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; requiring a school 
  1.11            district primary election in certain circumstances; 
  1.12            providing for recitation of the pledge of allegiance; 
  1.13            providing for technical amendments to certain 
  1.14            education provisions; changing the name of the 
  1.15            department of children, families, and learning to the 
  1.16            department of education; providing for teacher/school 
  1.17            board contract arbitration and post arbitration 
  1.18            procedures; providing for rulemaking; appropriating 
  1.19            money; amending Minnesota Statutes 2002, sections 
  1.20            12.21, subdivision 3; 15.01; 84A.51, subdivision 4; 
  1.21            119A.01, subdivision 2; 119A.02, subdivisions 2, 3; 
  1.22            119A.52; 119B.011, subdivisions 8, 10, 20; 120A.02; 
  1.23            120A.05, subdivisions 4, 7, 9; 120A.24, subdivision 4; 
  1.24            120A.41; 121A.11, by adding subdivisions; 121A.21; 
  1.25            121A.23, subdivision 1, by adding a subdivision; 
  1.26            121A.41, subdivision 10; 121A.50; 121A.55; 121A.64; 
  1.27            122A.09, subdivision 10; 122A.12, subdivisions 1, 2; 
  1.28            122A.18, subdivision 7a; 122A.21; 122A.22; 122A.41, 
  1.29            subdivision 2; 122A.414, by adding a subdivision; 
  1.30            122A.415, subdivisions 1, 3; 122A.63, subdivision 3; 
  1.31            123A.06, subdivision 3; 123A.18, subdivision 2; 
  1.32            123A.73, subdivisions 3, 4, 5; 123B.02, subdivisions 
  1.33            1, 14; 123B.36, subdivision 1; 123B.49, subdivision 4; 
  1.34            123B.51, subdivisions 3, 4; 123B.52, by adding a 
  1.35            subdivision; 123B.53, subdivision 4; 123B.57, 
  1.36            subdivisions 1, 4, 6; 123B.59, subdivisions 1, 2, 3, 
  1.37            5, by adding a subdivision; 123B.63, subdivisions 1, 
  1.38            2, 3, 4; 123B.72, subdivision 3; 123B.88, subdivision 
  1.39            2; 123B.90, subdivisions 2, 3; 123B.91, subdivision 1; 
  1.40            123B.92, subdivisions 1, 3, 9; 123B.93; 124D.03, 
  1.41            subdivision 12; 124D.081, by adding a subdivision; 
  1.42            124D.09, subdivisions 3, 9, 10, 13, 16, 20; 124D.10, 
  1.43            subdivisions 2a, 3, 4, 8, 13, 16, 20, 23a; 124D.11, 
  1.44            subdivisions 1, 2, 4, 6, 9; 124D.118, subdivision 4; 
  1.45            124D.128, subdivisions 3, 6; 124D.13, subdivisions 2, 
  1.46            4, 8, 11; 124D.135, subdivisions 1, 8; 124D.15, 
  2.1             subdivision 7; 124D.16, subdivisions 1, 6; 124D.19, 
  2.2             subdivision 3; 124D.20, subdivisions 3, 5, by adding 
  2.3             subdivisions; 124D.22, subdivision 3; 124D.42, 
  2.4             subdivision 6; 124D.454, subdivisions 1, 2, 3, 8, 10, 
  2.5             by adding a subdivision; 124D.52, subdivisions 1, 3; 
  2.6             124D.531, subdivisions 1, 2, 4, 7; 124D.59, 
  2.7             subdivision 2; 124D.65, subdivision 5; 124D.86, 
  2.8             subdivisions 1a, 3, 4, 5, 6; 125A.05; 125A.12; 
  2.9             125A.21, subdivision 2; 125A.28; 125A.30; 125A.76, 
  2.10            subdivisions 1, 4; 125A.79, subdivisions 1, 6; 
  2.11            125B.21; 126C.05, subdivisions 1, 8, 14, 15, 16, 17, 
  2.12            by adding a subdivision; 126C.10, subdivisions 1, 3, 
  2.13            4, 17, 18, 24, 28, by adding subdivisions; 126C.13, 
  2.14            subdivision 4; 126C.15, subdivision 1; 126C.17, 
  2.15            subdivisions 1, 2, 5, 7, 7a, 9, 13; 126C.21, 
  2.16            subdivision 3; 126C.40, subdivision 1; 126C.42, 
  2.17            subdivision 1; 126C.43, subdivisions 2, 3; 126C.44; 
  2.18            126C.45; 126C.457; 126C.48, subdivision 3; 126C.55, 
  2.19            subdivision 5; 126C.63, subdivisions 5, 8; 126C.69, 
  2.20            subdivisions 2, 9; 127A.05, subdivisions 1, 3, 4; 
  2.21            127A.45, subdivisions 2, 3, 7a, 10, 12, 13, 14, 14a, 
  2.22            16; 127A.47, subdivisions 7, 8; 127A.49, subdivisions 
  2.23            2, 3; 128C.05, by adding a subdivision; 128D.11, 
  2.24            subdivision 8; 134.34, subdivision 4; 169.26, 
  2.25            subdivision 3; 169.28, subdivision 1; 169.435; 
  2.26            169.449, subdivision 1; 169.4501, subdivisions 3, 4; 
  2.27            169.4503, subdivision 4; 169.454, subdivision 6; 
  2.28            169.973, subdivision 1; 171.321, subdivision 5; 
  2.29            177.42, subdivision 2; 178.02, subdivision 1; 205A.03, 
  2.30            subdivisions 1, 3, 4; 205A.06, subdivision 1a; 
  2.31            268.052, subdivisions 2, 4; 273.138, subdivision 6; 
  2.32            298.28, subdivision 4; 475.61, subdivisions 1, 3, 4; 
  2.33            Laws 1965, chapter 705, as amended; Laws 2001, First 
  2.34            Special Session chapter 6, article 2, section 64; 
  2.35            proposing coding for new law in Minnesota Statutes, 
  2.36            chapters 120B; 121A; 123B; 124D; 125A; 126C; repealing 
  2.37            Minnesota Statutes 2002, sections 15.014, subdivision 
  2.38            3; 93.22, subdivision 2; 93.223, subdivision 1; 
  2.39            119A.01, subdivision 1; 120B.23; 121A.49; 122A.60; 
  2.40            122A.61; 122A.62; 122A.64; 122A.65; 123A.73, 
  2.41            subdivisions 7, 10, 11; 123B.05; 123B.59, subdivisions 
  2.42            6, 7; 123B.81, subdivision 6; 123B.90, subdivision 1; 
  2.43            124D.09, subdivision 15; 124D.115; 124D.1156; 124D.17; 
  2.44            124D.21; 124D.221; 124D.54; 124D.65, subdivision 4; 
  2.45            124D.84, subdivision 2; 124D.89; 124D.93; 125A.023, 
  2.46            subdivision 5; 125A.09; 125A.47; 125A.79, subdivision 
  2.47            2; 125B.11; 126C.01, subdivision 4; 126C.05, 
  2.48            subdivision 12; 126C.12; 126C.125; 126C.14; 126C.445; 
  2.49            126C.55, subdivision 5; 127A.41, subdivision 6; 
  2.50            144.401, subdivision 5; 169.441, subdivision 4; 
  2.51            239.004; Laws 1993, chapter 224, article 8, section 
  2.52            20, subdivision 2, as amended; Laws 2000, chapter 489, 
  2.53            article 2, section 36, as amended; Laws 2001, First 
  2.54            Special Session chapter 3, article 4, sections 1, 2; 
  2.55            Laws 2001, First Special Session chapter 6, article 2, 
  2.56            section 52; Laws 2001, First Special Session chapter 
  2.57            6, article 5, section 12, as amended; Minnesota Rules, 
  2.58            parts 3500.0600; 3520.0400; 3520.1400; 3520.3300; 
  2.59            3530.1500; 3530.2700; 3530.4400; 3530.4500; 3530.4700; 
  2.60            3550.0100. 
  2.61  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  2.62                             ARTICLE 1 
  2.63                         GENERAL EDUCATION 
  2.64     Section 1.  Minnesota Statutes 2002, section 123A.06, 
  2.65  subdivision 3, is amended to read: 
  3.1      Subd. 3.  [HOURS OF INSTRUCTION EXEMPTION.] Notwithstanding 
  3.2   any law to the contrary, the center programs must be available 
  3.3   throughout the entire year.  Pupils in a center may receive 
  3.4   instruction for more than or less than the daily number of hours 
  3.5   required by the rules of the commissioner of children, families, 
  3.6   and learning.  However, a pupil must receive instruction each 
  3.7   year for at least the total number of instructional hours 
  3.8   required by statutes and rules.  A center may petition the state 
  3.9   board under Minnesota Rules, part 3500.1000, for exemption from 
  3.10  other rules.  
  3.11     Sec. 2.  Minnesota Statutes 2002, section 123A.18, 
  3.12  subdivision 2, is amended to read: 
  3.13     Subd. 2.  [EXTENDED YEAR INSTRUCTION.] The agreement may 
  3.14  provide opportunities for pupils to receive instruction 
  3.15  throughout the entire year and for teachers to coordinate 
  3.16  educational opportunities and provide instruction throughout the 
  3.17  entire year.  Pupils may receive instruction for more than or 
  3.18  less than the daily number of hours required by the rules of the 
  3.19  commissioner of children, families, and learning.  However, the 
  3.20  pupil must receive instruction each year for at least the total 
  3.21  number of instructional hours required by statutes and rules.  A 
  3.22  teacher who is employed for the extended year may develop, in 
  3.23  consultation with pupils and parents, individual educational 
  3.24  programs for not more than 125 pupils.  
  3.25     Sec. 3.  Minnesota Statutes 2002, section 123A.73, 
  3.26  subdivision 3, is amended to read: 
  3.27     Subd. 3.  [VOLUNTARY DISSOLUTION; REFERENDUM REVENUE.] As 
  3.28  of the effective date of the voluntary dissolution of a district 
  3.29  and its attachment to one or more existing districts pursuant to 
  3.30  section 123A.46, the authorization for all referendum revenues 
  3.31  previously approved by the voters of all affected districts for 
  3.32  those districts pursuant to section 126C.17, subdivision 9, or 
  3.33  its predecessor provision, is canceled.  However, if all of the 
  3.34  territory of any independent district is included in the 
  3.35  enlarged district, and if the adjusted net tax capacity of 
  3.36  taxable property in that territory comprises 90 percent or more 
  4.1   of the adjusted net tax capacity of all taxable property in an 
  4.2   enlarged district, the enlarged district's referendum revenue 
  4.3   shall be determined as follows: 
  4.4      If the referendum revenue previously approved in the 
  4.5   preexisting district is authorized as a tax rate, the referendum 
  4.6   revenue in the enlarged district is the tax rate times the net 
  4.7   tax capacity of the enlarged district.  If referendum revenue 
  4.8   previously approved in the preexisting district is authorized as 
  4.9   revenue per resident pupil unit, The referendum revenue shall be 
  4.10  the revenue per resident marginal cost pupil unit times the 
  4.11  number of resident marginal cost pupil units in the enlarged 
  4.12  district.  If referendum revenue in the preexisting district is 
  4.13  authorized both as a tax rate and as revenue per resident pupil 
  4.14  unit, the referendum revenue in the enlarged district shall be 
  4.15  the sum of both plus any referendum revenue in the preexisting 
  4.16  district authorized as a dollar amount.  Any new referendum 
  4.17  revenue shall be authorized only after approval is granted by 
  4.18  the voters of the entire enlarged district in an election 
  4.19  pursuant to section 126C.17, subdivision 9. 
  4.20     Sec. 4.  Minnesota Statutes 2002, section 123A.73, 
  4.21  subdivision 4, is amended to read: 
  4.22     Subd. 4.  [CONSOLIDATION; MAXIMUM AUTHORIZED REFERENDUM 
  4.23  REVENUES.] As of the effective date of a consolidation pursuant 
  4.24  to section 123A.48, if the plan for consolidation so provides, 
  4.25  or if the plan for consolidation makes no provision concerning 
  4.26  referendum revenues, the authorization for all referendum 
  4.27  revenues previously approved by the voters of all affected 
  4.28  districts for those districts pursuant to section 126C.17, 
  4.29  subdivision 9, or its predecessor provision shall be 
  4.30  recalculated as provided in this subdivision.  The referendum 
  4.31  revenue authorization for the newly created district shall be 
  4.32  the net tax capacity rate revenue per resident marginal cost 
  4.33  pupil unit that would raise an amount equal to the combined 
  4.34  dollar amount of the referendum revenues authorized by each of 
  4.35  the component districts for the year preceding the 
  4.36  consolidation, unless the referendum revenue authorization of 
  5.1   the newly created district is subsequently modified pursuant to 
  5.2   section 126C.17, subdivision 9.  If the referendum revenue 
  5.3   authorizations for each of the component districts were limited 
  5.4   to a specified number of years, The referendum revenue 
  5.5   authorization for the newly created district shall continue for 
  5.6   a period of time equal to the longest period authorized for any 
  5.7   component district.  If the referendum revenue authorization of 
  5.8   any component district is not limited to a specified number of 
  5.9   years, the referendum revenue authorization for the newly 
  5.10  created district shall not be limited to a specified number of 
  5.11  years.  
  5.12     Sec. 5.  Minnesota Statutes 2002, section 123A.73, 
  5.13  subdivision 5, is amended to read: 
  5.14     Subd. 5.  [ALTERNATIVE METHOD.] As of the effective date of 
  5.15  a consolidation pursuant to section 123A.48, if the plan for 
  5.16  consolidation so provides, the authorization for all referendum 
  5.17  revenues previously approved by the voters of all affected 
  5.18  districts for those districts pursuant to section 126C.17, 
  5.19  subdivision 9, or its predecessor provision shall be combined as 
  5.20  provided in this subdivision.  The referendum revenue 
  5.21  authorization for the newly created district may be any 
  5.22  allowance per resident marginal cost pupil unit provided in the 
  5.23  plan for consolidation, but may not exceed the allowance per 
  5.24  resident marginal cost pupil unit that would raise an amount 
  5.25  equal to the combined dollar amount of the referendum revenues 
  5.26  authorized by each of the component districts for the year 
  5.27  preceding the consolidation.  If the referendum revenue 
  5.28  authorizations for each of the component districts were limited 
  5.29  to a specified number of years, The referendum revenue 
  5.30  authorization for the newly created district shall continue for 
  5.31  a period of time equal to the longest period authorized for any 
  5.32  component district.  If the referendum revenue authorization of 
  5.33  any component district is not limited to a specified number of 
  5.34  years, the referendum revenue authorization for the newly 
  5.35  created district shall not be limited to a specified number of 
  5.36  years.  The referendum revenue authorization for the newly 
  6.1   created district may be modified pursuant to section 126C.17, 
  6.2   subdivision 9. 
  6.3      Sec. 6.  Minnesota Statutes 2002, section 123B.90, 
  6.4   subdivision 2, is amended to read: 
  6.5      Subd. 2.  [STUDENT TRAINING.] (a) Each district must 
  6.6   provide public school pupils enrolled in grades kindergarten 
  6.7   through grade 10 with age-appropriate school bus safety training.
  6.8   The training must be results-oriented and shall consist of both 
  6.9   classroom instruction and practical training using a school 
  6.10  bus.  Upon completing the training, a student shall be able to 
  6.11  demonstrate knowledge and understanding, as described in this 
  6.12  section, of at least the following competencies and concepts: 
  6.13     (1) transportation by school bus is a privilege and not a 
  6.14  right; 
  6.15     (2) district policies for student conduct and school bus 
  6.16  safety; 
  6.17     (3) appropriate conduct while on the school bus; 
  6.18     (4) the danger zones surrounding a school bus; 
  6.19     (5) procedures for safely boarding and leaving a school 
  6.20  bus; 
  6.21     (6) procedures for safe street or road crossing; and 
  6.22     (7) school bus evacuation and other emergency procedures; 
  6.23  and 
  6.24     (8) appropriate training on the use of lap belts or lap and 
  6.25  shoulder belts, if the district uses buses equipped with lap 
  6.26  belts or lap and shoulder belts. 
  6.27     (b) Each nonpublic school located within the district must 
  6.28  provide all nonpublic school pupils enrolled in grades 
  6.29  kindergarten through grade 10 who are transported by school bus 
  6.30  at public expense and attend school within the district's 
  6.31  boundaries with training as required in paragraph (a).  The 
  6.32  school district shall make a bus available for the practical 
  6.33  training if the district transports the nonpublic students.  
  6.34  Each nonpublic school shall provide the instruction. 
  6.35     (c) All Students enrolled in grades kindergarten through 3 
  6.36  grade 6 who are transported by school bus and are enrolled 
  7.1   during the first or second week of school must demonstrate 
  7.2   achievement of receive the school bus safety training 
  7.3   competencies by the end of the third week of school.  All 
  7.4   Students enrolled in grades 4 7 through 10 who are transported 
  7.5   by school bus and are enrolled during the first or second week 
  7.6   of school and have not received school bus safety training in 
  7.7   kindergarten through grade 6 must demonstrate achievement 
  7.8   of receive the competencies training by the end of the sixth 
  7.9   week of school.  Students in grades 9 and 10 must receive 
  7.10  training in the laws and proper procedures when operating a 
  7.11  motor vehicle in the vicinity of a school bus.  Students 
  7.12  enrolled in grades kindergarten through grade 10 who enroll in a 
  7.13  school after the second week of school and are transported by 
  7.14  school bus and have not received training in their previous 
  7.15  school district shall undergo school bus safety training and 
  7.16  demonstrate achievement of the school bus safety competencies or 
  7.17  receive bus safety instructional materials within four weeks of 
  7.18  the first day of attendance.  The school transportation safety 
  7.19  director in each district must certify to the commissioner 
  7.20  superintendent of schools annually that all students transported 
  7.21  by school bus within the district have satisfactorily 
  7.22  demonstrated knowledge and understanding of received the school 
  7.23  bus safety competencies training according to this section or 
  7.24  provide an explanation for a student's failure to demonstrate 
  7.25  the competencies.  The principal or other chief administrator of 
  7.26  each nonpublic school must certify annually to the school 
  7.27  transportation safety director of the district in which the 
  7.28  school is located that all of the school's students transported 
  7.29  by school bus at public expense have received training according 
  7.30  to this section.  A district may deny transportation to a 
  7.31  student who fails to demonstrate the competencies, unless the 
  7.32  student is unable to achieve the competencies due to a 
  7.33  disability, or to a student who attends a nonpublic school that 
  7.34  fails to provide training as required by this subdivision. 
  7.35     (d) A district and a nonpublic school with students 
  7.36  transported by school bus at public expense must, to the extent 
  8.1   possible, may provide kindergarten pupils with bus safety 
  8.2   training before the first day of school. 
  8.3      (e) A district and a nonpublic school with students 
  8.4   transported by school bus at public expense must may also 
  8.5   provide student safety education for bicycling and pedestrian 
  8.6   safety, for students enrolled in grades kindergarten through 
  8.7   grade 5. 
  8.8      (f) A district and a nonpublic school with students 
  8.9   transported by school bus at public expense must make reasonable 
  8.10  accommodations for the school bus, bicycle, and pedestrian 
  8.11  safety training of pupils known to speak English as a second 
  8.12  language and pupils with disabilities. 
  8.13     (g) The district must provide students enrolled in 
  8.14  kindergarten through grade 3 school bus safety training twice 
  8.15  during the school year.  
  8.16     Sec. 7.  Minnesota Statutes 2002, section 123B.90, 
  8.17  subdivision 3, is amended to read: 
  8.18     Subd. 3.  [MODEL TRAINING PROGRAM.] The commissioner shall 
  8.19  develop a comprehensive model school bus safety training program 
  8.20  for pupils who ride the bus that includes bus safety curriculum 
  8.21  for both classroom and practical instruction, methods for 
  8.22  assessing attainment of school bus safety competencies, and 
  8.23  age-appropriate instructional materials.  The model training 
  8.24  program for students riding buses with lap belts or lap and 
  8.25  shoulder belts must include information on the appropriate use 
  8.26  of lap belts or lap and shoulder belts.  The program must be 
  8.27  adaptable for use by students with disabilities. 
  8.28     Sec. 8.  Minnesota Statutes 2002, section 123B.91, 
  8.29  subdivision 1, is amended to read: 
  8.30     Subdivision 1.  [COMPREHENSIVE POLICY.] (a) Each district 
  8.31  shall develop and implement a comprehensive, written policy 
  8.32  governing pupil transportation safety, including transportation 
  8.33  of nonpublic school students, when applicable.  The policy, at 
  8.34  minimum, must contain: 
  8.35     (1) provisions for appropriate student bus safety training 
  8.36  under section 123B.90; 
  9.1      (2) rules governing student conduct on school buses and in 
  9.2   school bus loading and unloading areas; 
  9.3      (3) a statement of parent or guardian responsibilities 
  9.4   relating to school bus safety; 
  9.5      (4) provisions for notifying students and parents or 
  9.6   guardians of their responsibilities and the rules, including the 
  9.7   district's seat belt policy, if applicable; 
  9.8      (5) an intradistrict system for reporting school bus 
  9.9   accidents or misconduct and a system for dealing with local law 
  9.10  enforcement officials in cases of criminal conduct on a school 
  9.11  bus; 
  9.12     (6) (5) a discipline policy to address violations of school 
  9.13  bus safety rules, including procedures for revoking a student's 
  9.14  bus riding privileges in cases of serious or repeated 
  9.15  misconduct; 
  9.16     (7) (6) a system for integrating school bus misconduct 
  9.17  records with other discipline records; 
  9.18     (8) a statement of bus driver duties; 
  9.19     (9) (7) where applicable, provisions governing bus monitor 
  9.20  qualifications, training, and duties; 
  9.21     (10) (8) rules governing the use and maintenance of type 
  9.22  III vehicles, drivers of type III vehicles, qualifications to 
  9.23  drive a type III vehicle, qualifications for a type III vehicle, 
  9.24  and the circumstances under which a student may be transported 
  9.25  in a type III vehicle; 
  9.26     (11) (9) operating rules and procedures; 
  9.27     (12) provisions for annual bus driver in-service training 
  9.28  and evaluation; 
  9.29     (13) (10) emergency procedures; 
  9.30     (14) (11) a system for maintaining and inspecting 
  9.31  equipment; and 
  9.32     (15) (12) any other requirements of the school district, if 
  9.33  any, that exceed state law minimum requirements for school bus 
  9.34  operations; and 
  9.35     (16) requirements for basic first aid training, which must 
  9.36  include the Heimlich maneuver and procedures for dealing with 
 10.1   obstructed airways, shock, bleeding, and seizures. 
 10.2      (b) Districts are encouraged to use the model policy 
 10.3   developed by the Minnesota school boards association, the 
 10.4   department of public safety, and the department of children, 
 10.5   families, and learning, as well as the current edition of the 
 10.6   "National Standards for School Transportation," in developing 
 10.7   safety policies.  Each district shall review its policy annually 
 10.8   to ensure that it conforms to law. 
 10.9      Sec. 9.  Minnesota Statutes 2002, section 123B.92, 
 10.10  subdivision 1, is amended to read: 
 10.11     Subdivision 1.  [DEFINITIONS.] For purposes of this section 
 10.12  and section 125A.76, the terms defined in this subdivision have 
 10.13  the meanings given to them. 
 10.14     (a) "Actual expenditure per pupil transported in the 
 10.15  regular and excess transportation categories" means the quotient 
 10.16  obtained by dividing: 
 10.17     (1) the sum of: 
 10.18     (i) all expenditures for transportation in the regular 
 10.19  category, as defined in paragraph (b), clause (1), and the 
 10.20  excess category, as defined in paragraph (b), clause (2), plus 
 10.21     (ii) an amount equal to one year's depreciation on the 
 10.22  district's school bus fleet and mobile units computed on a 
 10.23  straight line basis at the rate of 15 percent per year for 
 10.24  districts operating a program under section 124D.128 for grades 
 10.25  1 to 12 for all students in the district and 12-1/2 percent per 
 10.26  year for other districts of the cost of the fleet, plus 
 10.27     (iii) an amount equal to one year's depreciation on the 
 10.28  district's type three school buses, as defined in section 
 10.29  169.01, subdivision 6, clause (5), which must be used a majority 
 10.30  of the time for pupil transportation purposes, computed on a 
 10.31  straight line basis at the rate of 20 percent per year of the 
 10.32  cost of the type three school buses by: 
 10.33     (2) the number of pupils eligible for transportation in the 
 10.34  regular category, as defined in paragraph (b), clause (1), and 
 10.35  the excess category, as defined in paragraph (b), clause (2).  
 10.36     (b) "Transportation category" means a category of 
 11.1   transportation service provided to pupils as follows:  
 11.2      (1) Regular transportation is:  
 11.3      (i) transportation to and from school during the regular 
 11.4   school year for resident elementary pupils residing one mile or 
 11.5   more from the public or nonpublic school they attend, and 
 11.6   resident secondary pupils residing two miles or more from the 
 11.7   public or nonpublic school they attend, excluding desegregation 
 11.8   transportation and noon kindergarten transportation; but with 
 11.9   respect to transportation of pupils to and from nonpublic 
 11.10  schools, only to the extent permitted by sections 123B.84 to 
 11.11  123B.87; 
 11.12     (ii) transportation of resident pupils to and from language 
 11.13  immersion programs; 
 11.14     (iii) transportation of a pupil who is a custodial parent 
 11.15  and that pupil's child between the pupil's home and the child 
 11.16  care provider and between the provider and the school, if the 
 11.17  home and provider are within the attendance area of the school; 
 11.18  and 
 11.19     (iv) transportation to and from or board and lodging in 
 11.20  another district, of resident pupils of a district without a 
 11.21  secondary school; and 
 11.22     (v) transportation to and from school during the regular 
 11.23  school year required under subdivision 3 for nonresident 
 11.24  elementary pupils when the distance from the attendance area 
 11.25  border to the public school is one mile or more, and for 
 11.26  nonresident secondary pupils when the distance from the 
 11.27  attendance area border to the public school is two miles or 
 11.28  more, excluding desegregation transportation and noon 
 11.29  kindergarten transportation. 
