITS.] (a) A loan must not be 
131.29  recommended for approval for a district exceeding an amount 
131.30  computed as follows: 
131.31     (1) the amount requested by the district under subdivision 
131.32  6; 
131.33     (2) plus the aggregate principal amount of general 
131.34  obligation bonds of the district outstanding on June 30 of the 
131.35  year following the year the application was received, not 
131.36  exceeding the limitation on net debt of the district in section 
132.1   475.53, subdivision 4, or 450 607 percent of its adjusted net 
132.2   tax capacity as most recently determined, whichever is less; 
132.3      (3) less the maximum net debt permissible for the district 
132.4   on December 1 of the year the application is received, under the 
132.5   limitation in section 475.53, subdivision 4, or 450 607 percent 
132.6   of its adjusted net tax capacity as most recently determined, 
132.7   whichever is less; 
132.8      (4) less any amount by which the amount voted exceeds the 
132.9   total cost of the facilities for which the loan is granted.  
132.10     (b) The loan may be approved in an amount computed as 
132.11  provided in paragraph (a), clauses (1) to (3), subject to later 
132.12  reduction according to paragraph (a), clause (4). 
132.13     Sec. 23.  Minnesota Statutes 2002, section 177.42, 
132.14  subdivision 2, is amended to read: 
132.15     Subd. 2.  [PROJECT.] "Project" means erection, 
132.16  construction, remodeling, or repairing of a public building or 
132.17  other public work, except a public school facility, financed in 
132.18  whole or part by state funds.  
132.19     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
132.20  following final enactment and applies to all contracts for 
132.21  erecting, constructing, remodeling, or repairing a public school 
132.22  facility for students in any grades kindergarten through 12 
132.23  entered into after that date.  
132.24     Sec. 24.  Minnesota Statutes 2002, section 475.61, 
132.25  subdivision 1, is amended to read: 
132.26     Subdivision 1.  [DEBT SERVICE RESOLUTION.] The governing 
132.27  body of any municipality issuing general obligations shall, 
132.28  prior to delivery of the obligations, levy by resolution a 
132.29  direct general ad valorem tax upon all taxable property in the 
132.30  municipality to be spread upon the tax rolls for each year of 
132.31  the term of the obligations.  The tax levies for all years for 
132.32  municipalities other than school districts shall be specified 
132.33  and such that if collected in full they, together with estimated 
132.34  collections of special assessments and other revenues pledged 
132.35  for the payment of said obligations, will produce at least five 
132.36  percent in excess of the amount needed to meet when due the 
133.1   principal and interest payments on the obligations.  The tax 
133.2   levies for school districts shall be specified and such that if 
133.3   collected in full they, together with estimated collection of 
133.4   other revenues pledged for the payment of the obligations, will 
133.5   produce between five and six percent in excess of the amount 
133.6   needed to meet when due the principal and interest payments on 
133.7   the obligations, rounded up to the nearest dollar; except that, 
133.8   with the permission of the commissioner of children, families, 
133.9   and learning education, a school board may specify a tax levy in 
133.10  a higher amount if necessary either to meet an anticipated tax 
133.11  delinquency or for cash flow needs to meet the required payments 
133.12  from the debt redemption fund.  Such resolution shall 
133.13  irrevocably appropriate the taxes so levied and any special 
133.14  assessments or other revenues so pledged to the municipality's 
133.15  debt service fund or a special debt service fund or account 
133.16  created for the payment of one or more issues of obligations.  
133.17  The governing body may, in its discretion, at any time after the 
133.18  obligations have been authorized, adopt a resolution levying 
133.19  only a portion of such taxes, to be filed, assessed, extended, 
133.20  collected, and remitted as hereinafter provided, and the amount 
133.21  or amounts therein levied shall be credited against the tax 
133.22  required to be levied prior to delivery of the obligations. 
133.23     Sec. 25.  Minnesota Statutes 2002, section 475.61, 
133.24  subdivision 3, is amended to read: 
133.25     Subd. 3.  [IRREVOCABILITY.] (a) Tax levies so made and 
133.26  filed shall be irrevocable, except as provided in this 
133.27  subdivision. 
133.28     (b) For purposes of this subdivision, "excess debt 
133.29  redemption fund balance" means the greater of zero or the 
133.30  balance in the district's debt redemption fund as of June 30 of 
133.31  the fiscal year ending in the year before the year the levy is 
133.32  certified, minus any debt redemption fund balance attributable 
133.33  to refunding of existing bonds, minus the amount of the levy 
133.34  reduction for the current year and the prior year under 
133.35  paragraphs (e) and (f), minus five percent of the district's 
133.36  required debt service levy for the next year. 
134.1      (c) By July 15 each year, a district shall report to the 
134.2   commissioner of children, families, and learning education the 
134.3   amount of the districts' debt redemption fund balance as of June 
134.4   30 of the prior year attributable to refunding of existing bonds.
134.5      (d) By August 15 each year, the commissioner shall 
134.6   determine the excess debt redemption fund balance for each 
134.7   school district, and shall certify the amount of the excess 
134.8   balance to the school district superintendent.  
134.9      (e) In each year when a district has an excess debt 
134.10  redemption fund balance, the commissioner shall report the 
134.11  amount of the excess to the county auditor and the auditor shall 
134.12  reduce the tax levy otherwise to be included in the rolls next 
134.13  prepared by the amount certified.  
134.14     (f) The school board may, with the approval of the 
134.15  commissioner, retain all or part of the excess balance if it is 
134.16  necessary to ensure the prompt and full payment of its 
134.17  obligations and any call premium on its obligations, will be 
134.18  used for redemption of its obligations in accordance with their 
134.19  terms, or to level out the debt service tax rate, excluding the 
134.20  debt excess adjustment, for its obligations over the next two 
134.21  years.  A school district requesting authority to retain all or 
134.22  part of the excess balance shall provide written documentation 
134.23  to the commissioner describing the rationale for its request by 
134.24  September 15 including the issuance of new obligations within 
134.25  the next year or the refunding of existing obligations.  A 
134.26  school district that retains an excess may request to transfer 
134.27  the excess to its operating capital account in the general fund 
134.28  under section 123B.80.  The school board may, with the approval 
134.29  of the commissioner, specify a tax levy in a higher amount if 
134.30  necessary because of anticipated tax delinquency or for cash 
134.31  flow needs to meet the required payments from the debt 
134.32  redemption fund.  
134.33     (g) If the governing body, including the governing body of 
134.34  a school district, in any year makes an irrevocable 
134.35  appropriation to the debt service fund of money actually on hand 
134.36  or if there is on hand any excess amount in the debt service 
135.1   fund, the recording officer may certify to the county auditor 
135.2   the fact and amount thereof and the auditor shall reduce by the 
135.3   amount so certified the amount otherwise to be included in the 
135.4   rolls next thereafter prepared. 
135.5      Sec. 26.  [BONDS; MOUNDS VIEW.] 
135.6      Notwithstanding Minnesota Statutes, section 123B.59, 
135.7   subdivision 3, independent school district No. 621, Mounds View, 
135.8   may issue bonds according to Minnesota Statutes 2002, section 
135.9   123B.59, subdivision 3, for projects approved by the 
135.10  commissioner before February 1, 2003. 
135.11     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
135.12  following final enactment. 
135.13     Sec. 27.  [LEASE LEVY EXCEPTION.] 
135.14     Notwithstanding Minnesota Statutes, section 126C.40, 
135.15  subdivision 1, a school district that has entered into a 
135.16  completed agreement under Laws 2000, chapter 492, article 1, 
135.17  section 3, subdivision 4, may continue to levy for 100 percent 
135.18  of the costs of any lease required by the agreement. 
135.19     Sec. 28.  [PROPERTY SALE; ST. FRANCIS SCHOOL DISTRICT.] 
135.20     Notwithstanding Minnesota Statutes, section 123B.51, 
135.21  subdivision 6, or any other law to the contrary, independent 
135.22  school district No. 15, St. Francis, may deposit the proceeds 
135.23  from the sale of land that was purchased with funds obtained 
135.24  according to Laws 1992, chapter 558, section 7, subdivision 7, 
135.25  in the district's general fund reserved for operating capital 
135.26  account.  The district may only use the proceeds of the sale for 
135.27  projects designed to create or improve safe walking routes for 
135.28  the students of independent school district No. 15, St. Francis. 
135.29     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
135.30  following final enactment. 
135.31     Sec. 29.  [APPROPRIATIONS.] 
135.32     Subdivision 1.  [DEPARTMENT OF EDUCATION.] The sums 
135.33  indicated in this section are appropriated from the general fund 
135.34  to the department of education for the fiscal years designated.  
135.35     Subd. 2.  [HEALTH AND SAFETY REVENUE.] For health and 
135.36  safety aid according to Minnesota Statutes, section 123B.57, 
136.1   subdivision 5: 
136.2        $7,602,000     .....     2004 
136.3        $6,137,000     .....     2005 
136.4      The 2004 appropriation includes $1,516,000 for 2003 and 
136.5   $6,086,000 for 2004. 
136.6      The 2005 appropriation includes $1,817,000 for 2004 and 
136.7   $4,320,000 for 2005. 
136.8      Subd. 3.  [DEBT SERVICE EQUALIZATION.] For debt service aid 
136.9   according to Minnesota Statutes, section 123B.53, subdivision 6: 
136.10       $33,416,000    .....     2004 
136.11       $37,521,000    .....     2005 
136.12     The 2004 appropriation includes $5,586,000 for 2003 and 
136.13  $27,830,000 for 2004. 
136.14     The 2005 appropriation includes $8,312,000 for 2004 and 
136.15  $29,209,000 for 2005. 
136.16     Subd. 4.  [ALTERNATIVE FACILITIES BONDING AID.] For 
136.17  alternative facilities bonding aid, according to Minnesota 
136.18  Statutes, section 123B.59, subdivision 1: 
136.19       $18,129,000    .....     2004 
136.20       $ 4,436,000    .....     2005 
136.21     The 2004 appropriation includes $3,278,000 for 2003 and 
136.22  $14,851,000 for 2004. 
136.23     The 2005 appropriation includes $4,436,000 for 2004 and $0 
136.24  for 2005. 
136.25     Sec. 30.  [REPEALER.] 
136.26     (a) Minnesota Statutes 2002, section 125B.11, is repealed. 
136.27     (b) Minnesota Statutes 2002, section 123B.59, subdivisions 
136.28  6 and 7, are repealed effective for revenue for fiscal year 2005.
136.29                             ARTICLE 5
136.30            NUTRITION; SCHOOL ACCOUNTING; OTHER PROGRAMS
136.31     Section 1.  Minnesota Statutes 2002, section 12.21, 
136.32  subdivision 3, is amended to read: 
136.33     Subd. 3.  [SPECIFIC AUTHORITY.] In performing duties under 
136.34  this chapter and to effect its policy and purpose, the governor 
136.35  may: 
136.36     (1) make, amend, and rescind the necessary orders and rules 
137.1   to carry out the provisions of this chapter and section 216C.15 
137.2   within the limits of the authority conferred by this section, 
137.3   with due consideration of the plans of the federal government 
137.4   and without complying with sections 14.001 to 14.69, but no 
137.5   order or rule has the effect of law except as provided by 
137.6   section 12.32; 
137.7      (2) ensure that a comprehensive emergency operations plan 
137.8   and emergency management program for this state are developed 
137.9   and maintained, and are integrated into and coordinated with the 
137.10  emergency plans of the federal government and of other states to 
137.11  the fullest possible extent; 
137.12     (3) in accordance with the emergency operations plan and 
137.13  the emergency management program of this state, procure 
137.14  supplies, equipment, and facilities; institute training programs 
137.15  and public information programs; and take all other preparatory 
137.16  steps, including the partial or full activation of emergency 
137.17  management organizations in advance of actual disaster to ensure 
137.18  the furnishing of adequately trained and equipped forces of 
137.19  emergency management personnel in time of need; 
137.20     (4) make studies and surveys of the industries, resources, 
137.21  and facilities in this state as may be necessary to ascertain 
137.22  the capabilities of the state for emergency management and to 
137.23  plan for the most efficient emergency use of those industries, 
137.24  resources, and facilities; 
137.25     (5) on behalf of this state, enter into mutual aid 
137.26  arrangements or cooperative agreements with other states, tribal 
137.27  authorities, and Canadian provinces, and coordinate mutual aid 
137.28  plans between political subdivisions of this state; 
137.29     (6) delegate administrative authority vested in the 
137.30  governor under this chapter, except the power to make rules, and 
137.31  provide for the subdelegation of that authority; 
137.32     (7) cooperate with the president and the heads of the armed 
137.33  forces, the emergency management agency of the United States and 
137.34  other appropriate federal officers and agencies, and with the 
137.35  officers and agencies of other states in matters pertaining to 
137.36  the emergency management of the state and nation, including the 
138.1   direction or control of: 
138.2      (i) emergency preparedness drills and exercises; 
138.3      (ii) warnings and signals for drills or actual emergencies 
138.4   and the mechanical devices to be used in connection with them; 
138.5      (iii) shutting off water mains, gas mains, electric power 
138.6   connections and the suspension of all other utility services; 
138.7      (iv) the conduct of persons in the state, including 
138.8   entrance or exit from any stricken or threatened public place, 
138.9   occupancy of facilities, and the movement and cessation of 
138.10  movement of pedestrians, vehicular traffic, and all forms of 
138.11  private and public transportation during, prior, and subsequent 
138.12  to drills or actual emergencies; 
138.13     (v) public meetings or gatherings; and 
138.14     (vi) the evacuation, reception, and sheltering of persons; 
138.15     (8) contribute to a political subdivision, within the 
138.16  limits of the appropriation for that purpose, not more than 25 
138.17  percent of the cost of acquiring organizational equipment that 
138.18  meets standards established by the governor; 
138.19     (9) formulate and execute, with the approval of the 
138.20  executive council, plans and rules for the control of traffic in 
138.21  order to provide for the rapid and safe movement over public 
138.22  highways and streets of troops, vehicles of a military nature, 
138.23  and materials for national defense and war or for use in any war 
138.24  industry, for the conservation of critical materials, or for 
138.25  emergency management purposes; coordinate the activities of the 
138.26  departments or agencies of the state and its political 
138.27  subdivisions concerned directly or indirectly with public 
138.28  highways and streets, in a manner that will best effectuate 
138.29  those plans; 
138.30     (10) alter or adjust by executive order, without complying 
138.31  with sections 14.01 to 14.69, the working hours, work days and 
138.32  work week of, and annual and sick leave provisions and payroll 
138.33  laws regarding all state employees in the executive branch as 
138.34  the governor deems necessary to minimize the impact of the 
138.35  disaster or emergency, conforming the alterations or adjustments 
138.36  to existing state laws, rules, and collective bargaining 
139.1   agreements to the extent practicable; 
139.2      (11) authorize the commissioner of children, families, and 
139.3   learning education to alter school schedules, curtail school 
139.4   activities, or order schools closed without affecting state aid 
139.5   to schools, as defined in section 120A.05, subdivisions 9, 11, 
139.6   13, and 17, and including charter schools under section 124D.10, 
139.7   and elementary schools enrolling prekindergarten pupils in 
139.8   district programs; and 
139.9      (12) transfer the direction, personnel, or functions of 
139.10  state agencies to perform or facilitate response and recovery 
139.11  programs. 
139.12     Sec. 2.  Minnesota Statutes 2002, section 84A.51, 
139.13  subdivision 4, is amended to read: 
139.14     Subd. 4.  [COUNTY'S USE OF FUNDS.] The funds received by 
139.15  each county must be apportioned by the county auditor as follows:
139.16     (1) 30 percent to a county development fund, which is 
139.17  created, to be spent under the direction of the county board for 
139.18  the rehabilitation and development of the portion of the county 
139.19  within the conservation area; 
139.20     (2) 40 percent to the capital outlay general fund of the 
139.21  school district from which derived; 
139.22     (3) 20 percent to the county revenue fund; and 
139.23     (4) ten percent to the township road and bridge fund of the 
139.24  township from which derived. 
139.25     If the proceeds are derived from an unorganized township 
139.26  with no levy for road and bridge purposes, the township portion 
139.27  must be credited to the county revenue fund. 
139.28     Sec. 3.  Minnesota Statutes 2002, section 120A.05, 
139.29  subdivision 9, is amended to read: 
139.30     Subd. 9.  [ELEMENTARY SCHOOL.] "Elementary school" means 
139.31  any school with building, equipment, courses of study, class 
139.32  schedules, enrollment of pupils ordinarily in prekindergarten 
139.33  through grade 6 or any portion thereof, and staff meeting the 
139.34  standards established by the commissioner. 
139.35     The commissioner of children, families, and learning shall 
139.36  not close a school or deny any state aids to a district for its 
140.1   elementary schools because of enrollment limitations classified 
140.2   in accordance with the provisions of this subdivision. 
140.3      Sec. 4.  Minnesota Statutes 2002, section 124D.11, 
140.4   subdivision 9, is amended to read: 
140.5      Subd. 9.  [PAYMENT OF AIDS TO CHARTER SCHOOLS.] (a) 
140.6   Notwithstanding section 127A.45, subdivision 3, aid payments for 
140.7   the current fiscal year to a charter school not in its first 
140.8   year of operation shall be of an equal amount on each of the 23 
140.9   payment dates.  A charter school in its first year of operation 
140.10  shall receive, on its first payment date, ten percent of its 
140.11  cumulative amount guaranteed for the year and 22 payments of an 
140.12  equal amount thereafter the sum of which shall be 90 percent of 
140.13  the cumulative amount guaranteed. 
140.14     (b) Notwithstanding paragraph (a), for a charter school 
140.15  ceasing operation prior to the end of a school year, 83 77 
140.16  percent of the amount due for the school year may be paid to the 
140.17  school after audit of prior fiscal year and current fiscal year 
140.18  pupil counts. 
140.19     (c) Notwithstanding section 127A.45, subdivision 3, and 
140.20  paragraph (a), 83 77 percent of the start-up cost aid under 
140.21  subdivision 8 shall be paid within 45 days after the first day 
140.22  of student attendance for that school year. 
140.23     (d) In order to receive state aid payments under this 
140.24  subdivision, a charter school in its first three years of 
140.25  operation must submit a quarterly report to the department of 
140.26  children, families, and learning education.  The report must 
140.27  list each student by grade, show the student's start and end 
140.28  dates, if any, with the charter school, and for any student 
140.29  participating in a learning year program, the report must list 
140.30  the hours and times of learning year activities.  The report 
140.31  must be submitted not more than two weeks after the end of the 
140.32  calendar quarter to the department.  The department must develop 
140.33  a Web-based reporting form for charter schools to use when 
140.34  submitting enrollment reports.  A charter school in its fourth 
140.35  and subsequent year of operation must submit enrollment 
140.36  information to the department in the form and manner requested 
141.1   by the department. 
141.2      <b>[EFFECTIVE DATE.]</b> This section is effective for revenue for 
141.3   fiscal year 2004. 
141.4      Sec. 5.  [124D.1158] [SCHOOL BREAKFAST PROGRAM.] 
141.5      Subdivision 1.  [PURPOSE.] The purpose of the school 
141.6   breakfast program is to provide affordable morning nutrition to 
141.7   children so that they can effectively learn.  Public and 
141.8   nonpublic schools that participate in the federal school 
141.9   breakfast program may receive state breakfast aid.  Schools 
141.10  shall encourage all children to eat a nutritious breakfast, 
141.11  either at home or at school, and shall work to eliminate 
141.12  barriers to breakfast participation at school such as inadequate 
141.13  facilities and transportation. 