 11.30     For the purposes of this paragraph, a district may 
 11.31  designate a licensed day care facility, respite care facility, 
 11.32  the residence of a relative, or the residence of a person chosen 
 11.33  by the pupil's parent or guardian as the home of a pupil for 
 11.34  part or all of the day, if requested by the pupil's parent or 
 11.35  guardian, and if that facility or residence is within the 
 11.36  attendance area of the school the pupil attends. 
 12.1      (2) Excess transportation is: 
 12.2      (i) transportation to and from school during the regular 
 12.3   school year for resident secondary pupils residing at least one 
 12.4   mile but less than two miles from the public or nonpublic school 
 12.5   they attend, and transportation to and from school for resident 
 12.6   pupils residing less than one mile from school who are 
 12.7   transported because of extraordinary traffic, drug, or crime 
 12.8   hazards; and 
 12.9      (ii) transportation to and from school during the regular 
 12.10  school year required under subdivision 3 for nonresident 
 12.11  secondary pupils when the distance from the attendance area 
 12.12  border to the school is at least one mile but less than two 
 12.13  miles from the public school they attend, and for nonresident 
 12.14  pupils when the distance from the attendance area border to the 
 12.15  school is less than one mile from the school and who are 
 12.16  transported because of extraordinary traffic, drug, or crime 
 12.17  hazards. 
 12.18     (3) Desegregation transportation is transportation within 
 12.19  and outside of the district during the regular school year of 
 12.20  pupils to and from schools located outside their normal 
 12.21  attendance areas under a plan for desegregation mandated by the 
 12.22  commissioner or under court order.  
 12.23     (4) "Transportation services for pupils with disabilities" 
 12.24  is: 
 12.25     (i) transportation of pupils with disabilities who cannot 
 12.26  be transported on a regular school bus between home or a respite 
 12.27  care facility and school; 
 12.28     (ii) necessary transportation of pupils with disabilities 
 12.29  from home or from school to other buildings, including centers 
 12.30  such as developmental achievement centers, hospitals, and 
 12.31  treatment centers where special instruction or services required 
 12.32  by sections 125A.03 to 125A.24, 125A.26 to 125A.48, and 125A.65 
 12.33  are provided, within or outside the district where services are 
 12.34  provided; 
 12.35     (iii) necessary transportation for resident pupils with 
 12.36  disabilities required by sections 125A.12, and 125A.26 to 
 13.1   125A.48; 
 13.2      (iv) board and lodging for pupils with disabilities in a 
 13.3   district maintaining special classes; 
 13.4      (v) transportation from one educational facility to another 
 13.5   within the district for resident pupils enrolled on a 
 13.6   shared-time basis in educational programs, and necessary 
 13.7   transportation required by sections 125A.18, and 125A.26 to 
 13.8   125A.48, for resident pupils with disabilities who are provided 
 13.9   special instruction and services on a shared-time basis; 
 13.10     (vi) transportation for resident pupils with disabilities 
 13.11  to and from board and lodging facilities when the pupil is 
 13.12  boarded and lodged for educational purposes; and 
 13.13     (vii) services described in clauses (i) to (vi), when 
 13.14  provided for pupils with disabilities in conjunction with a 
 13.15  summer instructional program that relates to the pupil's 
 13.16  individual education plan or in conjunction with a learning year 
 13.17  program established under section 124D.128. 
 13.18     (5) "Nonpublic nonregular transportation" is: 
 13.19     (i) transportation from one educational facility to another 
 13.20  within the district for resident pupils enrolled on a 
 13.21  shared-time basis in educational programs, excluding 
 13.22  transportation for nonpublic pupils with disabilities under 
 13.23  clause (4); 
 13.24     (ii) transportation within district boundaries between a 
 13.25  nonpublic school and a public school or a neutral site for 
 13.26  nonpublic school pupils who are provided pupil support services 
 13.27  pursuant to section 123B.44; and 
 13.28     (iii) late transportation home from school or between 
 13.29  schools within a district for nonpublic school pupils involved 
 13.30  in after-school activities. 
 13.31     (c) "Mobile unit" means a vehicle or trailer designed to 
 13.32  provide facilities for educational programs and services, 
 13.33  including diagnostic testing, guidance and counseling services, 
 13.34  and health services.  A mobile unit located off nonpublic school 
 13.35  premises is a neutral site as defined in section 123B.41, 
 13.36  subdivision 13. 
 14.1      Sec. 10.  Minnesota Statutes 2002, section 123B.92, 
 14.2   subdivision 3, is amended to read: 
 14.3      Subd. 3.  [ALTERNATIVE ATTENDANCE PROGRAMS.] A district 
 14.4   that enrolls nonresident pupils in programs under sections 
 14.5   124D.03, 124D.06, 124D.07, 124D.08, 123A.05 to 123A.08, and 
 14.6   124D.68, must provide authorized transportation to the pupil 
 14.7   within the attendance area for the school that the pupil attends 
 14.8   at the same level of service that is provided to resident pupils 
 14.9   within the attendance area.  The resident district need not 
 14.10  provide or pay for transportation between the pupil's residence 
 14.11  and the district's border. 
 14.12     Sec. 11.  Minnesota Statutes 2002, section 123B.92, 
 14.13  subdivision 9, is amended to read: 
 14.14     Subd. 9.  [NONPUBLIC PUPIL TRANSPORTATION AID.] (a) A 
 14.15  district's nonpublic pupil transportation aid for the 1996-1997 
 14.16  and later school years for transportation services for nonpublic 
 14.17  school pupils according to sections 123B.88, 123B.84 to 123B.86, 
 14.18  and this section, equals the sum of the amounts computed in 
 14.19  paragraphs (b) and (c).  This aid does not limit the obligation 
 14.20  to transport pupils under sections 123B.84 to 123B.87. 
 14.21     (b) For regular and excess transportation according to 
 14.22  subdivision 1, paragraph (b), clauses (1) and (2), an amount 
 14.23  equal to the product of: 
 14.24     (1) the district's actual expenditure per pupil transported 
 14.25  in the regular and excess transportation categories during the 
 14.26  second preceding school year; times 
 14.27     (2) the number of nonpublic school pupils residing in the 
 14.28  district who receive regular or excess transportation service or 
 14.29  reimbursement for the current school year; times 
 14.30     (3) the ratio of the formula allowance pursuant to section 
 14.31  126C.10, subdivision 2, for the current school year to the 
 14.32  formula allowance pursuant to section 126C.10, subdivision 2, 
 14.33  for the second preceding school year. 
 14.34     (c) For nonpublic nonregular transportation according to 
 14.35  subdivision 1, paragraph (b), clause (5), an amount equal to the 
 14.36  product of: 
 15.1      (1) the district's actual expenditure for nonpublic 
 15.2   nonregular transportation during the second preceding school 
 15.3   year; times 
 15.4      (2) the ratio of the formula allowance pursuant to section 
 15.5   126C.10, subdivision 2, for the current school year to the 
 15.6   formula allowance pursuant to section 126C.10, subdivision 2, 
 15.7   for the second preceding school year. 
 15.8      (d) Notwithstanding the amount of the formula allowance for 
 15.9   fiscal years 2000, 2001, and 2002 year 2004 in section 126C.10, 
 15.10  subdivision 2, the commissioner shall use the amount of the 
 15.11  formula allowance for the current year plus $87 minus $415 in 
 15.12  determining the nonpublic pupil transportation revenue in 
 15.13  paragraphs (b) and (c) for fiscal year 2000, and the amount of 
 15.14  the formula allowance less $110 in determining the nonpublic 
 15.15  pupil transportation revenue in paragraphs (b) and (c) for 
 15.16  fiscal years 2001 and 2002 2004. 
 15.17     <b>[EFFECTIVE DATE.]</b> This section is effective for revenue for 
 15.18  fiscal year 2004. 
 15.19     Sec. 12.  Minnesota Statutes 2002, section 124D.09, 
 15.20  subdivision 13, is amended to read: 
 15.21     Subd. 13.  [FINANCIAL ARRANGEMENTS.] For a pupil enrolled 
 15.22  in a course under this section, the department must make 
 15.23  payments according to this subdivision for courses that were 
 15.24  taken for secondary credit.  
 15.25     The department must not make payments to a school district 
 15.26  or post-secondary institution for a course taken for 
 15.27  post-secondary credit only.  The department must not make 
 15.28  payments to a post-secondary institution for a course from which 
 15.29  a student officially withdraws during the first 14 days of the 
 15.30  quarter or semester or who has been absent from the 
 15.31  post-secondary institution for the first 15 consecutive school 
 15.32  days of the quarter or semester and is not receiving instruction 
 15.33  in the home or hospital. 
 15.34     A post-secondary institution shall receive the following: 
 15.35     (1) for an institution granting quarter credit, the 
 15.36  reimbursement per credit hour shall be an amount equal to 88 
 16.1   percent of the product of the formula allowance minus $415, 
 16.2   multiplied by 1.3, and divided by 45; or 
 16.3      (2) for an institution granting semester credit, the 
 16.4   reimbursement per credit hour shall be an amount equal to 88 
 16.5   percent of the product of the general revenue formula 
 16.6   allowance minus $415, multiplied by 1.3, and divided by 30. 
 16.7      The department must pay to each post-secondary institution 
 16.8   100 percent of the amount in clause (1) or (2) within 30 days of 
 16.9   receiving initial enrollment information each quarter or 
 16.10  semester.  If changes in enrollment occur during a quarter or 
 16.11  semester, the change shall be reported by the post-secondary 
 16.12  institution at the time the enrollment information for the 
 16.13  succeeding quarter or semester is submitted.  At any time the 
 16.14  department notifies a post-secondary institution that an 
 16.15  overpayment has been made, the institution shall promptly remit 
 16.16  the amount due.  
 16.17     Sec. 13.  Minnesota Statutes 2002, section 124D.128, 
 16.18  subdivision 6, is amended to read: 
 16.19     Subd. 6.  [REVENUE COMPUTATION AND REPORTING.] Aid and levy 
 16.20  revenue computations must be based on the total number of hours 
 16.21  of education programs for pupils in average daily membership for 
 16.22  each fiscal year.  Average daily membership shall be computed 
 16.23  under section 126C.05, subdivision 15.  Hours of participation 
 16.24  that occur after the close of the regular 2003-2004 
 16.25  instructional year and before July 1, 2004, must be attributed 
 16.26  to the following fiscal year.  For revenue computation purposes, 
 16.27  the learning year program shall generate revenue based on the 
 16.28  formulas for the fiscal year in which the services are 
 16.29  provided.  The dates a participating pupil is promoted must be 
 16.30  reported in a timely manner to the department. 
 16.31     Sec. 14.  Minnesota Statutes 2002, section 124D.59, 
 16.32  subdivision 2, is amended to read: 
 16.33     Subd. 2.  [PUPIL OF LIMITED ENGLISH PROFICIENCY.] 
 16.34  (a) "Pupil of limited English proficiency" means a pupil in 
 16.35  kindergarten through grade 12 who meets the following 
 16.36  requirements: 
 17.1      (1) the pupil in kindergarten through grade 12, as declared 
 17.2   by a parent or guardian first learned a language other than 
 17.3   English, comes from a home where the language usually spoken is 
 17.4   other than English, or usually speaks a language other than 
 17.5   English; and 
 17.6      (2) for a pupil in kindergarten through grade 2, the pupil 
 17.7   is determined by developmentally appropriate measures, which 
 17.8   might include observations, teacher judgment, parent 
 17.9   recommendations, or developmentally appropriate assessment 
 17.10  instruments, to lack the necessary English skills to participate 
 17.11  fully in classes taught in English; or. 
 17.12     (3) the (b) Notwithstanding paragraph (a), a pupil in 
 17.13  grades 3 4 through 12 scores who was enrolled in a Minnesota 
 17.14  public school on the dates during the previous school year when 
 17.15  a commissioner provided assessment that measures the pupil's 
 17.16  emerging academic English was administered, shall not be counted 
 17.17  as a pupil of limited English proficiency in calculating limited 
 17.18  English proficiency pupil units under section 126C.05, 
 17.19  subdivision 17, and shall not generate state limited English 
 17.20  proficiency aid under section 124D.65, subdivision 5, unless the 
 17.21  pupil scored below the state cutoff score on an assessment 
 17.22  measuring emerging academic English provided by the commissioner 
 17.23  during the previous school year. 
 17.24     (c) Notwithstanding paragraphs (a) and (b), a pupil in 
 17.25  kindergarten through grade 12 shall not be counted as a pupil of 
 17.26  limited English proficiency in calculating limited English 
 17.27  proficiency pupil units under section 126C.05, subdivision 17, 
 17.28  and shall not generate state limited English proficiency aid 
 17.29  under section 124D.65, subdivision 5, if: 
 17.30     (i) the pupil is not enrolled during the current fiscal 
 17.31  year in an educational program for pupils of limited English 
 17.32  proficiency in accordance with sections 124D.58 to 124D.64; or 
 17.33     (ii) the pupil has generated seven or more years of average 
 17.34  daily membership in Minnesota public schools since July 1, 1996. 
 17.35     A pupil that has generated more than four years but less 
 17.36  than five years of average daily membership in Minnesota public 
 18.1   schools since July 1, 1996, counts as .75 pupils.  A pupil that 
 18.2   has generated more than five years but less than six years of 
 18.3   average daily membership in Minnesota schools since July 1, 
 18.4   1996, counts as .50 pupils.  A pupil that has generated more 
 18.5   than six years but less than seven years of average daily 
 18.6   membership in Minnesota schools since July 1, 1996, counts as 
 18.7   .25 pupils.  
 18.8      Sec. 15.  Minnesota Statutes 2002, section 124D.65, 
 18.9   subdivision 5, is amended to read: 
 18.10     Subd. 5.  [SCHOOL DISTRICT LEP REVENUE.] (a) A school 
 18.11  district's limited English proficiency programs revenue for 
 18.12  fiscal year 2000 equals the state total limited English 
 18.13  proficiency programs revenue, minus the amount determined under 
 18.14  paragraph (b), times the ratio of the district's adjusted 
 18.15  limited English proficiency programs base revenue to the state 
 18.16  total adjusted limited English proficiency programs base revenue.
 18.17     (b) Notwithstanding paragraph (a), if the limited English 
 18.18  proficiency programs base revenue for a district equals zero, 
 18.19  the limited English proficiency programs revenue equals the sum 
 18.20  of the following amounts, computed using current year data: 
 18.21     (1) 68 percent of the salary of one full-time equivalent 
 18.22  teacher for each 40 pupils of limited English proficiency 
 18.23  enrolled, or 68 percent of the salary of one-half of a full-time 
 18.24  teacher in a district with 20 or fewer pupils of limited English 
 18.25  proficiency enrolled; and 
 18.26     (2) for supplies and equipment purchased or rented for use 
 18.27  in the instruction of pupils of limited English proficiency an 
 18.28  amount equal to 47 percent of the sum actually spent by the 
 18.29  district but not to exceed an average of $47 in any one school 
 18.30  year for each pupil of limited English proficiency receiving 
 18.31  instruction. 
 18.32     (c) A district's limited English proficiency programs 
 18.33  revenue for fiscal year 2001 and later equals the product 
 18.34  of $584 (1) $650 in fiscal year 2004 and $675 in fiscal year 
 18.35  2005 and later times (2) the greater of 20 or the number of 
 18.36  adjusted marginal cost average daily membership of eligible 
 19.1   pupils of limited English proficiency enrolled in the district 
 19.2   during the current fiscal year. 
 19.3      (d) (b) A pupil ceases to generate state limited English 
 19.4   proficiency aid in the school year following the school year in 
 19.5   which the pupil attains the state cutoff score on a 
 19.6   commissioner-provided assessment that measures the pupil's 
 19.7   emerging academic English. 
 19.8      Sec. 16.  Minnesota Statutes 2002, section 126C.05, 
 19.9   subdivision 1, is amended to read: 
 19.10     Subdivision 1.  [PUPIL UNIT.] Pupil units for each 
 19.11  Minnesota resident pupil in average daily membership enrolled in 
 19.12  the district of residence, in another district under sections 
 19.13  123A.05 to 123A.08, 124D.03, 124D.06, 124D.07, 124D.08, or 
 19.14  124D.68; in a charter school under section 124D.10; or for whom 
 19.15  the resident district pays tuition under section 123A.18, 
 19.16  123A.22, 123A.30, 123A.32, 123A.44, 123A.488, 123B.88, 
 19.17  subdivision 4, 124D.04, 124D.05, 125A.03 to 125A.24, 125A.51, or 
 19.18  125A.65, shall be counted according to this subdivision.  
 19.19     (a) A prekindergarten pupil with a disability who is 
 19.20  enrolled in a program approved by the commissioner and has an 
 19.21  individual education plan is counted as the ratio of the number 
 19.22  of hours of assessment and education service to 825 times 1.25 
 19.23  with a minimum average daily membership of 0.28, but not more 
 19.24  than 1.25 pupil units. 
 19.25     (b) A prekindergarten pupil who is assessed but determined 
 19.26  not to be handicapped is counted as the ratio of the number of 
 19.27  hours of assessment service to 825 times 1.25.  
 19.28     (c) A kindergarten pupil with a disability who is enrolled 
 19.29  in a program approved by the commissioner is counted as the 
 19.30  ratio of the number of hours of assessment and education 
 19.31  services required in the fiscal year by the pupil's individual 
 19.32  education program plan to 875, but not more than one. 
 19.33     (d) A kindergarten pupil who is not included in paragraph 
 19.34  (c) is counted as .557 .50 of a pupil unit for fiscal year 2000 
 19.35  and thereafter. 
 19.36     (e) A pupil who is in any of grades 1 to 3 is counted as 
 20.1   1.115 1.00 pupil units for fiscal year 2000 and thereafter unit. 
 20.2      (f) A pupil who is any of grades 4 to 6 is counted as 1.06 
 20.3   1.00 pupil units for fiscal year 1995 and thereafter unit. 
 20.4      (g) A pupil who is in any of grades 7 to 12 is counted as 
 20.5   1.3 pupil units.  
 20.6      (h) A pupil who is in the post-secondary enrollment options 
 20.7   program is counted as 1.3 pupil units.  
 20.8      <b>[EFFECTIVE DATE.]</b> This section is effective for revenue for 
 20.9   fiscal year 2004. 
 20.10     Sec. 17.  Minnesota Statutes 2002, section 126C.05, 
 20.11  subdivision 8, is amended to read: 
 20.12     Subd. 8.  [AVERAGE DAILY MEMBERSHIP.] (a) Membership for 
 20.13  pupils in grades kindergarten through 12 and for prekindergarten 
 20.14  pupils with disabilities shall mean the number of pupils on the 
 20.15  current roll of the school, counted from the date of entry until 
 20.16  withdrawal.  The date of withdrawal shall mean the day the pupil 
 20.17  permanently leaves the school or the date it is officially known 
 20.18  that the pupil has left or has been legally excused.  However, a 
 20.19  pupil, regardless of age, who has been absent from school for 15 
 20.20  consecutive school days during the regular school year or for 
 20.21  five consecutive school days during summer school or 
 20.22  intersession classes of flexible school year programs without 
 20.23  receiving instruction in the home or hospital shall be dropped 
 20.24  from the roll and classified as withdrawn.  Nothing in this 
 20.25  section shall be construed as waiving the compulsory attendance 
 20.26  provisions cited in section 120A.22.  Average daily membership 
 20.27  equals the sum for all pupils of the number of days of the 
 20.28  school year each pupil is enrolled in the district's schools 
 20.29  divided by the number of days the schools are in session.  Days 
 20.30  of summer school or intersession classes of flexible school year 
 20.31  programs are only included in the computation of membership for 
 20.32  pupils with a disability not appropriately served primarily in 
 20.33  the regular classroom.  A student must not be counted as more 
 20.34  than 1.2 pupils in average daily membership under this section.  
 20.35  When the initial total average daily membership exceeds 1.2 for 
 20.36  a pupil enrolled in more than one school district during the 
 21.1   fiscal year, each district's average daily membership must be 
 21.2   reduced proportionately. 
 21.3      (b) A student must not be counted as more than one pupil in 
 21.4   average daily membership except for purposes of section 126C.10, 
 21.5   subdivision 2a.  
 21.6      Sec. 18.  Minnesota Statutes 2002, section 126C.05, 
 21.7   subdivision 14, is amended to read: 
 21.8      Subd. 14.  [COMPUTING PUPIL UNITS FOR A PRIOR YEAR.] In 
 21.9   computing pupil units for a prior year, the number of pupil 
 21.10  units shall be adjusted to reflect any change for the current 
 21.11  year in relative weightings by grade level or category of 
 21.12  special assistance, any change in measurement from average daily 
 21.13  attendance to average daily membership, any change in the limit 
 21.14  on average daily membership that can be generated by a pupil for 
 21.15  a fiscal year as provided in subdivisions 8 and 15, and any 
 21.16  change in school district boundaries, but not for the addition 
 21.17  for the first time in the current year of a specified category 
 21.18  of special assistance as provided in subdivision 1, clause (4). 
 21.19     Sec. 19.  Minnesota Statutes 2002, section 126C.05, 
 21.20  subdivision 15, is amended to read: 
 21.21     Subd. 15.  [LEARNING YEAR PUPIL UNITS.] (a) When a pupil is 
 21.22  enrolled in a learning year program under section 124D.128, an 
 21.23  area learning center under sections 123A.05 and 123A.06, an 
 21.24  alternative program approved by the commissioner, or a contract 
 21.25  alternative program under section 124D.68, subdivision 3, 
 21.26  paragraph (d), or subdivision 3a, for more than 1,020 hours in a 
 21.27  school year for a secondary student, more than 935 hours in a 
 21.28  school year for an elementary student, or more than 425 hours in 
 21.29  a school year for a kindergarten student without a disability, 
 21.30  that pupil may be counted as more than one pupil in average 
 21.31  daily membership for purposes of section 126C.10, subdivision 
 21.32  2a.  The amount in excess of one pupil must be determined by the 
 21.33  ratio of the number of hours of instruction provided to that 
 21.34  pupil in excess of:  (i) the greater of 1,020 hours or the 
 21.35  number of hours required for a full-time secondary pupil in the 
 21.36  district to 1,020 for a secondary pupil; (ii) the greater of 935 
 22.1   hours or the number of hours required for a full-time elementary 
 22.2   pupil in the district to 935 for an elementary pupil in grades 1 
 22.3   through 6; and (iii) the greater of 425 hours or the number of 
 22.4   hours required for a full-time kindergarten student without a 
 22.5   disability in the district to 425 for a kindergarten student 
 22.6   without a disability.  Hours that occur after the close of the 
 22.7   instructional year in June shall be attributable to the 
 22.8   following fiscal year.  A kindergarten student must not be 
 22.9   counted as more than 1.2 pupils in average daily membership 
 22.10  under this subdivision.  A student in grades 1 through 12 must 
 22.11  not be counted as more than 1.5 1.2 pupils in average daily 
 22.12  membership under this subdivision. 
 22.13     (b)(i) To receive general education revenue for a pupil in 
 22.14  an alternative program that has an independent study component, 
 22.15  a district must meet the requirements in this paragraph.  The 
 22.16  district must develop, for the pupil, a continual learning plan 
 22.17  consistent with section 124D.128, subdivision 3.  Each school 
 22.18  district that has a state-approved public alternative program 
 22.19  must reserve revenue in an amount equal to at least 90 percent 
 22.20  of the district average general education revenue per pupil unit 
 22.21  less compensatory revenue per pupil unit times the number of 
 22.22  pupil units generated by students attending a state-approved 
 22.23  public alternative program.  The amount of reserved revenue 
 22.24  available under this subdivision may only be spent for program 
 22.25  costs associated with the state-approved public alternative 
 22.26  program.  Compensatory revenue must be allocated according to 
 22.27  section 126C.15, subdivision 2. 
 22.28     (ii) General education revenue for a pupil in an approved 
 22.29  alternative program without an independent study component must 
 22.30  be prorated for a pupil participating for less than a full year, 
 22.31  or its equivalent.  The district must develop a continual 
 22.32  learning plan for the pupil, consistent with section 124D.128, 
 22.33  subdivision 3.  Each school district that has a state-approved 
 22.34  public alternative program must reserve revenue in an amount 
 22.35  equal to at least 90 percent of the district average general 
 22.36  education revenue per pupil unit less compensatory revenue per 
 23.1   pupil unit times the number of pupil units generated by students 
 23.2   attending a state-approved public alternative program.  The 
 23.3   amount of reserved revenue available under this subdivision may 
 23.4   only be spent for program costs associated with the 
 23.5   state-approved public alternative program.  Compensatory revenue 
 23.6   must be allocated according to section 126C.15, subdivision 2.  
 23.7      (iii) General education revenue for a pupil in an approved 
 23.8   alternative program that has an independent study component must 
 23.9   be paid for each hour of teacher contact time and each hour of 
 23.10  independent study time completed toward a credit or graduation 
 23.11  standards necessary for graduation.  Average daily membership 
 23.12  for a pupil shall equal the number of hours of teacher contact 
 23.13  time and independent study time divided by 1,020. 
 23.14     (iv) For an alternative program having an independent study 
 23.15  component, the commissioner shall require a description of the 
 23.16  courses in the program, the kinds of independent study involved, 
 23.17  the expected learning outcomes of the courses, and the means of 
 23.18  measuring student performance against the expected outcomes.  
 23.19     Sec. 20.  Minnesota Statutes 2002, section 126C.05, 
 23.20  subdivision 16, is amended to read: 
 23.21     Subd. 16.  [FREE AND REDUCED PRICED LUNCHES.] The 
 23.22  commissioner shall determine the number of children eligible to 
 23.23  receive either a free or reduced priced lunch on October 1 each 
 23.24  year.  Children enrolled in a building on October 1 and 
 23.25  determined to be eligible to receive free or reduced price lunch 
 23.26  by January December 15 of the following that school year shall 
 23.27  be counted as eligible on October 1 for purposes of subdivision 
 23.28  3.  The commissioner may use federal definitions for these 
 23.29  purposes and may adjust these definitions as appropriate.  The 
 23.30  commissioner may adopt reporting guidelines to assure accuracy 
 23.31  of data counts and eligibility.  Districts shall use any 
 23.32  guidelines adopted by the commissioner. 
 23.33     Sec. 21.  Minnesota Statutes 2002, section 126C.05, 
 23.34  subdivision 17, is amended to read: 
 23.35     Subd. 17.  [LEP PUPIL UNITS.] (a) Limited English 
 23.36  proficiency pupil units for fiscal year 1998 2004 and thereafter 
 24.1   shall be determined according to this subdivision. 
 24.2      (b) The limited English proficiency concentration 
 24.3   percentage for a district equals the product of 100 times the 
 24.4   ratio of: 
 24.5      (1) the number of eligible pupils of limited English 
 24.6   proficiency in average daily membership enrolled in the district 
 24.7   during the current fiscal year; to 
 24.8      (2) the number of pupils in average daily membership 
 24.9   enrolled in the district. 
 24.10     (c) The limited English proficiency pupil units for 
 24.11  each eligible pupil enrolled in a program for pupils of limited 
 24.12  English proficiency in accordance with sections 124D.58 to 
 24.13  124D.64 in average daily membership equals the lesser of one or 
 24.14  the quotient obtained by dividing the limited English 
 24.15  proficiency concentration percentage for the pupil's district of 
 24.16  enrollment by 11.5. 
 24.17     (d) Limited English proficiency pupil units shall be 
 24.18  counted by the district of enrollment. 
 24.19     (e) Notwithstanding paragraph (d), for the purposes of this 
 24.20  subdivision, pupils enrolled in a cooperative or intermediate 
 24.21  school district shall be counted by the district of residence. 
 24.22     (f) For the purposes of this subdivision, the terms defined 
 24.23  in section 124D.59 have the same meaning. 
 24.24     Sec. 22.  Minnesota Statutes 2002, section 126C.10, 
 24.25  subdivision 1, is amended to read: 
 24.26     Subdivision 1.  [GENERAL EDUCATION REVENUE.] (a) For fiscal 
 24.27  year 2002, the general education revenue for each district 
 24.28  equals the sum of the district's basic revenue, basic skills 
 24.29  revenue, training and experience revenue, secondary sparsity 
 24.30  revenue, elementary sparsity revenue, transportation sparsity 
 24.31  revenue, total operating capital revenue, equity revenue, 
 24.32  transition revenue, and supplemental revenue. 
 24.33     (b) For fiscal year 2003 and later, the general education 
 24.34  revenue for each district equals the sum of the district's basic 
 24.35  revenue, basic skills revenue, training and experience revenue, 
 24.36  secondary sparsity revenue, elementary sparsity revenue, 
 25.1   transportation sparsity revenue, total operating capital 
 25.2   revenue, and equity revenue. 
 25.3      (b) For fiscal year 2004 and later, the general education 
 25.4   revenue for each district equals the sum of the district's basic 
 25.5   revenue, extended time revenue, class size reduction revenue, 
 25.6   basic skills revenue, secondary sparsity revenue, elementary 
 25.7   sparsity revenue, transportation sparsity revenue, total 
 25.8   operating capital revenue, equity revenue, and transition 
 25.9   revenue. 
 25.10     Sec. 23.  Minnesota Statutes 2002, section 126C.10, is 
 25.11  amended by adding a subdivision to read: 
 25.12     Subd. 2a.  [EXTENDED TIME REVENUE.] (a) A school district's 
 25.13  extended time revenue is equal to the product of $4,601 and the 
 25.14  sum of the adjusted marginal cost pupil units of the district 
 25.15  for each pupil in average daily membership in excess of 1.0 and 
 25.16  less than 1.2 according to section 126C.05, subdivision 8. 
 25.17     (b) A school district's extended time revenue may be used 
 25.18  for extended day programs, extended week programs, summer 
 25.19  school, and other programming authorized under the learning year 
 25.20  program.  
 25.21     Sec. 24.  Minnesota Statutes 2002, section 126C.10, is 
 25.22  amended by adding a subdivision to read: 
 25.23     Subd. 2b.  [CLASS SIZE REDUCTION REVENUE.] For fiscal year 
 25.24  2004 and later, a school district's class size reduction revenue 
 25.25  equals: 
 25.26     (1) $262 times the sum of adjusted marginal cost pupils in 
 25.27  average daily membership, according to section 126C.05, 
 25.28  subdivision 5, in kindergarten; plus 
 25.29     (2) $529 times the sum of adjusted marginal cost pupils in 
 25.30  average daily membership, according to section 126C.05, 
 25.31  subdivision 5, in grades 1 to 3; plus 
 25.32     (3) $276 times the sum of adjusted marginal cost pupils in 
 25.33  average daily membership, according to section 126C.05, 
 25.34  subdivision 5, in grades 4 to 6. 
 25.35     Sec. 25.  Minnesota Statutes 2002, section 126C.10, 
 25.36  subdivision 3, is amended to read: 
 26.1      Subd. 3.  [COMPENSATORY EDUCATION REVENUE.] (a) For fiscal 
 26.2   year 2004 and later, the compensatory education revenue for each 
 26.3   building in the district equals the formula allowance $4,150 
 26.4   times the compensation revenue pupil units computed according to 
 26.5   section 126C.05, subdivision 3.  
 26.6      (b) A district's compensatory education revenue equals the 
 26.7   greater of the amount computed in paragraph (a) or the minimum 
 26.8   compensatory allowance times the number of compensatory pupils 
 26.9   computed according to section 126C.05, subdivision 3, paragraph 
 26.10  (a), clause (1).  For fiscal years 2004 and 2005, the minimum 
 26.11  compensatory allowance equals $500.  The minimum compensatory 
 26.12  allowance for each subsequent year equals the previous year's 
 26.13  allowance plus $50.  
 26.14     (c) Revenue shall be paid to the district and must be 
 26.15  allocated according to section 126C.15, subdivision 2. 
 26.16     Sec. 26.  Minnesota Statutes 2002, section 126C.10, 
 26.17  subdivision 4, is amended to read: 
 26.18     Subd. 4.  [BASIC SKILLS REVENUE.] (a) For fiscal year 2002, 
 26.19  a school district's basic skills revenue equals the sum of: 
 26.20     (1) compensatory revenue under subdivision 3; plus 
 26.21     (2) limited English proficiency revenue according to 
 26.22  section 124D.65, subdivision 5; plus 
 26.23     (3) $190 times the limited English proficiency pupil units 
 26.24  according to section 126C.05, subdivision 17; plus 
 26.25     (4) $22.50 times the number of adjusted marginal cost pupil 
 26.26  units in kindergarten to grade 8. 
 26.27     (b) For fiscal year 2003 and later, A school district's 
 26.28  basic skills revenue equals the sum of: 
 26.29     (1) compensatory revenue under subdivision 3; plus 
 26.30     (2) limited English proficiency revenue under section 
 26.31  124D.65, subdivision 5; plus 
 26.32     (3) $190 (i) $200 in fiscal year 2004 and later, times (ii) 
 26.33  the limited English proficiency pupil units under section 
 26.34  126C.05, subdivision 17. 
 26.35     Sec. 27.  Minnesota Statutes 2002, section 126C.10, 
 26.36  subdivision 17, is amended to read: 
 27.1      Subd. 17.  [TRANSPORTATION SPARSITY DEFINITIONS.] The 
 27.2   definitions in this subdivision apply to subdivisions 18 and 19. 
 27.3      (a) "Sparsity index" for a district means the greater of .2 
 27.4   or the ratio of the square mile area of the district to the 
 27.5   resident pupil units of the district. 
 27.6      (b) "Density index" for a district means the ratio of the 
 27.7   square mile area of the district to the resident pupil units of 
 27.8   the district.  However, the density index for a district cannot 
 27.9   be greater than .2 or less than .005. 
 27.10     (c) "Fiscal year 1996 base allowance" for a district means 
 27.11  the result of the following computation: 
 27.12     (1) sum the following amounts: 
 27.13     (i) the fiscal year 1996 regular transportation revenue for 
 27.14  the district according to Minnesota Statutes 1996, section 
 27.15  124.225, subdivision 7d, paragraph (a), excluding the revenue 
 27.16  attributable nonpublic school pupils and to pupils with 
 27.17  disabilities receiving special transportation services; plus 
 27.18     (ii) the fiscal year 1996 nonregular transportation revenue 
 27.19  for the district according to Minnesota Statutes 1996, section 
 27.20  124.225, subdivision 7d, paragraph (b), excluding the revenue 
 27.21  for desegregation transportation according to Minnesota Statutes 
 27.22  1996, section 124.225, subdivision 1, paragraph (c), clause (4), 
 27.23  and the revenue attributable to nonpublic school pupils and to 
 27.24  pupils with disabilities receiving special transportation 
 27.25  services or board and lodging; plus 
 27.26     (iii) the fiscal year 1996 excess transportation levy for 
 27.27  the district according to Minnesota Statutes 1996, section 
 27.28  124.226, subdivision 5, excluding the levy attributable to 
 27.29  nonpublic school pupils; plus 
 27.30     (iv) the fiscal year 1996 late activity bus levy for the 
 27.31  district according to Minnesota Statutes 1996, section 124.226, 
 27.32  subdivision 9, excluding the levy attributable to nonpublic 
 27.33  school pupils; plus 
 27.34     (v) an amount equal to one-third of the fiscal year 1996 
 27.35  bus depreciation for the district according to Minnesota 
 27.36  Statutes 1996, section 124.225, subdivision 1, paragraph (b), 
 28.1   clauses (2), (3), and (4). 
 28.2      (2) divide the result in clause (1) by the district's 
 28.3   1995-1996 fund balance pupil units. 
 28.4      Sec. 28.  Minnesota Statutes 2002, section 126C.10, 
 28.5   subdivision 18, is amended to read: 
 28.6      Subd. 18.  [TRANSPORTATION SPARSITY REVENUE ALLOWANCE.] (a) 
 28.7   A district's transportation sparsity allowance equals the 
 28.8   greater of zero or the result of the following computation: 
 28.9      (i) Multiply the formula allowance according to subdivision 
 28.10  2 minus $415, by .1469. 
 28.11     (ii) Multiply the result in clause (i) by the district's 
 28.12  sparsity index raised to the 26/100 power. 
 28.13     (iii) Multiply the result in clause (ii) by the district's 
 28.14  density index raised to the 13/100 power. 
 28.15     (iv) Multiply the formula allowance minus $415 according to 
 28.16  subdivision 2, by .0485. 
 28.17     (v) Subtract the result in clause (iv) from the result in 
 28.18  clause (iii). 
 28.19     (b) Transportation sparsity revenue is equal to the 
 28.20  transportation sparsity allowance times the adjusted marginal 
 28.21  cost pupil units. 
 28.22     Sec. 29.  Minnesota Statutes 2002, section 126C.10, 
 28.23  subdivision 24, is amended to read: 
 28.24     Subd. 24.  [EQUITY REVENUE.] (a) A school district 
 28.25  qualifies for equity revenue if: 
 28.26     (1) the school district's adjusted marginal cost pupil unit 
 28.27  amount of basic revenue, supplemental revenue, transition 
 28.28  revenue, and referendum revenue is less than the value of the 
 28.29  school district at or immediately above the 95th percentile of 
 28.30  school districts in its equity region for those revenue 
 28.31  categories; and 
 28.32     (2) the school district's administrative offices are not 
 28.33  located in a city of the first class on July 1, 1999. 
 28.34     (b) Equity revenue for a qualifying district that receives 
 28.35  referendum revenue under section 126C.17, subdivision 4, equals 
 28.36  the product of (1) the district's adjusted marginal cost pupil 
 29.1   units for that year; times (2) the sum of (i) $10 $13, plus (ii) 
 29.2   $55 $75, times the school district's equity index computed under 
 29.3   subdivision 27. 
 29.4      (c) Equity revenue for a qualifying district that does not 
 29.5   receive referendum revenue under section 126C.17, subdivision 4, 
 29.6   equals the product of the district's adjusted marginal cost 
 29.7   pupil units for that year times $10 $13. 
 29.8      <b>[EFFECTIVE DATE.]</b> This section is effective for revenue for 
 29.9   fiscal year 2005.  
 29.10     Sec. 30.  Minnesota Statutes 2002, section 126C.10, is 
 29.11  amended by adding a subdivision to read: 
 29.12     Subd. 29.  [EQUITY LEVY.] To obtain equity revenue for 
 29.13  fiscal year 2005 and later, a district may levy an amount not 
 29.14  more than the product of its equity revenue for the fiscal year 
 29.15  times the lesser of one or the ratio of its referendum market 
 29.16  value per resident marginal cost pupil unit to $476,000. 
 29.17     Sec. 31.  Minnesota Statutes 2002, section 126C.10, is 
 29.18  amended by adding a subdivision to read: 
 29.19     Subd. 30.  [EQUITY AID.] A district's equity aid equals its 
 29.20  equity revenue minus its equity levy times the ratio of the 
 29.21  actual amount levied to the permitted levy. 
 29.22     Sec. 32.  Minnesota Statutes 2002, section 126C.10, is 
 29.23  amended by adding a subdivision to read: 
 29.24     Subd. 31.  [TRANSITION REVENUE.] (a) A district's 
 29.25  transition allowance for fiscal years 2004 through 2008 equals 
 29.26  the greater of zero or the product of the ratio of the number of 
 29.27  adjusted marginal cost pupil units the district would have 
 29.28  counted for fiscal year 2004 under Minnesota Statutes 2002 to 
 29.29  the district's adjusted marginal cost pupil units for fiscal 
 29.30  year 2004, times the difference between:  (1) the lesser of the 
 29.31  district's general education revenue per adjusted marginal cost 
 29.32  pupil unit for fiscal year 2003 or the amount of general 
 29.33  education revenue the district would have received per adjusted 
 29.34  marginal cost pupil unit for fiscal year 2004 according to 
 29.35  Minnesota Statutes 2002, and (2) the district's general 
 29.36  education revenue for fiscal year 2004 excluding transition 
 30.1   revenue divided by the number of adjusted marginal cost pupil 
 30.2   units the district would have counted for fiscal year 2004 under 
 30.3   Minnesota Statutes 2002.  A district's transition allowance for 
 30.4   fiscal year 2009 and later is zero. 
 30.5      (b) A district's transition revenue for fiscal year 2004 
 30.6   and later equals the product of the district's transition 
 30.7   allowance times the district's adjusted marginal cost pupil 
 30.8   units. 
 30.9      Sec. 33.  Minnesota Statutes 2002, section 126C.10, is 
 30.10  amended by adding a subdivision to read: 
 30.11     Subd. 32.  [TRANSITION LEVY.] To obtain transition revenue 
 30.12  for fiscal year 2005 and later, a district may levy an amount 
 30.13  not more than the product of its transition revenue for the 
 30.14  fiscal year times the lesser of one or the ratio of its 
 30.15  referendum market value per resident marginal cost pupil unit to 
 30.16  $476,000. 
 30.17     Sec. 34.  Minnesota Statutes 2002, section 126C.10, is 
 30.18  amended by adding a subdivision to read: 
 30.19     Subd. 33.  [TRANSITION AID.] (a) For fiscal year 2004, a 
 30.20  district's transition aid equals its transition revenue. 
 30.21     (b) For fiscal year 2005 and later, a district's transition 
 30.22  aid equals its transition revenue minus its transition levy 
 30.23  times the ratio of the actual amount levied to the permitted 
 30.24  levy. 
 30.25     Sec. 35.  Minnesota Statutes 2002, section 126C.13, 
 30.26  subdivision 4, is amended to read: 
 30.27     Subd. 4.  [GENERAL EDUCATION AID.] (a) For fiscal year 
 30.28  2004, a district's general education aid is the sum of the 
 30.29  following amounts:  
 30.30     (1) general education revenue; 
 30.31     (2) shared time aid according to section 126C.01, 
 30.32  subdivision 7; and 
 30.33     (3) referendum aid according to section 126C.17; and 
 30.34     (4) distance education aid according to section 126C.24. 
 30.35     (b) For fiscal year 2005 and later, a district's general 
 30.36  education aid is the sum of the following amounts: 
 31.1      (1) general education revenue, excluding equity revenue and 
 31.2   transition revenue; 
 31.3      (2) equity aid according to section 126C.10, subdivision 
 31.4   30; 
 31.5      (3) transition aid according to section 126C.10, 
 31.6   subdivision 33; 
 31.7      (4) shared time aid according to section 126C.01, 
 31.8   subdivision 7; 
 31.9      (5) referendum aid according to section 126C.17; and 
 31.10     (6) distance education aid according to section 126C.24. 
 31.11     Sec. 36.  Minnesota Statutes 2002, section 126C.15, 
 31.12  subdivision 1, is amended to read: 
 31.13     Subdivision 1.  [USE OF THE REVENUE.] The basic skills 
 31.14  revenue under section 126C.10, subdivision 4, and the portion of 
 31.15  the transition revenue adjustment under section 126C.10, 
 31.16  subdivision 20, attributable to the compensatory transition 
 31.17  allowance under section 126C.10, subdivision 19, paragraph (b), 
 31.18  must be reserved and used to meet the educational needs of 
 31.19  pupils who enroll under-prepared to learn and whose progress 
 31.20  toward meeting state or local content or performance standards 
 31.21  is below the level that is appropriate for learners of their 
 31.22  age.  Any of the following may be provided to meet these 
 31.23  learners' needs: 
 31.24     (1) direct instructional services under the assurance of 
 31.25  mastery program according to section 124D.66; 
 31.26     (2) remedial instruction in reading, language arts, 
 31.27  mathematics, other content areas, or study skills to improve the 
 31.28  achievement level of these learners; 
 31.29     (3) additional teachers and teacher aides to provide more 
 31.30  individualized instruction to these learners through individual 
 31.31  tutoring, lower instructor-to-learner ratios, or team teaching; 
 31.32     (4) a longer school day or week during the regular school 
 31.33  year or through a summer program that may be offered directly by 
 31.34  the site or under a performance-based contract with a 
 31.35  community-based organization; 
 31.36     (5) comprehensive and ongoing staff development consistent 
 32.1   with district and site plans according to section 122A.60, for 
 32.2   teachers, teacher aides, principals, and other personnel to 
 32.3   improve their ability to identify the needs of these learners 
 32.4   and provide appropriate remediation, intervention, 
 32.5   accommodations, or modifications; 
 32.6      (6) instructional materials and technology appropriate for 
 32.7   meeting the individual needs of these learners; 
 32.8      (7) programs to reduce truancy, encourage completion of 
 32.9   high school, enhance self-concept, provide health services, 
 32.10  provide nutrition services, provide a safe and secure learning 
 32.11  environment, provide coordination for pupils receiving services 
 32.12  from other governmental agencies, provide psychological services 
 32.13  to determine the level of social, emotional, cognitive, and 
 32.14  intellectual development, and provide counseling services, 
 32.15  guidance services, and social work services; 
 32.16     (8) bilingual programs, bicultural programs, and programs 
 32.17  for learners of limited English proficiency; 
 32.18     (9) all day kindergarten; 
 32.19     (10) extended school day and extended school year programs; 
 32.20  and 
 32.21     (11) substantial parent involvement in developing and 
 32.22  implementing remedial education or intervention plans for a 
 32.23  learner, including learning contracts between the school, the 
 32.24  learner, and the parent that establish achievement goals and 
 32.25  responsibilities of the learner and the learner's parent or 
 32.26  guardian. 
 32.27     Sec. 37.  Minnesota Statutes 2002, section 126C.17, 
 32.28  subdivision 1, is amended to read: 
 32.29     Subdivision 1.  [REFERENDUM ALLOWANCE.] (a) For fiscal year 
 32.30  2002, a district's referendum revenue allowance equals the sum 
 32.31  of the allowance under section 126C.16, subdivision 2, plus any 
 32.32  additional allowance per resident marginal cost pupil unit 
 32.33  authorized under subdivision 9 for fiscal year 2002. 
 32.34     (b) For fiscal year 2003 and later, a district's initial 
 32.35  referendum revenue allowance equals the sum of the allowance 
 32.36  under section 126C.16, subdivision 2, plus any additional 
 33.1   allowance per resident marginal cost pupil unit authorized under 
 33.2   subdivision 9 before May 1, 2001, for fiscal year 2002 and 
 33.3   later, plus the referendum conversion allowance approved under 
 33.4   subdivision 13, minus $415.  For districts with more than one 
 33.5   referendum authority, the reduction must be computed separately 
 33.6   for each authority.  The reduction must be applied first to the 
 33.7   referendum conversion allowance and next to the authority with 
 33.8   the earliest expiration date.  A district's initial referendum 
 33.9   revenue allowance may not be less than zero. 
 33.10     (c) For fiscal year 2003 and later, a district's referendum 
 33.11  revenue allowance equals the initial referendum allowance plus 
 33.12  any additional allowance per resident marginal cost pupil unit 
 33.13  authorized under subdivision 9 after between April 30, 2001, and 
 33.14  December 30, 2001, for fiscal year 2003 and later. 
 33.15     (d) For fiscal year 2004 and later, a district's referendum 
 33.16  revenue allowance equals the sum of: 
 33.17     (1) the product of (i) the ratio of the resident marginal 
 33.18  cost pupil units the district would have counted for fiscal year 
 33.19  2004 under Minnesota Statutes 2002, section 126C.05, to the 
 33.20  district's resident marginal cost pupil units for fiscal year 
 33.21  2004, times (ii) the initial referendum allowance plus any 
 33.22  additional allowance per resident marginal cost pupil unit 
 33.23  authorized under subdivision 9 between April 30, 2001, and May 
 33.24  30, 2003, for fiscal year 2003 and later, plus 
 33.25     (2) any additional allowance per resident marginal cost 
 33.26  pupil unit authorized under subdivision 9 after May 30, 2003, 
 33.27  for fiscal year 2005 and later. 
 33.28     Sec. 38.  Minnesota Statutes 2002, section 126C.17, 
 33.29  subdivision 2, is amended to read: 
 33.30     Subd. 2.  [REFERENDUM ALLOWANCE LIMIT.] (a) Notwithstanding 
 33.31  subdivision 1, for fiscal year 2002, a district's referendum 
 33.32  allowance must not exceed the greater of:  
 33.33     (1) the district's referendum allowance for fiscal year 
 33.34  1994; 
 33.35     (2) 25 percent of the formula allowance; or 
 33.36     (3) for a newly reorganized district created after July 1, 
 34.1   1994, the sum of the referendum revenue authority for the 
 34.2   reorganizing districts for the fiscal year preceding the 
 34.3   reorganization, divided by the sum of the resident marginal cost 
 34.4   pupil units of the reorganizing districts for the fiscal year 
 34.5   preceding the reorganization. 
 34.6      (b) Notwithstanding subdivision 1, for fiscal year 2003 and 
 34.7   later fiscal years, a district's referendum allowance must not 
 34.8   exceed the greater of: 
 34.9      (1) the sum of a district's referendum allowance for fiscal 
 34.10  year 1994 times 1.162 plus its referendum conversion allowance 
 34.11  for fiscal year 2003, minus $415; 
 34.12     (2) 18.2 percent of the formula allowance; 
 34.13     (3) for a newly reorganized district created on July 1, 
 34.14  2002, the referendum revenue authority for each reorganizing 
 34.15  district in the year preceding reorganization divided by its 
 34.16  resident marginal cost pupil units for the year preceding 
 34.17  reorganization, minus $415; or 
 34.18     (4) for a newly reorganized district created after July 1, 
 34.19  2002, the referendum revenue authority for each reorganizing 
 34.20  district in the year preceding reorganization divided by its 
 34.21  resident marginal cost pupil units for the year preceding 
 34.22  reorganization. 
 34.23     (b) Notwithstanding subdivision 1, for fiscal year 2004 and 
 34.24  later, a district's referendum allowance must not exceed the 
 34.25  greater of: 
 34.26     (1) the sum of:  (i) a district's referendum allowance for 
 34.27  fiscal year 1994 times 1.300 times the annual inflationary 
 34.28  increase as calculated under paragraph (c) plus (ii) its 
 34.29  referendum conversion allowance for fiscal year 2003, minus 
 34.30  (iii) $415; 
 34.31     (2) 21 percent of the formula allowance times the annual 
 34.32  inflationary increase as calculated under paragraph (c); or 
 34.33     (3) for a newly reorganized district created after July 1, 
 34.34  2002, the referendum revenue authority for each reorganizing 
 34.35  district in the year preceding reorganization divided by its 
 34.36  resident marginal cost pupil units for the year preceding 
 35.1   reorganization. 
 35.2      (c) For purposes of this subdivision, for fiscal year 2005 
 35.3   and later, "inflationary increase" means one plus the percentage 
 35.4   change in the Consumer Price Index for urban consumers, as 
 35.5   prepared by the United States Bureau of Labor Standards, for the 
 35.6   most recent year for which data is available to the previous 
 35.7   year.  
 35.8      <b>[EFFECTIVE DATE.]</b> This section is effective for taxes 
 35.9   payable in 2004. 
 35.10     Sec. 39.  Minnesota Statutes 2002, section 126C.17, 
 35.11  subdivision 5, is amended to read: 
 35.12     Subd. 5.  [REFERENDUM EQUALIZATION REVENUE.] (a) For fiscal 
 35.13  year 2003 and later, a district's referendum equalization 
 35.14  revenue equals the sum of the first tier referendum equalization 
 35.15  revenue and the second tier referendum equalization revenue. 
 35.16     (b) A district's first tier referendum equalization revenue 
 35.17  equals the district's first tier referendum equalization 
 35.18  allowance times the district's resident marginal cost pupil 
 35.19  units for that year.  