141.14     Subd. 2.  [PROGRAM; ELIGIBILITY.] Each school year, public 
141.15  and nonpublic schools that participate in the federal school 
141.16  breakfast program are eligible for the state breakfast program.  
141.17     Subd. 3.  [PROGRAM REIMBURSEMENT.] Each school year, the 
141.18  state must reimburse each participating school 30 cents for each 
141.19  reduced price breakfast and 55 cents for each fully paid 
141.20  breakfast. 
141.21     Sec. 6.  Minnesota Statutes 2002, section 124D.118, 
141.22  subdivision 4, is amended to read: 
141.23     Subd. 4.  [REIMBURSEMENT.] In accordance with program 
141.24  guidelines, the commissioner shall prepay or reimburse each 
141.25  participating districts for the state share of the district's 
141.26  cost for providing public or nonpublic school nine cents for 
141.27  each half-pint of milk that is served to kindergarten students 
141.28  and is not part of a school lunch or breakfast reimbursed under 
141.29  section 124D.111 or 124D.1158. 
141.30     Sec. 7.  Minnesota Statutes 2002, section 126C.42, 
141.31  subdivision 1, is amended to read: 
141.32     Subdivision 1.  [1977 STATUTORY OPERATING DEBT.] (a) In 
141.33  each year in which so required by this subdivision, a district 
141.34  must make an additional levy to eliminate its statutory 
141.35  operating debt, determined as of June 30, 1977, and certified 
141.36  and adjusted by the commissioner.  This levy shall not be made 
142.1   in more than 30 successive years and each year before it is 
142.2   made, it must be approved by the commissioner and the approval 
142.3   shall specify its amount.  This levy shall be an amount which is 
142.4   equal to the amount raised by a levy of a net tax rate of 1.98 
142.5   2.67 percent times the adjusted net tax capacity of the district 
142.6   for the preceding year for taxes payable in 2000 2002 and 
142.7   thereafter; provided that in the last year in which the district 
142.8   is required to make this levy, it must levy an amount not to 
142.9   exceed the amount raised by a levy of a net tax rate of 1.98 
142.10  2.67 percent times the adjusted net tax capacity of the district 
142.11  for the preceding year for taxes payable in 2000 2002 and 
142.12  thereafter.  When the sum of the cumulative levies made pursuant 
142.13  to this subdivision and transfers made according to section 
142.14  123B.79, subdivision 6, equals an amount equal to the statutory 
142.15  operating debt of the district, the levy shall be discontinued. 
142.16     (b) The district must establish a special account in the 
142.17  general fund which shall be designated "appropriated fund 
142.18  balance reserve account for purposes of reducing statutory 
142.19  operating debt" on its books and records.  This account shall 
142.20  reflect the levy authorized pursuant to this subdivision.  The 
142.21  proceeds of this levy must be used only for cash flow 
142.22  requirements and must not be used to supplement district 
142.23  revenues or income for the purposes of increasing the district's 
142.24  expenditures or budgets. 
142.25     (c) Any district which is required to levy pursuant to this 
142.26  subdivision must certify the maximum levy allowable under 
142.27  section 126C.13, subdivision 2, in that same year. 
142.28     (d) Each district shall make permanent fund balance 
142.29  transfers so that the total statutory operating debt of the 
142.30  district is reflected in the general fund as of June 30, 1977. 
142.31     Sec. 8.  Minnesota Statutes 2002, section 126C.43, 
142.32  subdivision 2, is amended to read: 
142.33     Subd. 2.  [PAYMENT TO UNEMPLOYMENT INSURANCE PROGRAM TRUST 
142.34  FUND BY STATE AND POLITICAL SUBDIVISIONS.] A district may 
142.35  levy 90 percent of the amounts amount exceeding $10 times the 
142.36  district's adjusted marginal cost pupil units for the fiscal 
143.1   year ending in the year before the year the levy is certified 
143.2   necessary (i) to pay the district's obligations under section 
143.3   268.052, subdivision 1, and the amounts necessary (ii) to pay 
143.4   for job placement services offered to employees who may become 
143.5   eligible for benefits pursuant to section 268.085 for the fiscal 
143.6   year the levy is certified. 
143.7      <b>[EFFECTIVE DATE.]</b> This section is effective for taxes 
143.8   payable in 2004. 
143.9      Sec. 9.  Minnesota Statutes 2002, section 126C.43, 
143.10  subdivision 3, is amended to read: 
143.11     Subd. 3.  [TAX LEVY FOR JUDGMENT.] A district may levy 90 
143.12  percent of the amounts amount exceeding $10 times the district's 
143.13  adjusted marginal cost pupil units for the fiscal year ending in 
143.14  the year before the year the levy is certified necessary to pay 
143.15  judgments against the district under section 123B.25 that became 
143.16  final after the date the district certified its proposed levy in 
143.17  the previous year.  With the approval of the commissioner, a 
143.18  district may spread this levy over a period not to exceed three 
143.19  years.  Upon approval through the adoption of a resolution by 
143.20  each of an intermediate district's member school district 
143.21  boards, a member school district may include its proportionate 
143.22  share of the costs of a judgment against an intermediate school 
143.23  district that became final under section 123B.25 after the date 
143.24  that the earliest member school district certified its proposed 
143.25  levy in the previous year.  With the approval of the 
143.26  commissioner, an intermediate school district member school 
143.27  district may spread this levy over a period not to exceed three 
143.28  years. 
143.29     <b>[EFFECTIVE DATE.]</b> This section is effective for taxes 
143.30  payable in 2004. 
143.31     Sec. 10.  Minnesota Statutes 2002, section 126C.45, is 
143.32  amended to read: 
143.33     126C.45 [ICE ARENA LEVY.] 
143.34     (a) Each year, an independent school district operating and 
143.35  maintaining an ice arena, may levy for the net operational costs 
143.36  of the ice arena.  The levy may not exceed 90 percent of the net 
144.1   actual costs of operation of the arena for the previous year.  
144.2   Net actual costs are defined as operating costs less any 
144.3   operating revenues. 
144.4      (b) Any district operating and maintaining an ice arena 
144.5   must demonstrate to the satisfaction of the office of monitoring 
144.6   in the department that the district will offer equal sports 
144.7   opportunities for male and female students to use its ice arena, 
144.8   particularly in areas of access to prime practice time, team 
144.9   support, and providing junior varsity and younger level teams 
144.10  for girls' ice sports and ice sports offerings. 
144.11     <b>[EFFECTIVE DATE.]</b> This section is effective for taxes 
144.12  payable in 2004. 
144.13     Sec. 11.  Minnesota Statutes 2002, section 126C.48, 
144.14  subdivision 3, is amended to read: 
144.15     Subd. 3.  [ADJUSTMENTS.] If any district levy is found to 
144.16  be excessive as a result of a decision of the tax court or a 
144.17  redetermination by the commissioner of revenue under section 
144.18  127A.48, subdivisions 7 to 16, or for any other reason, the 
144.19  amount of the excess shall be deducted from the levy certified 
144.20  in the next year for the same purpose.  If no levy is certified 
144.21  in the next year for the same purpose or if the amount certified 
144.22  is less than the amount of the excess, the excess must be 
144.23  deducted from that levy and the general fund levy certified 
144.24  pursuant to section 126C.13, subdivision 2 chapters 122A, 123A, 
144.25  123B, 124D, and 126C.  If the amount of any aid would have been 
144.26  increased in a prior year as a result of a decision of the tax 
144.27  court or a redetermination by the commissioner of revenue, the 
144.28  amount of the increase shall be added to the amount of current 
144.29  aid for the same purposes. 
144.30     Sec. 12.  Minnesota Statutes 2002, section 127A.45, 
144.31  subdivision 2, is amended to read: 
144.32     Subd. 2.  [DEFINITIONS.] (a) The term "other district 
144.33  receipts" means payments by county treasurers pursuant to 
144.34  section 276.10, apportionments from the school endowment fund 
144.35  pursuant to section 127A.33, apportionments by the county 
144.36  auditor pursuant to section 127A.34, subdivision 2, and payments 
145.1   to school districts by the commissioner of revenue pursuant to 
145.2   chapter 298.  
145.3      (b) The term "cumulative amount guaranteed" means the 
145.4   product of 
145.5      (1) the cumulative disbursement percentage shown in 
145.6   subdivision 3; times 
145.7      (2) the sum of 
145.8      (i) 83 77 percent of the estimated aid and credit 
145.9   entitlements paid according to subdivision 13; plus 
145.10     (ii) 100 percent of the entitlements paid according to 
145.11  subdivisions 11 and 12; plus 
145.12     (iii) the other district receipts.  
145.13     (c) The term "payment date" means the date on which state 
145.14  payments to districts are made by the electronic funds transfer 
145.15  method.  If a payment date falls on a Saturday, a Sunday, or a 
145.16  weekday which is a legal holiday, the payment shall be made on 
145.17  the immediately preceding business day.  The commissioner may 
145.18  make payments on dates other than those listed in subdivision 3, 
145.19  but only for portions of payments from any preceding payment 
145.20  dates which could not be processed by the electronic funds 
145.21  transfer method due to documented extenuating circumstances.  
145.22     Sec. 13.  Minnesota Statutes 2002, section 127A.45, 
145.23  subdivision 3, is amended to read: 
145.24     Subd. 3.  [PAYMENT DATES AND PERCENTAGES.] (a) For fiscal 
145.25  year 2003, the commissioner shall pay to a district on the dates 
145.26  indicated an amount computed as follows:  the cumulative amount 
145.27  guaranteed minus the sum of (a) the district's other district 
145.28  receipts through the current payment, and (b) the aid and credit 
145.29  payments through the immediately preceding payment.  For 
145.30  purposes of this computation, the payment dates and the 
145.31  cumulative disbursement percentages are as follows:  
145.32                           Payment date               Percentage 
145.33  Payment 1    July 15:                                         5.1
145.34  Payment 2    July 30:                                         7.7
145.35  Payment 3    August 15:                                      16.9
145.36  Payment 4    August 30:                                      19.3
146.1   Payment 5    September 15:                                   21.8
146.2   Payment 6    September 30:                                   24.3
146.3   Payment 7    October 15:                                     26.3
146.4   Payment 8    October 30:                                     28.3
146.5   Payment 9    November 15:                                    32.8
146.6   Payment 10   November 30:                                    39.1
146.7   Payment 11   December 15:                                    42.4
146.8   Payment 12   December 30:                                    45.6
146.9   Payment 13   January 15:                                     50.5
146.10  Payment 14   January 30:                                     55.0
146.11  Payment 15   February 15:                                    60.2
146.12  Payment 16   February 28:                                    65.0
146.13  Payment 17   March 15:                                       69.7
146.14  Payment 18   March 30:                                       74.3
146.15  Payment 19   April 15:                                       78.3
146.16  Payment 20   April 30:                                       84.2
146.17  Payment 21   May 15:                                         88.7
146.18  Payment 22   May 30:                                         93.3
146.19  Payment 23   June 20:                                       100.0
146.20     (b) In addition to the amounts paid under paragraph (a), 
146.21  for fiscal year 2003, the commissioner shall pay to a district 
146.22  on the dates indicated an amount computed as follows: 
146.23  Payment 3    August 15:  the final adjustment for the
146.24               prior fiscal year for the state paid
146.25               property tax credits established in
146.26               section 273.1392
146.27  Payment 7    October 15:  one-half of the final adjustment
146.28               for the prior fiscal year for all aid
146.29               entitlements except state paid property
146.30               tax credits 
146.31  Payment 8    October 30:  one-half of the final adjustment
146.32               for the prior fiscal year for all aid
146.33               entitlements except state paid property
146.34               tax credits 
146.35     (c) For fiscal year 2004 and later, the commissioner shall 
146.36  pay to a district on the dates indicated an amount computed as 
147.1   follows:  the cumulative amount guaranteed minus the sum of (a) 
147.2   the district's other district receipts through the current 
147.3   payment, and (b) the aid and credit payments through the 
147.4   immediately preceding payment.  For purposes of this 
147.5   computation, the payment dates and the cumulative disbursement 
147.6   percentages are as follows: 
147.7              Payment date                      Percentage 
147.8   Payment 1    July 15:                                     5.1 5.5
147.9   Payment 2    July 30:                                     7.7 8.0
147.10  Payment 3    August 15:                                 16.9 17.5
147.11  Payment 4    August 30:                                 19.3 20.0
147.12  Payment 5    September 15:                              21.8 22.5
147.13  Payment 6    September 30:                              24.3 25.0
147.14  Payment 7    October 15:                                26.3 27.0
147.15  Payment 8    October 30:                                28.3 30.0
147.16  Payment 9    November 15:                               30.3 32.5
147.17  Payment 10   November 30:                               35.0 36.5
147.18  Payment 11   December 15:                               40.0 42.0
147.19  Payment 12   December 30:                               43.0 45.0
147.20  Payment 13   January 15:                                48.0 50.0
147.21  Payment 14   January 30:                                52.0 54.0
147.22  Payment 15   February 15:                               56.0 58.0
147.23  Payment 16   February 28:                               61.0 63.0
147.24  Payment 17   March 15:                                  66.0 68.0
147.25  Payment 18   March 30:                                  72.0 74.0
147.26  Payment 19   April 15:                                  76.0 78.0
147.27  Payment 20   April 30:                                  83.0 85.0
147.28  Payment 21   May 15:                                    88.0 90.0
147.29  Payment 22   May 30:                                    95.0
147.30  Payment 23   June 20:                                  100.0
147.31     (d) (b) In addition to the amounts paid under paragraph 
147.32  (c) (a), for fiscal year 2004 and later, the commissioner shall 
147.33  pay to a district on the dates indicated an amount computed as 
147.34  follows: 
147.35  Payment 3    August 15:  the final adjustment for the
147.36               prior fiscal year for the state paid
148.1                property tax credits established in 
148.2                section 273.1392 
148.3   Payment 4    August 30:  one-third of the final adjustment
148.4                for the prior fiscal year for all aid
148.5                entitlements except state paid property
148.6                tax credits 
148.7   Payment 6    September 30:  one-third of the final adjustment
148.8                for the prior fiscal year for all aid
148.9                entitlements except state paid property
148.10               tax credits
148.11  Payment 8    October 30:  one-third of the final adjustment
148.12               for the prior fiscal year for all aid
148.13               entitlements except state paid property
148.14               tax credits
148.15     (c) In addition to the amounts paid under paragraph (a), 
148.16  for fiscal year 2005 and later, the commissioner shall pay to a 
148.17  district on the dates indicated an amount computed as follows: 
148.18  Payment 3    August 15:  the final adjustment for the
148.19               prior fiscal year for the state paid
148.20               property tax credits established in
148.21               section 273.1392
148.22  Payment 4    August 30:  30 percent of the final adjustment
148.23               for the prior fiscal year for all aid
148.24               entitlements except state paid property
148.25               tax credits
148.26  Payment 6    September 30:  40 percent of the final adjustment
148.27               for the prior fiscal year for all aid
148.28               entitlements except state paid property
148.29               tax credits
148.30  Payment 8    October 30:  30 percent of the final adjustment
148.31               for the prior fiscal year for all aid
148.32               entitlements except state paid property
148.33               tax credits
148.34     Sec. 14.  Minnesota Statutes 2002, section 127A.45, 
148.35  subdivision 7a, is amended to read: 
148.36     Subd. 7a.  [ADVANCE FINAL PAYMENT.] (a) Notwithstanding 
149.1   subdivisions 3 and 7, a school district or a charter school 
149.2   exceeding its expenditure limitations under section 123B.83 as 
149.3   of June 30 of the prior fiscal year may receive a portion of its 
149.4   final payment for the current fiscal year on June 20, if 
149.5   requested by the district.  The amount paid under this 
149.6   subdivision must not exceed the lesser of: 
149.7      (1) seven percent of the district or charter school's 
149.8   general education aid for the current fiscal year; or 
149.9      (2) the amount by which the district or charter school's 
149.10  net negative unreserved general fund balance as of June 30 of 
149.11  the prior fiscal year exceeds 2.5 percent of the district or 
149.12  charter school's expenditures for that fiscal year. 
149.13     (b) The state total advance final payment under this 
149.14  subdivision for any year must not exceed $17,500,000 $12,000,000.
149.15  If the amount requested exceeds $17,500,000 $12,000,000, the 
149.16  advance final payment for each eligible district must be reduced 
149.17  proportionately. 
149.18     Sec. 15.  Minnesota Statutes 2002, section 127A.45, 
149.19  subdivision 10, is amended to read: 
149.20     Subd. 10.  [PAYMENTS TO SCHOOL NONOPERATING FUNDS.] Each 
149.21  fiscal year state general fund payments for a district 
149.22  nonoperating fund must be made at 83 77 percent of the estimated 
149.23  entitlement during the fiscal year of the entitlement.  This 
149.24  amount shall be paid in 12 equal monthly installments.  The 
149.25  amount of the actual entitlement, after adjustment for actual 
149.26  data, minus the payments made during the fiscal year of the 
149.27  entitlement must be paid prior to October 31 of the following 
149.28  school year.  The commissioner may make advance payments of debt 
149.29  service equalization aid or homestead and agricultural credit 
149.30  aid for a district's debt service fund earlier than would occur 
149.31  under the preceding schedule if the district submits evidence 
149.32  showing a serious cash flow problem in the fund.  The 
149.33  commissioner may make earlier payments during the year and, if 
149.34  necessary, increase the percent of the entitlement paid to 
149.35  reduce the cash flow problem. 
149.36     Sec. 16.  Minnesota Statutes 2002, section 127A.45, 
150.1   subdivision 13, is amended to read: 
150.2      Subd. 13.  [AID PAYMENT PERCENTAGE.] Except as provided in 
150.3   subdivisions 11, 12, 12a, and 14, each fiscal year, all 
150.4   education aids and credits in this chapter and chapters 120A, 
150.5   120B, 121A, 122A, 123A, 123B, 124D, 125A, 125B, 126C, 134, and 
150.6   section 273.1392, shall be paid at 83 77 percent of the 
150.7   estimated entitlement during the fiscal year of the 
150.8   entitlement.  For the purposes of this subdivision, a district's 
150.9   estimated entitlement for special education excess cost aid 
150.10  under section 125A.79 equals 70 percent of the district's 
150.11  entitlement for the second prior fiscal year.  The final 
150.12  adjustment payment, according to subdivision 9, must be the 
150.13  amount of the actual entitlement, after adjustment for actual 
150.14  data, minus the payments made during the fiscal year of the 
150.15  entitlement. 
150.16     Sec. 17.  Minnesota Statutes 2002, section 127A.45, 
150.17  subdivision 14, is amended to read: 
150.18     Subd. 14.  [NONPUBLIC AIDS.] The state shall pay aid 
150.19  according to sections 123B.40 to 123B.48 for pupils attending 
150.20  nonpublic schools as follows: 
150.21     (1) an advance payment by November 30 equal to 83 77 
150.22  percent of the estimated entitlement for the current fiscal 
150.23  year; and 
150.24     (2) a final payment by October 31 of the following fiscal 
150.25  year, adjusted for actual data.  
150.26     If a payment advance to meet cash flow needs is requested 
150.27  by a district and approved by the commissioner, the state shall 
150.28  pay nonpublic pupil transportation aid according to section 
150.29  123B.92 by October 31. 
150.30     Sec. 18.  Minnesota Statutes 2002, section 127A.45, 
150.31  subdivision 14a, is amended to read: 
150.32     Subd. 14a.  [STATE NUTRITION PROGRAMS.] Notwithstanding 
150.33  subdivision 3, the state shall pay 100 percent of the aid for 
150.34  the current year according to sections 124D.111, 
150.35  124D.115, 124D.1158, and 124D.118 and 83 percent of the aid for 
150.36  the current year according to section 124D.1156 based on 
151.1   submitted monthly vouchers showing meals and milk served.  The 
151.2   remaining 17 percent according to section 124D.1156 shall be 
151.3   paid by October 30 of the following fiscal year. 
151.4      Sec. 19.  Minnesota Statutes 2002, section 127A.45, 
151.5   subdivision 16, is amended to read: 
151.6      Subd. 16.  [PAYMENTS TO THIRD PARTIES.] Notwithstanding 
151.7   subdivision 3, 83 77 percent of the amounts under section 
151.8   123A.26, subdivision 3, shall be paid in equal installments on 
151.9   August 30, December 30, and March 30, with a 17 23 percent final 
151.10  adjustment payment on October 30 of the next fiscal year. 
151.11     Sec. 20.  Minnesota Statutes 2002, section 127A.47, 
151.12  subdivision 7, is amended to read: 
151.13     Subd. 7.  [ALTERNATIVE ATTENDANCE PROGRAMS.] The general 
151.14  education aid for districts must be adjusted for each pupil 
151.15  attending a nonresident district under sections 123A.05 to 
151.16  123A.08, 124D.03, 124D.06, 124D.07, 124D.08, and 124D.68.  The 
151.17  adjustments must be made according to this subdivision. 
151.18     (a) General education aid paid to a resident district must 
151.19  be reduced by an amount equal to the referendum equalization aid 
151.20  attributable to the pupil in the resident district. 
151.21     (b) General education aid paid to a district serving a 
151.22  pupil in programs listed in this subdivision must be increased 
151.23  by an amount equal to the referendum equalization aid 
151.24  attributable to the pupil in the nonresident district.  
151.25     (c) If the amount of the reduction to be made from the 
151.26  general education aid of the resident district is greater than 
151.27  the amount of general education aid otherwise due the district, 
151.28  the excess reduction must be made from other state aids due the 
151.29  district. 
151.30     (d) The district of residence must pay tuition to a 
151.31  district or an area learning center, operated according to 
151.32  paragraph (e), providing special instruction and services to a 
151.33  pupil with a disability, as defined in section 125A.02, or a 
151.34  pupil, as defined in section 125A.51, who is enrolled in a 
151.35  program listed in this subdivision.  The tuition must be equal 
151.36  to (1) the actual cost of providing special instruction and 
152.1   services to the pupil, including a proportionate amount for debt 
152.2   service and for capital expenditure facilities and equipment, 
152.3   and debt service but not including any amount for 
152.4   transportation, minus (2) the amount of general education 
152.5   revenue and special education aid but not including any amount 
152.6   for transportation, attributable to that pupil, that is received 
152.7   by the district providing special instruction and services. 
152.8      (e) An area learning center operated by a service 
152.9   cooperative, intermediate district, education district, or a 
152.10  joint powers cooperative may elect through the action of the 
152.11  constituent boards to charge the resident district tuition for 
152.12  pupils rather than to calculate general education aid 
152.13  adjustments under paragraph (a), (b), or (c).  The tuition must 
152.14  be equal to the greater of the average general education revenue 
152.15  per pupil unit attributable to the pupil, or the actual cost of 
152.16  providing the instruction, excluding transportation costs, if 
152.17  the pupil meets the requirements of section 125A.02 or 
152.18  125A.51 have the general education revenue paid to a fiscal 
152.19  agent school district.  Except as provided in paragraph (d), the 
152.20  district of residence must pay tuition equal to at least 90 
152.21  percent of the district average general education revenue per 
152.22  pupil unit minus an amount equal to the product of the formula 
152.23  allowance according to section 126C.10, subdivision 2, times 
152.24  .0485, calculated without basic skills revenue and 
152.25  transportation sparsity revenue, times the number of pupil units 
152.26  for pupils attending the area learning center, plus the amount 
152.27  of compensatory revenue generated by pupils attending the area 
152.28  learning center. 
152.29     Sec. 21.  Minnesota Statutes 2002, section 127A.47, 
152.30  subdivision 8, is amended to read: 
152.31     Subd. 8.  [CHARTER SCHOOLS.] (a) The general education aid 
152.32  for districts must be adjusted for each pupil attending a 
152.33  charter school under section 124D.10.  The adjustments must be 
152.34  made according to this subdivision. 
152.35     (b) General education aid paid to a district in which a 
152.36  charter school not providing transportation according to section 
153.1   124D.10, subdivision 16, is located must be increased by an 
153.2   amount equal to the product of:  (1) the sum of an amount equal 
153.3   to the product of the formula allowance according to section 
153.4   126C.10, subdivision 2, times .0485, plus the transportation 
153.5   sparsity allowance for the district, plus the transportation 
153.6   transition allowance for the district; times (2) the pupil units 
153.7   attributable to the pupil.  
153.8      Sec. 22.  Minnesota Statutes 2002, section 127A.49, 
153.9   subdivision 2, is amended to read: 
153.10     Subd. 2.  [ABATEMENTS.] Whenever by virtue of chapter 278, 
153.11  sections 270.07, 375.192, or otherwise, the net tax capacity of 
153.12  any district for any taxable year is changed after the taxes for 
153.13  that year have been spread by the county auditor and the local 
153.14  tax rate as determined by the county auditor based upon the 
153.15  original net tax capacity is applied upon the changed net tax 
153.16  capacities, the county auditor shall, prior to February 1 of 
153.17  each year, certify to the commissioner of children, families, 
153.18  and learning education the amount of any resulting net revenue 
153.19  loss that accrued to the district during the preceding year.  
153.20  Each year, the commissioner shall pay an abatement adjustment to 
153.21  the district in an amount calculated according to the provisions 
153.22  of this subdivision.  This amount shall be deducted from the 
153.23  amount of the levy authorized by section 126C.46.  The amount of 
153.24  the abatement adjustment must be the product of:  
153.25     (1) the net revenue loss as certified by the county 
153.26  auditor, times 
153.27     (2) the ratio of:  
153.28     (i) the sum of the amounts of the district's certified levy 
153.29  in the preceding year according to the following:  
153.30     (A) section 126C.13 if the district received general 
153.31  education aid according to that section for the second preceding 
153.32  year; 
153.33     (B) section 123B.57, if the district received health and 
153.34  safety aid according to that section for the second preceding 
153.35  year; 
153.36     (C) sections (B) section 124D.20, 124D.21, and 124D.56, if 
154.1   the district received aid for community education programs 
154.2   according to any of those sections that section for the second 
154.3   preceding year; 
154.4      (D) (C) section 124D.135, subdivision 3, if the district 
154.5   received early childhood family education aid according to 
154.6   section 124D.135 for the second preceding year; and 
154.7      (E) (D) section 126C.17, subdivision 6, if the district 
154.8   received referendum equalization aid according to that section 
154.9   for the second preceding year; to 
154.10     (ii) the total amount of the district's certified levy in 
154.11  the preceding December, plus or minus auditor's adjustments. 
154.12     Sec. 23.  Minnesota Statutes 2002, section 127A.49, 
154.13  subdivision 3, is amended to read: 
154.14     Subd. 3.  [EXCESS TAX INCREMENT.] (a) If a return of excess 
154.15  tax increment is made to a district pursuant to section 469.176, 
154.16  subdivision 2, or upon decertification of a tax increment 
154.17  district, the school district's aid and levy limitations must be 
154.18  adjusted for the fiscal year in which the excess tax increment 
154.19  is paid under the provisions of this subdivision. 
154.20     (b) An amount must be subtracted from the district's aid 
154.21  for the current fiscal year equal to the product of: 
154.22     (1) the amount of the payment of excess tax increment to 
154.23  the district, times 
154.24     (2) the ratio of: 
154.25     (i) the sum of the amounts of the district's certified levy 
154.26  for the fiscal year in which the excess tax increment is paid 
154.27  according to the following: 
154.28     (A) section 126C.13, if the district received general 
154.29  education aid according to that section for the second preceding 
154.30  year; 
154.31     (B) section 123B.57, if the district received health and 
154.32  safety aid according to that section for the second preceding 
154.33  year; 
154.34     (C) sections (B) section 124D.20, 124D.21, and 124D.56, if 
154.35  the district received aid for community education programs 
154.36  according to any of those sections that section for the second 
155.1   preceding year; 
155.2      (D) (C) section 124D.135, subdivision 3, if the district 
155.3   received early childhood family education aid according to 
155.4   section 124D.135 for the second preceding year; and 
155.5      (E) (D) section 126C.17, subdivision 6, if the district 
155.6   received referendum equalization aid according to that section 
155.7   for the second preceding year; to 
155.8      (ii) the total amount of the district's certified levy for 
155.9   the fiscal year, plus or minus auditor's adjustments. 
155.10     (c) An amount must be subtracted from the school district's 
155.11  levy limitation for the next levy certified equal to the 
155.12  difference between: 
155.13     (1) the amount of the distribution of excess increment; and 
155.14     (2) the amount subtracted from aid pursuant to clause (a). 
155.15     If the aid and levy reductions required by this subdivision 
155.16  cannot be made to the aid for the fiscal year specified or to 
155.17  the levy specified, the reductions must be made from aid for 
155.18  subsequent fiscal years, and from subsequent levies.  The school 
155.19  district must use the payment of excess tax increment to replace 
155.20  the aid and levy revenue reduced under this subdivision. 
155.21     (d) This subdivision applies only to the total amount of 
155.22  excess increments received by a district for a calendar year 
155.23  that exceeds $25,000. 
155.24     Sec. 24.  Minnesota Statutes 2002, section 128D.11, 
155.25  subdivision 8, is amended to read: 
155.26     Subd. 8.  [NET DEBT LIMIT.] The school district shall not 
155.27  be subject to a net debt in excess of 102 144 percent of the net 
155.28  tax capacity of all taxable property therein. 
155.29     Sec. 25.  Minnesota Statutes 2002, section 268.052, 
155.30  subdivision 2, is amended to read: 
155.31     Subd. 2.  [ELECTION BY STATE OR POLITICAL SUBDIVISION TO BE 
155.32  A TAXPAYING EMPLOYER.] (a) The state or political 
155.33  subdivision excluding a school district may elect to be a 
155.34  taxpaying employer for any calendar year if a notice of election 
155.35  is filed within 30 calendar days following January 1 of that 
155.36  calendar year.  Upon election, the state or political 
156.1   subdivision shall be assigned the new employer tax rate under 
156.2   section 268.051, subdivision 5, for the calendar year of the 
156.3   election and until it qualifies for an experience rating under 
156.4   section 268.051, subdivision 3. 
156.5      (b) An election shall be for a minimum period of two 
156.6   calendar years following the effective date of the election and 
156.7   continue unless a notice terminating the election is filed not 
156.8   later than 30 calendar days before the beginning of the calendar 
156.9   year.  The termination shall be effective at the beginning of 
156.10  the next calendar year.  Upon election, the commissioner shall 
156.11  establish a reimbursable account for the state or political 
156.12  subdivision.  A termination of election shall be allowed only if 
156.13  the state or political subdivision has, since the beginning of 
156.14  the experience rating period under section 268.051, subdivision 
156.15  3, paid taxes and made voluntary payments under section 268.051, 
156.16  subdivision 7, equal to or more than 125 percent of the 
156.17  unemployment benefits used in computing the experience rating.  
156.18  In addition, any unemployment benefits paid after the experience 
156.19  rating period shall be transferred to the new reimbursable 
156.20  account of the state or political subdivision.  If the amount of 
156.21  taxes and voluntary payments paid since the beginning of the 
156.22  experience rating period exceeds 125 percent of the amount of 
156.23  unemployment benefits paid during the experience rating period, 
156.24  that amount in excess shall be applied against any unemployment 
156.25  benefits paid after the experience rating period. 
156.26     (c) The method of payments to the fund under subdivisions 3 
156.27  and 4 shall apply to all taxes paid by or due from the state or 
156.28  political subdivision that elects to be taxpaying employers 
156.29  under this subdivision. 
156.30     (d) The commissioner may allow a notice of election or a 
156.31  notice terminating election to be filed by mail or electronic 
156.32  transmission.  
156.33     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
156.34  following final enactment. 
156.35     Sec. 26.  Minnesota Statutes 2002, section 268.052, 
156.36  subdivision 4, is amended to read: 
157.1      Subd. 4.  [METHOD OF PAYMENT BY POLITICAL SUBDIVISION.] A 
157.2   political subdivision or instrumentality thereof is authorized 
157.3   and directed to pay its liabilities by money collected from 
157.4   taxes or other revenues.  Every political subdivision authorized 
157.5   to levy taxes except school districts may include in its tax 
157.6   levy the amount necessary to pay its liabilities.  School 
157.7   districts may levy according to section 126C.43, subdivision 2.  
157.8   If the taxes authorized to be levied cause the total amount of 
157.9   taxes levied to exceed any limitation upon the power of a 
157.10  political subdivision to levy taxes, the political subdivision 
157.11  may levy taxes in excess of the limitations in the amounts 
157.12  necessary to meet its liability.  The expenditures authorized 
157.13  shall not be included in computing the cost of government as 
157.14  defined in any home rule charter.  The governing body of a 
157.15  municipality, for the purpose of meeting its liabilities, in the 
157.16  event of a deficit, may issue its obligations payable in not 
157.17  more than two years, in an amount that may cause its 
157.18  indebtedness to exceed any statutory or charter limitations, 
157.19  without an election, and may levy taxes in the manner provided 
157.20  in section 475.61. 
157.21     <b>[EFFECTIVE DATE.]</b> This section is effective for taxes 
157.22  payable in 2004. 
157.23     Sec. 27.  Minnesota Statutes 2002, section 273.138, 
157.24  subdivision 6, is amended to read: 
157.25     Subd. 6.  The amount of aid calculated for a school 
157.26  district pursuant to subdivision 3, clauses (2), (3), (4), and 
157.27  (5) shall be deducted from the school district's general fund 
157.28  levy limitation established pursuant to section 126C.13 chapters 
157.29  122A, 123A, 123B, 124D, and 126C in determining the amount of 
157.30  taxes the school district may levy for general and special 
157.31  purposes. 
157.32     Sec. 28.  Minnesota Statutes 2002, section 298.28, 
157.33  subdivision 4, is amended to read: 
157.34     Subd. 4.  [SCHOOL DISTRICTS.] (a) 17.15 cents per taxable 
157.35  ton plus the increase provided in paragraph (d) must be 
157.36  allocated to qualifying school districts to be distributed, 
158.1   based upon the certification of the commissioner of revenue, 
158.2   under paragraphs (b) and (c), except as otherwise provided in 
158.3   paragraph (f). 
158.4      (b) 3.43 cents per taxable ton must be distributed to the 
158.5   school districts in which the lands from which taconite was 
158.6   mined or quarried were located or within which the concentrate 
158.7   was produced.  The distribution must be based on the 
158.8   apportionment formula prescribed in subdivision 2. 
158.9      (c)(i) 13.72 cents per taxable ton, less any amount 
158.10  distributed under paragraph (e), shall be distributed to a group 
158.11  of school districts comprised of those school districts in which 
158.12  the taconite was mined or quarried or the concentrate produced 
158.13  or in which there is a qualifying municipality as defined by 
158.14  section 273.134, paragraph (b), in direct proportion to school 
158.15  district indexes as follows:  for each school district, its 
158.16  pupil units determined under section 126C.05 for the prior 
158.17  school year shall be multiplied by the ratio of the average 
158.18  adjusted net tax capacity per pupil unit for school districts 
158.19  receiving aid under this clause as calculated pursuant to 
158.20  chapters 122A, 126C, and 127A for the school year ending prior 
158.21  to distribution to the adjusted net tax capacity per pupil unit 
158.22  of the district.  Each district shall receive that portion of 
158.23  the distribution which its index bears to the sum of the indices 
158.24  for all school districts that receive the distributions.  
158.25     (ii) Notwithstanding clause (i), each school district that 
158.26  receives a distribution under sections 298.018; 298.23 to 
158.27  298.28, exclusive of any amount received under this clause; 
158.28  298.34 to 298.39; 298.391 to 298.396; 298.405; or any law 
158.29  imposing a tax on severed mineral values after reduction for any 
158.30  portion distributed to cities and towns under section 126C.48, 
158.31  subdivision 8, paragraph (5), that is less than the amount of 
158.32  its levy reduction under section 126C.48, subdivision 8, for the 
158.33  second year prior to the year of the distribution shall receive 
158.34  a distribution equal to the difference; the amount necessary to 
158.35  make this payment shall be derived from proportionate reductions 
158.36  in the initial distribution to other school districts under 
159.1   clause (i).  
159.2      (d) Any school district described in paragraph (c) where a 
159.3   levy increase pursuant to section 126C.17, subdivision 9, was 
159.4   authorized by referendum for taxes payable in 2001, shall 
159.5   receive a distribution from a fund that receives a distribution 
159.6   in 1998 of 21.3 cents per ton.  On July 15 of 1999, and each 
159.7   year thereafter, the increase over the amount established for 
159.8   the prior year shall be determined according to the increase in 
159.9   the implicit price deflator as provided in section 298.24, 
159.10  subdivision 1.  Each district shall receive $175 times the pupil 
159.11  units identified in section 126C.05, subdivision 1, enrolled in 
159.12  the second previous year or the 1983-1984 school year, whichever 
159.13  is greater, less the product of 1.8 percent times the district's 
159.14  taxable net tax capacity in the second previous year. 
159.15     If the total amount provided by paragraph (d) is 
159.16  insufficient to make the payments herein required then the 
159.17  entitlement of $175 per pupil unit shall be reduced uniformly so 
159.18  as not to exceed the funds available.  Any amounts received by a 
159.19  qualifying school district in any fiscal year pursuant to 
159.20  paragraph (d) shall not be applied to reduce general education 
159.21  aid which the district receives pursuant to section 126C.13 or 
159.22  the permissible levies of the district.  Any amount remaining 
159.23  after the payments provided in this paragraph shall be paid to 
159.24  the commissioner of iron range resources and rehabilitation who 
159.25  shall deposit the same in the taconite environmental protection 
159.26  fund and the northeast Minnesota economic protection trust fund 
159.27  as provided in subdivision 11. 
159.28     Each district receiving money according to this paragraph 
159.29  shall reserve the lesser of the amount received under this 
159.30  paragraph or $25 times the number of pupil units served in the 
159.31  district.  It may use the money for early childhood programs or 
159.32  for outcome-based learning programs that enhance the academic 
159.33  quality of the district's curriculum.  The outcome-based 
159.34  learning programs must be approved by the commissioner of 
159.35  children, families, and learning education. 
159.36     (e) There shall be distributed to any school district the 
160.1   amount which the school district was entitled to receive under 
160.2   section 298.32 in 1975. 