 35.20     (c) For fiscal years 2003 and 2004, a district's first tier 
 35.21  referendum equalization allowance equals the lesser of the 
 35.22  district's referendum allowance under subdivision 1 or 
 35.23  $126.  For fiscal year 2005, a district's first tier referendum 
 35.24  equalization allowance equals the lesser of the district's 
 35.25  referendum allowance under subdivision 1 or $405.  For fiscal 
 35.26  year 2006 and later, a district's first tier referendum 
 35.27  equalization allowance equals the lesser of the district's 
 35.28  referendum allowance under subdivision 1 or $500. 
 35.29     (d) A district's second tier referendum equalization 
 35.30  revenue equals the district's second tier referendum 
 35.31  equalization allowance times the district's resident marginal 
 35.32  cost pupil units for that year. 
 35.33     (e) A district's second tier referendum equalization 
 35.34  allowance equals the lesser of the district's referendum 
 35.35  allowance under subdivision 1 or 18.2 21 percent of the formula 
 35.36  allowance, minus the district's first tier referendum 
 36.1   equalization allowance. 
 36.2      (f) Notwithstanding paragraph (e), the second tier 
 36.3   referendum allowance for a district qualifying for secondary 
 36.4   sparsity revenue under section 126C.10, subdivision 7, or 
 36.5   elementary sparsity revenue under section 126C.10, subdivision 
 36.6   8, equals the district's referendum allowance under subdivision 
 36.7   1 minus the district's first tier referendum equalization 
 36.8   allowance. 
 36.9      Sec. 40.  Minnesota Statutes 2002, section 126C.17, 
 36.10  subdivision 7, is amended to read: 
 36.11     Subd. 7.  [REFERENDUM EQUALIZATION AID.] (a) A district's 
 36.12  referendum equalization aid equals the difference between its 
 36.13  referendum equalization revenue and levy. 
 36.14     (b) If a district's actual levy for first or second tier 
 36.15  referendum equalization revenue is less than its maximum levy 
 36.16  limit for that tier, aid shall be proportionately reduced. 
 36.17     (c) Notwithstanding paragraph (a), the referendum 
 36.18  equalization aid for a district, where the referendum 
 36.19  equalization aid under paragraph (a) exceeds 90 percent of the 
 36.20  referendum revenue, must not exceed 18.2 21 percent of the 
 36.21  formula allowance times the district's resident marginal cost 
 36.22  pupil units.  A district's referendum levy is increased by the 
 36.23  amount of any reduction in referendum aid under this paragraph. 
 36.24     Sec. 41.  Minnesota Statutes 2002, section 126C.17, 
 36.25  subdivision 7a, is amended to read: 
 36.26     Subd. 7a.  [REFERENDUM TAX BASE REPLACEMENT AID.] For each 
 36.27  school district that had a referendum allowance for fiscal year 
 36.28  2002 exceeding $415, for each separately authorized referendum 
 36.29  levy, the commissioner of revenue, in consultation with the 
 36.30  commissioner of children, families, and learning education, 
 36.31  shall certify the amount of the referendum levy in taxes payable 
 36.32  year 2001 attributable to the portion of the referendum 
 36.33  allowance exceeding $415 levied against property classified as 
 36.34  class 2, noncommercial 4c(1), or 4c(4), under section 273.13, 
 36.35  excluding the portion of the tax paid by the portion of class 2a 
 36.36  property consisting of the house, garage, and surrounding one 
 37.1   acre of land.  The resulting amount must be used to reduce the 
 37.2   district's referendum levy amount otherwise determined, and must 
 37.3   be paid to the district each year that the referendum authority 
 37.4   remains in effect.  The aid payable under this subdivision must 
 37.5   be subtracted from the district's referendum equalization aid 
 37.6   under subdivision 7.  The referendum equalization aid after the 
 37.7   subtraction must not be less than zero. 
 37.8      For the purposes of this subdivision, the referendum levy 
 37.9   with the latest year of expiration is assumed to be at the 
 37.10  highest level of equalization, and the referendum levy with the 
 37.11  earliest year of expiration is assumed to be at the lowest level 
 37.12  of equalization. 
 37.13     Sec. 42.  Minnesota Statutes 2002, section 126C.17, 
 37.14  subdivision 9, is amended to read: 
 37.15     Subd. 9.  [REFERENDUM REVENUE.] (a) The revenue authorized 
 37.16  by section 126C.10, subdivision 1, may be increased in the 
 37.17  amount approved by the voters of the district at a referendum 
 37.18  called for the purpose.  The referendum may be called by the 
 37.19  board or shall be called by the board upon written petition of 
 37.20  qualified voters of the district.  The referendum must be 
 37.21  conducted one or two calendar years before the increased levy 
 37.22  authority, if approved, first becomes payable.  Only one 
 37.23  election to approve an increase may be held in a calendar year.  
 37.24  Unless the referendum is conducted by mail under paragraph (g), 
 37.25  the referendum must be held on the first Tuesday after the first 
 37.26  Monday in November.  The ballot must state the maximum amount of 
 37.27  the increased revenue per resident marginal cost pupil unit, the 
 37.28  estimated referendum tax rate as a percentage of referendum 
 37.29  market value in the first year it is to be levied, and that the 
 37.30  revenue must be used to finance school operations.  The ballot 
 37.31  may state a schedule, determined by the board, of increased 
 37.32  revenue per resident marginal cost pupil unit that differs from 
 37.33  year to year over the number of years for which the increased 
 37.34  revenue is authorized.  If the ballot contains a schedule 
 37.35  showing different amounts, it must also indicate the estimated 
 37.36  referendum tax rate as a percent of referendum market value for 
 38.1   the amount specified for the first year and for the maximum 
 38.2   amount specified in the schedule.  The ballot may state that 
 38.3   existing referendum levy authority is expiring.  In this case, 
 38.4   the ballot may also compare the proposed levy authority to the 
 38.5   existing expiring levy authority, and express the proposed 
 38.6   increase as the amount, if any, over the expiring referendum 
 38.7   levy authority.  The ballot must designate the specific number 
 38.8   of years, not to exceed ten, for which the referendum 
 38.9   authorization applies.  The notice required under section 275.60 
 38.10  may be modified to read, in cases of renewing existing levies: 
 38.11     "BY VOTING "YES" ON THIS BALLOT QUESTION, YOU MAY BE VOTING 
 38.12     FOR A PROPERTY TAX INCREASE." 
 38.13     The ballot may contain a textual portion with the 
 38.14  information required in this subdivision and a question stating 
 38.15  substantially the following:  
 38.16     "Shall the increase in the revenue proposed by (petition 
 38.17  to) the board of ........., School District No. .., be approved?"
 38.18     If approved, an amount equal to the approved revenue per 
 38.19  resident marginal cost pupil unit times the resident marginal 
 38.20  cost pupil units for the school year beginning in the year after 
 38.21  the levy is certified shall be authorized for certification for 
 38.22  the number of years approved, if applicable, or until revoked or 
 38.23  reduced by the voters of the district at a subsequent referendum.
 38.24     (b) The board must prepare and deliver by first class mail 
 38.25  at least 15 days but no more than 30 days before the day of the 
 38.26  referendum to each taxpayer a notice of the referendum and the 
 38.27  proposed revenue increase.  The board need not mail more than 
 38.28  one notice to any taxpayer.  For the purpose of giving mailed 
 38.29  notice under this subdivision, owners must be those shown to be 
 38.30  owners on the records of the county auditor or, in any county 
 38.31  where tax statements are mailed by the county treasurer, on the 
 38.32  records of the county treasurer.  Every property owner whose 
 38.33  name does not appear on the records of the county auditor or the 
 38.34  county treasurer is deemed to have waived this mailed notice 
 38.35  unless the owner has requested in writing that the county 
 38.36  auditor or county treasurer, as the case may be, include the 
 39.1   name on the records for this purpose.  The notice must project 
 39.2   the anticipated amount of tax increase in annual dollars and 
 39.3   annual percentage for typical residential homesteads, 
 39.4   agricultural homesteads, apartments, and commercial-industrial 
 39.5   property within the school district. 
 39.6      The notice for a referendum may state that an existing 
 39.7   referendum levy is expiring and project the anticipated amount 
 39.8   of increase over the existing referendum levy in the first year, 
 39.9   if any, in annual dollars and annual percentage for typical 
 39.10  residential homesteads, agricultural homesteads, apartments, and 
 39.11  commercial-industrial property within the district. 
 39.12     The notice must include the following statement:  "Passage 
 39.13  of this referendum will result in an increase in your property 
 39.14  taxes."  However, in cases of renewing existing levies, the 
 39.15  notice may include the following statement:  "Passage of this 
 39.16  referendum may result in an increase in your property taxes." 
 39.17     (c) A referendum on the question of revoking or reducing 
 39.18  the increased revenue amount authorized pursuant to paragraph 
 39.19  (a) may be called by the board and shall be called by the board 
 39.20  upon the written petition of qualified voters of the district.  
 39.21  A referendum to revoke or reduce the levy revenue amount must be 
 39.22  based upon the dollar amount, local tax rate, or state the 
 39.23  amount per resident marginal cost pupil unit, that was stated to 
 39.24  be the basis for the initial authorization by which the 
 39.25  authority is to be reduced.  Revenue authority approved by the 
 39.26  voters of the district pursuant to paragraph (a) must 
 39.27  be received available to the school district at least once 
 39.28  before it is subject to a referendum on its revocation or 
 39.29  reduction for subsequent years.  Only one revocation or 
 39.30  reduction referendum may be held to revoke or reduce referendum 
 39.31  revenue for any specific year and for years thereafter. 
 39.32     (d) A petition authorized by paragraph (a) or (c) is 
 39.33  effective if signed by a number of qualified voters in excess of 
 39.34  15 percent of the registered voters of the district on the day 
 39.35  the petition is filed with the board.  A referendum invoked by 
 39.36  petition must be held on the date specified in paragraph (a). 
 40.1      (e) The approval of 50 percent plus one of those voting on 
 40.2   the question is required to pass a referendum authorized by this 
 40.3   subdivision. 
 40.4      (f) At least 15 days before the day of the referendum, the 
 40.5   district must submit a copy of the notice required under 
 40.6   paragraph (b) to the commissioner and to the county auditor of 
 40.7   each county in which the district is located.  Within 15 days 
 40.8   after the results of the referendum have been certified by the 
 40.9   board, or in the case of a recount, the certification of the 
 40.10  results of the recount by the canvassing board, the district 
 40.11  must notify the commissioner of the results of the referendum. 
 40.12     Sec. 43.  Minnesota Statutes 2002, section 126C.17, 
 40.13  subdivision 13, is amended to read: 
 40.14     Subd. 13.  [REFERENDUM CONVERSION ALLOWANCE.] (a) A school 
 40.15  district that received supplemental or transition revenue in 
 40.16  fiscal year 2002 may convert its supplemental revenue conversion 
 40.17  allowance and transition revenue conversion allowance to 
 40.18  additional referendum allowance under subdivision 1 for fiscal 
 40.19  year 2003 and thereafter.  A majority of the school board must 
 40.20  approve the conversion at a public meeting before November 1, 
 40.21  2001.  For a district with other referendum authority, the 
 40.22  referendum conversion allowance approved by the board continues 
 40.23  until the portion of the district's other referendum authority 
 40.24  with the earliest expiration date after June 30, 2006, expires.  
 40.25  For a district with no other referendum authority, the 
 40.26  referendum conversion allowance approved by the board continues 
 40.27  until June 30, 2012. 
 40.28     (b) A school district that received transition revenue in 
 40.29  fiscal year 2004 may convert all or part of its transition 
 40.30  revenue to referendum revenue with voter approval in a 
 40.31  referendum called for the purpose.  The referendum must be held 
 40.32  in accordance with subdivision 9, except that the ballot may 
 40.33  state that existing transition revenue authority is being 
 40.34  canceled or is expiring.  In this case, the ballot shall compare 
 40.35  the proposed referendum allowance to the canceled or expiring 
 40.36  transition revenue allowance.  For purposes of this comparison, 
 41.1   the canceled or expiring transition revenue allowance per 
 41.2   adjusted marginal cost pupil unit shall be converted to an 
 41.3   allowance per resident marginal cost pupil unit based on the 
 41.4   district's ratio of adjusted marginal cost pupil units to 
 41.5   resident marginal cost pupil units for the preceding fiscal 
 41.6   year.  The referendum must be held on the first Tuesday after 
 41.7   the first Monday in November.  The notice required under section 
 41.8   275.60 may be modified to read:  "BY VOTING 'YES' ON THIS BALLOT 
 41.9   QUESTION, YOU MAY BE VOTING FOR A PROPERTY TAX INCREASE."  
 41.10  Elections under this paragraph must be held in 2007 or earlier.  
 41.11     Sec. 44.  Minnesota Statutes 2002, section 126C.21, 
 41.12  subdivision 3, is amended to read: 
 41.13     Subd. 3.  [COUNTY APPORTIONMENT DEDUCTION.] Each year the 
 41.14  amount of money apportioned to a district for that year pursuant 
 41.15  to section 127A.34, subdivision 2, excluding any district where 
 41.16  the general education levy is determined according to section 
 41.17  126C.13, subdivision 3, must be deducted from the general 
 41.18  education aid earned by that district for the same year or from 
 41.19  aid earned from other state sources.  
 41.20     Sec. 45.  Minnesota Statutes 2002, section 126C.457, is 
 41.21  amended to read: 
 41.22     126C.457 [CAREER AND TECHNICAL LEVY.] 
 41.23     For taxes payable in 2003 only, A school district may levy 
 41.24  an amount equal to the greater of (1) $10,000, or (2) the 
 41.25  district's fiscal year 2001 entitlement for career and technical 
 41.26  aid under section 124D.453.  The district must recognize the 
 41.27  full amount of this levy as revenue for the fiscal year in which 
 41.28  it is certified.  Revenue received under this section must be 
 41.29  reserved and used only for career and technical programs.  
 41.30     <b>[EFFECTIVE DATE.]</b> This section is effective for taxes 
 41.31  payable in 2004.  
 41.32     Sec. 46.  Minnesota Statutes 2002, section 169.28, 
 41.33  subdivision 1, is amended to read: 
 41.34     Subdivision 1.  [STOP REQUIRED.] (a) The driver of any 
 41.35  motor vehicle carrying passengers for hire, or of any school bus 
 41.36  whether carrying passengers or not, or of any Head Start bus 
 42.1   whether carrying passengers or not, or of any vehicle that is 
 42.2   required to stop at railroad grade crossings under Code of 
 42.3   Federal Regulations, title 49, section 392.10, before crossing 
 42.4   at grade any track or tracks of a railroad, shall stop the 
 42.5   vehicle not less than 15 feet nor more than 50 feet from the 
 42.6   nearest rail of the railroad and while so stopped shall listen 
 42.7   and look in both directions along the track for any approaching 
 42.8   train, and for signals indicating the approach of a train, 
 42.9   except as hereinafter provided, and shall not proceed until safe 
 42.10  to do so.  The driver must not shift gears while crossing the 
 42.11  railroad tracks.  
 42.12     (b) A school bus or Head Start bus shall not be flagged 
 42.13  across railroad grade crossings except at those railroad grade 
 42.14  crossings that the local school administrative officer may 
 42.15  designate. 
 42.16     (c) A type III school bus, as defined in section 169.01, is 
 42.17  exempt from the requirement of school buses to stop at railroad 
 42.18  grade crossings. 
 42.19     Sec. 47.  Minnesota Statutes 2002, section 169.4503, 
 42.20  subdivision 4, is amended to read: 
 42.21     Subd. 4.  [CERTIFICATION.] A body manufacturer, school bus 
 42.22  dealer, or certified Minnesota commercial vehicle inspector who 
 42.23  is also an employee of an organization purchasing a school bus 
 42.24  shall certify to the department of public safety that the 
 42.25  product meets Minnesota standards. 
 42.26     Sec. 48.  Minnesota Statutes 2002, section 169.454, 
 42.27  subdivision 6, is amended to read: 
 42.28     Subd. 6.  [IDENTIFICATION.] (a) The vehicle must not have 
 42.29  the words "school bus" in any location on the exterior of the 
 42.30  vehicle, or in any interior location visible to a motorist. 
 42.31     (b) The vehicle must display to the rear of the vehicle 
 42.32  this sign:  "VEHICLE STOPS AT RR CROSSINGS." 
 42.33     (c) The lettering (except for "AT," which may be one inch 
 42.34  smaller) must be a minimum two-inch "Series D" as specified in 
 42.35  standard alphabets for highway signs as specified by the Federal 
 42.36  Highway Administration.  The printing must be in a color giving 
 43.1   a marked contrast with that of the part of the vehicle on which 
 43.2   it is placed. 
 43.3      (d) The sign must have provisions for being covered, or be 
 43.4   of a removable or fold-down type. 
 43.5      Sec. 49.  Minnesota Statutes 2002, section 171.321, 
 43.6   subdivision 5, is amended to read: 
 43.7      Subd. 5.  [ANNUAL EVALUATION AND LICENSE VERIFICATION.] (a) 
 43.8   A school district's pupil transportation safety director, the 
 43.9   chief administrator of a nonpublic school, or a private 
 43.10  contractor shall certify annually to the school board or 
 43.11  governing board of a nonpublic school that, at minimum, each 
 43.12  school bus driver meets the school bus driver training 
 43.13  competencies under subdivision 4.  A school district, nonpublic 
 43.14  school, or private contractor also shall provide in-service 
 43.15  training annually to each school bus driver.  
 43.16     (b) A school district, nonpublic school, or private 
 43.17  contractor shall annually verify the validity of the driver's 
 43.18  license of each person who transports students for the district 
 43.19  with the National Drivers Register or with the department of 
 43.20  public safety. 
 43.21     Sec. 50.  [NONPUBLIC PUPIL MATERIALS AND TESTS.] 
 43.22     Notwithstanding Minnesota Statutes, section 123B.42, 
 43.23  subdivision 3, paragraph (b), the inflation adjustment for 
 43.24  nonpublic pupil textbooks, individualized instructional or 
 43.25  cooperative learning materials, and standardized tests for 
 43.26  fiscal year 2004 must be computed using the fiscal year 2004 
 43.27  formula allowance minus $415. 
 43.28     Sec. 51.  [RECOGNITION OF EXCELLENCE IN EDUCATION.] 
 43.29     (a) The commissioner of education must develop for the 
 43.30  kindergarten through grade 12 task force on school finance 
 43.31  reform a plan that recognizes and financially rewards 
 43.32  outstanding schools and students demonstrating excellence in 
 43.33  education consistent with the provisions on academic excellence 
 43.34  in Minnesota Statutes, chapter 120B. 
 43.35     (b) The commissioner must also develop a plan for the task 
 43.36  force that recognizes and financially rewards outstanding 
 44.1   schools and school districts, where at least 40 percent of the 
 44.2   students tested are eligible to receive a free or reduced price 
 44.3   meal, that demonstrate: 
 44.4      (1) student achievement greater than the estimated 
 44.5   statewide average student achievement for that particular 
 44.6   assessment; or 
 44.7      (2) greater student achievement than schools or districts 
 44.8   with similar populations of students tested who are eligible to 
 44.9   receive a free or reduced price meal, have limited English 
 44.10  proficiency, receive special education programs and services and 
 44.11  are enrolled in the school or district for less than one school 
 44.12  year. 
 44.13     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
 44.14  following final enactment and, for purposes of paragraph (b), 
 44.15  requires the commissioner to begin to publicly recognize 
 44.16  eligible schools and school districts using 2002 and 2003 
 44.17  reading and math basic skills test results. 
 44.18     Sec. 52.  [APPROPRIATIONS.] 
 44.19     Subdivision 1.  [DEPARTMENT OF EDUCATION.] The sums 
 44.20  indicated in this section are appropriated from the general fund 
 44.21  to the department of education for the fiscal years designated.  
 44.22     Subd. 2.  [GENERAL EDUCATION AID.] For general education 
 44.23  aid under Minnesota Statutes, section 126C.13, subdivision 4: 
 44.24    $4,833,731,000    .....     2004
 44.25    $5,134,951,000    .....     2005
 44.26     The 2004 appropriation includes $857,432,000 for 2003 and 
 44.27  $3,976,299,000 for 2004. 
 44.28     The 2005 appropriation includes $1,164,715,000 for 2004 and 
 44.29  $3,970,237,000 for 2005.  
 44.30     Subd. 3.  [REFERENDUM TAX BASE REPLACEMENT AID.] For 
 44.31  referendum tax base replacement aid under Minnesota Statutes, 
 44.32  section 126C.17, subdivision 7a: 
 44.33       $ 7,600,000    .....     2004 
 44.34       $ 7,971,000    .....     2005 
 44.35     The 2004 appropriation includes $1,419,000 for 2003 and 
 44.36  $6,181,000 for 2004.  
 45.1      The 2005 appropriation includes $1,846,000 for 2004 and 
 45.2   $6,125,000 for 2005. 
 45.3      Subd. 4.  [ENROLLMENT OPTIONS TRANSPORTATION.] For 
 45.4   transportation of pupils attending postsecondary institutions 
 45.5   under Minnesota Statutes, section 124D.09, or for transportation 
 45.6   of pupils attending nonresident districts under Minnesota 
 45.7   Statutes, section 124D.03: 
 45.8        $50,000        .....     2004
 45.9        $55,000        .....     2005
 45.10     Subd. 5.  [ABATEMENT REVENUE.] For abatement aid under 
 45.11  Minnesota Statutes, section 127A.49:  
 45.12       $2,597,000     .....     2004 
 45.13       $2,931,000     .....     2005 
 45.14     The 2004 appropriation includes $472,000 for 2003 and 
 45.15  $2,125,000 for 2004.  
 45.16     The 2005 appropriation includes $643,000 for 2004 and 
 45.17  $2,297,000 for 2005.  
 45.18     Subd. 6.  [CONSOLIDATION TRANSITION.] For districts 
 45.19  consolidating under Minnesota Statutes, section 123A.485: 
 45.20       $200,000        .....     2004 
 45.21       $593,000        .....     2005 
 45.22     The 2004 appropriation includes $35,000 for 2003 and 
 45.23  $165,000 for 2004. 
 45.24     The 2005 appropriation includes $49,000 for 2004 and 
 45.25  $544,000 for 2005. 
 45.26     Subd. 7.  [TORNADO IMPACT; YELLOW MEDICINE EAST.] For a 
 45.27  grant to independent school district No. 2190, Yellow Medicine 
 45.28  East, for tornado impact declining enrollment aid: 
 45.29       $78,000         .....     2004
 45.30       $39,000         .....     2005
 45.31     Subd. 8.  [DECLINING PUPIL AID; ALBERT LEA.] For declining 
 45.32  pupil aid to independent school district No. 241, Albert Lea: 
 45.33       $225,000        .....     2004
 45.34       $150,000        .....     2005
 45.35     Subd. 9.  [DECLINING PUPIL AID; MESABI EAST.] For declining 
 45.36  pupil aid to independent school district No. 2711, Mesabi East: 
 46.1        $150,000        .....     2004
 46.2        $100,000        .....     2005
 46.3      Subd. 10.  [DECLINING PUPIL AID; ROSEAU.] For declining 
 46.4   pupil aid to independent school district No. 682, Roseau: 
 46.5        $30,000         .....     2004
 46.6        $20,000         .....     2005
 46.7      Subd. 11.  [NONPUBLIC PUPIL AID.] For nonpublic pupil 
 46.8   education aid under Minnesota Statutes, sections 123B.40 to 
 46.9   123B.43 and 123B.87: 
 46.10       $14,179,000    .....     2004 
 46.11       $15,568,000    .....     2005 
 46.12     The 2004 appropriation includes $2,715,000 for 2003 and 
 46.13  $11,464,000 for 2004. 
 46.14     The 2005 appropriation includes $3,424,000 for 2004 and 
 46.15  $12,144,000 for 2005. 
 46.16     Subd. 12.  [NONPUBLIC PUPIL TRANSPORTATION.] For nonpublic 
 46.17  pupil transportation aid under Minnesota Statutes, section 
 46.18  123B.92, subdivision 9: 
 46.19       $20,821,000     .....     2004 
 46.20       $21,978,000     .....     2005 
 46.21     The 2004 appropriation includes $3,990,000 for 2003 and 
 46.22  $16,831,000 for 2004. 
 46.23     The 2005 appropriation includes $5,027,000 for 2004 and 
 46.24  $16,951,000 for 2005. 
 46.25     Sec. 53.  [REPEALER.] 
 46.26     (a) Minnesota Statutes 2002, sections 122A.60; 122A.61; 
 46.27  123A.73, subdivisions 7, 10, and 11; 123B.81, subdivision 6; 
 46.28  124D.65, subdivision 4; 126C.01, subdivision 4; 126C.12; and 
 46.29  126C.125, are repealed.  
 46.30     (b) Minnesota Statutes 2002, section 126C.14, is repealed 
 46.31  effective for revenue for fiscal year 2003. 
 46.32     (c) Minnesota Statutes 2002, sections 122A.62; and 
 46.33  126C.445, are repealed effective for taxes payable in 2004. 
 46.34     (d) Laws 2001, First Special Session chapter 6, article 5, 
 46.35  section 12, as amended by Laws 2002, chapter 377, article 12, 
 46.36  section 15, is repealed. 
 47.1      (e) Laws 2000, chapter 489, article 2, section 36, as 
 47.2   amended by Laws 2001, First Special Session chapter 6, article 
 47.3   1, section 44, is repealed effective for revenue for fiscal year 
 47.4   2004. 
 47.5                              ARTICLE 2
 47.6                         EDUCATION EXCELLENCE
 47.7      Section 1.  Minnesota Statutes 2002, section 120A.24, 
 47.8   subdivision 4, is amended to read: 
 47.9      Subd. 4.  [REPORTS TO THE STATE.] A superintendent must 
 47.10  make an annual report to the commissioner of children, families, 
 47.11  and learning education.  The report must include the following 
 47.12  information: 
 47.13     (1) the number of children residing in the district 
 47.14  attending nonpublic schools or receiving instruction from 
 47.15  persons or institutions other than a public school; 
 47.16     (2) the number of children in clause (1) who are in 
 47.17  compliance with section 120A.22 and this section; and 
 47.18     (3) the names, ages, and addresses number of children whom 
 47.19  in clause (1) who the superintendent has determined are not in 
 47.20  compliance with section 120A.22 and this section.  
 47.21     Sec. 2.  Minnesota Statutes 2002, section 120A.41, is 
 47.22  amended to read: 
 47.23     120A.41 [LENGTH OF SCHOOL YEAR; DAYS OF INSTRUCTION.] 
 47.24     A school board's annual school calendar must include at 
 47.25  least three additional days of student instruction or staff 
 47.26  development training related to implementing section 120B.031, 
 47.27  subdivision 1, paragraph (f), beyond the number of days of 
 47.28  student instruction the board formally adopted as its school 
 47.29  calendar at the beginning of the 1996-1997 school year. 
 47.30     <b>[EFFECTIVE DATE.]</b> This section is effective for the 
 47.31  2003-2004 school year. 
 47.32     Sec. 3.  [120B.25] [AMERICAN HERITAGE EDUCATION.] 
 47.33     (a) School districts must develop and implement a policy of 
 47.34  grade-level instruction to assure the maintenance of freedom and 
 47.35  encourage and provide the opportunity for all students to read 
 47.36  and study America's founding documents that contribute to 
 48.1   understanding the principles, character, and world view of 
 48.2   America's founders.  The documents covered under this policy are 
 48.3   those that have contributed to the founding or maintaining of 
 48.4   America's republican form of limited government, natural law, 
 48.5   the free-market system, and patriotism.  Districts must allow a 
 48.6   principal or teacher to use, read, or post in a public school 
 48.7   classroom or building or at a public school-sponsored event any 
 48.8   document or document excerpt, including a document or document 
 48.9   excerpt that contains religious content, related to the history, 
 48.10  heritage, or foundation of the country or Minnesota.  Examples 
 48.11  of such documents include, but are not limited to: 
 48.12     (1) the Mayflower compact; 
 48.13     (2) the Declaration of Independence; 
 48.14     (3) the Constitutions of the United States and the state of 
 48.15  Minnesota; 
 48.16     (4) the Northwest Ordinance of 1787; 
 48.17     (5) the Federalist Papers; 
 48.18     (6) the Pledge of Allegiance in its original and current 
 48.19  forms; 
 48.20     (7) the national anthem and other patriotic songs; 
 48.21     (8) Patrick Henry's "give me liberty or give me death" 
 48.22  speech, Washington's farewell address to the nation, Lincoln's 
 48.23  Gettysburg address, and other writings such as those of George 
 48.24  Washington Carver, Phyllis Wheatley, Florence Nightingale, and 
 48.25  Reverend Doctor Martin Luther King Jr.; 
 48.26     (9) the acts and published records of Congress; 
 48.27     (10) the United States Supreme Court decisions and records; 
 48.28     (11) the Atlantic Slave Trade; 
 48.29     (12) the Civil Rights Movement; and 
 48.30     (13) the Women's Suffrage Movement. 
 48.31     (b) Districts may not limit or restrain instruction in 
 48.32  American or Minnesota state history or heritage based on 
 48.33  religious references in documents, writings, speeches, 
 48.34  proclamations, or records described under paragraph (a).  These 
 48.35  and any other materials must be used for educational purposes 
 48.36  and not to establish any religion. 
 49.1      (c) Students may voluntarily choose to read, write, share, 
 49.2   report, or otherwise study a topic which is religious in nature 
 49.3   provided other students are provided with the same opportunity 
 49.4   to freely choose a topic. 
 49.5      <b>[EFFECTIVE DATE.]</b> This section is effective the day 
 49.6   following final enactment. 
 49.7      Sec. 4.  Minnesota Statutes 2002, section 121A.11, is 
 49.8   amended by adding a subdivision to read: 
 49.9      Subd. 3.  [PLEDGE OF ALLEGIANCE.] (a) All public and 
 49.10  charter school students shall recite the pledge of allegiance to 
 49.11  the flag of the United States of America one or more times each 
 49.12  week.  The recitation shall be conducted: 
 49.13     (1) by each individual classroom teacher or the teacher's 
 49.14  surrogate; or 
 49.15     (2) over a school intercom system by a person designated by 
 49.16  the school principal or other person having administrative 
 49.17  control over the school. 
 49.18  A local school board or a charter school board of directors 
 49.19  annually, by majority vote, may waive this requirement.  
 49.20     (b) Any student or teacher who objects to reciting the 
 49.21  pledge must be excused from participating without penalty. 
 49.22     (c) A local school board or a charter school board of 
 49.23  directors that waives the requirement to recite the pledge of 
 49.24  allegiance under paragraph (a) may adopt a district or school 
 49.25  policy regarding the reciting of the pledge of allegiance. 
 49.26     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
 49.27  following final enactment. 
 49.28     Sec. 5.  Minnesota Statutes 2002, section 121A.11, is 
 49.29  amended by adding a subdivision to read: 
 49.30     Subd. 4.  [INSTRUCTION.] Unless this requirement is waived 
 49.31  annually by a majority vote of the school board, a school 
 49.32  district must instruct students in the proper etiquette toward, 
 49.33  correct display of, and respect for the flag, and in patriotic 
 49.34  exercises.  The instruction is recommended to be part of the 
 49.35  district's fifth grade social studies curriculum. 
 49.36     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
 50.1   following final enactment.  Each school district must begin the 
 50.2   instruction required under this section no later than the 
 50.3   2004-2005 school year. 
 50.4      Sec. 6.  Minnesota Statutes 2002, section 121A.23, 
 50.5   subdivision 1, is amended to read: 
 50.6      Subdivision 1.  [SEXUALLY TRANSMITTED INFECTIONS AND 
 50.7   DISEASES PROGRAM.] The commissioner of children, families, and 
 50.8   learning education, in consultation with the commissioner of 
 50.9   health, shall assist districts in developing and implementing a 
 50.10  program to prevent and reduce the risk of sexually transmitted 
 50.11  infections and diseases, including but not exclusive to human 
 50.12  immune deficiency virus and human papilloma virus.  Each 
 50.13  district must have a program that includes at least: 
 50.14     (1) planning materials, guidelines, and other technically 
 50.15  accurate and updated information; 
 50.16     (2) a comprehensive, technically accurate, and updated 
 50.17  curriculum that includes helping students to abstain from sexual 
 50.18  activity until marriage; 
 50.19     (3) cooperation and coordination among districts and SCs; 
 50.20     (4) a targeting of adolescents, especially those who may be 
 50.21  at high risk of contracting sexually transmitted infections and 
 50.22  diseases, for prevention efforts; 
 50.23     (5) involvement of parents and other community members; 
 50.24     (6) in-service training for appropriate district staff and 
 50.25  school board members; 
 50.26     (7) collaboration with state agencies and organizations 
 50.27  having a sexually transmitted infection and disease prevention 
 50.28  or sexually transmitted infection and disease risk reduction 
 50.29  program; 
 50.30     (8) collaboration with local community health services, 
 50.31  agencies and organizations having a sexually transmitted 
 50.32  infection and disease prevention or sexually transmitted 
 50.33  infection and disease risk reduction program; and 
 50.34     (9) participation by state and local student organizations. 
 50.35     The department may provide assistance at a neutral site to 
 50.36  a nonpublic school participating in a district's program.  
 51.1   District programs must not conflict with the health and wellness 
 51.2   curriculum developed under Laws 1987, chapter 398, article 5, 
 51.3   section 2, subdivision 7. 
 51.4      If a district fails to develop and implement a program to 
 51.5   prevent and reduce the risk of sexually transmitted infection 
 51.6   and disease, the department must assist the service cooperative 
 51.7   in the region serving that district to develop or implement the 
 51.8   program.  
 51.9      Sec. 7.  Minnesota Statutes 2002, section 121A.23, is 
 51.10  amended by adding a subdivision to read: 
 51.11     Subd. 1a.  [ABSTINENCE UNTIL MARRIAGE.] A school district 
 51.12  that complies with subdivision 1 must provide students with a 
 51.13  curriculum on and instruction in abstinence until marriage 
 51.14  premised on risk avoidance. 
 51.15     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
 51.16  following final enactment. 
 51.17     Sec. 8.  [121A.24] [NOTICE REQUIREMENTS FOR STUDENT SURVEYS 
 51.18  AND SIMILAR INSTRUMENTS.] 
 51.19     (a) A school district must obtain prior written informed 
 51.20  consent from a student's parent or guardian before administering 
 51.21  an academic or nonacademic student survey, assessment, analysis, 
 51.22  evaluation, or similar instrument that reveals information about 
 51.23  the student or the student's family concerning: 
 51.24     (1) political affiliations or beliefs; 
 51.25     (2) mental or psychological problems; 
 51.26     (3) sexual behavior or attitudes; 
 51.27     (4) illegal, antisocial, self-incriminating, or demeaning 
 51.28  behavior; 
 51.29     (5) critical appraisals of another individual with whom a 
 51.30  student has a close family relationship; 
 51.31     (6) legally recognized privileged or analogous 
 51.32  relationships, such as those with a lawyer, physician, or 
 51.33  minister; 
 51.34     (7) religious practices, affiliations, or beliefs; or 
 51.35     (8) income or other income-related information required by 
 51.36  law to determine eligibility to participate in or receive 
 52.1   financial assistance under a program. 
 52.2      (b) When asking a parent or guardian to provide informed 
 52.3   written consent, the school district must: 
 52.4      (1) make a copy of the instrument readily accessible to the 
 52.5   parent or guardian at a convenient location and reasonable time; 
 52.6   and 
 52.7      (2) specifically identify the information in paragraph (a) 
 52.8   that will be revealed through the instrument. 
 52.9   The district must request the consent of the parent or guardian 
 52.10  at least 14 days before administering the instrument. 
 52.11     (c) A parent or guardian seeking to compel a school 
 52.12  district to comply with this section has available the civil 
 52.13  remedies under section 13.08, subdivision 4, in addition to 
 52.14  other remedies provided by law. 
 52.15     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
 52.16  following final enactment. 
 52.17     Sec. 9.  Minnesota Statutes 2002, section 121A.50, is 
 52.18  amended to read: 
 52.19     121A.50 [JUDICIAL REVIEW.] 
 52.20     The decision of the commissioner of children, families, and 
 52.21  learning school district made under sections 121A.40 to 121A.56 
 52.22  is subject to judicial review under sections 14.63 to 14.69 by 
 52.23  writ of certiorari to the court of appeals.  The school district 
 52.24  may implement its decision during the appeal.  The decision of 
 52.25  the commissioner is stayed pending an appeal under this section. 
 52.26     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
 52.27  following final enactment and applies to all appeals of school 
 52.28  district decisions made after that date. 
 52.29     Sec. 10.  Minnesota Statutes 2002, section 121A.55, is 
 52.30  amended to read: 
 52.31     121A.55 [POLICIES TO BE ESTABLISHED.] 
 52.32     (a) The commissioner of children, families, and 
 52.33  learning education shall promulgate guidelines to assist each 
 52.34  school board.  Each school board shall establish uniform 
 52.35  criteria for dismissal and adopt written policies and rules to 
 52.36  effectuate the purposes of sections 121A.40 to 121A.56.  The 
 53.1   policies shall emphasize preventing dismissals through early 
 53.2   detection of problems and shall be designed to address students' 
 53.3   inappropriate behavior from recurring.  The policies shall 
 53.4   recognize the continuing responsibility of the school for the 
 53.5   education of the pupil during the dismissal period.  The 
 53.6   alternative educational services, if the pupil wishes to take 
 53.7   advantage of them, must be adequate to allow the pupil to make 
 53.8   progress towards meeting the graduation standards adopted under 
 53.9   section 120B.02 and help prepare the pupil for readmission.  
 53.10     (b) Consistent with its policies adopted under paragraph 
 53.11  (a), a school district, in consultation with a student's parent 
 53.12  or guardian, may assign a student to an area learning center or 
 53.13  provide other alternative educational services under section 
 53.14  121A.41, subdivision 11.  An area learning center under section 
 53.15  123A.05 may not prohibit an expelled or excluded pupil from 
 53.16  enrolling solely because a district expelled or excluded the 
 53.17  pupil.  The board of the area learning center may use the 
 53.18  provisions of the Pupil Fair Dismissal Act to exclude a pupil or 
 53.19  to require an admission plan. 
 53.20     (c) The commissioner shall actively encourage and assist 
 53.21  school districts to cooperatively establish alternative 
 53.22  educational services within school buildings or at alternative 
 53.23  program sites that offer instruction to pupils who are dismissed 
 53.24  from school for willfully engaging in dangerous, disruptive, or 
 53.25  violent behavior, including for possessing a firearm in a school 
 53.26  zone. 
 53.27     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
 53.28  following final enactment.  
 53.29     Sec. 11.  Minnesota Statutes 2002, section 121A.64, is 
 53.30  amended to read: 
 53.31     121A.64 [NOTIFICATION; TEACHERS' LEGITIMATE EDUCATIONAL 
 53.32  INTEREST.] 
 53.33     (a) A classroom teacher has a legitimate educational 
 53.34  interest in knowing which students placed in the teacher's 
 53.35  classroom have a history of violent behavior and must be 
 53.36  notified before such students are placed in the teacher's 
 54.1   classroom.  
 54.2      (b) Representatives of the school board and the exclusive 
 54.3   representative of the teachers shall discuss issues related to 
 54.4   notification prior to placement the model policy on student 
 54.5   records adopted under Laws 1999, chapter 241, article 9, section 
 54.6   50, and any modifications adopted under this act for notifying 
 54.7   classroom teachers and other school district employees having a 
 54.8   legitimate educational interest in knowing about students with a 
 54.9   history of violent behavior placed in classrooms of students 
 54.10  with histories of violent behavior and any.  The representatives 
 54.11  of the school board and the exclusive representative of the 
 54.12  teachers also may discuss the need for intervention services or 
 54.13  conflict resolution or training for staff in these cases related 
 54.14  to placing students with a history of violent behavior in 
 54.15  teachers' classrooms. 
 54.16     <b>[EFFECTIVE DATE.]</b> This section is effective for the 
 54.17  2003-2004 school year and later. 
 54.18     Sec. 12.  Minnesota Statutes 2002, section 122A.414, is 
 54.19  amended by adding a subdivision to read: 
 54.20     Subd. 3.  [REPORT.] Participating districts and school 
 54.21  sites must report on the implementation and effectiveness of the 
 54.22  alternative teacher compensation plan, particularly addressing 
 54.23  each requirement under subdivision 2 and make biennial 
 54.24  recommendations by January 1 to their school boards.  The school 
 54.25  boards shall transmit a summary of the findings and 
 54.26  recommendations of their district to the commissioner. 
 54.27     Sec. 13.  Minnesota Statutes 2002, section 122A.415, 
 54.28  subdivision 1, is amended to read: 
 54.29     Subdivision 1.  [AID AMOUNT.] (a) A school district that 
 54.30  meets the conditions of section 122A.414 and submits an 
 54.31  application approved by the commissioner is eligible for 
 54.32  alternative compensation aid.  The commissioner must consider 
 54.33  only applications submitted jointly by a school district and the 
 54.34  exclusive representative of the teachers for participation in 
 54.35  the program.  The application must contain a formally adopted 
 54.36  collective bargaining agreement, memorandum of understanding, or 
 55.1   other binding agreement that implements an alternative teacher 
 55.2   professional pay system consistent with section 122A.414 and 
 55.3   includes all teachers in a district, all teachers at a school 
 55.4   site, or at least 25 percent of the teachers in a district.  The 
 55.5   commissioner, in approving applications, may give preference to 
 55.6   applications involving entire districts or sites in approving 
 55.7   applications or to applications that align measures of teacher 
 55.8   performance with student academic achievement and progress under 
 55.9   section 120B.35, subdivision 1.  
 55.10     (b) Alternative compensation aid for a qualifying school 
 55.11  district, site, or portion of a district or school site is as 
 55.12  follows: 
 55.13     (1) for a school district in which the school board and the 
 55.14  exclusive representative of the teachers agree to place all 
 55.15  teachers in the district or at the site on the alternative 
 55.16  compensation schedule, alternative compensation aid equals $150 
 55.17  times the district's or the site's number of pupils enrolled on 
 55.18  October 1 of the previous fiscal year; or 
 55.19     (2) for a district in which the school board and the 
 55.20  exclusive representative of the teachers agree that at least 25 
 55.21  percent of the district's licensed teachers will be paid on the 
 55.22  alternative compensation schedule, alternative compensation aid 
 55.23  equals $150 times the percentage of participating teachers times 
 55.24  the district's number of pupils enrolled as of October 1 of the 
 55.25  previous fiscal year.  
 55.26     Sec. 14.  Minnesota Statutes 2002, section 122A.415, 
 55.27  subdivision 3, is amended to read: 
 55.28     Subd. 3.  [AID TIMING.] (a) Districts or sites with 
 55.29  approved applications must receive alternative compensation aid 
 55.30  for each school year that the district or site participates in 
 55.31  the program as described in this subdivision.  Districts or 
 55.32  sites with applications received by the commissioner before June 
 55.33  1 of the first year of a two-year contract shall receive 
 55.34  alternative compensation aid for both years of the contract.  
 55.35  Districts or sites with applications received by the 
 55.36  commissioner after June 1 of the first year of a two-year 
 56.1   contract shall receive alternative compensation aid only for the 
 56.2   second year of the contract.  A qualifying district or site that 
 56.3   received alternative compensation aid for the previous fiscal 
 56.4   year must receive at least an amount equal to the lesser of the 
 56.5   amount it received for the previous fiscal year or its 
 56.6   proportionate share of the previous year's appropriation if the 
 56.7   district or site submits a timely application and the 
 56.8   commissioner determines that the district or site continues to 
 56.9   implement an alternative teacher professional pay system, 
 56.10  consistent with its application under this section.  The 
 56.11  commissioner must approve initial applications for school 
 56.12  districts qualifying under subdivision 1, paragraph (b), clause 
 56.13  (1), by January 15 of each year.  If any money remains, the 
 56.14  commissioner must approve aid amounts for school districts 
 56.15  qualifying under subdivision 1, paragraph (b), clause (2), by 
 56.16  February 15 of each year.  
 56.17     (b) The commissioner shall select applicants that qualify 
 56.18  for this program, notify school districts and school sites about 
 56.19  the program, develop and disseminate application materials, and 
 56.20  carry out other activities needed to implement this section.  
 56.21     Sec. 15.  Minnesota Statutes 2002, section 122A.63, 
 56.22  subdivision 3, is amended to read: 
 56.23     Subd. 3.  [REVIEW AND COMMENT.] The commissioner must 
 56.24  submit the joint application to the Minnesota American Indian 
 56.25  scholarship education committee for review and comment. 
 56.26     Sec. 16.  Minnesota Statutes 2002, section 123B.02, 
 56.27  subdivision 14, is amended to read: 
 56.28     Subd. 14.  [EMPLOYEES; CONTRACTS FOR SERVICES.] (a) The 
 56.29  board may employ and discharge necessary employees and may 
 56.30  contract for other services.  Notwithstanding any other law to 
 56.31  the contrary, it shall be an inherent managerial right of the 
 56.32  board to unilaterally contract or subcontract for services 
 56.33  unless the power to contract or subcontract is specifically 
 56.34  prohibited by collective bargaining agreements with all units of 
 56.35  affected employees. 
 56.36     (b) Notwithstanding any law to the contrary, when the 
 57.1   exclusive representative and the employer have been in 
 57.2   negotiation of a contract or subcontract for the services of 
 57.3   nonteachers as set out in the collective bargaining agreement 
 57.4   and have participated in mediation over a period of at least 45 
 57.5   days, either party may declare an impasse and terminate the 
 57.6   negotiation and the collective bargaining agreement shall 
 57.7   conclusively be determined to be expired.  After expiration of 
 57.8   the collective bargaining agreement occurs under this paragraph, 
 57.9   the employer may contract with any other persons and entities 
 57.10  for the services. 
 57.11     (c) For the purposes of paragraph (b), the mediation period 
 57.12  begins on the day following receipt by the commissioner of a 
 57.13  request for mediation.  
 57.14     (d) Paragraph (b) applies to all agreements between the 
 57.15  board and collective bargaining representatives except for 
 57.16  teachers as defined in section 122A.41, subdivision 1, paragraph 
 57.17  (a). 
 57.18     <b>[EFFECTIVE DATE.]</b> This section is effective for contracts 
 57.19  negotiated and entered into on or after July 1, 2003, and 
 57.20  contracts beginning negotiation, but not entered into, before 
 57.21  July 1, 2003.  
 57.22     Sec. 17.  [123B.025] [SCHOOL SPONSORSHIP AND ADVERTISING 
 57.23  REVENUE.] 
 57.24     Subdivision 1.  [BOARD AUTHORITY; CONTRACTS.] A school 
 57.25  board may enter into a contract with advertisers, sponsors, or 
 57.26  others regarding advertising and naming rights to school 
 57.27  facilities and vehicles under the general charge of the 
 57.28  district.  A contract authorized under this section must be 
 57.29  approved by the school board.  The powers granted to a school 
 57.30  board under this section are in addition to any other authority 
 57.31  the school district may have. 
 57.32     Subd. 2.  [AUTHORIZED AGREEMENTS.] A school district may 
 57.33  enter into a contract to: 
 57.34     (1) lease the naming rights for school facilities, 
 57.35  including school buildings, ice arenas, and stadiums; 
 57.36     (2) sell advertising on or in the facilities listed in 
 58.1   clause (1); 
 58.2      (3) sell advertising on or in school buses subject to the 
 58.3   content restrictions of section 123B.93; and 
 58.4      (4) otherwise enter into an agreement with a sponsoring 
 58.5   agent. 
 58.6      Subd. 3.  [REVENUE USES.] Revenue generated under this 
 58.7   section must be used according to a plan specified by the school 
 58.8   board. 
 58.9      Sec. 18.  Minnesota Statutes 2002, section 123B.36, 
 58.10  subdivision 1, is amended to read: 
 58.11     Subdivision 1.  [SCHOOL BOARDS MAY REQUIRE FEES.] (a) For 
 58.12  purposes of this subdivision, "home school" means a home school 
 58.13  as defined in sections 120A.22 and 120A.24 with five or fewer 
 58.14  students receiving instruction.  
 58.15     (b) A school board is authorized to require payment of fees 
 58.16  in the following areas: 
 58.17     (1) in any program where the resultant product, in excess 
 58.18  of minimum requirements and at the pupil's option, becomes the 
 58.19  personal property of the pupil; 
 58.20     (2) admission fees or charges for extra curricular 
 58.21  activities, where attendance is optional and where the admission 
 58.22  fees or charges a student must pay to attend or participate in 
 58.23  an extracurricular activity is the same for all students, 
 58.24  regardless of whether the student is enrolled in a public or a 
 58.25  home school; 
 58.26     (3) a security deposit for the return of materials, 
 58.27  supplies, or equipment; 
 58.28     (4) personal physical education and athletic equipment and 
 58.29  apparel, although any pupil may personally provide it if it 
 58.30  meets reasonable requirements and standards relating to health 
 58.31  and safety established by the board; 
 58.32     (5) items of personal use or products that a student has an 
 58.33  option to purchase such as student publications, class rings, 
 58.34  annuals, and graduation announcements; 
 58.35     (6) fees specifically permitted by any other statute, 
 58.36  including but not limited to section 171.05, subdivision 2; 
 59.1   provided (i) driver education fees do not exceed the actual cost 
 59.2   to the school and school district of providing driver education, 
 59.3   and (ii) the driver education courses are open to enrollment to 
 59.4   persons between the ages of 15 and 18 who reside or attend 
 59.5   school in the school district; 
 59.6      (7) field trips considered supplementary to a district 
 59.7   educational program; 
 59.8      (8) any authorized voluntary student health and accident 
 59.9   benefit plan; 
 59.10     (9) for the use of musical instruments owned or rented by 
 59.11  the district, a reasonable rental fee not to exceed either the 
 59.12  rental cost to the district or the annual depreciation plus the 
 59.13  actual annual maintenance cost for each instrument; 
 59.14     (10) transportation of pupils to and from extra curricular 
 59.15  activities conducted at locations other than school, where 
 59.16  attendance is optional, and transportation of charter school 
 59.17  students participating in extracurricular activities conducted 
 59.18  in the resident school district under section 123B.49, 
 59.19  subdivision 4, paragraph (a), which must be charged to the 
 59.20  charter school; 
 59.21     (11) transportation to and from school of pupils living 
 59.22  within two miles from school and all other transportation 
 59.23  services not required by law.  If a district charges fees for 
 59.24  transportation of pupils, it must establish guidelines for that 
 59.25  transportation to ensure that no pupil is denied transportation 
 59.26  solely because of inability to pay; 
 59.27     (12) motorcycle classroom education courses conducted 
 59.28  outside of regular school hours; provided the charge must not 
 59.29  exceed the actual cost of these courses to the school district; 
 59.30     (13) transportation to and from post-secondary institutions 
 59.31  for pupils enrolled under the post-secondary enrollment options 
 59.32  program under section 123B.88, subdivision 22.  Fees collected 
 59.33  for this service must be reasonable and must be used to reduce 
 59.34  the cost of operating the route.  Families who qualify for 
 59.35  mileage reimbursement under section 124D.09, subdivision 22, may 
 59.36  use their state mileage reimbursement to pay this fee.  If no 
 60.1   fee is charged, districts must allocate costs based on the 
 60.2   number of pupils riding the route. 
 60.3      <b>[EFFECTIVE DATE.]</b> This section is effective for the 
 60.4   2003-2004 school year and later. 