160.3      (f) Effective for the distribution in 2003 only, five 
160.4   percent of the distributions to school districts under 
160.5   paragraphs (b), (c), and (e); subdivision 6, paragraph (c); 
160.6   subdivision 11; and section 298.225, shall be distributed to the 
160.7   general fund.  The remainder less any portion distributed to 
160.8   cities and towns under section 126C.48, subdivision 8, paragraph 
160.9   (5), shall be distributed to the northeast Minnesota economic 
160.10  protection trust fund created in section 298.292.  Fifty percent 
160.11  of the amount distributed to the northeast Minnesota economic 
160.12  protection trust fund shall be made available for expenditure 
160.13  under section 298.293 as governed by section 298.296.  Effective 
160.14  in 2003 only, 100 percent of the distributions to school 
160.15  districts under section 477A.15 less any portion distributed to 
160.16  cities and towns under section 126C.48, subdivision 8, paragraph 
160.17  (5), shall be distributed to the general fund. 
160.18     Sec. 29.  Minnesota Statutes 2002, section 475.61, 
160.19  subdivision 4, is amended to read: 
160.20     Subd. 4.  [SURPLUS FUNDS.] (a) All such taxes shall be 
160.21  collected and remitted to the municipality by the county 
160.22  treasurer as other taxes are collected and remitted, and shall 
160.23  be used only for payment of the obligations on account of which 
160.24  levied or to repay advances from other funds used for such 
160.25  payments, except that any surplus remaining in the debt service 
160.26  fund when the obligations and interest thereon are paid may be 
160.27  appropriated to any other general purpose by the municipality.  
160.28  However, the amount of any surplus remaining in the debt service 
160.29  fund of a school district when the obligations and interest 
160.30  thereon are paid shall be used to reduce the general education 
160.31  fund levy authorized pursuant to section 126C.13 chapters 122A, 
160.32  123A, 123B, 124D, and 126C and the state aids authorized 
160.33  pursuant to chapters 122A, 123A, 123B, 124D, 125A, 126C, and 
160.34  127A. 
160.35     (b) The reduction to state aids equals the lesser of (1) 
160.36  the amount of the surplus times the ratio of the district's debt 
161.1   service equalization aid to the district's debt service 
161.2   equalization revenue for the last year that the district 
161.3   qualified for debt service equalization aid; or (2) the 
161.4   district's cumulative amount of debt service equalization aid.  
161.5      (c) The reduction to the general education fund levy equals 
161.6   the total amount of the surplus minus the reduction to state 
161.7   aids. 
161.8      Sec. 30.  Laws 1965, chapter 705, as amended by Laws 1975, 
161.9   chapter 261, section 4; Laws 1980, chapter 609, article 6, 
161.10  section 37; and Laws 1989, chapter 329, article 13, section 18, 
161.11  is amended to read: 
161.12     Sec. 6.  [ST. PAUL SEVERANCE LEVY.] The school board of 
161.13  independent school district No. 625, St. Paul, for the purpose 
161.14  of providing moneys for the payment of its severance pay 
161.15  obligations under a plan approved by resolution of the district, 
161.16  in addition to all other powers possessed by the school district 
161.17  and in addition to and in excess of any existing limitation upon 
161.18  the amount it is otherwise authorized by law to levy as taxes, 
161.19  is authorized to levy taxes annually not exceeding in any one 
161.20  year an amount equal to a gross tax capacity rate of .17 percent 
161.21  for taxes payable in 1990 or a net tax capacity rate of .21 .34 
161.22  percent for taxes payable in 1991 2002 and thereafter upon all 
161.23  taxable property within the school district which taxes as 
161.24  levied shall be spread upon the tax rolls, and all corrections 
161.25  thereof shall be held by the school district, and allocated 
161.26  therefor to be disbursed and expended by the school district in 
161.27  payment of any public school severance pay obligations and for 
161.28  no other purpose.  Disbursements and expenditures previously 
161.29  authorized on behalf of the school district for payment of 
161.30  severance pay obligations shall not be deemed to constitute any 
161.31  part of the cost of the operation and maintenance of the school 
161.32  district within the meaning of any statutory limitation of any 
161.33  school district expenditures.  
161.34     The amount of such severance pay allowable or to become 
161.35  payable in respect of any such employment or to any such 
161.36  employee shall not exceed the amount permitted by Minnesota 
162.1   Statutes, Section 465.72.  
162.2      <b>[EFFECTIVE DATE.]</b> This section is effective retroactively 
162.3   for taxes payable in 2002 and thereafter. 
162.4      Sec. 31.  [APPROPRIATIONS.] 
162.5      Subdivision 1.  [DEPARTMENT OF EDUCATION.] The sums 
162.6   indicated in this section are appropriated from the general fund 
162.7   to the department of education for the fiscal years designated. 
162.8      Subd. 2.  [SCHOOL LUNCH.] (a) For school lunch aid 
162.9   according to Minnesota Statutes, section 124D.111, and Code of 
162.10  Federal Regulations, title 7, section 210.17:  
162.11       $7,800,000     .....     2004 
162.12       $7,950,000     .....     2005 
162.13     Subd. 3.  [TRADITIONAL SCHOOL BREAKFAST; KINDERGARTEN 
162.14  MILK.] For traditional school breakfast aid and kindergarten 
162.15  milk under Minnesota Statutes, sections 124D.1158 and 124D.118: 
162.16       $3,088,000     .....     2004 
162.17       $3,217,000     .....     2005 
162.18     Subd. 4.  [FAST BREAK TO LEARNING BREAKFAST.] For fast 
162.19  break to learning breakfast under Minnesota Statutes, section 
162.20  124D.1156: 
162.21       $747,000     .....     2004 
162.22     The 2004 appropriation includes $747,000 for 2003 and $0 
162.23  for 2004. 
162.24     Subd. 5.  [SUMMER SCHOOL SERVICE REPLACEMENT AID.] For 
162.25  summer food service replacement aid under Minnesota Statutes, 
162.26  section 124D.119: 
162.27       $150,000       .....     2004 
162.28       $150,000       .....     2005 
162.29     Sec. 32.  [REVISOR INSTRUCTION.] 
162.30     In the next and subsequent editions of Minnesota Statutes, 
162.31  the revisor shall codify section 30 as Minnesota Statutes, 
162.32  section 126C.41, subdivision 5.  
162.33     Sec. 33.  [REPEALER.] 
162.34     Minnesota Statutes 2002, sections 124D.115; 124D.1156; and 
162.35  127A.41, subdivision 6, are repealed. 
162.36                             ARTICLE 6 
163.1                              LIBRARIES 
163.2      Section 1.  [APPROPRIATIONS.] 
163.3      Subdivision 1.  [DEPARTMENT OF EDUCATION.] The sums 
163.4   indicated in this section are appropriated from the general fund 
163.5   to the department of education for the fiscal years designated.  
163.6      Subd. 2.  [BASIC SUPPORT.] For basic support grants 
163.7   according to Minnesota Statutes, sections 134.32 to 134.35: 
163.8        $8,979,000     .....     2004 
163.9        $9,770,000     .....     2005 
163.10     The 2004 appropriation includes $1,456,000 for 2003 and 
163.11  $7,523,000 for 2004. 
163.12     The 2005 appropriation includes $2,247,000 for 2004 and 
163.13  $7,523,000 for 2005. 
163.14     Subd. 3.  [MULTICOUNTY, MULTITYPE LIBRARY SYSTEMS.] For 
163.15  grants according to Minnesota Statutes, sections 134.353 and 
163.16  134.354, to multicounty, multitype library systems: 
163.17       $849,000       .....     2004 
163.18       $903,000       .....     2005 
163.19     The 2004 appropriation includes $153,000 for 2003 and 
163.20  $696,000 for 2004. 
163.21     The 2005 appropriation includes $207,000 for 2004 and 
163.22  $696,000 for 2005.  
163.23     Subd. 4.  [ELECTRONIC LIBRARY FOR MINNESOTA.] For statewide 
163.24  licenses to on-line databases selected in cooperation with the 
163.25  higher education services office for school media centers, 
163.26  public libraries, state government agency libraries, and public 
163.27  or private college or university libraries: 
163.28        $400,000     .....     2004 
163.29        $400,000     .....     2005 
163.30     Any balance in the first year does not cancel but is 
163.31  available in the second year. 
163.32                             ARTICLE 7
163.33                   EARLY CHILDHOOD FAMILY SUPPORT
163.34     Section 1.  Minnesota Statutes 2002, section 119A.52, is 
163.35  amended to read: 
163.36     119A.52 [DISTRIBUTION OF APPROPRIATION AND PROGRAM 
164.1   COORDINATION.] 
164.2      Subdivision 1.  [DISTRIBUTION OF APPROPRIATION; WORK PLAN.] 
164.3   (a) The commissioner of children, families, and learning 
164.4   education must distribute money appropriated for that purpose to 
164.5   Head Start program grantees to expand services and to serve 
164.6   additional low-income children.  Money must be allocated to each 
164.7   project Head Start grantee in existence on the effective date of 
164.8   Laws 1989, chapter 282.  Migrant and Indian reservation grantees 
164.9   must be initially allocated money based on the grantees' share 
164.10  of federal funds.  The remaining money must be initially 
164.11  allocated to the remaining local agencies based equally on the 
164.12  agencies' share of federal funds and on the proportion of 
164.13  eligible children in the agencies' service area who are not 
164.14  currently being served.  A Head Start grantee must be funded at 
164.15  a per child rate equal to its contracted, federally funded base 
164.16  level for program accounts 20, 22, and 25 at the start of the 
164.17  fiscal year.  In allocating funds under this paragraph, the 
164.18  commissioner of children, families, and learning education must 
164.19  assure that each Head Start grantee is allocated no less funding 
164.20  in any fiscal year than was allocated to that grantee in fiscal 
164.21  year 1993.  The commissioner may provide additional funding to 
164.22  grantees for start-up costs incurred by grantees due to the 
164.23  increased number of children to be served.  Before paying money 
164.24  to the grantees, the commissioner must notify each grantee of 
164.25  its initial allocation, how the money must be used, and the 
164.26  number of low-income children that must be served with the 
164.27  allocation.  Each grantee must notify present a work plan to the 
164.28  commissioner of for approval.  The work plan must include the 
164.29  estimated number of low-income children and families it will be 
164.30  able to serve, a description of the program design and service 
164.31  delivery area which meets the needs of and encourages access by 
164.32  low-income working families, a program design that ensures fair 
164.33  and equitable access to Head Start services for all populations 
164.34  and parts of the service area, and a plan for coordinating 
164.35  services to maximize assistance for child care costs available 
164.36  to families under chapter 119B.  For any grantee that cannot 
165.1   utilize its full allocation, the commissioner must reduce the 
165.2   allocation proportionately.  Money available after the initial 
165.3   allocations are reduced must be redistributed to eligible 
165.4   grantees. 
165.5      (b) Up to 11 percent of the funds appropriated annually may 
165.6   be used to provide grants to local Head Start agencies to 
165.7   provide funds for innovative programs designed either to target 
165.8   Head Start resources to particular at-risk groups of children or 
165.9   to provide services in addition to those currently allowable 
165.10  under federal Head Start regulations.  The commissioner must 
165.11  award funds for innovative programs under this paragraph on a 
165.12  competitive basis. 
165.13     Subd. 2.  [PROGRAM COORDINATION.] Each Head Start grantee 
165.14  must submit a plan, as part of the work plan requirement in 
165.15  subdivision 1, to coordinate and maximize use of existing public 
165.16  and private community resources and reduce duplication of 
165.17  services. 
165.18     Sec. 2.  Minnesota Statutes 2002, section 124D.13, 
165.19  subdivision 2, is amended to read: 
165.20     Subd. 2.  [PROGRAM CHARACTERISTICS.] Early childhood family 
165.21  education programs are programs for children in the period of 
165.22  life from birth to kindergarten, for the parents of such 
165.23  children, and for expectant parents.  The To the extent that 
165.24  funds are insufficient to provide programs for all children, 
165.25  early childhood family education programs should emphasize 
165.26  programming for a child from birth to age three and encourage 
165.27  parents to involve four- and five-year-old children in school 
165.28  readiness programs, and other public and nonpublic early 
165.29  learning programs.  Early childhood family education programs 
165.30  may include the following:  
165.31     (1) programs to educate parents about the physical, mental, 
165.32  and emotional development of children; 
165.33     (2) programs to enhance the skills of parents in providing 
165.34  for their children's learning and development; 
165.35     (3) learning experiences for children and parents that 
165.36  promote children's development; 
166.1      (4) activities designed to detect children's physical, 
166.2   mental, emotional, or behavioral problems that may cause 
166.3   learning problems; 
166.4      (5) activities and materials designed to encourage 
166.5   self-esteem, skills, and behavior that prevent sexual and other 
166.6   interpersonal violence; 
166.7      (6) educational materials which may be borrowed for home 
166.8   use; 
166.9      (7) information on related community resources; 
166.10     (8) programs to prevent child abuse and neglect; 
166.11     (9) other programs or activities to improve the health, 
166.12  development, and school readiness of children; or 
166.13     (10) activities designed to maximize development during 
166.14  infancy.  
166.15     The programs must not include activities for children that 
166.16  do not require substantial involvement of the children's 
166.17  parents.  The programs must be reviewed periodically to assure 
166.18  the instruction and materials are not racially, culturally, or 
166.19  sexually biased.  The programs must encourage parents to be 
166.20  aware of practices that may affect equitable development of 
166.21  children. 
166.22     Sec. 3.  Minnesota Statutes 2002, section 124D.13, 
166.23  subdivision 4, is amended to read: 
166.24     Subd. 4.  [HOME VISITING PROGRAM.] (a) The commissioner A 
166.25  district that levies for home visiting under section 124D.135, 
166.26  subdivision 6, shall use this revenue to include as part of the 
166.27  early childhood family education programs a parent education 
166.28  component to prevent child abuse and neglect.  This parent 
166.29  education component must include: 
166.30     (1) expanding statewide the home visiting component of the 
166.31  early childhood family education programs; 
166.32     (2) training parent educators, child educators, community 
166.33  outreach workers, and home visitors in the dynamics of child 
166.34  abuse and neglect and positive parenting and discipline 
166.35  practices; and 
166.36     (3) developing and disseminating education and public 
167.1   information materials that promote positive parenting skills and 
167.2   prevent child abuse and neglect. 
167.3      (b) The parent education component must: 
167.4      (1) offer to isolated or at-risk families home visiting 
167.5   parent education services that at least address parenting 
167.6   skills, a child's development and stages of growth, 
167.7   communication skills, managing stress, problem-solving skills, 
167.8   positive child discipline practices, methods of improving 
167.9   parent-child interactions and enhancing self-esteem, using 
167.10  community support services and other resources, and encouraging 
167.11  parents to have fun with and enjoy their children; 
167.12     (2) develop a that is designed to reach isolated or at-risk 
167.13  families. 
167.14     The home visiting program must use: 
167.15     (1) an established risk assessment tool to determine the 
167.16  family's level of risk; 
167.17     (3) (2) establish clear objectives and protocols for home 
167.18  visits; 
167.19     (4) determine the frequency and duration of home visits 
167.20  based on a risk-need assessment of the client, with home visits 
167.21  beginning in the second trimester of pregnancy and continuing, 
167.22  based on client need, until a child is six years old; 
167.23     (5) (3) encourage families to make a transition from home 
167.24  visits to site-based parenting programs to build a family 
167.25  support network and reduce the effects of isolation; 
167.26     (6) develop and distribute education materials on 
167.27  preventing child abuse and neglect that may be used in home 
167.28  visiting programs and parent education classes and distributed 
167.29  to the public; 
167.30     (7) initially provide at least 40 hours of training and 
167.31  thereafter ongoing training for parent educators, child 
167.32  educators, community outreach workers, and home visitors that 
167.33  covers the dynamics of child abuse and neglect, domestic 
167.34  violence and victimization within family systems, signs of abuse 
167.35  or other indications that a child may be at risk of being abused 
167.36  or neglected, what child abuse and neglect are, how to properly 
168.1   report cases of child abuse and neglect, respect for cultural 
168.2   preferences in child rearing, what community resources, social 
168.3   service agencies, and family support activities and programs are 
168.4   available, child development and growth, parenting skills, 
168.5   positive child discipline practices, identifying stress factors 
168.6   and techniques for reducing stress, home visiting techniques, 
168.7   and risk assessment measures; 
168.8      (8) (4) provide program services that are community-based, 
168.9   accessible, and culturally relevant; and 
168.10     (9) (5) foster collaboration among existing agencies and 
168.11  community-based organizations that serve young children and 
168.12  their families. 
168.13     (c) Home visitors should reflect the demographic 
168.14  composition of the community the home visitor is serving to the 
168.15  extent possible.  
168.16     Sec. 4.  Minnesota Statutes 2002, section 124D.13, 
168.17  subdivision 8, is amended to read: 
168.18     Subd. 8.  [COORDINATION.] (a) A district is encouraged to 
168.19  coordinate the program with its special education and vocational 
168.20  education programs and with related services provided by other 
168.21  governmental agencies and nonprofit agencies. must describe 
168.22  strategies to coordinate and maximize public and private 
168.23  community resources and reduce duplication of services. 
168.24     (b) A district is encouraged to coordinate adult basic 
168.25  education programs provided to parents and early childhood 
168.26  family education programs provided to children to accomplish the 
168.27  goals of section 124D.895. 
168.28     Sec. 5.  Minnesota Statutes 2002, section 124D.13, 
168.29  subdivision 11, is amended to read: 
168.30     Subd. 11.  [TEACHERS.] A school board must employ necessary 
168.31  qualified teachers or instructors for its early childhood family 
168.32  education programs. 
168.33     Sec. 6.  Minnesota Statutes 2002, section 124D.135, 
168.34  subdivision 1, is amended to read: 
168.35     Subdivision 1.  [REVENUE.] The revenue for early childhood 
168.36  family education programs for a school district equals $113.50 
169.1   for fiscal years 2000 and 2001 and $120 for 2002 and later 
169.2   fiscal years for fiscal years 2003 and 2004 and $105 for fiscal 
169.3   year 2005 and later, times the greater of: 
169.4      (1) 150; or 
169.5      (2) the number of people under five years of age residing 
169.6   in the district on October 1 of the previous school year. 
169.7      Sec. 7.  Minnesota Statutes 2002, section 124D.135, 
169.8   subdivision 8, is amended to read: 
169.9      Subd. 8.  [RESERVE ACCOUNT LIMIT.] (a) Under this section, 
169.10  the average balance, during the most recent three-year period in 
169.11  a district's early childhood family education reserve account on 
169.12  June 30 of each year, adjusted for any prior reductions under 
169.13  this subdivision, must not be greater than 25 percent of the sum 
169.14  of the district's maximum early childhood family education 
169.15  annual revenue under subdivision 1, excluding adjustments under 
169.16  this subdivision, plus any fees, grants, or other revenue 
169.17  received by the district for early childhood family education 
169.18  programs for the prior year. 
169.19     (b) If a district's adjusted average early childhood family 
169.20  education reserve over the three-year period is in excess of 25 
169.21  percent of the prior year annual revenue the limit under 
169.22  paragraph (a), the district's early childhood family education 
169.23  state aid and levy authority for the current school year must be 
169.24  reduced by the lesser of the current year revenue under 
169.25  subdivision 1 or the excess reserve amount.  The aid reduction 
169.26  equals the product of the lesser of the excess reserve amount or 
169.27  the current year revenue under subdivision 1 times the ratio of 
169.28  the district's aid for the prior current year under subdivision 
169.29  4 to the district's revenue for the prior current year under 
169.30  subdivision 1.  The levy reduction equals the excess reserve 
169.31  amount minus the aid reduction.  The commissioner must 
169.32  reallocate aid and levy reduced under this subdivision to other 
169.33  eligible early childhood family education programs in proportion 
169.34  to each district's revenue for the prior year under subdivision 
169.35  1.  For purposes of this paragraph, if a district does not levy 
169.36  the entire amount permitted under subdivision 3, the revenue 
170.1   under subdivision 1 must be reduced in proportion to the actual 
170.2   amount levied.  