 60.5      Sec. 19.  Minnesota Statutes 2002, section 123B.49, 
 60.6   subdivision 4, is amended to read: 
 60.7      Subd. 4.  [BOARD CONTROL OF EXTRACURRICULAR ACTIVITIES.] 
 60.8   (a) The board may take charge of and control all extracurricular 
 60.9   activities of the teachers and children of the public schools in 
 60.10  the district.  Extracurricular activities means all direct and 
 60.11  personal services for pupils for their enjoyment that are 
 60.12  managed and operated under the guidance of an adult or staff 
 60.13  member.  The board shall allow all resident pupils receiving 
 60.14  instruction in a home school as defined in section 123B.36, 
 60.15  subdivision 1, paragraph (a), and all resident pupils receiving 
 60.16  instruction in a charter school as defined in section 124D.10 to 
 60.17  be eligible to fully participate in extracurricular activities 
 60.18  on the same basis as public school students enrolled in the 
 60.19  district's schools.  Charter school students participating in 
 60.20  extracurricular activities must meet the academic and student 
 60.21  conduct requirements of the charter school and resident district.
 60.22     (b) Extracurricular activities have all of the following 
 60.23  characteristics: 
 60.24     (1) they are not offered for school credit nor required for 
 60.25  graduation; 
 60.26     (2) they are generally conducted outside school hours, or 
 60.27  if partly during school hours, at times agreed by the 
 60.28  participants, and approved by school authorities; 
 60.29     (3) the content of the activities is determined primarily 
 60.30  by the pupil participants under the guidance of a staff member 
 60.31  or other adult. 
 60.32     (c) If the board does not take charge of and control 
 60.33  extracurricular activities, these activities shall be 
 60.34  self-sustaining with all expenses, except direct salary costs 
 60.35  and indirect costs of the use of school facilities, met by dues, 
 60.36  admissions, or other student fund-raising events.  The general 
 61.1   fund must reflect only those salaries directly related to and 
 61.2   readily identified with the activity and paid by public funds.  
 61.3   Other revenues and expenditures for extra curricular activities 
 61.4   must be recorded according to the "Manual of Instruction for 
 61.5   Uniform Student Activities Accounting for Minnesota School 
 61.6   Districts and Area Vocational-Technical Colleges."  
 61.7   Extracurricular activities not under board control must have an 
 61.8   annual financial audit and must also be audited annually for 
 61.9   compliance with this section. 
 61.10     (d) If the board takes charge of and controls 
 61.11  extracurricular activities, any or all costs of these activities 
 61.12  may be provided from school revenues and all revenues and 
 61.13  expenditures for these activities shall be recorded in the same 
 61.14  manner as other revenues and expenditures of the district.  
 61.15     (e) If the board takes charge of and controls 
 61.16  extracurricular activities, the teachers or pupils in the 
 61.17  district must not participate in such activity, nor shall the 
 61.18  school name or any allied name be used in connection therewith, 
 61.19  except by consent and direction of the board.  
 61.20     (f) School districts may charge charter schools their 
 61.21  proportional share of the direct and indirect costs of the 
 61.22  extracurricular activities not covered by student fees under 
 61.23  section 123B.36, subdivision 1. 
 61.24     <b>[EFFECTIVE DATE.]</b> This section is effective for the 
 61.25  2003-2004 school year and later. 
 61.26     Sec. 20.  Minnesota Statutes 2002, section 123B.88, 
 61.27  subdivision 2, is amended to read: 
 61.28     Subd. 2.  [VOLUNTARY SURRENDER OF TRANSPORTATION 
 61.29  PRIVILEGES.] The parent or guardian of a secondary student may 
 61.30  voluntarily surrender the secondary student's to and from school 
 61.31  transportation privileges granted under subdivision 1. 
 61.32     Sec. 21.  Minnesota Statutes 2002, section 124D.081, is 
 61.33  amended by adding a subdivision to read: 
 61.34     Subd. 9.  [RESERVE ACCOUNT.] First grade preparedness 
 61.35  revenue must be placed in a reserve account within the general 
 61.36  fund and may only be used for first grade preparedness programs 
 62.1   at qualifying school sites. 
 62.2      Sec. 22.  Minnesota Statutes 2002, section 124D.09, 
 62.3   subdivision 9, is amended to read: 
 62.4      Subd. 9.  [ENROLLMENT PRIORITY.] A post-secondary 
 62.5   institution shall give priority to its post-secondary students 
 62.6   when enrolling 11th and 12th grade pupils in its courses.  A 
 62.7   post-secondary institution may provide information about its 
 62.8   programs to a secondary school or to a pupil or parent, but it 
 62.9   may not advertise or otherwise recruit or solicit the 
 62.10  participation on financial grounds, of secondary pupils to 
 62.11  enroll in its programs on financial grounds.  An institution 
 62.12  must not enroll secondary pupils, for post-secondary enrollment 
 62.13  options purposes, in remedial, developmental, or other courses 
 62.14  that are not college level.  Once a pupil has been enrolled in a 
 62.15  post-secondary course under this section, the pupil shall not be 
 62.16  displaced by another student.  
 62.17     Sec. 23.  Minnesota Statutes 2002, section 124D.09, 
 62.18  subdivision 10, is amended to read: 
 62.19     Subd. 10.  [COURSES ACCORDING TO AGREEMENTS.] An eligible 
 62.20  pupil, according to subdivision 4 5, may enroll in a 
 62.21  nonsectarian course taught by a secondary teacher or a 
 62.22  post-secondary faculty member and offered at a secondary school, 
 62.23  or another location, according to an agreement between a public 
 62.24  school board and the governing body of an eligible public 
 62.25  post-secondary system or an eligible private post-secondary 
 62.26  institution, as defined in subdivision 3.  All provisions of 
 62.27  this section shall apply to a pupil, public school board, 
 62.28  district, and the governing body of a post-secondary 
 62.29  institution, except as otherwise provided.  
 62.30     Sec. 24.  Minnesota Statutes 2002, section 124D.09, 
 62.31  subdivision 16, is amended to read: 
 62.32     Subd. 16.  [FINANCIAL ARRANGEMENTS FOR COURSES PROVIDED 
 62.33  ACCORDING TO AGREEMENTS.] (a) The agreement between a board and 
 62.34  the governing body of a public post-secondary system or private 
 62.35  post-secondary institution shall set forth the payment amounts 
 62.36  and arrangements, if any, from the board to the post-secondary 
 63.1   institution.  No payments shall be made by the department 
 63.2   according to subdivision 14 13 or 15.  For the purpose of 
 63.3   computing state aids for a district, a pupil enrolled according 
 63.4   to subdivision 10 shall be counted in the average daily 
 63.5   membership of the district as though the pupil were enrolled in 
 63.6   a secondary course that is not offered in connection with an 
 63.7   agreement.  Nothing in this subdivision shall be construed to 
 63.8   prohibit a public post-secondary system or private 
 63.9   post-secondary institution from receiving additional state 
 63.10  funding that may be available under any other law.  
 63.11     (b) If a course is provided under subdivision 10, offered 
 63.12  at a secondary school, and taught by a secondary teacher, the 
 63.13  post-secondary system or institution must not require a payment 
 63.14  from the school board that exceeds the cost to the 
 63.15  post-secondary institution that is directly attributable to 
 63.16  providing that course.  
 63.17     Sec. 25.  Minnesota Statutes 2002, section 124D.09, 
 63.18  subdivision 20, is amended to read: 
 63.19     Subd. 20.  [TEXTBOOKS; MATERIALS.] All textbooks and 
 63.20  equipment provided to a pupil, and paid for under subdivision 
 63.21  13, are the property of the pupil's school district of residence 
 63.22  postsecondary institution.  Each pupil is required to return all 
 63.23  textbooks and equipment to the district postsecondary 
 63.24  institution after the course has ended. 
 63.25     Sec. 26.  [124D.095] [DISTANCE EDUCATION OPTION.] 
 63.26     Subdivision 1.  [CITATION.] This section may be cited as 
 63.27  the "Distance Education Option Act." 
 63.28     Subd. 2.  [DEFINITIONS.] For purposes of this section, the 
 63.29  following terms have the meanings given them. 
 63.30     (a) "Distance education" is an interactive course or 
 63.31  program that delivers instruction to a student by video, audio, 
 63.32  computer, or multimedia communication; is combined with other 
 63.33  traditional delivery methods that include frequent student 
 63.34  assessment and actual teacher contact time; and meets or exceeds 
 63.35  state academic standards. 
 63.36     (b) "Distance education provider" is a school district, an 
 64.1   organization of two or more school districts operating under a 
 64.2   joint powers agreement, or a charter school located in Minnesota 
 64.3   that provides distance education to students. 
 64.4      (c) "Student" is a Minnesota resident enrolled in a school 
 64.5   under section 120A.22, subdivision 4, in kindergarten through 
 64.6   grade 12. 
 64.7      (d) "Distance education student" is a student enrolled in 
 64.8   distance education delivered by a distance education provider 
 64.9   under paragraph (b). 
 64.10     Subd. 3.  [AUTHORIZATION; NOTICE; LIMITATIONS ON 
 64.11  ENROLLMENT.] (a) A student, or the parent or guardian of a 
 64.12  student age 17 or younger, may apply to a distance education 
 64.13  provider to enroll the student in distance education.  No school 
 64.14  district or charter school may prohibit a student from applying 
 64.15  to enroll in distance education.  A distance education provider 
 64.16  that accepts a student under this section must, within ten days, 
 64.17  notify the student and the student's school and school district 
 64.18  if the student is not enrolled in the school district or charter 
 64.19  school delivering the distance education.  The notice must 
 64.20  report the student's course or program and hours of instruction. 
 64.21     (b) A distance education provider must notify the 
 64.22  commissioner that it is delivering distance education and report 
 64.23  the number of distance education students it is accepting and 
 64.24  the distance education courses and programs it is delivering.  
 64.25     (c) A distance education provider may limit enrollment if 
 64.26  the provider's school board or board of directors adopts by 
 64.27  resolution specific standards for accepting and rejecting 
 64.28  students' applications. 
 64.29     (d) An enrolling district may reduce a distance education 
 64.30  student's regular classroom instructional membership in 
 64.31  proportion to the student's membership in distance education 
 64.32  courses. 
 64.33     Subd. 4.  [DISTANCE EDUCATION PARAMETERS.] (a) A distance 
 64.34  education student must receive academic credit for successfully 
 64.35  completing the requirements of a distance education course or 
 64.36  program.  Secondary credits granted to a distance education 
 65.1   student must be counted toward the graduation and subject area 
 65.2   requirements of the school district or charter school in which 
 65.3   the student is enrolled.  
 65.4      (b) A distance education student may: 
 65.5      (1) enroll during a single school year in a maximum of 12 
 65.6   semester-long courses or their equivalent delivered by a 
 65.7   distance education provider or the school district or charter 
 65.8   school in which the distance education student is currently 
 65.9   enrolled; 
 65.10     (2) complete course work at a grade level that is different 
 65.11  from the student's current grade level; and 
 65.12     (3) enroll in additional courses with the distance 
 65.13  education provider under a separate agreement that includes 
 65.14  terms for payment of any tuition or course fees.  
 65.15     (c) A distance education student has the same access to the 
 65.16  computer hardware and education software available in a school 
 65.17  as all other students enrolled in the district or charter 
 65.18  school.  A distance education provider must assist a distance 
 65.19  education student whose family qualifies for the education tax 
 65.20  credit under section 290.0674 to acquire computer hardware and 
 65.21  educational software for distance learning purposes. 
 65.22     Subd. 5.  [PARTICIPATION IN EXTRACURRICULAR ACTIVITIES.] A 
 65.23  distance education student may participate in the 
 65.24  extracurricular activities of the charter school or school 
 65.25  district in which the student is currently enrolled on the same 
 65.26  basis as other students enrolled in the charter school or school 
 65.27  district. 
 65.28     Subd. 6.  [INFORMATION.] School districts and charter 
 65.29  schools must make available information about distance education 
 65.30  to all interested people. 
 65.31     Subd. 7.  [FINANCIAL ARRANGEMENTS.] (a) For a distance 
 65.32  education student enrolled in a distance education course, the 
 65.33  department must calculate average daily membership and make 
 65.34  payments according to this subdivision. 
 65.35     (b) The initial distance education average daily membership 
 65.36  equals 1/12 for each semester course or a proportionate amount 
 66.1   for courses of different lengths.  The adjusted distance 
 66.2   education average daily membership equals the initial distance 
 66.3   education average daily membership times .88. 
 66.4      (c) No distance education average daily membership shall be 
 66.5   generated if:  (i) the distance education student officially 
 66.6   withdraws from the distance education course during the first 15 
 66.7   days of the course, or (ii) the distance education student is 
 66.8   enrolled in distance education provided by the district or 
 66.9   charter school in which the student is currently enrolled and 
 66.10  the student was enrolled in a Minnesota public school for the 
 66.11  school year before the school year in which the student first 
 66.12  enrolled in distance education. 
 66.13     (d) Distance education average daily membership under this 
 66.14  subdivision for a distance education student currently enrolled 
 66.15  in a Minnesota public school and who was enrolled in a Minnesota 
 66.16  public school for the school year before the school year in 
 66.17  which the student first enrolled in distance education shall be 
 66.18  used only for the computation of average daily membership 
 66.19  according to section 126C.05, subdivision 19, paragraph (a), 
 66.20  clause (ii), and for the computation of distance education aid 
 66.21  according to section 126C.24. 
 66.22     (e) Distance education average daily membership under this 
 66.23  subdivision for distance education students not included in 
 66.24  paragraph (b) or (c) shall be used only for the computation of 
 66.25  average daily membership according to section 126C.05, 
 66.26  subdivision 19, paragraph (a), clause (ii), and for the 
 66.27  computation of payments under paragraphs (f) and (g). 
 66.28     (f) Subject to the limitations in subdivision 8, the 
 66.29  department must pay a distance education provider an amount 
 66.30  equal to the product of the adjusted distance education average 
 66.31  daily membership for students under paragraph (e) times the 
 66.32  student grade level weighting under section 126C.05, subdivision 
 66.33  1, times the formula allowance. 
 66.34     (g) The department must pay each distance education 
 66.35  provider 100 percent of the amount in paragraph (f) within 45 
 66.36  days of receiving initial enrollment information each quarter or 
 67.1   semester.  If a change in enrollment occurs during a semester, 
 67.2   the distance education provider must report the change to the 
 67.3   department at the time it submits the enrollment information for 
 67.4   the next quarter or semester. 
 67.5      Subd. 8.  [PAYMENT PRIORITY.] (a) To the extent funds are 
 67.6   available, the commissioner must pay a distance education 
 67.7   provider according to subdivision 7, in the order in which a 
 67.8   distance education provider notifies the commissioner under 
 67.9   subdivision 3, paragraph (b), that it is delivering distance 
 67.10  education.  The distance education provider must submit to the 
 67.11  commissioner any student information necessary to process 
 67.12  payments under this section. 
 67.13     (b) Before paying other distance education providers under 
 67.14  paragraph (a), the commissioner must pay providers that 
 67.15  delivered distance education in fiscal year 2003.  A provider's 
 67.16  qualifying number of pupils may not exceed 110 percent of the 
 67.17  previous year's pupils.  A provider that qualifies under this 
 67.18  paragraph may also submit an application for funding for 
 67.19  additional pupils under paragraph (a). 
 67.20     <b>[EFFECTIVE DATE.]</b> This section is effective for the 
 67.21  2003-2004 school year and later. 
 67.22     Sec. 27.  Minnesota Statutes 2002, section 124D.10, 
 67.23  subdivision 2a, is amended to read: 
 67.24     Subd. 2a.  [CHARTER SCHOOL ADVISORY COUNCIL.] (a) A charter 
 67.25  school advisory council is established under section 
 67.26  15.059 except that the term for each council member shall be 
 67.27  three years.  The advisory council is composed of seven members 
 67.28  from throughout the state who have demonstrated experience with 
 67.29  or interest in charter schools.  The members of the council 
 67.30  shall be appointed by the commissioner.  The advisory council 
 67.31  shall bring to the attention of the commissioner any matters 
 67.32  related to charter schools that the council deems necessary and 
 67.33  shall: 
 67.34     (1) encourage school boards to make full use of charter 
 67.35  school opportunities; 
 67.36     (2) encourage the creation of innovative schools; 
 68.1      (3) provide leadership and support for charter school 
 68.2   sponsors to increase the innovation in and the effectiveness, 
 68.3   accountability, and fiscal soundness of charter schools; 
 68.4      (4) serve an ombudsman function in facilitating the 
 68.5   operations of new and existing charter schools; 
 68.6      (5) promote timely financial management training for newly 
 68.7   elected members of a charter school board of directors and 
 68.8   ongoing training for other members of a charter school board of 
 68.9   directors; and 
 68.10     (6) review charter school applications and recommend 
 68.11  approving or disapproving the applications; and 
 68.12     (7) facilitate compliance with auditing and other reporting 
 68.13  requirements.  The advisory council shall refer all its 
 68.14  proposals to the commissioner who shall provide time for reports 
 68.15  from the council. 
 68.16     (b) The charter school advisory council under this 
 68.17  subdivision expires June 30, 2003 2007. 
 68.18     Sec. 28.  Minnesota Statutes 2002, section 124D.10, 
 68.19  subdivision 3, is amended to read: 
 68.20     Subd. 3.  [SPONSOR.] A school board; intermediate school 
 68.21  district school board; education district organized under 
 68.22  sections 123A.15 to 123A.19; charitable organization under 
 68.23  section 501(c)(3) of the Internal Revenue Code of 1986 that is a 
 68.24  member of the Minnesota council of nonprofits or the Minnesota 
 68.25  council on foundations, registered with the attorney general's 
 68.26  office, and reports an end-of-year fund balance of at least 
 68.27  $2,000,000; Minnesota private college that grants two- or 
 68.28  four-year degrees and is registered with the higher education 
 68.29  services office under chapter 136A; community college, state 
 68.30  university, or technical college, governed by the board of 
 68.31  trustees of the Minnesota state colleges and universities; or 
 68.32  the University of Minnesota may sponsor one or more charter 
 68.33  schools.  A nonprofit corporation subject to chapter 317A, 
 68.34  described in section 317A.905, and exempt from federal income 
 68.35  tax under section 501(c)(6) of the Internal Revenue Code of 
 68.36  1986, may sponsor one or more charter schools if the nonprofit 
 69.1   corporation has existed for at least 25 years.  
 69.2      <b>[EFFECTIVE DATE.]</b> This section is effective for the 
 69.3   2003-2004 school year and later. 
 69.4      Sec. 29.  Minnesota Statutes 2002, section 124D.10, 
 69.5   subdivision 4, is amended to read: 
 69.6      Subd. 4.  [FORMATION OF SCHOOL.] (a) A sponsor may 
 69.7   authorize one or more licensed teachers under section 122A.18, 
 69.8   subdivision 1, to operate a charter school subject to approval 
 69.9   by the commissioner.  A board must vote on charter school 
 69.10  application for sponsorship no later than 90 days after 
 69.11  receiving the application.  After 90 days, the applicant may 
 69.12  apply to the commissioner.  If a board elects not to sponsor a 
 69.13  charter school, the applicant may appeal the board's decision to 
 69.14  the commissioner.  The commissioner may elect to sponsor the 
 69.15  charter school or assist the applicant in finding an eligible 
 69.16  sponsor.  The school must be organized and operated as a 
 69.17  cooperative under chapter 308A or nonprofit corporation under 
 69.18  chapter 317A and the provisions under the applicable chapter 
 69.19  shall apply to the school except as provided in this section.  
 69.20  Notwithstanding sections 465.717 and 465.719, a school district 
 69.21  may create a corporation for the purpose of creating a charter 
 69.22  school.  
 69.23     (b) Before the operators may form and operate a school, the 
 69.24  sponsor must file an affidavit with the commissioner stating its 
 69.25  intent to authorize a charter school.  The affidavit must state 
 69.26  the terms and conditions under which the sponsor would authorize 
 69.27  a charter school.  The commissioner must approve or disapprove 
 69.28  the sponsor's proposed authorization within 60 days of receipt 
 69.29  of the affidavit.  Failure to obtain commissioner approval 
 69.30  precludes a sponsor from authorizing the charter school that was 
 69.31  the subject of the affidavit.  
 69.32     (c) The operators authorized to organize and operate a 
 69.33  school, before entering into a contract or other agreement for 
 69.34  professional or other services, goods, or facilities, must 
 69.35  incorporate as a cooperative under chapter 308A or as a 
 69.36  nonprofit corporation under chapter 317A and must establish a 
 70.1   board of directors composed of at least five members until a 
 70.2   timely election for members of the charter school board of 
 70.3   directors is held according to the school's articles and 
 70.4   bylaws.  A charter school board of directors must be composed of 
 70.5   at least five members.  Any staff members who are employed at 
 70.6   the school, including teachers providing instruction under a 
 70.7   contract with a cooperative, and all parents of children 
 70.8   enrolled in the school may participate in the election for 
 70.9   members of the school's board of directors.  Licensed teachers 
 70.10  employed at the school, including teachers providing instruction 
 70.11  under a contract with a cooperative, must be a majority of the 
 70.12  members of the board of directors before the school completes 
 70.13  its third year of operation, unless the commissioner waives the 
 70.14  requirement for a majority of licensed teachers on the board.  
 70.15  Board of director meetings must comply with chapter 13D. 
 70.16     (d) The granting or renewal of a charter by a sponsoring 
 70.17  entity must not be conditioned upon the bargaining unit status 
 70.18  of the employees of the school.  
 70.19     (e) A sponsor may authorize the operators of a charter 
 70.20  school to expand the operation of the charter school to 
 70.21  additional sites or to add additional grades at the school 
 70.22  beyond those described in the sponsor's application as approved 
 70.23  by the commissioner only after submitting a supplemental 
 70.24  application to the commissioner in a form and manner prescribed 
 70.25  by the commissioner.  The supplemental application must provide 
 70.26  evidence that: 
 70.27     (1) the expansion of the charter school is supported by 
 70.28  need and projected enrollment; 
 70.29     (2) the charter school is fiscally sound; 
 70.30     (3) the sponsor supports the expansion; and 
 70.31     (4) the building of the additional site meets all health 
 70.32  and safety requirements to be eligible for lease aid. 
 70.33     (f) The commissioner annually must provide timely financial 
 70.34  management training to newly elected members of a charter school 
 70.35  board of directors and ongoing training to other members of a 
 70.36  charter school board of directors.  Training must address ways 
 71.1   to: 
 71.2      (1) proactively assess opportunities for a charter school 
 71.3   to maximize all available revenue sources; 
 71.4      (2) establish and maintain complete, auditable records for 
 71.5   the charter school; 
 71.6      (3) establish proper filing techniques; 
 71.7      (4) document formal actions of the charter school, 
 71.8   including meetings of the charter school board of directors; 
 71.9      (5) properly manage and retain charter school and student 
 71.10  records; 
 71.11     (6) comply with state and federal payroll record-keeping 
 71.12  requirements; and 
 71.13     (7) address other similar factors that facilitate 
 71.14  establishing and maintaining complete records on the charter 
 71.15  school's operations.  
 71.16     Sec. 30.  Minnesota Statutes 2002, section 124D.10, 
 71.17  subdivision 8, is amended to read: 
 71.18     Subd. 8.  [STATE AND LOCAL REQUIREMENTS.] (a) A charter 
 71.19  school shall meet all applicable state and local health and 
 71.20  safety requirements. 
 71.21     (b) A school sponsored by a school board may be located in 
 71.22  any district, unless the school board of the district of the 
 71.23  proposed location disapproves by written resolution.  
 71.24     (c) A charter school must be nonsectarian in its programs, 
 71.25  admission policies, employment practices, and all other 
 71.26  operations.  A sponsor may not authorize a charter school or 
 71.27  program that is affiliated with a nonpublic sectarian school or 
 71.28  a religious institution. 
 71.29     (d) Charter schools must not be used as a method of 
 71.30  providing education or generating revenue for students who are 
 71.31  being home-schooled. 
 71.32     (e) The primary focus of a charter school must be to 
 71.33  provide a comprehensive program of instruction for at least one 
 71.34  grade or age group from five through 18 years of age.  
 71.35  Instruction may be provided to people younger than five years 
 71.36  and older than 18 years of age. 
 72.1      (f) A charter school may not charge tuition. 
 72.2      (g) A charter school is subject to and must comply with 
 72.3   chapter 363 and section 121A.04. 
 72.4      (h) A charter school is subject to and must comply with the 
 72.5   Pupil Fair Dismissal Act, sections 121A.40 to 121A.56, and the 
 72.6   Minnesota Public School Fee Law, sections 123B.34 to 123B.39. 
 72.7      (i) A charter school is subject to the same financial 
 72.8   audits, audit procedures, and audit requirements as a district.  
 72.9   Audits must be conducted in compliance with generally accepted 
 72.10  governmental auditing standards, the Federal Single Audit Act, 
 72.11  if applicable, and section 6.65.  A charter school is subject to 
 72.12  and must comply with sections 15.054; 118A.01; 118A.02; 118A.03; 
 72.13  118A.04; 118A.05; 118A.06; 123B.52, subdivision 5; 471.38; 
 72.14  471.391; 471.392; 471.425; 471.87; 471.88, subdivisions 1, 2, 3, 
 72.15  4, 5, 6, 12, 13, and 15; 471.881; and 471.89.  The audit must 
 72.16  comply with the requirements of sections 123B.75 to 123B.83, 
 72.17  except to the extent deviations are necessary because of the 
 72.18  program at the school.  Deviations must be approved by the 
 72.19  commissioner.  The department of children, families, and 
 72.20  learning education, state auditor, or legislative auditor may 
 72.21  conduct financial, program, or compliance audits.  A charter 
 72.22  school determined to be in statutory operating debt under 
 72.23  sections 123B.81 to 123B.83 must submit a plan under section 
 72.24  123B.81, subdivision 4. 
 72.25     (j) A charter school is a district for the purposes of tort 
 72.26  liability under chapter 466. 