170.3      (b) (c) Notwithstanding paragraph (a), for fiscal year 
170.4   2003, the excess reserve amount shall be computed using the 
170.5   balance in a district's early childhood family education reserve 
170.6   account on June 30, 2002.  For fiscal year 2004, the excess 
170.7   reserve amount shall be computed using the adjusted average 
170.8   balance in a district's early childhood family education reserve 
170.9   account on June 30, 2002, and June 30, 2003. 
170.10     <b>[EFFECTIVE DATE.]</b> This section is effective for revenue for 
170.11  fiscal year 2003. 
170.12     Sec. 8.  Minnesota Statutes 2002, section 124D.15, 
170.13  subdivision 7, is amended to read: 
170.14     Subd. 7.  [ADVISORY COUNCIL.] Each school readiness program 
170.15  must have an advisory council composed of members of existing 
170.16  early education-related boards, parents of participating 
170.17  children, child care providers, culturally specific service 
170.18  organizations, local resource and referral agencies, local early 
170.19  intervention committees, and representatives of early childhood 
170.20  service providers.  The council must advise the board in 
170.21  creating and administering the program and must monitor the 
170.22  progress of the program.  The council must ensure that children 
170.23  at greatest risk receive appropriate services.  If the board is 
170.24  unable to appoint to the advisory council members of existing 
170.25  early education-related boards, it must appoint parents of 
170.26  children enrolled in the program who represent the racial, 
170.27  cultural, and economic diversity of the district and 
170.28  representatives of early childhood service providers as 
170.29  representatives to an existing advisory council. 
170.30     Sec. 9.  Minnesota Statutes 2002, section 124D.16, 
170.31  subdivision 1, is amended to read: 
170.32     Subdivision 1.  [PROGRAM REVIEW AND APPROVAL.] A school 
170.33  district shall biennially by May 1 submit to the commissioners 
170.34  of children, families, and learning education and health the 
170.35  program plan required under this subdivision.  As determined by 
170.36  the commissioners, one-half of the districts shall first submit 
171.1   the plan by May 1 of the 2000-2001 school year and one-half of 
171.2   the districts shall first submit the plan by May 1 of the 
171.3   2001-2002 school year.  The program plan must include: 
171.4      (1) a description of the services to be provided; 
171.5      (2) a plan to ensure children at greatest risk receive 
171.6   appropriate services; 
171.7      (3) a description of procedures and methods to be used 
171.8   strategies to coordinate and maximize public and private 
171.9   community resources to maximize use of existing community 
171.10  resources, including school districts, health care facilities, 
171.11  government agencies, neighborhood organizations, and other 
171.12  resources knowledgeable in early childhood development and 
171.13  reduce duplication of services; 
171.14     (4) comments about the district's proposed program by the 
171.15  advisory council required by section 124D.15, subdivision 7; and 
171.16     (5) agreements with all participating service providers.  
171.17     Each commissioner may review and comment on the program, 
171.18  and make recommendations to the commissioner of children, 
171.19  families, and learning education, within 30 90 days of receiving 
171.20  the plan. 
171.21     Sec. 10.  Minnesota Statutes 2002, section 124D.16, 
171.22  subdivision 6, is amended to read: 
171.23     Subd. 6.  [RESERVE ACCOUNT LIMIT.] (a) Under this section, 
171.24  the average balance, during the most recent three-year period, 
171.25  in a district's school readiness reserve account on June 30 of 
171.26  each year, adjusted for any prior reductions under this 
171.27  subdivision, must not be greater than 25 percent of the 
171.28  district's school readiness annual revenue for the prior year, 
171.29  excluding adjustments under this subdivision.  
171.30     (b) If a district's adjusted average school readiness 
171.31  reserve over the three-year period is in excess of 25 percent of 
171.32  the prior year annual revenue the limit under paragraph (a), the 
171.33  district's current year school readiness state aid must be 
171.34  reduced by the lesser of the excess reserve amount or the 
171.35  current year aid.  The commissioner must reallocate aid reduced 
171.36  under this subdivision to other eligible school readiness 
172.1   programs in proportion to each district's aid for the prior year 
172.2   under subdivision 2.  
172.3      (b) (c) Notwithstanding paragraph (a), for fiscal year 
172.4   2003, the excess reserve amount shall be computed using the 
172.5   balance in a district's school readiness reserve account on June 
172.6   30, 2002.  For fiscal year 2004, the excess reserve amount shall 
172.7   be computed using the adjusted average balance in a district's 
172.8   school readiness reserve account on June 30, 2002, and June 30, 
172.9   2003. 
172.10     <b>[EFFECTIVE DATE.]</b> This section is effective for revenue for 
172.11  fiscal year 2003. 
172.12     Sec. 11.  [EARLY CHILDHOOD PROGRAMS FOR LOW-INCOME 
172.13  CHILDREN.] 
172.14     The commissioner of education, in order to expand services 
172.15  to low-income children between the ages of three and five, must 
172.16  consider redistributing state funds currently appropriated to 
172.17  Head Start grantees to various qualifying early childhood 
172.18  program providers.  The commissioner must explore eligibility 
172.19  criteria and requirements for awarding grants to early childhood 
172.20  program providers throughout the state, including Head Start 
172.21  grantees, that deliver services to low-income children in 
172.22  unserved and underserved areas, demonstrate relevant experience 
172.23  with young children, and include a strong early learning 
172.24  component in their program.  The commissioner by February 15, 
172.25  2004, must report the commissioner's findings about 
172.26  redistributing state funds currently appropriated to Head Start 
172.27  grantees to various qualifying early childhood program providers 
172.28  to the committees of the legislature having jurisdiction over 
172.29  kindergarten through grade 12 education policy and finance. 
172.30     Sec. 12.  [APPROPRIATIONS.] 
172.31     Subdivision 1.  [DEPARTMENT OF EDUCATION.] The sums 
172.32  indicated in this section are appropriated from the general fund 
172.33  to the department of education for the fiscal years designated.  
172.34     Subd. 2.  [SCHOOL READINESS.] For revenue for school 
172.35  readiness programs under Minnesota Statutes, sections 124D.15 
172.36  and 124D.16: 
173.1        $ 9,239,000    .....     2004
173.2        $ 9,283,000    .....     2005
173.3      The 2004 appropriation includes $1,605,000 for 2003 and 
173.4   $7,634,000 for 2004. 
173.5      The 2005 appropriation includes $2,279,000 for 2004 and 
173.6   $7,004,000 for 2005.  
173.7      Subd. 3.  [EARLY CHILDHOOD FAMILY EDUCATION AID.] For early 
173.8   childhood family education aid under Minnesota Statutes, section 
173.9   124D.135: 
173.10       $19,059,000    .....     2004 
173.11       $17,862,000    .....     2005 
173.12     The 2004 appropriation includes $3,239,000 for 2003 and 
173.13  $15,820,000 for 2004.  
173.14     The 2005 appropriation includes $4,725,000 for 2004 and 
173.15  $13,137,000 for 2005.  
173.16     Subd. 4.  [HEALTH AND DEVELOPMENTAL SCREENING AID.] For 
173.17  health and developmental screening aid under Minnesota Statutes, 
173.18  sections 121A.17 and 121A.19: 
173.19       $2,501,000     .....     2004 
173.20       $2,661,000     .....     2005 
173.21     The 2004 appropriation includes $452,000 for 2003 and 
173.22  $2,049,000 for 2004.  
173.23     The 2005 appropriation includes $612,000 for 2004 and 
173.24  $2,049,000 for 2005.  
173.25     Subd. 5.  [HEAD START PROGRAM.] For Head Start programs 
173.26  under Minnesota Statutes, section 119A.52: 
173.27       $16,475,000    .....     2004
173.28       $12,000,000    .....     2005
173.29     Sec. 13.  [REPEALER.] 
173.30     Minnesota Statutes 2002, section 124D.17, is repealed. 
173.31                             ARTICLE 8
173.32                             PREVENTION
173.33     Section 1.  Minnesota Statutes 2002, section 124D.19, 
173.34  subdivision 3, is amended to read: 
173.35     Subd. 3.  [COMMUNITY EDUCATION DIRECTOR.] (a) Except as 
173.36  provided under paragraphs (b) and (c), each board shall employ a 
174.1   licensed community education director.  The board shall submit 
174.2   the name of the person who is serving as director of community 
174.3   education under this section on the district's annual community 
174.4   education report to the commissioner. 
174.5      (b) A board may apply to the commissioner Minnesota board 
174.6   of school administrators under Minnesota Rules, part 3512.3500, 
174.7   subpart 9, for authority to use an individual who is not 
174.8   licensed as a community education director. 
174.9      (c) A board of a district with a total population of 2,000 
174.10  or less may identify an employee who holds a valid Minnesota 
174.11  principal or superintendent license under Minnesota Rules, 
174.12  chapter 3512, to serve as director of community education.  To 
174.13  be eligible for an exception under this paragraph, the board 
174.14  shall certify in writing to the commissioner that the district 
174.15  has not placed a licensed director of community education on 
174.16  unrequested leave. 
174.17     Sec. 2.  Minnesota Statutes 2002, section 124D.20, 
174.18  subdivision 3, is amended to read: 
174.19     Subd. 3.  [GENERAL COMMUNITY EDUCATION REVENUE.] The 
174.20  general community education revenue for a district equals 
174.21  $5.95 for fiscal year 2003 and 2004 and $5.23 for fiscal year 
174.22  2005 and later, times the greater of 1,335 or the population of 
174.23  the district.  The population of the district is determined 
174.24  according to section 275.14.  
174.25     <b>[EFFECTIVE DATE.]</b> This section is effective for revenue for 
174.26  fiscal year 2005. 
174.27     Sec. 3.  Minnesota Statutes 2002, section 124D.20, 
174.28  subdivision 5, is amended to read: 
174.29     Subd. 5.  [TOTAL COMMUNITY EDUCATION LEVY.] To obtain total 
174.30  community education revenue, a district operating a youth 
174.31  after-school enrichment program under section 124D.19, 
174.32  subdivision 12, may levy the amount raised by a maximum tax rate 
174.33  of .7431 .985 percent times the adjusted net tax capacity of the 
174.34  district.  To obtain total community education revenue, a 
174.35  district not operating a youth after-school enrichment program 
174.36  may levy the amount raised by a maximum tax rate of .4795 
175.1   percent times the adjusted net tax capacity of the district.  If 
175.2   the amount of the total community education levy would exceed 
175.3   the total community education revenue, the total community 
175.4   education levy shall be determined according to subdivision 6. 
175.5      <b>[EFFECTIVE DATE.]</b> This section is effective for revenue for 
175.6   fiscal year 2005. 
175.7      Sec. 4.  Minnesota Statutes 2002, section 124D.20, is 
175.8   amended by adding a subdivision to read: 
175.9      Subd. 11.  [RESERVE ACCOUNT LIMIT.] (a) Under this section, 
175.10  the sum of the average balances during the most recent 
175.11  three-year period in a district's community education reserve 
175.12  account and unreserved/undesignated community service fund 
175.13  account on June 30 of each year, adjusted for any prior 
175.14  reductions under this subdivision, must not be greater than 25 
175.15  percent of the sum of the district's maximum total community 
175.16  education revenue under subdivision 1, excluding adjustments 
175.17  under this subdivision, plus the district's additional community 
175.18  education levy under section 124D.21, plus any fees, grants, or 
175.19  other revenue received by the district for community education 
175.20  programs for the prior year.  For purposes of this paragraph, 
175.21  "community education programs" means programs according to 
175.22  subdivisions 8, paragraph (a), and 9, and section 124D.19, 
175.23  subdivision 12, excluding early childhood family education 
175.24  programs under section 124D.13, school readiness programs under 
175.25  sections 124D.15 and 124D.17, and adult basic education programs 
175.26  under section 124D.52. 
175.27     (b) If the sum of the average balances during the most 
175.28  recent three-year period in a district's community education 
175.29  reserve account and unreserved/undesignated community service 
175.30  fund account on June 30 of each year, adjusted for any prior 
175.31  reductions under this subdivision, is in excess of the limit 
175.32  under paragraph (a), the district's community education state 
175.33  aid and levy authority for the current school year must be 
175.34  reduced by the lesser of the current year revenue under 
175.35  subdivision 1 or the excess reserve amount.  The aid reduction 
175.36  equals the product of the lesser of the excess reserve amount or 
176.1   the current year revenue under subdivision 1 times the ratio of 
176.2   the district's aid for the current year under subdivision 7 to 
176.3   the district's revenue for the current year under subdivision 
176.4   1.  The levy reduction equals the excess reserve amount minus 
176.5   the aid reduction.  For purposes of this paragraph, if a 
176.6   district does not levy the entire amount permitted under 
176.7   subdivision 5 or 6, the revenue under subdivision 1 must be 
176.8   reduced in proportion to the actual amount levied. 
176.9      (c) Notwithstanding paragraph (a), for fiscal year 2003, 
176.10  the excess reserve amount shall be computed using the balances 
176.11  in a district's community education reserve account and 
176.12  unreserved/undesignated community service fund account on June 
176.13  30, 2002.  For fiscal year 2004, the excess reserve amount shall 
176.14  be computed using the adjusted average balances in a district's 
176.15  community education reserve account and unreserved/undesignated 
176.16  community service fund account on June 30, 2002, and June 30, 
176.17  2003. 
176.18     <b>[EFFECTIVE DATE.]</b> This section is effective for revenue for 
176.19  fiscal year 2003. 
176.20     Sec. 5.  Minnesota Statutes 2002, section 124D.20, is 
176.21  amended by adding a subdivision to read: 
176.22     Subd. 12.  [WAIVER.] (a) If a district anticipates that the 
176.23  reserve account may exceed the 25 percent limit established 
176.24  under subdivision 11 because of extenuating circumstances, prior 
176.25  approval to exceed the limit must be obtained in writing from 
176.26  the commissioner. 
176.27     (b) Notwithstanding paragraph (a), for fiscal year 2003, a 
176.28  district may submit a waiver request within 30 days of the date 
176.29  of final enactment. 
176.30     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
176.31  following final enactment for revenue for fiscal year 2003. 
176.32     Sec. 6.  Minnesota Statutes 2002, section 124D.22, 
176.33  subdivision 3, is amended to read: 
176.34     Subd. 3.  [SCHOOL-AGE CARE LEVY.] To obtain school-age care 
176.35  revenue, a school district may levy an amount equal to the 
176.36  district's school-age care revenue as defined in subdivision 2 
177.1   multiplied by the lesser of one, or the ratio of the quotient 
177.2   derived by dividing the adjusted net tax capacity of the 
177.3   district for the year before the year the levy is certified by 
177.4   the resident pupil units in the district for the school year to 
177.5   which the levy is attributable, to $3,280 $2,433. 
177.6      Sec. 7.  [APPROPRIATIONS.] 
177.7      Subdivision 1.  [DEPARTMENT OF EDUCATION.] The sums 
177.8   indicated in this section are appropriated from the general fund 
177.9   to the department of education for the fiscal years designated. 
177.10     Subd. 2.  [COMMUNITY EDUCATION AID.] For community 
177.11  education aid under Minnesota Statutes, section 124D.20: 
177.12       $5,325,000     .....     2004 
177.13       $3,491,000     .....     2005 
177.14     The 2004 appropriation includes $956,000 for 2003 and 
177.15  $4,369,000 for 2004.  
177.16     The 2005 appropriation includes $1,304,000 for 2004 and 
177.17  $2,187,000 for 2005.  
177.18     Subd. 3.  [ADULTS WITH DISABILITIES PROGRAM AID.] For 
177.19  adults with disabilities programs under Minnesota Statutes, 
177.20  section 124D.56: 
177.21       $667,000       .....     2004 
177.22       $710,000       .....     2005 
177.23     The 2004 appropriation includes $120,000 for 2003 and 
177.24  $547,000 for 2004.  
177.25     The 2005 appropriation includes $163,000 for 2004 and 
177.26  $547,000 for 2005. 
177.27     Subd. 4.  [HEARING-IMPAIRED ADULTS.] For programs for 
177.28  hearing-impaired adults under Minnesota Statutes, section 
177.29  124D.57: 
177.30       $70,000        .....     2004
177.31       $70,000        .....     2005
177.32     Subd. 5.  [ABUSED CHILDREN.] For abused children programs 
177.33  under Minnesota Statutes, section 119A.21: 
177.34       $945,000       .....     2004 
177.35       $945,000       .....     2005 
177.36     Subd. 6.  [SCHOOL-AGE CARE REVENUE.] For extended day care 
178.1   aid under Minnesota Statutes, section 124D.22: 
178.2        $40,000        .....     2004 
178.3        $23,000        .....     2005
178.4      The 2004 appropriation includes $14,000 for 2003 and 
178.5   $26,000 for 2004. 
178.6      The 2005 appropriation includes $7,000 for 2004 and $16,000 
178.7   for 2005. 
178.8      Sec. 8.  [REPEALER.] 
178.9      Minnesota Statutes 2002, sections 120B.23; 124D.21; 
178.10  124D.221; 124D.93; and 144.401, subdivision 5, are repealed. 
178.11                             ARTICLE 9
178.12              SELF-SUFFICIENCY AND LIFE LONG LEARNING
178.13     Section 1.  Minnesota Statutes 2002, section 124D.52, 
178.14  subdivision 1, is amended to read: 
178.15     Subdivision 1.  [PROGRAM REQUIREMENTS.] (a) An adult basic 
178.16  education program is a day or evening program offered by a 
178.17  district that is for people over 16 years of age who do not 
178.18  attend an elementary or secondary school.  The program offers 
178.19  academic instruction necessary to earn a high school diploma or 
178.20  equivalency certificate.  Tuition and fees may not be charged to 
178.21  a learner for instruction paid under this section, except for 
178.22     (b) Notwithstanding any law to the contrary, a school board 
178.23  or the governing body of a consortium offering an adult basic 
178.24  education program may adopt a sliding fee schedule based on a 
178.25  family's income, but must waive the fee for participants who are 
178.26  under the age of 21 or unable to pay.  The fees charged must be 
178.27  designed to enable individuals of all socioeconomic levels to 
178.28  participate in the program.  A program may charge a security 
178.29  deposit to assure return of materials, supplies, and equipment. 
178.30     (c) Each approved adult basic education program must 
178.31  develop a memorandum of understanding with the local workforce 
178.32  development centers located in the approved program's service 
178.33  delivery area.  The memorandum of understanding must describe 
178.34  how the adult basic education program and the workforce 
178.35  development centers will cooperate and coordinate services to 
178.36  provide unduplicated, efficient, and effective services to 
179.1   clients.  
179.2      (d) Adult basic education aid must be spent for adult basic 
179.3   education purposes as specified in sections 124D.518 to 124D.531.