 72.27     (k) A charter school must comply with sections 13.32; 
 72.28  120A.22, subdivision 7; 121A.75; and 260B.171, subdivisions 3 
 72.29  and 5.  
 72.30     (l) A charter school where students participate in the 
 72.31  extracurricular activities of the student's resident school 
 72.32  district is subject to sections 123B.36, subdivision 1, clause 
 72.33  (10), and 123B.49, subdivision 4, paragraph (a). 
 72.34     (m) A charter school is subject to the pledge of allegiance 
 72.35  requirement under section 121A.11, subdivision 3. 
 72.36     <b>[EFFECTIVE DATE.]</b> This section is effective for the 
 73.1   2003-2004 school year and later. 
 73.2      Sec. 31.  Minnesota Statutes 2002, section 124D.10, 
 73.3   subdivision 16, is amended to read: 
 73.4      Subd. 16.  [TRANSPORTATION.] (a) By July 1 of each year, a 
 73.5   charter school must notify the district in which the school is 
 73.6   located and the department of children, families, and 
 73.7   learning education if it will provide transportation for pupils 
 73.8   enrolled in the school for the fiscal year. 
 73.9      (b) If a charter school elects to provide transportation 
 73.10  for pupils, the transportation must be provided by the charter 
 73.11  school within the district in which the charter school is 
 73.12  located.  The state must pay transportation aid to the charter 
 73.13  school according to section 124D.11, subdivision 2. 
 73.14     For pupils who reside outside the district in which the 
 73.15  charter school is located, the charter school is not required to 
 73.16  provide or pay for transportation between the pupil's residence 
 73.17  and the border of the district in which the charter school is 
 73.18  located.  A parent may be reimbursed by the charter school for 
 73.19  costs of transportation from the pupil's residence to the border 
 73.20  of the district in which the charter school is located if the 
 73.21  pupil is from a family whose income is at or below the poverty 
 73.22  level, as determined by the federal government.  The 
 73.23  reimbursement may not exceed the pupil's actual cost of 
 73.24  transportation or 15 cents per mile traveled, whichever is 
 73.25  less.  Reimbursement may not be paid for more than 250 miles per 
 73.26  week.  
 73.27     At the time a pupil enrolls in a charter school, the 
 73.28  charter school must provide the parent or guardian with 
 73.29  information regarding the transportation.  
 73.30     (c) If a charter school does not elect to provide 
 73.31  transportation, transportation for pupils enrolled at the school 
 73.32  must be provided by the district in which the school is located, 
 73.33  according to sections 123B.88, subdivision 6, and 124D.03, 
 73.34  subdivision 8, for a pupil residing in the same district in 
 73.35  which the charter school is located.  Transportation may be 
 73.36  provided by the district in which the school is located, 
 74.1   according to sections 123B.88, subdivision 6, and 124D.03, 
 74.2   subdivision 8, for a pupil residing in a different district.  If 
 74.3   the district provides the transportation, the scheduling of 
 74.4   routes, manner and method of transportation, control and 
 74.5   discipline of the pupils, and any other matter relating to the 
 74.6   transportation of pupils under this paragraph shall be within 
 74.7   the sole discretion, control, and management of the district. 
 74.8      Sec. 32.  Minnesota Statutes 2002, section 124D.10, 
 74.9   subdivision 20, is amended to read: 
 74.10     Subd. 20.  [LEAVE TO TEACH IN A CHARTER SCHOOL.] If a 
 74.11  teacher employed by a district makes a written request for an 
 74.12  extended leave of absence to teach at a charter school, the 
 74.13  district must grant the leave.  The district must grant a leave 
 74.14  for any number of not to exceed a total of five years requested 
 74.15  by the teacher, and must.  Any request to extend the leave at 
 74.16  the teacher's request shall be granted only at the discretion of 
 74.17  the school board.  The district may require that the request for 
 74.18  a leave or extension of leave be made up to 90 days before the 
 74.19  teacher would otherwise have to report for duty.  Except as 
 74.20  otherwise provided in this subdivision and except for section 
 74.21  122A.46, subdivision 7, the leave is governed by section 
 74.22  122A.46, including, but not limited to, reinstatement, notice of 
 74.23  intention to return, seniority, salary, and insurance. 
 74.24     During a leave, the teacher may continue to aggregate 
 74.25  benefits and credits in the teachers' retirement association 
 74.26  account by paying both the employer and employee contributions 
 74.27  based upon the annual salary of the teacher for the last full 
 74.28  pay period before the leave began.  The retirement association 
 74.29  may impose reasonable requirements to efficiently administer 
 74.30  this subdivision.  
 74.31     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
 74.32  following final enactment and applies to approvals of leaves or 
 74.33  approvals of extensions of leaves made after that date.  
 74.34  Notwithstanding Minnesota Statutes 2002, section 122A.46, 
 74.35  subdivision 2, a school district, upon request, must grant a 
 74.36  one-year extension for the 2003-2004 school year to a teacher on 
 75.1   a leave of absence to teach at a charter school under this 
 75.2   subdivision who has taught five or more years as of the 
 75.3   2003-2004 school year. 
 75.4      Sec. 33.  Minnesota Statutes 2002, section 124D.11, 
 75.5   subdivision 1, is amended to read: 
 75.6      Subdivision 1.  [GENERAL EDUCATION REVENUE.] (a) General 
 75.7   education revenue must be paid to a charter school as though it 
 75.8   were a district.  The general education revenue for each 
 75.9   adjusted marginal cost pupil unit is the state average general 
 75.10  education revenue per pupil unit, plus the referendum 
 75.11  equalization aid allowance in the pupil's district of residence, 
 75.12  minus an amount equal to the product of the formula allowance 
 75.13  according to section 126C.10, subdivision 2, times .0485, 
 75.14  calculated without basic skills revenue, and transportation 
 75.15  sparsity revenue, and the transportation portion of the 
 75.16  transition revenue adjustment, plus basic skills revenue and 
 75.17  transition revenue as though the school were a school district. 
 75.18     (b) Notwithstanding paragraph (a), for charter schools in 
 75.19  the first year of operation, general education revenue shall be 
 75.20  computed using the number of adjusted pupil units in the current 
 75.21  fiscal year.  
 75.22     Sec. 34.  Minnesota Statutes 2002, section 124D.11, 
 75.23  subdivision 2, is amended to read: 
 75.24     Subd. 2.  [TRANSPORTATION REVENUE.] Transportation revenue 
 75.25  must be paid to a charter school that provides transportation 
 75.26  services according to section 124D.10, subdivision 16, according 
 75.27  to this subdivision.  Transportation aid shall equal 
 75.28  transportation revenue.  
 75.29     In addition to the revenue under subdivision 1, a charter 
 75.30  school providing transportation services must receive general 
 75.31  education aid for each pupil unit equal to the sum of an amount 
 75.32  equal to the product of the formula allowance according to 
 75.33  section 126C.10, subdivision 2, times .0485, plus the 
 75.34  transportation sparsity allowance for the school district in 
 75.35  which the charter school is located, plus the transportation 
 75.36  transition allowance for the district in which the charter 
 76.1   school is located.  
 76.2      Sec. 35.  Minnesota Statutes 2002, section 124D.11, 
 76.3   subdivision 4, is amended to read: 
 76.4      Subd. 4.  [BUILDING LEASE AID.] When a charter school finds 
 76.5   it economically advantageous to rent or lease a building or land 
 76.6   for any instructional purposes and it determines that the total 
 76.7   operating capital revenue under section 126C.10, subdivision 13, 
 76.8   is insufficient for this purpose, it may apply to the 
 76.9   commissioner for building lease aid for this purpose.  The 
 76.10  commissioner must review and either approve or deny a lease aid 
 76.11  application using the following criteria: 
 76.12     (1) the reasonableness of the price based on current market 
 76.13  values; 
 76.14     (2) the extent to which the lease conforms to applicable 
 76.15  state laws and rules; and 
 76.16     (3) the appropriateness of the proposed lease in the 
 76.17  context of the space needs and financial circumstances of the 
 76.18  charter school. 
 76.19  A charter school must not use the building lease aid it receives 
 76.20  for custodial, maintenance service, utility, or other operating 
 76.21  costs.  The amount of building lease aid per pupil unit served 
 76.22  for a charter school for any year shall not exceed the lesser of 
 76.23  (a) 90 percent of the approved cost or (b) the product of the 
 76.24  pupil units served for the current school year times $1,500 the 
 76.25  greater of the charter school's building lease aid per pupil 
 76.26  unit served for fiscal year 2003, excluding the adjustment under 
 76.27  Laws 2002, chapter 392, article 6, section 4, or $1,200. 
 76.28     <b>[EFFECTIVE DATE.]</b> This section is effective for revenue for 
 76.29  fiscal year 2004. 
 76.30     Sec. 36.  Minnesota Statutes 2002, section 124D.11, 
 76.31  subdivision 6, is amended to read: 
 76.32     Subd. 6.  [OTHER AID, GRANTS, REVENUE.] (a) A charter 
 76.33  school is eligible to receive other aids, grants, and revenue 
 76.34  according to chapters 120A to 129C, as though it were a district.
 76.35     (b) Notwithstanding paragraph (a), a charter school may not 
 76.36  receive aid, a grant, or revenue if a levy is required to obtain 
 77.1   the money, except as otherwise provided in this section.  
 77.2      (c) Federal aid received by the state must be paid to the 
 77.3   school, if it qualifies for the aid as though it were a school 
 77.4   district. 
 77.5      (d) A charter school may receive money from any source for 
 77.6   capital facilities needs.  In the year-end report to the 
 77.7   commissioner of children, families, and learning education, the 
 77.8   charter school shall report the total amount of funds received 
 77.9   from grants and other outside sources. 
 77.10     (e) Notwithstanding paragraph (a) or (b), a charter school 
 77.11  may apply for a grant to receive the aid portion of integration 
 77.12  revenue under section 124D.86, subdivision 3, for enrolled 
 77.13  students who are residents of a district that is eligible for 
 77.14  integration revenue.  The commissioner shall determine grant 
 77.15  recipients and may adopt application guidelines.  The grants 
 77.16  must be competitively determined and must demonstrate that 
 77.17  enrolling pupils in the charter school contributes to 
 77.18  desegregation or integration purposes as determined by the 
 77.19  commissioner.  If the charter school has elected not to provide 
 77.20  transportation under section 124D.10, subdivision 16, the aid 
 77.21  shall be reduced by the amount per pupil unit specified for the 
 77.22  district where the charter school is located under section 
 77.23  123B.92, subdivision 8. 
 77.24     <b>[EFFECTIVE DATE.]</b> This section is effective for revenue for 
 77.25  fiscal year 2004. 
 77.26     Sec. 37.  Minnesota Statutes 2002, section 124D.128, 
 77.27  subdivision 3, is amended to read: 
 77.28     Subd. 3.  [STUDENT PLANNING.] A district must inform all 
 77.29  pupils and their parents about the learning year program and 
 77.30  that participation in the program is optional.  A continual 
 77.31  learning plan must be developed at least annually for each pupil 
 77.32  with the participation of the pupil, parent or guardian, 
 77.33  teachers, and other staff; each participant must sign and date 
 77.34  the plan.  The plan must specify the learning experiences that 
 77.35  must occur during the entire fiscal year and, for secondary 
 77.36  students, for graduation.  The plan must include:  
 78.1      (1) the pupil's learning objectives and experiences, 
 78.2   including courses or credits the pupil plans to complete each 
 78.3   year and, for a secondary pupil, the graduation requirements the 
 78.4   student must complete; 
 78.5      (2) the assessment measurements used to evaluate a pupil's 
 78.6   objectives; 
 78.7      (3) requirements for grade level or other appropriate 
 78.8   progression; and 
 78.9      (4) for pupils generating more than one average daily 
 78.10  membership in a given grade, an indication of which objectives 
 78.11  were unmet. 
 78.12  The plan may be modified to conform to district schedule 
 78.13  changes.  The district may not modify the plan if the 
 78.14  modification would result in delaying the student's time of 
 78.15  graduation.  
 78.16     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
 78.17  following final enactment. 
 78.18     Sec. 38.  Minnesota Statutes 2002, section 124D.42, 
 78.19  subdivision 6, is amended to read: 
 78.20     Subd. 6.  [PROGRAM TRAINING.] (a) The commission must, 
 78.21  within available resources, ensure an opportunity for each 
 78.22  participant to have three weeks of training in a residential 
 78.23  setting.  If offered, each training session must: 
 78.24     (1) orient each participant in the nature, philosophy, and 
 78.25  purpose of the program; 
 78.26     (2) build an ethic of community service through general 
 78.27  community service training; and 
 78.28     (3) provide additional training as it determines necessary, 
 78.29  which may include training in evaluating early literacy skills 
 78.30  and teaching reading to preschool children through the St. Croix 
 78.31  River education district under Laws 2001, First Special Session 
 78.32  chapter 6, article 2, section 70, to assist local Head Start 
 78.33  organizations in establishing and evaluating Head Start programs 
 78.34  for developing children's early literacy skills.  
 78.35     (b) Each grantee organization shall also train participants 
 78.36  in skills relevant to the community service opportunity.  
 79.1      Sec. 39.  Minnesota Statutes 2002, section 124D.86, 
 79.2   subdivision 1a, is amended to read: 
 79.3      Subd. 1a.  [BUDGET APPROVAL PROCESS.] Each year before a 
 79.4   district receives any revenue under subdivision 3, clause (4), 
 79.5   (5), or (6), the district must submit to the department of 
 79.6   children, families, and learning education, for its review and 
 79.7   approval a budget detailing the costs of the 
 79.8   desegregation/integration plan filed under Minnesota Rules, 
 79.9   parts 3535.0100 to 3535.0180.  Notwithstanding chapter 14, the 
 79.10  department may develop criteria for budget approval.  The 
 79.11  department shall consult with the desegregation advisory board 
 79.12  in developing these criteria.  The criteria developed by the 
 79.13  department should address, at a minimum, the following: 
 79.14     (1) budget items cannot be approved unless they are part of 
 79.15  any overall desegregation plan approved by the district for 
 79.16  isolated sites or by the multidistrict collaboration council and 
 79.17  participation individual members; 
 79.18     (2) the budget must indicate how revenue expenditures will 
 79.19  be used specifically to support increased opportunities for 
 79.20  interracial contact; 
 79.21     (3) components of the budget to be considered by the 
 79.22  department, including staffing, curriculum, transportation, 
 79.23  facilities, materials, and equipment and reasonable planning 
 79.24  costs, as determined by the department; and 
 79.25     (4) if plans are proposed to enhance existing programs, the 
 79.26  total budget being appropriated to the program must be included, 
 79.27  indicating what part is to be funded using integration revenue 
 79.28  and what part is to be funded using other revenues.  
 79.29     <b>[EFFECTIVE DATE.]</b> This section is effective retroactively 
 79.30  for revenue for fiscal year 2003. 
 79.31     Sec. 40.  Minnesota Statutes 2002, section 124D.86, 
 79.32  subdivision 3, is amended to read: 
 79.33     Subd. 3.  [INTEGRATION REVENUE.] Integration revenue equals 
 79.34  the following amounts: 
 79.35     (1) for independent school district No. 709, 
 79.36  Duluth, $207 $212 times the adjusted pupil units for the school 
 80.1   year; 
 80.2      (2) for independent school district No. 625, St. 
 80.3   Paul, $446 $464 times the adjusted pupil units for the school 
 80.4   year; 
 80.5      (3) for special school district No. 1, Minneapolis, the sum 
 80.6   of $446 $473 times the adjusted pupil units for the school year 
 80.7   and an additional $35 $40 times the adjusted pupil units for the 
 80.8   school year that is provided entirely through a local levy; 
 80.9      (4) for a district not listed in clause (1), (2), or (3), 
 80.10  that must implement a plan under Minnesota Rules, parts 
 80.11  3535.0100 to 3535.0180, where the district's enrollment of 
 80.12  protected students, as defined under Minnesota Rules, part 
 80.13  3535.0110, exceeds 15 percent, the lesser of (i) the actual cost 
 80.14  of implementing the plan during the fiscal year minus the aid 
 80.15  received under subdivision 6, or (ii) $130 $133 times the 
 80.16  adjusted pupil units for the school year; 
 80.17     (5) for a district not listed in clause (1), (2), (3), or 
 80.18  (4), that is required to implement a plan according to the 
 80.19  requirements of Minnesota Rules, parts 3535.0100 to 3535.0180, 
 80.20  the lesser of 
 80.21     (i) the actual cost of implementing the plan during the 
 80.22  fiscal year minus the aid received under subdivision 6, or 
 80.23     (ii) $93 $94 times the adjusted pupil units for the school 
 80.24  year. 
 80.25     Any money received by districts in clauses (1) to (4) (3) 
 80.26  which exceeds the amount received in fiscal year 2000 shall be 
 80.27  subject to the budget requirements in subdivision 1a; and 
 80.28     (6) for a member district of a multidistrict integration 
 80.29  collaborative that files a plan with the commissioner, but is 
 80.30  not contiguous to a racially isolated district, integration 
 80.31  revenue equals the amount defined in clause (5). 
 80.32     <b>[EFFECTIVE DATE.]</b> This section is effective for revenue for 
 80.33  fiscal year 2004. 
 80.34     Sec. 41.  Minnesota Statutes 2002, section 124D.86, 
 80.35  subdivision 4, is amended to read: 
 80.36     Subd. 4.  [INTEGRATION LEVY.] A district may levy an amount 
 81.1   equal to 37 percent for fiscal year 2003, 22 23 percent for 
 81.2   fiscal year 2004, 29 and 30 percent for fiscal year 2005, and 22 
 81.3   percent for fiscal year 2006 and thereafter of the district's 
 81.4   integration revenue as defined in subdivision 3. 
 81.5      <b>[EFFECTIVE DATE.]</b> This section is effective for revenue for 
 81.6   fiscal year 2004. 
 81.7      Sec. 42.  Minnesota Statutes 2002, section 124D.86, 
 81.8   subdivision 5, is amended to read: 
 81.9      Subd. 5.  [INTEGRATION AID.] A district's integration aid 
 81.10  equals 63 percent for fiscal year 2003, 78 percent for fiscal 
 81.11  year 2004, 71 percent for fiscal year 2005, and 78 percent for 
 81.12  fiscal year 2006 and thereafter of the difference between the 
 81.13  district's integration revenue as defined in subdivision 3 and 
 81.14  its integration levy. 
 81.15     <b>[EFFECTIVE DATE.]</b> This section is effective for revenue for 
 81.16  fiscal year 2004.  
 81.17     Sec. 43.  Minnesota Statutes 2002, section 124D.86, 
 81.18  subdivision 6, is amended to read: 
 81.19     Subd. 6.  [ALTERNATIVE ATTENDANCE PROGRAMS.] (a) The 
 81.20  integration aid under subdivision 5 must be adjusted for each 
 81.21  pupil residing in a district eligible for integration revenue 
 81.22  under subdivision 3, clause (1), (2), or (3), and attending a 
 81.23  nonresident district under sections 123A.05 to 123A.08, 124D.03, 
 81.24  124D.06, 124D.07, and 124D.08, that is not eligible for 
 81.25  integration revenue under subdivision 3, clause (1), (2), or 
 81.26  (3), and has implemented a plan under Minnesota Rules, parts 
 81.27  3535.0100 to 3535.0180, if the enrollment of the pupil in the 
 81.28  nonresident district contributes to desegregation or integration 
 81.29  purposes.  The adjustments must be made according to this 
 81.30  subdivision.  
 81.31     (b) Aid paid to a district serving nonresidents must be 
 81.32  increased by an amount equal to the revenue per pupil unit of 
 81.33  the resident district under subdivision 3, clause (1), (2), or 
 81.34  (3), minus the revenue attributable to the pupil in the 
 81.35  nonresident district under subdivision 3, clause (4), (5), or 
 81.36  (6), for the time the pupil is enrolled in the nonresident 
 82.1   district.  
 82.2      <b>[EFFECTIVE DATE.]</b> This section is effective retroactively 
 82.3   for fiscal year 2003. 
 82.4      Sec. 44.  Minnesota Statutes 2002, section 126C.05, is 
 82.5   amended by adding a subdivision to read: 
 82.6      Subd. 19.  [DISTANCE EDUCATION STUDENTS.] (a) The average 
 82.7   daily membership for a public school pupil generating distance 
 82.8   education average daily membership according to section 
 82.9   124D.095, subdivision 7, paragraph (a), equals the sum of:  (i) 
 82.10  the ratio of the sum of the number of instructional hours the 
 82.11  pupil is enrolled in a regular classroom setting at the 
 82.12  enrolling school to the actual number of instructional hours in 
 82.13  the school year at the enrolling school, plus (ii) .12 times the 
 82.14  initial distance education average daily membership according to 
 82.15  section 124D.095, subdivision 7, paragraph (a). 
 82.16     (b) When the sum of the average daily membership under 
 82.17  paragraph (a) and the adjusted distance education average daily 
 82.18  membership under section 124D.095, subdivision 7, paragraph (a), 
 82.19  exceeds the maximum allowed for the student under subdivision 8 
 82.20  or 15, as applicable, the average daily membership under 
 82.21  paragraph (a) shall be reduced by the excess over the maximum, 
 82.22  but shall not be reduced below .12.  The adjusted distance 
 82.23  education average daily membership according to section 
 82.24  124D.095, subdivision 7, paragraph (a) shall be reduced by any 
 82.25  remaining excess over the maximum. 
 82.26     Sec. 45.  [126C.24] [DISTANCE EDUCATION AID.] 
 82.27     (a) The distance education aid for a distance education 
 82.28  provider equals the product of the adjusted distance education 
 82.29  average daily membership for students under section 124D.095, 
 82.30  subdivision 7, paragraph (c), times the student grade level 
 82.31  weighting under section 126C.05, subdivision 1, times the 
 82.32  formula allowance. 
 82.33     (b) Notwithstanding section 127A.45, the department must 
 82.34  pay each distance education provider 77 percent of the amount in 
 82.35  paragraph (a) within 45 days of receiving initial enrollment 
 82.36  information each quarter or semester.  If a change in enrollment 
 83.1   occurs during a quarter or semester, the distance education 
 83.2   provider must report the change to the department at the time it 
 83.3   submits the enrollment information for the next quarter or 
 83.4   semester.  A final payment equal to 23 percent of the amount in 
 83.5   paragraph (a) must be made on September 30 of the next fiscal 
 83.6   year. 
 83.7      Sec. 46.  Minnesota Statutes 2002, section 126C.44, is 
 83.8   amended to read: 
 83.9      126C.44 [SAFE SCHOOLS LEVY.] 
 83.10     Each district may make a levy on all taxable property 
 83.11  located within the district for the purposes specified in this 
 83.12  section.  The maximum amount which may be levied for all costs 
 83.13  under this section shall be equal to $30 $31 multiplied by the 
 83.14  district's adjusted marginal cost pupil units for the school 
 83.15  year.  The proceeds of the levy must be used for directly 
 83.16  funding the following purposes or for reimbursing the cities and 
 83.17  counties who contract with the district for the following 
 83.18  purposes:  (1) to pay the costs incurred for the salaries, 
 83.19  benefits, and transportation costs of peace officers and 
 83.20  sheriffs for liaison in services in the district's schools; (2) 
 83.21  to pay the costs for a drug abuse prevention program as defined 
 83.22  in section 609.101, subdivision 3, paragraph (e), in the 
 83.23  elementary schools; (3) to pay the costs for a gang resistance 
 83.24  education training curriculum in the district's schools; (4) to 
 83.25  pay the costs for security in the district's schools and on 
 83.26  school property; or (5) to pay the costs for other crime 
 83.27  prevention, drug abuse, student and staff safety, and violence 
 83.28  prevention measures taken by the school district.  The district 
 83.29  must initially attempt to contract for services to be provided 
 83.30  by peace officers or sheriffs with the police department of each 
 83.31  city or the sheriff's department of the county within the 
 83.32  district containing the school receiving the services.  If a 
 83.33  local police department or a county sheriff's department does 
 83.34  not wish to provide the necessary services, the district may 
 83.35  contract for these services with any other police or sheriff's 
 83.36  department located entirely or partially within the school 
 84.1   district's boundaries.  The levy authorized under this section 
 84.2   is not included in determining the school district's levy 
 84.3   limitations. 
 84.4      <b>[EFFECTIVE DATE.]</b> This section is effective for taxes 
 84.5   payable in 2004.  
 84.6      Sec. 47.  Minnesota Statutes 2002, section 128C.05, is 
 84.7   amended by adding a subdivision to read: 
 84.8      Subd. 1a.  [SUPERVISED COMPETITIVE HIGH SCHOOL DIVING.] (a) 
 84.9   Notwithstanding Minnesota Rules, part 4717.3750, any pool built 
 84.10  before January 1, 1987, that complies with the swimming and 
 84.11  diving rules of the national federation of state high school 
 84.12  associations may be used for supervised competitive high school 
 84.13  diving.  A school or district using a pool for supervised 
 84.14  competitive high school diving under this provision must provide 
 84.15  appropriate notice to parents and participants. 
 84.16     (b) Paragraph (a) applies only to a school or district that 
 84.17  provided a high school diving program during the 2000-2001 
 84.18  school year. 
 84.19     <b>[EFFECTIVE DATE.]</b> This section is effective for the 
 84.20  2003-2004 school year and later. 
 84.21     Sec. 48.  Minnesota Statutes 2002, section 205A.03, 
 84.22  subdivision 1, is amended to read: 
 84.23     Subdivision 1.  [RESOLUTION REQUIRED PRIMARY IN CERTAIN 
 84.24  CIRCUMSTANCES.] The school board of a school district may, by 
 84.25  resolution adopted by June 1 of any year, decide to choose 
 84.26  nominees for school district elective offices by a primary as 
 84.27  provided in subdivisions 1 to 6.  The resolution, when adopted, 
 84.28  is effective for all ensuing elections of board members in that 
 84.29  school district until it is revoked. In a school district 
 84.30  election, if there are more than two candidates for a specified 
 84.31  school board position or more than twice as many school board 
 84.32  candidates as there are at-large school board positions 
 84.33  available, a school district must hold a primary.  