179.4      Sec. 2.  Minnesota Statutes 2002, section 124D.52, 
179.5   subdivision 3, is amended to read: 
179.6      Subd. 3.  [ACCOUNTS; REVENUE; AID.] (a) Each district, 
179.7   group of districts, or private nonprofit organization providing 
179.8   adult basic education programs must establish and 
179.9   maintain accounts separate from all other district accounts a 
179.10  reserve account within the community service fund for the 
179.11  receipt and disbursement of all funds related to these 
179.12  programs.  All revenue received pursuant to this section must be 
179.13  utilized solely for the purposes of adult basic education 
179.14  programs.  State aid must not equal more than 100 percent of the 
179.15  unreimbursed expenses of providing these programs, excluding 
179.16  in-kind costs.  
179.17     (b) Notwithstanding section 123A.26 or any other law to the 
179.18  contrary, an adult basic education consortium providing an 
179.19  approved adult basic education program may be its own fiscal 
179.20  agent and is eligible to receive state-aid payments directly 
179.21  from the commissioner. 
179.22     Sec. 3.  Minnesota Statutes 2002, section 124D.531, 
179.23  subdivision 1, is amended to read: 
179.24     Subdivision 1.  [STATE TOTAL ADULT BASIC EDUCATION AID.] 
179.25  (a) The state total adult basic education aid for fiscal year 
179.26  2001 2004 equals $30,157,000 $34,388,000.  The state total adult 
179.27  basic education aid for fiscal year 2005 and later is 
179.28  $36,509,000.  The state total adult basic education aid for 
179.29  later years equals: 
179.30     (1) the state total adult basic education aid for the 
179.31  preceding fiscal year; times 
179.32     (2) the lesser of: 
179.33     (i) 1.08, or 
179.34     (ii) the greater of 1.00 or the ratio of the state total 
179.35  contact hours in the first prior program year to the state total 
179.36  contact hours in the second prior program year.  Beginning in 
180.1   fiscal year 2002, two percent of the state total adult basic 
180.2   education aid must be set aside for adult basic education 
180.3   supplemental service grants under section 124D.522.  
180.4      (b) The state total adult basic education aid, excluding 
180.5   basic population aid, equals the difference between the amount 
180.6   computed in paragraph (a), and the state total basic population 
180.7   aid under subdivision 2. 
180.8      Sec. 4.  Minnesota Statutes 2002, section 124D.531, 
180.9   subdivision 2, is amended to read: 
180.10     Subd. 2.  [BASIC POPULATION AID.] A district is eligible 
180.11  for basic population aid if the district has a basic service 
180.12  level approved by the commissioner under section 124D.52, 
180.13  subdivision 5, or is a member of a consortium with an approved 
180.14  basic service level.  Basic population aid is equal to the 
180.15  greater of $4,000 $3,844 or $1.80 $1.73 times the population of 
180.16  the district.  District population is determined according to 
180.17  section 275.14. 
180.18     Sec. 5.  Minnesota Statutes 2002, section 124D.531, 
180.19  subdivision 4, is amended to read: 
180.20     Subd. 4.  [ADULT BASIC EDUCATION PROGRAM AID LIMIT.] (a) 
180.21  Notwithstanding subdivisions 2 and 3, the total adult basic 
180.22  education aid for a program per prior year contact hour must not 
180.23  exceed four times the rate $21 per prior year contact hour 
180.24  computed under subdivision 3, clause (2). 
180.25     (b) For fiscal year 2004, the aid for a program under 
180.26  subdivision 3, clause (2), adjusted for changes in program 
180.27  membership, must not exceed the aid for that program under 
180.28  subdivision 3, clause (2), for fiscal year 2003 by more than the 
180.29  greater of eight percent or $10,000. 
180.30     (c) For fiscal year 2005, the aid for a program under 
180.31  subdivision 3, clause (2), adjusted for changes in program 
180.32  membership, must not exceed the sum of the aid for that program 
180.33  under subdivision 3, clause (2), and section 8, paragraph (a), 
180.34  for the preceding fiscal year by more than the greater of eight 
180.35  percent or $10,000.  
180.36     (d) For fiscal year 2002 2006 and later, the aid for a 
181.1   program under subdivision 3, clause (2), adjusted for changes in 
181.2   program membership, must not exceed the aid for that program 
181.3   under subdivision 3, clause (2), for the first preceding fiscal 
181.4   year by more than the greater of 17 eight percent or 
181.5   $20,000 $10,000. 
181.6      (c) (d) Adult basic education aid is payable to a program 
181.7   for unreimbursed costs. 
181.8      Sec. 6.  Minnesota Statutes 2002, section 124D.531, 
181.9   subdivision 7, is amended to read: 
181.10     Subd. 7.  [PROGRAM AUDITS.] Programs that receive aid under 
181.11  this section must maintain records that support the aid 
181.12  payments.  The commissioner may audit these records upon 
181.13  request.  The commissioner must establish procedures for 
181.14  conducting fiscal audits of adult basic education programs 
181.15  according to the schedule in this subdivision.  In calendar year 
181.16  2003, the commissioner must audit one-half of approved adult 
181.17  basic education programs that received aid for fiscal year 2002, 
181.18  and in calendar year 2004, the commissioner must audit the 
181.19  remaining unaudited programs for aid received in fiscal year 
181.20  2003.  Beginning with fiscal year 2005, the commissioner must, 
181.21  at a minimum, audit each adult basic education program once 
181.22  every five years.  The commissioner must establish procedures to 
181.23  reconcile any discrepancies between aid payments based on 
181.24  information reported to the commissioner and aid estimates based 
181.25  on a program audit. 
181.26     Sec. 7.  [ADULT BASIC EDUCATION PROGRAM APPROVAL AND AID, 
181.27  FISCAL YEAR 2004.] 
181.28     (a) Notwithstanding Minnesota Statutes 2002, section 
181.29  124D.54, subdivision 2, a district or consortium of districts 
181.30  that provided a program funded under Minnesota Statutes 2002, 
181.31  section 124D.54, in fiscal year 2003 may request an extension of 
181.32  the application deadline for approval of an adult basic 
181.33  education program for fiscal year 2004. 
181.34     (b) For purposes of computing the fiscal year 2005 adult 
181.35  basic education aid for a program under Minnesota Statutes, 
181.36  section 124D.531, subdivision 3, clause (2), the contact hours 
182.1   for students participating in the program during the first prior 
182.2   program year must be increased by 17 percent of the adult 
182.3   graduation aid average daily attendance for fiscal year 2002.  
182.4      Sec. 8.  [ADULT BASIC EDUCATION TRANSITION AID.] 
182.5      (a) For fiscal year 2004, adult basic education transition 
182.6   aid for each qualifying district equals the district's adult 
182.7   high school graduation aid for fiscal year 2002.  This aid 
182.8   amount must be used to provide an adult basic education program 
182.9   under Minnesota Statutes, section 124D.52.  To qualify for aid 
182.10  under this section a district must establish or join an approved 
182.11  adult basic education program according to Minnesota Statutes, 
182.12  section 124D.52, subdivision 2.  
182.13     (b) For fiscal year 2005, the adult high school graduation 
182.14  aid program is eliminated.  
182.15     Sec. 9.  [APPROPRIATIONS.] 
182.16     Subdivision 1.  [DEPARTMENT OF EDUCATION.] The sums 
182.17  indicated in this section are appropriated from the general fund 
182.18  to the department of education for the fiscal years designated. 
182.19     Subd. 2.  [ADULT BASIC EDUCATION AID.] For adult basic 
182.20  education aid under Minnesota Statutes, section 124D.52, in 
182.21  fiscal year 2004 and Minnesota Statutes, section 124D.531, in 
182.22  fiscal year 2005:  
182.23       $32,131,000    .....     2004 
182.24       $35,758,000    .....     2005 
182.25     The 2004 appropriation includes $5,905,000 for 2003 and 
182.26  $26,226,000 for 2004.  
182.27     The 2005 appropriation includes $7,833,000 for 2004 and 
182.28  $27,925,000 for 2005.  
182.29     Subd. 3.  [ADULT GRADUATION AID.] For adult graduation aid 
182.30  under Minnesota Statutes, section 124D.54:  
182.31       $396,000       .....     2004
182.32     Subd. 4.  [ADULT BASIC EDUCATION TRANSITION AID.] (a) For 
182.33  adult basic transition aid under section 8: 
182.34       $1,634,000     .....     2004
182.35       $  488,000       .....     2005
182.36     The 2004 appropriation includes $1,634,000 for 2004.  
183.1      The 2005 appropriation includes $488,000 for 2004 and $0 
183.2   for 2005.  
183.3      Subd. 5.  [GED TESTS.] For payment of 60 percent of the 
183.4   costs of GED tests under Laws 1993, chapter 224, article 4, 
183.5   section 44, subdivision 10: 
183.6        $125,000       .....     2004
183.7        $125,000       .....     2005
183.8      Subd. 6.  [FAMILY ASSETS FOR INDEPENDENCE.] For family 
183.9   assets for independence: 
183.10       $500,000       .....     2004
183.11     Any balance in the first year does not cancel but is 
183.12  available in the second year. 
183.13     Sec. 10.  [REPEALER.] 
183.14     Minnesota Statutes 2002, sections 124D.09, subdivision 15; 
183.15  124D.54; and 126C.05, subdivision 12, are repealed. 
183.16                             ARTICLE 10
183.17                           STATE AGENCIES
183.18     Section 1.  Minnesota Statutes 2002, section 15.01, is 
183.19  amended to read: 
183.20     15.01 [DEPARTMENTS OF THE STATE.] 
183.21     The following agencies are designated as the departments of 
183.22  the state government:  the department of administration; the 
183.23  department of agriculture; the department of commerce; the 
183.24  department of corrections; the department of children, families, 
183.25  and learning education; the department of economic security; the 
183.26  department of trade and economic development; the department of 
183.27  finance; the department of health; the department of human 
183.28  rights; the department of labor and industry; the department of 
183.29  military affairs; the department of natural resources; the 
183.30  department of employee relations; the department of public 
183.31  safety; the department of human services; the department of 
183.32  revenue; the department of transportation; the department of 
183.33  veterans affairs; and their successor departments. 
183.34     Sec. 2.  Minnesota Statutes 2002, section 119A.01, 
183.35  subdivision 2, is amended to read: 
183.36     Subd. 2.  [ESTABLISHMENT.] The department of children, 
184.1   families, and learning education is established. 
184.2      Sec. 3.  Minnesota Statutes 2002, section 119A.02, 
184.3   subdivision 2, is amended to read: 
184.4      Subd. 2.  [COMMISSIONER.] "Commissioner" means the 
184.5   commissioner of children, families, and learning education. 
184.6      Sec. 4.  Minnesota Statutes 2002, section 119A.02, 
184.7   subdivision 3, is amended to read: 
184.8      Subd. 3.  [DEPARTMENT.] "Department" means the department 
184.9   of children, families, and learning education. 
184.10     Sec. 5.  Minnesota Statutes 2002, section 119B.011, 
184.11  subdivision 8, is amended to read: 
184.12     Subd. 8.  [COMMISSIONER.] "Commissioner" means the 
184.13  commissioner of children, families, and learning education. 
184.14     Sec. 6.  Minnesota Statutes 2002, section 119B.011, 
184.15  subdivision 10, is amended to read: 
184.16     Subd. 10.  [DEPARTMENT.] "Department" means the department 
184.17  of children, families, and learning education. 
184.18     Sec. 7.  Minnesota Statutes 2002, section 120A.02, is 
184.19  amended to read: 
184.20     120A.02 [DEPARTMENT OF CHILDREN, FAMILIES, AND LEARNING 
184.21  EDUCATION.] 
184.22     The department of children, families, and learning 
184.23  education shall carry out the provisions of chapters 120A to 
184.24  129C and other related education provisions under law. 
184.25     Sec. 8.  Minnesota Statutes 2002, section 120A.05, 
184.26  subdivision 4, is amended to read: 
184.27     Subd. 4.  [COMMISSIONER.] "Commissioner" means the 
184.28  commissioner of children, families, and learning education. 
184.29     Sec. 9.  Minnesota Statutes 2002, section 120A.05, 
184.30  subdivision 7, is amended to read: 
184.31     Subd. 7.  [DEPARTMENT.] "Department" means the department 
184.32  of children, families, and learning education. 
184.33     Sec. 10.  Minnesota Statutes 2002, section 122A.09, 
184.34  subdivision 10, is amended to read: 
184.35     Subd. 10.  [VARIANCES.] (a) Notwithstanding subdivision 9 
184.36  and section 14.05, subdivision 4, the board of teaching may 
185.1   grant a variance to its rules upon application by a school 
185.2   district for purposes of implementing experimental programs in 
185.3   learning or management. 
185.4      (b) To enable a school district to meet the needs of 
185.5   students enrolled in an alternative education program and to 
185.6   enable licensed teachers instructing those students to satisfy 
185.7   content area licensure requirements, the board of teaching 
185.8   annually may permit a licensed teacher teaching in an 
185.9   alternative education program to instruct students in a content 
185.10  area for which the teacher is not licensed, consistent with 
185.11  paragraph (a). 
185.12     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
185.13  following final enactment.  
185.14     Sec. 11.  Minnesota Statutes 2002, section 122A.12, 
185.15  subdivision 1, is amended to read: 
185.16     Subdivision 1.  [MEMBERSHIP.] A board of school 
185.17  administrators is established and must consist of nine ten 
185.18  members appointed by the governor with the advice and consent of 
185.19  the senate, including at least: 
185.20     (1) one elementary school principal; 
185.21     (2) one secondary school principal; 
185.22     (3) one higher education faculty member in an educational 
185.23  administration program approved by the board; 
185.24     (4) one higher education administrator for an educational 
185.25  administration program approved by the board; 
185.26     (5) one school superintendent; 
185.27     (6) one classroom teacher; 
185.28     (7) one community education director or a and one special 
185.29  education director; and 
185.30     (8) two members of the public, one of whom must be a 
185.31  present or former school board member. 
185.32     In making appointments, the governor shall solicit 
185.33  recommendations from groups representing persons in clauses (1) 
185.34  to (8). 
185.35     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
185.36  following final enactment.  
186.1      Sec. 12.  Minnesota Statutes 2002, section 122A.12, 
186.2   subdivision 2, is amended to read: 
186.3      Subd. 2.  [TERMS; COMPENSATION; REMOVAL; ADMINISTRATION.] 
186.4   Membership terms, removal of members, and the filling of 
186.5   membership vacancies are as provided in section 214.09.  The 
186.6   terms of the initial board members must be determined by lot as 
186.7   follows: 
186.8      (1) three members must be appointed for terms that expire 
186.9   August 1, 2002; 
186.10     (2) three members must be appointed for terms that expire 
186.11  August 1, 2003; and 
186.12     (3) three four members must be appointed for terms that 
186.13  expire August 1, 2004. 
186.14     Members shall not receive the daily payment under section 
186.15  214.09, subdivision 3.  The public employer of a member shall 
186.16  not reduce the member's compensation or benefits for the 
186.17  member's absence from employment when engaging in the business 
186.18  of the board.  The provision of staff, administrative services, 
186.19  and office space; the review and processing of complaints; the 
186.20  setting of fees; the selection and duties of an executive 
186.21  secretary to serve the board; and other provisions relating to 
186.22  board operations are as provided in chapter 214.  Fiscal year 
186.23  and reporting requirements are as provided in sections 214.07 
186.24  and 214.08. 
186.25     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
186.26  following final enactment.  
186.27     Sec. 13.  Minnesota Statutes 2002, section 122A.18, 
186.28  subdivision 7a, is amended to read: 
186.29     Subd. 7a.  [PERMISSION TO SUBSTITUTE TEACH.] (a) The board 
186.30  of teaching may allow a person who is enrolled in and making 
186.31  satisfactory progress in a board-approved teacher program and 
186.32  who has successfully completed student teaching to be employed 
186.33  as a short-call substitute teacher.  
186.34     (b) The board of teaching may issue a lifetime qualified 
186.35  short-call substitute teaching license to a person who: 
186.36     (1) was a qualified teacher under section 122A.16 while 
187.1   holding a continuing five-year teaching license issued by the 
187.2   board, and receives a retirement annuity from the teachers 
187.3   retirement association, Minneapolis teachers retirement fund 
187.4   association, St. Paul teachers retirement fund association, or 
187.5   Duluth teachers retirement fund association; 
187.6      (2) holds an out-of-state teaching license and receives a 
187.7   retirement annuity as a result of the person's teaching 
187.8   experience; or 
187.9      (3) held a continuing five-year license issued by the 
187.10  board, taught at least three school years in an accredited 
187.11  nonpublic school in Minnesota, and receives a retirement annuity 
187.12  as a result of the person's teaching experience. 
187.13  A person holding a lifetime qualified short-call substitute 
187.14  teaching license is not required to complete continuing 
187.15  education clock hours.  A person holding this license may 
187.16  reapply to the board for a continuing five-year license and must 
187.17  again complete continuing education clock hours one school year 
187.18  after receiving the continuing five-year license. 
187.19     <b>[EFFECTIVE DATE.]</b> This section is effective for the 
187.20  2003-2004 school year. 
187.21     Sec. 14.  Minnesota Statutes 2002, section 122A.21, is 
187.22  amended to read: 
187.23     122A.21 [TEACHERS' AND ADMINISTRATORS' LICENSES; FEES.] 
187.24     Each application for the issuance, renewal, or extension of 
187.25  a license to teach must be accompanied by a processing fee in an 
187.26  amount set by the board of teaching by rule of $57.  Each 
187.27  application for issuing, renewing, or extending the license of a 
187.28  school administrator or supervisor must be accompanied by a 
187.29  processing fee in the amount set by the board of teaching.  The 
187.30  processing fee for a teacher's license and for the licenses of 
187.31  supervisory personnel must be paid to the executive secretary of 
187.32  the appropriate board.  The executive secretary of the board 
187.33  shall deposit the fees with the state treasurer, as provided by 
187.34  law, and report each month to the commissioner of finance the 
187.35  amount of fees collected.  The fees as set by the board are 
187.36  nonrefundable for applicants not qualifying for a license.  
188.1   However, a fee must be refunded by the state treasurer in any 
188.2   case in which the applicant already holds a valid unexpired 
188.3   license.  The board may waive or reduce fees for applicants who 
188.4   apply at the same time for more than one license. 
188.5      Sec. 15.  Minnesota Statutes 2002, section 122A.22, is 
188.6   amended to read: 
188.7      122A.22 [DISTRICT RECORDING VERIFICATION OF TEACHER 
188.8   LICENSES.] 
188.9      No person shall be accounted a qualified teacher until the 
188.10  person has filed for record with the district superintendent 
188.11  where the person intends to teach a license, or certified copy 
188.12  of a license, authorizing the person to teach school in the 
188.13  district school system school district or charter school 
188.14  contracting with the person for teaching services verifies 
188.15  through the Minnesota education licensing system available on 
188.16  the department Web site that the person is a qualified teacher, 
188.17  consistent with sections 122A.16 and 122A.44, subdivision 1. 
188.18     <b>[EFFECTIVE DATE.]</b> This section is effective for the 
188.19  2003-2004 school year and later.  
188.20     Sec. 16.  Minnesota Statutes 2002, section 127A.05, 
188.21  subdivision 1, is amended to read: 
188.22     Subdivision 1.  [APPOINTMENT AND DUTIES.] The department 
188.23  shall be under the administrative control of the commissioner of 
188.24  children, families, and learning education which office is 
188.25  established.  The governor shall appoint the commissioner under 
188.26  the provisions of section 15.06.  
188.27     The commissioner shall be a person who possesses 
188.28  educational attainment and breadth of experience in the 
188.29  administration of public education and of the finances 
188.30  pertaining thereto commensurate with the spirit and intent of 
188.31  this code.  Notwithstanding any other law to the contrary, the 
188.32  commissioner may appoint two deputy commissioners who shall 
188.33  serve in the unclassified service.  The commissioner shall also 
188.34  appoint other employees as may be necessary for the organization 
188.35  of the department.  The commissioner shall perform such duties 
188.36  as the law and rules may provide and be held responsible for the 
189.1   efficient administration and discipline of the department.  The 
189.2   commissioner is charged with the execution of powers and duties 
189.3   to promote public education in the state and to safeguard the 
189.4   finances pertaining thereto. 
189.5      Sec. 17.  Minnesota Statutes 2002, section 127A.05, 
189.6   subdivision 3, is amended to read: 
189.7      Subd. 3.  [GENERAL SUPERVISION OVER PUBLIC SCHOOLS AND 
189.8   EDUCATIONAL AGENCIES.] The commissioner of children, families, 
189.9   and learning education shall adopt goals for and exercise 
189.10  general supervision over public schools and public educational 
189.11  agencies in the state, classify and standardize public 
189.12  elementary and secondary schools, and prepare for them outlines 
189.13  and suggested courses of study.  The commissioner shall develop 
189.14  a plan to attain the adopted goals.  The commissioner may 
189.15  recognize educational accrediting agencies for the sole purposes 
189.16  of sections 120A.22, 120A.24, and 120A.26. 
189.17     Sec. 18.  Minnesota Statutes 2002, section 169.26, 
189.18  subdivision 3, is amended to read: 
189.19     Subd. 3.  [DRIVER TRAINING.] All driver education courses 
189.20  approved by the commissioner of children, families, and learning 
189.21  and the commissioner of public safety must include instruction 
189.22  on railroad-highway grade crossing safety.  The commissioner of 
189.23  children, families, and learning and the commissioner of public 
189.24  safety shall by rule establish minimum standards of course 
189.25  content relating to operation of vehicles at railroad-highway 
189.26  grade crossings.  
189.27     Sec. 19.  Minnesota Statutes 2002, section 169.973, 
189.28  subdivision 1, is amended to read: 
189.29     Subdivision 1.  [COMMISSIONER'S AUTHORITY; RULES; 
189.30  CURRICULUM.] The commissioner of public safety shall supervise 
189.31  the administration and conduct of driver improvement clinics and 
189.32  youth-oriented driver improvement clinics.  The commissioner of 
189.33  public safety shall promulgate rules setting forth standards for 
189.34  the curriculum and mode of instruction of driver improvement 
189.35  clinics and youth-oriented driver improvement clinics and such 
189.36  other matters as the commissioner of public safety considers 
190.1   necessary for the proper administration of such clinics.  In the 
190.2   preparation of such standards the commissioner of public safety 
190.3   shall consult with the commissioner of children, families, and 
190.4   learning and state associations of judges.  A driver improvement 
190.5   clinic established under sections 169.971 to 169.973 and 171.20, 
190.6   subdivision 3, shall conform to the standards promulgated by the 
190.7   commissioner of public safety.  The course of study at a driver 
190.8   improvement clinic and youth-oriented driver improvement clinic 
190.9   may not exceed a cumulative total of nine hours with no single 
190.10  class session lasting more than three hours.  The course of 
190.11  study at a driver improvement clinic and youth-oriented driver 
190.12  improvement clinic shall include instruction in railroad 
190.13  crossing safety. 
190.14     Sec. 20.  Minnesota Statutes 2002, section 178.02, 
190.15  subdivision 1, is amended to read: 
190.16     Subdivision 1.  [MEMBERS.] The commissioner of labor and 
190.17  industry, hereinafter called the commissioner, shall appoint an 
190.18  apprenticeship advisory council, hereinafter referred to as the 
190.19  council, composed of three representatives each from employer 
190.20  and employee organizations, and two representatives of the 
190.21  general public.  The assistant commissioner director of 
190.22  children, families, and learning education responsible for 
190.23  vocational career and technical education or designee shall be 
190.24  an ex officio member of the council and shall serve in an 
190.25  advisory capacity only.  
190.26     Sec. 21.  [COST-BENEFIT ANALYSIS OF FEDERAL NO CHILD LEFT 
190.27  BEHIND ACT.] 
190.28     The commissioner of education must conduct a rigorous 
190.29  cost-benefit analysis to determine the tangible and intangible 
190.30  costs and benefits to Minnesota of implementing the federal No 
190.31  Child Left Behind Act and the time needed for the benefits of 
190.32  the changes to repay the costs of the changes.  The 
190.33  commissioner, by February 15, 2004, must present a written 
190.34  report of the analysis to the committees of the legislature 
190.35  having jurisdiction over kindergarten through grade 12 education 
190.36  policy and finance. 
191.1      Sec. 22.  [APPROPRIATIONS; DEPARTMENT OF EDUCATION.] 
191.2      Subdivision 1.  [DEPARTMENT OF EDUCATION.] Unless otherwise 
191.3   indicated, the sums indicated in this section are appropriated 
191.4   from the general fund to the department of education for the 
191.5   fiscal years designated. 
191.6      Subd. 2.  [DEPARTMENT.] (a) For the department of education:
191.7        $23,653,000    .....     2004 
191.8        $23,653,000    .....     2005 
191.9      Any balance in the first year does not cancel but is 
191.10  available in the second year. 
191.11     (b) $260,000 each year is for the Minnesota children's 
191.12  museum. 
191.13     (c) $41,000 each year is for the Minnesota academy of 
191.14  science. 
191.15     (d) $246,000 of the balance in the state education 
191.16  courseware development account in the state government special 
191.17  revenue fund as of July 1, 2004, is canceled to the general fund.
191.18     (e) $160,000 of the balance in the state item bank 
191.19  revolving account in the state government special revenue fund 
191.20  as of July 1, 2004, is canceled to the general fund. 
191.21     (f) $621,000 each year is for the board of teaching. 
191.22     (g) $165,000 each year is for the board of school 
191.23  administrators.  
191.24     Subd. 3.  [FEDERAL GRANTS AND AIDS.] The expenditures of 
191.25  federal grants and aids as shown in the biennial budget document 
191.26  and its supplements are approved and appropriated and shall be 
191.27  spent as indicated. 
191.28     Sec. 23.  [APPROPRIATIONS; MINNESOTA STATE ACADEMIES.] 
191.29     The sums indicated in this section are appropriated from 
191.30  the general fund to the Minnesota state academies for the deaf 
191.31  and the blind for the fiscal years designated:  
191.32       $10,966,000    .....     2004 
191.33       $10,966,000    .....     2005 
191.34     Any balance in the first year does not cancel but is 
191.35  available in the second year. 
191.36     Sec. 24.  [APPROPRIATIONS; PERPICH CENTER FOR ARTS 
192.1   EDUCATION.] 
192.2      The sums indicated in this section are appropriated from 
192.3   the general fund to the Perpich center for arts education for 
192.4   the fiscal years designated: 
192.5        $6,864,000     .....     2004 
192.6        $6,423,000     .....     2005 
192.7      Any balance in the first year does not cancel but is 
192.8   available in the second year. 
192.9      Sec. 25.  [REVISOR'S INSTRUCTION.] 
192.10     (a) In Minnesota Statutes, the revisor shall renumber 
192.11  section 119A.02, subdivision 2, as 120A.02, paragraph (a), and 
192.12  section 120A.02 as 120A.02, paragraph (b). 
192.13     (b) In Minnesota Statutes and Minnesota Rules, the revisor 
192.14  shall change the term "children, families, and learning" to 
192.15  "education." 
192.16     (c) In the next and subsequent editions of Minnesota 
192.17  Statutes, the revisor shall change all references to the 
192.18  "commissioner of children, families, and learning" to the 
192.19  "commissioner of public safety" in Minnesota Statutes, sections 
192.20  123B.88, subdivision 9; 168.102; 169.441, subdivision 5; and 
192.21  171.321, subdivision 4c; and "Part H" to "Part C" in Minnesota 
192.22  Statutes, sections 125A.27, subdivisions 7 and 8; 125A.32; 
192.23  125A.35; 125A.37; 125A.39; 125A.44; and 125A.45. 
192.24     Sec. 26.  [REPEALER.] 
192.25     (a) Minnesota Statutes 2002, sections 15.014, subdivision 
192.26  3; 119A.01, subdivision 1; 123B.90, subdivision 1; 169.441, 
192.27  subdivision 4; and 239.004, are repealed. 
192.28     (b) Minnesota Rules, parts 3500.0600; 3520.0400; 3520.1400; 
192.29  3520.3300; 3530.1500; 3530.2700; 3530.4400; 3530.4500; 
192.30  3530.4700; and 3550.0100, are repealed. 
192.31                             ARTICLE 11
192.32                            DEFICIENCIES
192.33  Section 1.  [DEPARTMENT OF EDUCATION.] 
192.34     The dollar amounts shown are added to or, if shown in 
192.35  parentheses, are subtracted from the appropriations in Laws 
192.36  2001, First Special Session chapter 6, as amended by Laws 2002, 
193.1   chapter 220, and Laws 2002, chapter 374, or other law, and are 
193.2   appropriated from the general fund to the department of 
193.3   education for the purposes specified in this article, to be 
193.4   available for the fiscal year indicated for each purpose.  The 
193.5   figure "2003" used in this article means that the appropriation 
193.6   or appropriations listed are available for the fiscal year 
193.7   ending June 30, 2003. 
193.8                                                          2003 
193.9   APPROPRIATION ADJUSTMENTS                         $  10,869,000 
193.10                                             APPROPRIATION CHANGE
193.11  Sec. 2.  APPROPRIATIONS; DEPARTMENT OF 
193.12  EDUCATION 
193.13  Subdivision 1.  Community Education Aid                 219,000 
193.14  Subd. 2.  General and Supplemental 
193.15  Education Aid                                         8,791,000 
193.16  This change includes ($7,420,000) for 
193.17  2002 and $16,211,000 for 2003. 
193.18  Subd. 3.  Nonpublic Pupil Aid                           437,000 
193.19  Subd. 4.  Consolidation Transition Aid                    5,000 
193.20  Subd. 5.  Interdistrict Desegregation 
193.21  or Integration Transportation Grants                    169,000 
193.22  Subd. 6.  Travel for Home-Based 
193.23  Services                                                 48,000  
193.24  Subd. 7.  Debt Service Aid                               19,000 
193.25  Subd. 8.  School Breakfast                              100,000 
193.26  Subd. 9.  Fast Break to Learning                      1,081,000 
193.27     Sec. 3.  [EFFECTIVE DATE.] 
193.28     Sections 1 and 2 are effective the day following final 
193.29  enactment. 
193.30                             ARTICLE 12
193.31                        TECHNICAL AMENDMENTS
193.32     Section 1.  Minnesota Statutes 2002, section 119B.011, 
193.33  subdivision 20, is amended to read: 
193.34     Subd. 20.  [TRANSITION YEAR FAMILIES.] "Transition year 
193.35  families" means families who have received MFIP assistance, or 
193.36  who were eligible to receive MFIP assistance after choosing to 
193.37  discontinue receipt of the cash portion of MFIP assistance under 
193.38  section 256J.31, subdivision 12, for at least three of the last 
194.1   six months before losing eligibility for MFIP or families 
194.2   participating in work first under chapter 256K who meet the 
194.3   requirements of section 256K.07.  Transition year child care may 
194.4   be used to support employment or job search.  Transition year 
194.5   child care is not available to families who have been 
194.6   disqualified from MFIP due to fraud.  
194.7      Sec. 2.  Minnesota Statutes 2002, section 121A.21, is 
194.8   amended to read: 
194.9      121A.21 [SCHOOL HEALTH SERVICES.] 
194.10     (a) Every school board must provide services to promote the 
194.11  health of its pupils. 
194.12     (b) The board of a district with 1,000 pupils or more in 
194.13  average daily membership in early childhood family education, 
194.14  preschool handicapped, elementary, and secondary programs must 
194.15  comply with the requirements of this paragraph.  It may use one 
194.16  or a combination of the following methods: 
194.17     (1) employ personnel, including at least one full-time 
194.18  equivalent licensed school nurse or continue to employ a 
194.19  registered nurse not yet certified as a public health nurse as 
194.20  defined in section 145A.02, subdivision 18, who is enrolled in a 
194.21  program that would lead to certification within four years of 
194.22  August 1, 1988; 
194.23     (2) contract with a public or private health organization 
194.24  or another public agency for personnel during the regular school 
194.25  year, determined appropriate by the board, who are currently 
194.26  licensed under chapter 148 and who are certified public health 
194.27  nurses; or 
194.28     (3) enter into another arrangement approved by the 
194.29  commissioner.  
194.30     Sec. 3.  Minnesota Statutes 2002, section 122A.41, 
194.31  subdivision 2, is amended to read: 
194.32     Subd. 2.  [PROBATIONARY PERIOD; DISCHARGE OR DEMOTION.] All 
194.33  teachers in the public schools in cities of the first class 
194.34  during the first three years of consecutive employment shall be 
194.35  deemed to be in a probationary period of employment during which 
194.36  period any annual contract with any teacher may, or may not, be 
195.1   renewed as the school board, after consulting with the peer 
195.2   review committee charged with evaluating the probationary 
195.3   teachers under subdivision 2a or 3, shall see fit.  The school 
195.4   site management team or the school board if there is no school 
195.5   site management team, shall adopt a plan for a written 
195.6   evaluation of teachers during the probationary period according 
195.7   to subdivision 2a 3.  Evaluation by the peer review committee 
195.8   charged with evaluating probationary teachers under subdivision 
195.9   2a 3 shall occur at least three times each year for a teacher 
195.10  performing services on 120 or more school days, at least two 
195.11  times each year for a teacher performing services on 60 to 119 
195.12  school days, and at least one time each year for a teacher 
195.13  performing services on fewer than 60 school days.  Days devoted 
195.14  to parent-teacher conferences, teachers' workshops, and other 
195.15  staff development opportunities and days on which a teacher is 
195.16  absent from school shall not be included in determining the 
195.17  number of school days on which a teacher performs services.  The 
195.18  school board may, during such probationary period, discharge or 
195.19  demote a teacher for any of the causes as specified in this 
195.20  code.  A written statement of the cause of such discharge or 
195.21  demotion shall be given to the teacher by the school board at 
195.22  least 30 days before such removal or demotion shall become 
195.23  effective, and the teacher so notified shall have no right of 
195.24  appeal therefrom. 
195.25     Sec. 4.  Minnesota Statutes 2002, section 123B.02, 
195.26  subdivision 1, is amended to read: 
195.27     Subdivision 1.  [BOARD AUTHORITY.] The board must have the 
195.28  general charge of the business of the district, the school 
195.29  houses, and of the interests of the schools thereof.  The 
195.30  board's authority to govern, manage, and control the district; 
195.31  to carry out its duties and responsibilities; and to conduct the 
195.32  business of the district includes implied powers in addition to 
195.33  any specific powers granted by the legislature.  
195.34     Sec. 5.  Minnesota Statutes 2002, section 123B.72, 
195.35  subdivision 3, is amended to read: 
195.36     Subd. 3.  [CERTIFICATION.] Prior to occupying or 
196.1   reoccupying a school facility affected by this section, a school 
196.2   board or its designee shall submit a document prepared by a 
196.3   system inspector to the building official or to the 
196.4   commissioner, verifying that the facility's heating, 
196.5   ventilation, and air conditioning system has been installed and 
196.6   operates according to design specifications and code, according 
196.7   to section 123B.71, subdivision 10 9, clause (3) (11).  A 
196.8   systems inspector shall also verify that the facility's design 
196.9   will provide the ability for monitoring of outdoor airflow and 
196.10  total airflow of ventilation systems in new school facilities 
196.11  and that any heating, ventilation, or air conditioning system 
196.12  that is installed or modified for a project subject to this 
196.13  section must provide a filtration system with a current ASHRAE 
196.14  standard. 
196.15     Sec. 6.  Minnesota Statutes 2002, section 123B.93, is 
196.16  amended to read: 
196.17     123B.93 [ADVERTISING ON SCHOOL BUSES.] 
196.18     (a) The commissioner, through a competitive process, and 
196.19  with the approval of the school bus safety advisory committee 
196.20  may contract with advertisers regarding advertising on school 
196.21  buses.  At a minimum, the contract must prohibit advertising and 
196.22  advertising images that: 
196.23     (1) solicit the sale of, or promote the use of, alcoholic 
196.24  beverages and tobacco products; 
196.25     (2) are discriminatory in nature or content; 
196.26     (3) imply or declare an endorsement of the product or 
196.27  service by the school district; 
196.28     (4) contain obscene material; 
196.29     (5) are false, misleading, or deceptive; or 
196.30     (6) relate to an illegal activity or antisocial behavior. 
196.31     (b) Advertisement must meet the following conditions: 
196.32     (1) the advertising attached to the school bus does not 
196.33  interfere with bus identification under section 169.441; and 
196.34     (2) the bus with attached advertising meets the school bus 
196.35  equipment standards under sections 169.4501 to 169.4504. 
196.36     (c) All buses operated by school districts may be attached 
197.1   with advertisements under the state contract.  All school 
197.2   district contracts shall include a provision for advertisement.  
197.3   Each school district shall be reimbursed by the advertiser for 
197.4   all costs incurred by the district and its contractors for 
197.5   supporting the advertising program, including, but not limited 
197.6   to, retrofitting buses, storing advertising, attaching 
197.7   advertising to the bus, and related maintenance. 
197.8      (d) The commissioner shall hold harmless and indemnify each 
197.9   district for all liabilities arising from the advertising 
197.10  program.  Each district must tender defense of all such claims 
197.11  to the commissioner within five days of receipt. 
197.12     (e) All revenue from the contract shall be deposited in the 
197.13  general fund. 
197.14     Sec. 7.  Minnesota Statutes 2002, section 124D.03, 
197.15  subdivision 12, is amended to read: 
197.16     Subd. 12.  [TERMINATION OF ENROLLMENT.] A district may 
197.17  terminate the enrollment of a nonresident student enrolled under 
197.18  this section or section 124D.07 or 124D.08 at the end of a 
197.19  school year if the student meets the definition of a habitual 
197.20  truant under section 260C.007, subdivision 19, the student has 
197.21  been provided appropriate services under chapter 260A, and the 
197.22  student's case has been referred to juvenile court.  A district 
197.23  may also terminate the enrollment of a nonresident student over 
197.24  the age of 16 enrolled under this section if the student is 
197.25  absent without lawful excuse for one or more periods on 15 
197.26  school days and has not lawfully withdrawn from school under 
197.27  section 120A.22, subdivision 8. 
197.28     Sec. 8.  Minnesota Statutes 2002, section 124D.09, 
197.29  subdivision 3, is amended to read: 
197.30     Subd. 3.  [DEFINITIONS.] For purposes of this section, the 
197.31  following terms have the meanings given to them. 
197.32     (a) "Eligible institution" means a Minnesota public 
197.33  post-secondary institution, a private, nonprofit two-year trade 
197.34  and technical school granting associate degrees, an 
197.35  opportunities industrialization center accredited by the North 
197.36  Central Association of Colleges and Schools, or a private, 
198.1   residential, two-year or four-year, liberal arts, 
198.2   degree-granting college or university located in Minnesota.  
198.3   "Course" means a course or program.  
198.4      (b) "Course" means a course or program.  
198.5      Sec. 9.  Minnesota Statutes 2002, section 124D.10, 
198.6   subdivision 13, is amended to read: 
198.7      Subd. 13.  [LENGTH OF SCHOOL YEAR.] A charter school must 
198.8   provide instruction each year for at least the number of days 
198.9   required by section 120A.22, subdivision 5 120A.41.  It may 
198.10  provide instruction throughout the year according to sections 
198.11  124D.12 to 124D.127 or 124D.128.  
198.12     Sec. 10.  Minnesota Statutes 2002, section 124D.10, 
198.13  subdivision 23a, is amended to read: 
198.14     Subd. 23a.  [RELATED PARTY LEASE COSTS.] (a) A charter 
198.15  school is prohibited from entering a lease of real property with 
198.16  a related party as defined in this subdivision, unless the 
198.17  lessor is a nonprofit corporation under chapter 317A or a 
198.18  cooperative under chapter 308A, and the lease cost is reasonable 
198.19  under section 124D.11, subdivision 4, clause (1). 
198.20     (b) For purposes of this subdivision: 
198.21     (1) A "related party" is an affiliate or close relative of 
198.22  the other party in question, an affiliate of a close relative, 
198.23  or a close relative of an affiliate.  
198.24     (2) "Affiliate" means a person that directly, or indirectly 
198.25  through one or more intermediaries, controls, or is controlled 
198.26  by, or is under common control with, another person. 
198.27     (3) "Close relative" means an individual whose relationship 
198.28  by blood, marriage, or adoption to another individual is no more 
198.29  remote than first cousin. 
198.30     (4) "Person" means an individual or entity of any kind. 
198.31     (5) "Control" includes the terms "controlling," "controlled 
198.32  by," and "under common control with" and means the possession, 
198.33  direct or indirect, of the power to direct or cause the 
198.34  direction of the management, operations, or policies of a 
198.35  person, whether through the ownership of voting securities, by 
198.36  contract, or otherwise. 
199.1      (c) A lease of real property to be used for a charter 
199.2   school, not excluded in paragraph (b), must contain the 
199.3   following statement:  "This lease is subject to Minnesota 
199.4   Statutes, section 124D.10, subdivision 23a." 
199.5      (d) If a charter school enters into as lessee a lease with 
199.6   a related party and the charter school subsequently closes, the 
199.7   commissioner has the right to recover from the lessor any lease 
199.8   payments in excess of those that are reasonable under section 
199.9   124.11 124D.11, subdivision 4, clause (1). 
199.10     Sec. 11.  Minnesota Statutes 2002, section 125A.05, is 
199.11  amended to read: 
199.12     125A.05 [METHOD OF SPECIAL INSTRUCTION.] 
199.13     (a) As defined in this subdivision section, to the extent 
199.14  required by federal law as of July 1, 1999, special instruction 
199.15  and services for children with a disability must be based on the 
199.16  assessment and individual education plan.  The instruction and 
199.17  services may be provided by one or more of the following methods:
199.18     (1) in connection with attending regular elementary and 
199.19  secondary school classes; 
199.20     (2) establishment of special classes; 
199.21     (3) at the home or bedside of the child; 
199.22     (4) in other districts; 
199.23     (5) instruction and services by special education 
199.24  cooperative centers established under this section, or in 
199.25  another member district of the cooperative center to which the 
199.26  resident district of the child with a disability belongs; 
199.27     (6) in a state residential school or a school department of 
199.28  a state institution approved by the commissioner; 
199.29     (7) in other states; 
199.30     (8) by contracting with public, private or voluntary 
199.31  agencies; 
199.32     (9) for children under age five and their families, 
199.33  programs and services established through collaborative efforts 
199.34  with other agencies; 
199.35     (10) for children under age five and their families, 
199.36  programs in which children with a disability are served with 
200.1   children without a disability; and 
200.2      (11) any other method approved by the commissioner. 
200.3      (b) Preference shall be given to providing special 
200.4   instruction and services to children under age three and their 
200.5   families in the residence of the child with the parent or 
200.6   primary caregiver, or both, present. 
200.7      (c) The primary responsibility for the education of a child 
200.8   with a disability must remain with the district of the child's 
200.9   residence regardless of which method of providing special 
200.10  instruction and services is used.  If a district other than a 
200.11  child's district of residence provides special instruction and 
200.12  services to the child, then the district providing the special 
200.13  instruction and services must notify the child's district of 
200.14  residence before the child's individual education plan is 
200.15  developed and must provide the district of residence an 
200.16  opportunity to participate in the plan's development.  The 
200.17  district of residence must inform the parents of the child about 
200.18  the methods of instruction that are available. 
200.19     Sec. 12.  Minnesota Statutes 2002, section 125A.12, is 
200.20  amended to read: 
200.21     125A.12 [ATTENDANCE IN ANOTHER DISTRICT.] 
200.22     No resident of a district who is eligible for special 
200.23  instruction and services pursuant to this section may be denied 
200.24  provision of this instruction and service because of attending a 
200.25  public school in another district pursuant to section 123B.88, 
200.26  subdivision 5, if the attendance is not subject to section 
200.27  124D.06, 124D.07, or 124D.08.  If the pupil attends a public 
200.28  school located in a contiguous district and the district of 
200.29  attendance does not provide special instruction and services, 
200.30  the district of residence must provide necessary transportation 
200.31  for the pupil between the boundary of the district of residence 
200.32  and the educational facility where special instruction and 
200.33  services are provided within the district of residence.  The 
200.34  district of residence may provide necessary transportation for 
200.35  the pupil between its boundary and the school attended in the 
200.36  contiguous district, but must not pay the cost of transportation 
201.1   provided outside the boundary of the district of residence.  
201.2      Sec. 13.  Minnesota Statutes 2002, section 126C.10, 
201.3   subdivision 28, is amended to read: 
201.4      Subd. 28.  [EQUITY REGION.] For the purposes of computing 
201.5   equity revenue under subdivision 23 24, a district whose 
201.6   administrative offices on July 1, 1999, is located in Anoka, 
201.7   Carver, Dakota, Hennepin, Ramsey, Scott, or Washington county is 
201.8   part of the metro equity region.  Districts whose administrative 
201.9   offices on July 1, 1999, are not located in Anoka, Carver, 
201.10  Dakota, Hennepin, Ramsey, Scott, or Washington county are part 
201.11  of the rural equity region. 
201.12     Sec. 14.  Minnesota Statutes 2002, section 126C.55, 
201.13  subdivision 5, is amended to read: 
201.14     Subd. 5.  [AID REDUCTION FOR REPAYMENT.] Except as provided 
201.15  in this subdivision, the state must reduce the state aid payable 
201.16  to the district under this chapter and chapters 120B, 122A, 
201.17  123A, 123B, 124D, 125A, 127A, and 273, according to the schedule 
201.18  in section 127A.44, subdivision 2, by the amount paid by the 
201.19  state under this section on behalf of the district, plus the 
201.20  interest due on it, and the amount reduced must revert from the 
201.21  appropriate account to the state general fund.  Payments from 
201.22  the school endowment fund or any federal aid payments shall not 
201.23  be reduced.  If, after review of the financial situation of the 
201.24  district, the commissioner advises the commissioner of finance 
201.25  that a total reduction of the aids would cause an undue hardship 
201.26  on or an undue disruption of the educational program of the 
201.27  district, the commissioner, with the approval of the 
201.28  commissioner of finance, may establish a different schedule for 
201.29  reduction of those aids to repay the state.  The amount of aids 
201.30  to be reduced are decreased by any amounts repaid to the state 
201.31  by the school district from other revenue sources. 
201.32     Sec. 15.  Minnesota Statutes 2002, section 127A.05, 
201.33  subdivision 4, is amended to read: 
201.34     Subd. 4.  [ADMINISTRATIVE RULES.] The commissioner may 
201.35  adopt new rules or amend any existing rules only under specific 
201.36  authority and consistent with the requirements of chapter 14.  
202.1   The commissioner may repeal any existing rules adopted by the 
202.2   commissioner.  Notwithstanding the provisions of section 14.05, 
202.3   subdivision 4, The commissioner may grant a variance to rules 
202.4   adopted by the commissioner upon application by a school 
202.5   district for purposes of implementing experimental programs in 
202.6   learning or school management.  This subdivision shall not 
202.7   prohibit the commissioner from making technical changes or 
202.8   corrections to rules adopted by the commissioner. 
202.9      Sec. 16.  Minnesota Statutes 2002, section 127A.45, 
202.10  subdivision 12, is amended to read: 
202.11     Subd. 12.  [PAYMENT PERCENTAGE FOR CERTAIN AIDS.] (a) One 
202.12  hundred percent of the aid for the current fiscal year must be 
202.13  paid for the following aids:  reimbursement for enrollment 
202.14  options transportation, according to sections 124D.03, 
202.15  subdivision 8, 124D.09, subdivision 22, and 124D.10; school 
202.16  lunch aid, according to section 124D.111; hearing impaired 
202.17  support services aid, according to section 124D.57; and Indian 
202.18  post-secondary preparation grants according to section 124D.85 
202.19  124D.80. 
202.20     (b) One hundred percent of the aid for the current fiscal 
202.21  year, based on enrollment in the previous year, must be paid for 
202.22  the first grade preparedness program according to section 
202.23  124D.081. 
202.24     Sec. 17.  Minnesota Statutes 2002, section 169.435, is 
202.25  amended to read: 
202.26     169.435 [STATE SCHOOL BUS SAFETY ADMINISTRATION.] 
202.27     Subdivision 1.  [RESPONSIBILITY; DEPARTMENT OF PUBLIC 
202.28  SAFETY.] The department of public safety has the primary 
202.29  responsibility for school transportation safety.  To oversee 
202.30  school transportation safety, the commissioner of public safety 
202.31  shall establish a school bus safety advisory committee according 
202.32  to subdivision 2.  The commissioner or the commissioner's 
202.33  designee shall serve as state director of pupil transportation 
202.34  according to subdivision 3. 
202.35     Subd. 3.  [PUPIL TRANSPORTATION SAFETY DIRECTOR.] (a) The 
202.36  commissioner of public safety or the commissioner's designee 
203.1   shall serve as pupil transportation safety director. 
203.2      (b) The duties of the pupil transportation safety director 
203.3   shall include: 
203.4      (1) overseeing all department activities related to school 
203.5   bus safety; 
203.6      (2) assisting in the development, interpretation, and 
203.7   implementation of laws and policies relating to school bus 
203.8   safety; 
203.9      (3) supervising preparation of the school bus inspection 
203.10  manual; and 
203.11     (4) in conjunction with the department of children, 
203.12  families, and learning education, assisting school districts in 
203.13  developing and implementing comprehensive transportation 
203.14  policies; and 
203.15     (5) providing information requested by the school bus 
203.16  safety advisory committee. 
203.17     Sec. 18.  Minnesota Statutes 2002, section 169.449, 
203.18  subdivision 1, is amended to read: 
203.19     Subdivision 1.  [RULES.] The commissioner of public safety, 
203.20  in consultation with the school bus safety advisory committee, 
203.21  shall adopt rules governing the operation of school buses used 
203.22  for transportation of school children, when owned or operated by 
203.23  a school or privately owned and operated under a contract with a 
203.24  school, and these rules must be made a part of that contract by 
203.25  reference.  Each school, its officers and employees, and each 
203.26  person employed under the contract is subject to these rules. 
203.27     Sec. 19.  Minnesota Statutes 2002, section 169.4501, 
203.28  subdivision 3, is amended to read: 
203.29     Subd. 3.  [INSPECTION MANUAL.] The department of public 
203.30  safety shall develop a school bus inspection manual based on the 
203.31  national standards adopted in subdivision 1 and Minnesota 
203.32  standards adopted in sections 169.4502 to 169.4504.  The 
203.33  Minnesota state patrol shall use the manual as the basis for 
203.34  inspecting buses as provided in section 169.451.  When 
203.35  appropriate, the school bus safety advisory committee shall 
203.36  recommend to the education committees of the legislature 
204.1   modifications to the standards upon which the school bus 
204.2   inspection manual is based.  The department of public safety has 
204.3   no rulemaking authority to alter the standards upon which school 
204.4   buses are inspected. 
204.5      Sec. 20.  Minnesota Statutes 2002, section 169.4501, 
204.6   subdivision 4, is amended to read: 
204.7      Subd. 4.  [VARIANCE.] The commissioner of public safety may 
204.8   grant a variance to any of the school bus standards to 
204.9   accommodate testing of new equipment related to school buses.  A 
204.10  variance from the standards must be for the sole purpose of 
204.11  testing and evaluating new equipment for increased safety, 
204.12  efficiency, and economy of pupil transportation.  The variance 
204.13  expires 18 months from the date on which it is granted unless 
204.14  the commissioner specifies an earlier expiration date.  The 
204.15  school bus safety advisory committee shall annually review all 
204.16  variances that are granted under this subdivision and consider 
204.17  whether to recommend modifications to the Minnesota school bus 
204.18  equipment standards based on the variances. 
204.19     Sec. 21.  [REPEALER.] 
204.20     (a) Minnesota Statutes 2002, section 126C.55, subdivision 
204.21  5, is repealed. 
204.22     (b) Laws 2001, First Special Session chapter 3, article 4, 
204.23  sections 1 and 2; and Laws 2001, First Special Session chapter 
204.24  6, article 2, section 52, are repealed. 
204.25                             ARTICLE 13
204.26                     ACADEMIC CONTENT STANDARDS
204.27     Section 1.  [120B.001] [REPEALING PROFILE OF LEARNING 
204.28  STATUTES AND RULES AND RELATED STATEWIDE TESTING REQUIREMENT.] 
204.29     (a) Notwithstanding sections 120B.02, 120B.031, 120B.30, 
204.30  120B.31, and 120B.35, or other law to the contrary, the 
204.31  commissioner of education must not implement the profile of 
204.32  learning portion of the state's results-oriented graduation rule 
204.33  and all rules under Minnesota Rules, chapter 3501, related to 
204.34  the profile of learning portion of the state's results-oriented 
204.35  graduation rule described in this chapter are repealed. 
204.36     (b) The requirement under section 120B.30 for a test 
205.1   aligned with the profile of learning portion of the state's 
205.2   graduation standards that is administered annually to all 
205.3   students in grades 3, 5, 7, 8, 10, and 11 is repealed.  This 
205.4   repeal does not apply to the state's basic skills tests in 
205.5   reading, mathematics, and written composition. 
205.6      <b>[EFFECTIVE DATE.]</b> Paragraph (a) is effective the day 
205.7   following final enactment and applies to the 2003-2004 school 
205.8   year and later.  Paragraph (b) is effective immediately and 
205.9   applies to the 2005-2006 school year and later. 
205.10     Sec. 2.  [REPLACING PROFILE OF LEARNING STATUTES AND 
205.11  RULES.] 
205.12     Subdivision 1.  [STAKEHOLDER ADVICE ON STANDARDS.] The 
205.13  commissioner of education must consider advice from at least the 
205.14  following stakeholders in developing statewide rigorous core 
205.15  academic standards in English, mathematics, science, and history 
205.16  and geography to replace the profile of learning: 
205.17     (1) parents of school-age children and members of the 
205.18  public throughout the state; 
205.19     (2) teachers throughout the state currently licensed and 
205.20  providing instruction in English, mathematics, science, or 
205.21  history and geography and licensed elementary and secondary 
205.22  school principals throughout the state currently administering a 
205.23  school site; 
205.24     (3) currently serving members of local school boards and 
205.25  charter school boards throughout the state; 
205.26     (4) faculty teaching core subjects at postsecondary 
205.27  institutions in Minnesota; and 
205.28     (5) representatives of the Minnesota business community. 
205.29     Subd. 2.  [PARAMETERS FOR ACADEMIC STANDARDS.] The academic 
205.30  standards must: 
205.31     (1) be based on factual, objective, verifiable knowledge in 
205.32  English, mathematics, science, and history and geography; 
205.33     (2) be clear, concise, measurable, and grade-level 
205.34  appropriate; 
205.35     (3) preserve and promote fundamental American principles 
205.36  stated in the Declaration of Independence and the Constitution 
206.1   of the United States and other such principles as national 
206.2   sovereignty, natural law, and free market enterprise; 
206.3      (4) not mandate a specific teaching methodology nor include 
206.4   work-based learning or any other content standard inconsistent 
206.5   with this subdivision; and 
206.6      (5) be assessed using tests aligned with the academic 
206.7   standards established under this section. 
206.8      Subd. 3.  [COMMISSIONER TO PRESENT PROPOSED RULES TO THE 
206.9   LEGISLATURE.] (a) The commissioner must present to the 
206.10  legislature proposed rules for implementing statewide rigorous 
206.11  core academic standards in English, mathematics, science, and 
206.12  history and geography as follows: 
206.13     (1) by April 15, 2003, present proposed rules for 
206.14  implementing statewide rigorous core academic standards in 
206.15  English and mathematics; 
206.16     (2) present a statewide plan for students, educators, 
206.17  schools, and school districts to make the transition from the 
206.18  profile of learning to the standards described under this act; 
206.19     (3) by March 1, 2004, present proposed rules for 
206.20  implementing statewide rigorous core academic standards in 
206.21  science; 
206.22     (4) by March 1, 2005, present proposed rules for 
206.23  implementing statewide rigorous core academic standards in 
206.24  history and geography. 
206.25     (b) All proposed rules the commissioner presents must 
206.26  comply with the requirements of this section. 
206.27     (c) A school district, no later than the 2007-2008 school 
206.28  year, must incorporate into its existing locally established 
206.29  graduation requirements the state graduation requirements 
206.30  premised on rules proposed under this section.  A school 
206.31  district that incorporates these state graduation requirements 
206.32  before the 2007-2008 school year must provide students who enter 
206.33  the ninth grade in or before the 2004-2005 school year with the 
206.34  opportunity to earn a diploma based on existing locally 
206.35  established graduation requirements in effect when the students 
206.36  entered grade 9.  District efforts to develop, implement, or 
207.1   improve instruction or curriculum as a result of the provisions 
207.2   of this section must be consistent with sections 120B.10, 
207.3   120B.11, and 120B.20.  
207.4      Subd. 4.  [RULES IMPLEMENTING READING AND MATH 
207.5   STANDARDS.] The commissioner must adopt rules under section 
207.6   14.388, clause (2), for implementing the statewide rigorous core 
207.7   academic standards in English and mathematics described in 
207.8   subdivision 3, paragraph (a), clause (1). 
207.9      <b>[EFFECTIVE DATE.]</b> Subdivisions 1, 2, and 3 are effective 
207.10  the day following final enactment.  Subdivision 4 is effective 
207.11  April 30, 2003. 
207.12     Sec. 3.  [INTERIM ALTERNATIVE.] 
207.13     If the legislature does not authorize the commissioner 
207.14  under section 2, subdivision 4, to adopt rules to implement 
207.15  statewide rigorous core academic standards in English and 
207.16  mathematics that are effective for the 2003-2004 school year, 
207.17  each school district and charter school shall continue to 
207.18  implement academic English and mathematics standards consistent 
207.19  with Minnesota Statutes, section 120A.22, subdivision 9, until 
207.20  such rules to implement statewide rigorous core academic 
207.21  standards in English and mathematics are adopted. 
207.22     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
207.23  following final enactment.