 84.34     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
 84.35  following final enactment for independent school district No. 
 84.36  742.  This section is effective January 1, 2004, for all other 
 85.1   school districts and applies to school board elections held in 
 85.2   2004 and thereafter. 
 85.3      Sec. 49.  Minnesota Statutes 2002, section 205A.03, 
 85.4   subdivision 3, is amended to read: 
 85.5      Subd. 3.  [CANDIDATES, FILING.] The clerk shall place upon 
 85.6   the primary ballot without partisan designation the names of 
 85.7   individuals whose candidacies have been filed and for whom the 
 85.8   proper filing fee has been paid.  When not more than twice the 
 85.9   number of individuals to be elected to a school district 
 85.10  elective office as many school board candidates as there are 
 85.11  at-large school board positions available file for nomination 
 85.12  for the office or when not more than two candidates for a 
 85.13  specified school board position file for nomination for that 
 85.14  office, their names must not be placed upon the primary ballot 
 85.15  and must be placed on the school district general election 
 85.16  ballot as the nominees for that office.  
 85.17     Sec. 50.  Minnesota Statutes 2002, section 205A.03, 
 85.18  subdivision 4, is amended to read: 
 85.19     Subd. 4.  [RESULTS.] The school district primary must be 
 85.20  conducted and the returns made in the manner provided for the 
 85.21  state primary as far as practicable.  Within two days after the 
 85.22  primary, the school board of the school district shall canvass 
 85.23  the returns, and the two candidates for each office specified 
 85.24  school board position who receive the highest number of votes, 
 85.25  or a number of candidates equal to twice the number of 
 85.26  individuals to be elected to the office at-large school board 
 85.27  positions who receive the highest number of votes, are the 
 85.28  nominees for the office named.  Their names must be certified to 
 85.29  the school district clerk who shall place them on the school 
 85.30  district general election ballot without partisan designation 
 85.31  and without payment of an additional fee. 
 85.32     Sec. 51.  Minnesota Statutes 2002, section 205A.06, 
 85.33  subdivision 1a, is amended to read: 
 85.34     Subd. 1a.  [FILING PERIOD.] In school districts nominating 
 85.35  candidates at a school district primary, Affidavits of candidacy 
 85.36  may must be filed with the school district clerk no earlier than 
 86.1   the 70th day and no later than the 56th day before the first 
 86.2   Tuesday after the second Monday in September in the year when 
 86.3   the school district general election is held.  In all other 
 86.4   school districts, affidavits of candidacy must be filed not more 
 86.5   than 70 days and not less than 56 days before the school 
 86.6   district general election. 
 86.7      <b>[EFFECTIVE DATE.]</b> This section is effective the day 
 86.8   following final enactment for independent school district No. 
 86.9   742.  This section is effective January 1, 2004, for all other 
 86.10  school districts and applies to school board elections held in 
 86.11  2004 and thereafter. 
 86.12     Sec. 52.  Laws 2001, First Special Session chapter 6, 
 86.13  article 2, section 64, is amended to read: 
 86.14     Sec. 64.  [SCHOOLS' ACADEMIC AND FINANCIAL PERFORMANCE 
 86.15  EVALUATION; INDEPENDENT CONTRACTOR.] 
 86.16     (a) To assist taxpayers, educators, school board members, 
 86.17  and state and local officials in realizing their commitment to 
 86.18  improving student achievement and the management of school 
 86.19  systems, the commissioner of children, families, and 
 86.20  learning education shall contract with an independent school 
 86.21  evaluation services contractor to evaluate and report on the 
 86.22  academic and financial performance of the state's independent 
 86.23  school districts using, but not limited to, six core categories 
 86.24  of analysis: 
 86.25     (1) school district expenditures; 
 86.26     (2) students' performance outcomes based on multiple 
 86.27  indicia including students' test scores, attendance rates, 
 86.28  dropout rates, and graduation rates; 
 86.29     (3) return on resources to determine the extent to which 
 86.30  student outcomes improve commensurate with increases in district 
 86.31  spending; 
 86.32     (4) school district finances, taxes, and debt to establish 
 86.33  the context for analyzing the district's return on resources 
 86.34  under clause (3); 
 86.35     (5) students' learning environment to establish the context 
 86.36  for analyzing the district's return on resources under clause 
 87.1   (3); and 
 87.2      (6) school district demographics to establish the 
 87.3   socioeconomic context for analyzing the district's return on 
 87.4   resources under clause (3). 
 87.5      (b) In order to compare the regional and socioeconomic 
 87.6   peers of particular school districts, monitor educational 
 87.7   changes over time and identify important educational trends, the 
 87.8   contractor shall use the six core categories of analysis to: 
 87.9      (1) identify allocations of baseline and incremental school 
 87.10  district spending; 
 87.11     (2) connect student achievement with expenditure patterns; 
 87.12     (3) track school district financial health; 
 87.13     (4) observe school district debt and capital spending 
 87.14  levels; and 
 87.15     (5) measure the return on a school district's educational 
 87.16  resources. 
 87.17     (c) The contractor under paragraph (a) shall evaluate and 
 87.18  report on the academic and financial performance of all school 
 87.19  districts. 
 87.20     (d) Consistent with paragraph (a), clause (2), the 
 87.21  evaluation and reporting of test scores must distinguish between:
 87.22     (1) performance-based assessments; and 
 87.23     (2) academic, objective knowledge-based tests. 
 87.24     (e) The contractor must shall complete its written report 
 87.25  and submit it to the commissioner within 360 days of the date on 
 87.26  which the contract is signed.  The commissioner immediately must 
 87.27  make the report available in a readily accessible format to 
 87.28  state and local elected officials, members of the public, 
 87.29  educators, parents, and other interested individuals.  The 
 87.30  commissioner, upon receiving an individual's request, also must 
 87.31  shall make available all draft reports prepared by the 
 87.32  contractor, consistent with Minnesota Statutes, chapter 13. 
 87.33     Sec. 53.  [CHARTER SCHOOL ADVISORY BOARD MEMBER TERMS.] 
 87.34     In order to establish staggered terms for charter school 
 87.35  advisory board members under Minnesota Statutes, section 
 87.36  124D.10, subdivision 2a, the commissioner of education shall, by 
 88.1   lot, determine the length of term for each member serving on the 
 88.2   board on the effective date of this section.  One-third of the 
 88.3   members shall serve a one-year term, one-third shall serve a 
 88.4   two-year term, and one-third shall serve a three-year term.  
 88.5   Thereafter, the term for each member must be three years. 
 88.6      Sec. 54.  [PILOT PROJECT; CARE AND TREATMENT CHARTER 
 88.7   SCHOOL.] 
 88.8      Subdivision 1.  [PILOT PROJECT AUTHORIZED.] A pilot project 
 88.9   is created to evaluate the educational effectiveness of 
 88.10  combining a care and treatment program with a charter school. 
 88.11     Subd. 2.  [APPLICATION.] Northwood Children's Services may 
 88.12  apply to the commissioner of education to form a care and 
 88.13  treatment pilot charter school under the provisions of this 
 88.14  section and Minnesota Statutes, section 124D.10.  Before forming 
 88.15  the care and treatment pilot charter school, Northwood 
 88.16  Children's Services must file an affidavit with the commissioner 
 88.17  stating its intent to form the pilot charter school.  The 
 88.18  affidavit must state the terms and conditions under which the 
 88.19  care and treatment pilot charter school would operate.  The 
 88.20  commissioner must approve or disapprove Northwood Children's 
 88.21  Services' proposed authorization within 60 days of receipt of 
 88.22  the affidavit.  Northwood Children's Services must include in 
 88.23  its application the items required in a charter school's 
 88.24  contract under Minnesota Statutes, section 124D.10, subdivision 
 88.25  6, and any other information the commissioner may request to 
 88.26  approve or disapprove the application. 
 88.27     Subd. 3.  [ENROLLMENT.] Notwithstanding Minnesota Statutes, 
 88.28  section 124D.10, subdivision 9, a care and treatment center 
 88.29  pilot charter school shall give preference for enrollment to 
 88.30  participants in the center's care and treatment programs. 
 88.31     Subd. 4.  [PLACEMENT OF STUDENTS; RESPONSIBILITIES FOR 
 88.32  PROVIDING EDUCATION.] Notwithstanding Minnesota Statutes, 
 88.33  section 125A.515, subdivision 3, a care and treatment center 
 88.34  operating a charter school may notify the department of 
 88.35  education of its intent to provide education services, including 
 88.36  special education if eligible, to all students placed in the 
 89.1   facility for care and treatment. 
 89.2      Subd. 5.  [REVENUE.] A care and treatment center pilot 
 89.3   charter school is eligible for revenue as if it were a charter 
 89.4   school under Minnesota Statutes, section 124D.11, except that it 
 89.5   does not qualify for charter school lease aid under Minnesota 
 89.6   Statutes, section 124D.11, subdivision 4. 
 89.7      Subd. 6.  [FINANCIAL INFORMATION.] A charter school 
 89.8   operating under this section must keep financial records 
 89.9   sufficient to allow audits under Minnesota Statutes, section 
 89.10  124D.10, subdivisions 6a and 8. 
 89.11     Subd. 7.  [REPORT.] Northwood Children's Services must 
 89.12  annually report to the education committees of the legislature 
 89.13  on the charter school's success in integrating educational 
 89.14  services into the students' care and treatment programs. 
 89.15     Subd. 8.  [EXPIRATION.] The authority granted Northwood 
 89.16  Children's Services under this section applies only to the 
 89.17  school's first six years of operation.  This section expires 
 89.18  after the school's sixth year of operation. 
 89.19     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
 89.20  following final enactment. 
 89.21     Sec. 55.  [PILOT PROJECT TO EVALUATE PARENT INVOLVEMENT 
 89.22  POLICIES AND STRATEGIES.] 
 89.23     Subdivision 1.  [DISTRICT AND SCHOOL SITE POLICY 
 89.24  EVALUATION.] A school board may elect to participate in a 
 89.25  two-year pilot project to evaluate parent involvement policies 
 89.26  and strategies in the district and in school sites, with the 
 89.27  goal of improving the academic achievement of all students 
 89.28  within the district, including at-risk students.  
 89.29     Subd. 2.  [PARENT INVOLVEMENT REVIEW COMMITTEES.] A school 
 89.30  board electing to participate and interested school sites within 
 89.31  that district must establish a parent involvement review 
 89.32  committee or expand the purview of an existing committee 
 89.33  composed of a majority of parents.  The committees must evaluate 
 89.34  the effectiveness of district and school site programs and 
 89.35  strategies intended to provide all parents with meaningful 
 89.36  opportunities to participate in the process of educating 
 90.1   students.  The committees, among other things, may evaluate the 
 90.2   operation of the instruction and curriculum advisory committee 
 90.3   or building team under Minnesota Statutes, section 120B.11, or 
 90.4   parent involvement programs developed under Minnesota Statutes, 
 90.5   section 124D.895.  A majority of committee members must be 
 90.6   parents of students enrolled in the district or school site, if 
 90.7   applicable.  The committee also must include teachers employed 
 90.8   by the district and who teach at a school site, if applicable.  
 90.9   A district must assist participating school sites at the request 
 90.10  of the school site. 
 90.11     Subd. 3.  [NOTICE OF PARTICIPATION; NOTICE TO PARENTS.] (a) 
 90.12  A school board electing to participate under this section must 
 90.13  notify the commissioner of children, families, and learning of 
 90.14  its participation and the participation of interested school 
 90.15  sites on a form supplied by the commissioner.  The commissioner 
 90.16  may assist participating districts and school sites at the 
 90.17  request of the district or school site. 
 90.18     (b) Participating school districts must transmit timely 
 90.19  effective notice of this project to parent organizations 
 90.20  throughout the district and to parents of children enrolled in 
 90.21  district schools.  
 90.22     Subd. 4.  [REPORT.] Participating districts and school 
 90.23  sites must report the findings of the evaluation and related 
 90.24  recommendations annually by March 1 to the school board, which 
 90.25  shall transmit a summary of the findings and recommendations to 
 90.26  the commissioner.  Information the commissioner receives under 
 90.27  this subdivision may be used to modify guidelines and model 
 90.28  plans for parent involvement programs under Minnesota Statutes, 
 90.29  section 124D.895.  
 90.30     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
 90.31  following final enactment and applies to the 2003-2004 and 
 90.32  2004-2005 school years. 
 90.33     Sec. 56.  [PROGRAM EFFICACY.] 
 90.34     The commissioner of education must study the efficacy of 
 90.35  American Indian Success for the Future program under Minnesota 
 90.36  Statutes, section 124D.81, to determine the extent to which the 
 91.1   program meets the educational needs of students participating in 
 91.2   the program and achieves the goals and objectives of the program 
 91.3   and its students and of the Minnesota American Indian Education 
 91.4   Act.  The commissioner by February 15, 2004, must present a 
 91.5   written report of the efficacy of the program to the committees 
 91.6   of the legislature having jurisdiction over kindergarten through 
 91.7   grade 12 education policy and finance. 
 91.8      Sec. 57.  [CHARTER SCHOOL START-UP AID.] 
 91.9      A charter school in its first year of operation during 
 91.10  fiscal year 2004 or 2005 is not eligible for charter school 
 91.11  start-up aid under Minnesota Statutes, section 124D.11, 
 91.12  subdivision 8. 
 91.13     Sec. 58.  [ALTERNATIVE ATTENDANCE ADJUSTMENTS FOR FISCAL 
 91.14  YEAR 2002.] 
 91.15     Notwithstanding Minnesota Statutes, section 124D.86, 
 91.16  subdivision 6, for fiscal year 2002 only, integration aid under 
 91.17  Minnesota Statutes, section 124D.86, subdivision 5, must be 
 91.18  adjusted for each pupil residing in special school district No. 
 91.19  1, Minneapolis; independent school district No. 625, St. Paul; 
 91.20  or independent school district No. 709, Duluth, and attending a 
 91.21  nonresident district under Minnesota Statutes, sections 123A.05 
 91.22  to 123A.08, 124D.03, 124D.06, and 124D.08, other than 
 91.23  Minneapolis, St. Paul or Duluth that has implemented a plan 
 91.24  under Minnesota Rules, parts 3535.0100 to 3535.0180, if the 
 91.25  enrollment of the pupil in the nonresident district contributes 
 91.26  to desegregation or integration purposes.  The adjustments must 
 91.27  be made according to this subdivision. 
 91.28     (b) Aid paid to a district serving nonresident pupils must 
 91.29  be increased by an amount equal to the revenue per pupil of the 
 91.30  resident district under Minnesota Statutes, section 124D.86, 
 91.31  subdivision 3, minus the revenue attributable to the pupil in 
 91.32  the nonresident district for the time the pupil is enrolled in 
 91.33  the nonresident district. 
 91.34     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
 91.35  following final enactment and applies to fiscal year 2002. 
 91.36     Sec. 59.  [POLICY ON STUDENTS WITH A HISTORY OF VIOLENT 
 92.1   BEHAVIOR.] 
 92.2      (a) Representatives of the Minnesota school boards 
 92.3   association, Education Minnesota, and the information policy 
 92.4   analysis division in the Minnesota department of administration, 
 92.5   the parent of a child who has participated in the Title I 
 92.6   delinquent education program selected by the commissioner of 
 92.7   children, families, and learning, a member of the majority party 
 92.8   and minority party in the state house appointed by the speaker 
 92.9   of the house and a member of the majority party and minority 
 92.10  party in the state senate appointed by the subcommittee on 
 92.11  committees, and the commissioner of children, families, and 
 92.12  learning or the commissioner's designee, shall develop a model 
 92.13  policy by August 1, 2003, on notifying classroom teachers and 
 92.14  other school district employees having a legitimate educational 
 92.15  interest when a student with a history of violent behavior is 
 92.16  placed in the teacher's classroom.  The model policy at least 
 92.17  must: 
 92.18     (1) define what constitutes a history of violent behavior, 
 92.19  consistent with Minnesota Statutes, section 121A.45, subdivision 
 92.20  2, clause (c); 
 92.21     (2) limit reports on violent behavior to a specified number 
 92.22  of school years; 
 92.23     (3) define "legitimate educational interest," consistent 
 92.24  with Minnesota Statutes, section 121A.64; 
 92.25     (4) indicate the persons at the school or district level 
 92.26  who determine which school district employees have a legitimate 
 92.27  educational interest; 
 92.28     (5) require school districts that transfer the student 
 92.29  records of a student with a history of violent behavior to 
 92.30  another school district, charter school, or alternative 
 92.31  education program to include all information about the student's 
 92.32  history of violent behavior in the student's educational records 
 92.33  it transmits to the enrolling school district, charter school, 
 92.34  or alternative education program, consistent with this policy; 
 92.35     (6) permit the parent of a student with a history of 
 92.36  violent behavior, before the classroom teacher or other district 
 93.1   employee is notified, to review the student's education records, 
 93.2   request that the school correct inaccurate, misleading, or 
 93.3   otherwise inappropriate information and request a formal hearing 
 93.4   if the school refuses to change the records, consistent with 
 93.5   federal data practices law; and 
 93.6      (7) require school districts to inform the parent or 
 93.7   guardian of a student with a history of violent behavior under 
 93.8   Minnesota Statutes, section 121A.64, that the district gives 
 93.9   notice about the student's history of violent behavior to the 
 93.10  classroom teacher and other district employees having a 
 93.11  legitimate educational interest before placing the student in 
 93.12  the teacher's classroom. 
 93.13     (b) The information policy analysis division in the 
 93.14  Minnesota department of administration by August 15, 2003, must 
 93.15  post on its division Web site the model policy developed under 
 93.16  paragraph (a). 
 93.17     (c) The task force in paragraph (a) expires on August 1, 
 93.18  2003. 
 93.19     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
 93.20  following final enactment. 
 93.21     Sec. 60.  [TITLE.] 
 93.22     Minnesota Statutes, section 120B.25, shall be known as the 
 93.23  "American Heritage Education in Minnesota Public Schools Act."  
 93.24     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
 93.25  following final enactment. 
 93.26     Sec. 61.  [APPROPRIATIONS.] 
 93.27     Subdivision 1.  [DEPARTMENT OF EDUCATION.] The sums 
 93.28  indicated in this section are appropriated from the general fund 
 93.29  to the department of education for the fiscal years designated. 
 93.30     Subd. 2.  [CHARTER SCHOOL BUILDING LEASE AID.] For building 
 93.31  lease aid under Minnesota Statutes, section 124D.11, subdivision 
 93.32  4: 
 93.33       $16,592,000    .....     2004 
 93.34       $20,915,000    .....     2005 
 93.35     The 2004 appropriation includes $2,524,000 for 2003 and 
 93.36  $14,068,000 for 2004. 
 94.1      The 2005 appropriation includes $4,202,000 for 2004 and 
 94.2   $16,713,000 for 2005.  
 94.3      Subd. 3.  [CHARTER SCHOOL STARTUP AID.] For charter school 
 94.4   startup cost aid under Minnesota Statutes, section 124D.11: 
 94.5        $802,000       .....     2004 
 94.6        $173,000       .....     2005 
 94.7      The 2004 appropriation includes $220,000 for 2003 and 
 94.8   $582,000 for 2004.  
 94.9      The 2005 appropriation includes $173,000 for 2004 and $0 
 94.10  for 2005. 
 94.11     Subd. 4.  [CHARTER SCHOOL INTEGRATION GRANTS.] For grants 
 94.12  to charter schools to promote integration and desegregation 
 94.13  under Minnesota Statutes, section 124D.11, subdivision 6, 
 94.14  paragraph (e): 
 94.15       $8,000         .....     2004 
 94.16     This appropriation includes $8,000 for 2003 and $0 for 2004.
 94.17     Subd. 5.  [INTEGRATION AID.] For integration aid under 
 94.18  Minnesota Statutes, section 124D.86, subdivision 5: 
 94.19       $55,169,000    .....     2004 
 94.20       $56,347,000    .....     2005 
 94.21     The 2004 appropriation includes $8,428,000 for 2003 and 
 94.22  $46,741,000 for 2004. 
 94.23     The 2005 appropriation includes $13,961,000 for 2004 and 
 94.24  $42,386,000 for 2005.  
 94.25     Subd. 6.  [MAGNET SCHOOL GRANTS.] For magnet school and 
 94.26  program grants: 
 94.27       $750,000       .....     2004 
 94.28       $750,000       .....     2005 
 94.29     $65,000 of the fiscal year 2004 appropriation is for 
 94.30  continuation of the magnet school program authorized under Laws 
 94.31  2000, chapter 489, article 7, section 15, subdivision 5, for 
 94.32  independent school district No. 696, Ely. 
 94.33     These amounts may be used for magnet school programs under 
 94.34  Minnesota Statutes, section 124D.88. 
 94.35     Subd. 7.  [MAGNET SCHOOL STARTUP AID.] For magnet school 
 94.36  startup aid under Minnesota Statutes, section 124D.88: 
 95.1        $ 37,000       .....     2004 
 95.2        $437,000       .....     2005 
 95.3      The 2004 appropriation includes $37,000 for 2003 and $0 for 
 95.4   2004.  
 95.5      The 2005 appropriation includes $0 for 2004 and $437,000 
 95.6   for 2005. 
 95.7      Subd. 8.  [INTERDISTRICT DESEGREGATION OR INTEGRATION 
 95.8   TRANSPORTATION GRANTS.] For interdistrict desegregation or 
 95.9   integration transportation grants under Minnesota Statutes, 
 95.10  section 124D.87: 
 95.11       $5,796,000     .....     2004 
 95.12       $8,401,000     .....     2005
 95.13     Subd. 9.  [SUCCESS FOR THE FUTURE.] For American Indian 
 95.14  success for the future grants under Minnesota Statutes, section 
 95.15  124D.81: 
 95.16       $2,009,000     .....     2004
 95.17       $2,137,000     .....     2005
 95.18     The 2004 appropriation includes $363,000 for 2003 and 
 95.19  $1,646,000 for 2004. 
 95.20     The 2005 appropriation includes $491,000 for 2004 and 
 95.21  $1,646,000 for 2005. 
 95.22     Subd. 10.  [AMERICAN INDIAN SCHOLARSHIPS.] For American 
 95.23  Indian scholarships under Minnesota Statutes, section 124D.84: 
 95.24       $1,875,000     .....     2004 
 95.25       $1,875,000     .....     2005 
 95.26     Subd. 11.  [AMERICAN INDIAN TEACHER PREPARATION 
 95.27  GRANTS.] For joint grants to assist American Indian people to 
 95.28  become teachers under Minnesota Statutes, section 122A.63: 
 95.29       $190,000       .....     2004 
 95.30       $190,000       .....     2005 
 95.31     Subd. 12.  [TRIBAL CONTRACT SCHOOLS.] For tribal contract 
 95.32  school aid under Minnesota Statutes, section 124D.83: 
 95.33       $2,066,000     .....     2004
 95.34       $2,335,000     .....     2005
 95.35     The 2004 appropriation includes $285,000 for 2003 and 
 95.36  $1,781,000 for 2004. 
 96.1      The 2005 appropriation includes $531,000 for 2004 and 
 96.2   $1,804,000 for 2005. 
 96.3      Subd. 13.  [EARLY CHILDHOOD PROGRAMS AT TRIBAL 
 96.4   SCHOOLS.] For early childhood family education programs at 
 96.5   tribal contract schools under Minnesota Statutes, section 
 96.6   124D.83, subdivision 4: 
 96.7        $68,000        .....     2004 
 96.8        $68,000        .....     2005 
 96.9      Subd. 14.  [STATEWIDE TESTING SUPPORT.] For supporting 
 96.10  implementation of the graduation standards: 
 96.11       $6,500,000     .....     2004 
 96.12       $6,500,000     .....     2005 
 96.13     Subd. 15.  [SEVENTH GRADE TESTING.] For seventh grade 
 96.14  testing under Minnesota Statutes, section 120B.30:  
 96.15       $2,500,000     .....     2004
 96.16       $2,500,000     .....     2005
 96.17     Subd. 16.  [BEST PRACTICES SEMINARS.] For best practices 
 96.18  seminars and other professional development capacity building 
 96.19  activities that assure proficiency in teaching and 
 96.20  implementation of graduation rule standards: 
 96.21       $2,180,000     .....     2004
 96.22       $2,180,000     .....     2005
 96.23     $250,000 per year is for a grant to A Chance to Grow/New 
 96.24  Visions for the Minnesota learning resource center's 
 96.25  comprehensive training program for education professionals 
 96.26  charged with helping children acquire basic reading and math 
 96.27  skills.  
 96.28     Subd. 17.  [SCHOOL PERFORMANCE EVALUATION.] For evaluating 
 96.29  school performance under Laws 2001, First Special Session 
 96.30  chapter 6, article 2, section 64:  
 96.31       $2,000,000     .....     2004
 96.32     This appropriation is available until June 30, 2005.  This 
 96.33  is a onetime appropriation.  
 96.34     Subd. 18.  [ALTERNATIVE TEACHER COMPENSATION.] For 
 96.35  alternative teacher compensation established under Minnesota 
 96.36  Statutes, sections 122A.413 to 122A.415: 
 97.1        $3,700,000     .....     2004
 97.2        $3,700,000     .....     2005
 97.3      If the appropriations under this subdivision are 
 97.4   insufficient to fund all program participants, a participant may 
 97.5   receive less than the maximum per pupil amount available under 
 97.6   Minnesota Statutes, section 122A.415, subdivision 1. 
 97.7      A qualifying district or site receiving alternative teacher 
 97.8   compensation funding under this subdivision may use the funding 
 97.9   it receives to participate in a national program for enhancing 
 97.10  teacher professionalism. 
 97.11     Subd. 19.  [EXAMINATION FEES; TEACHER TRAINING AND SUPPORT 
 97.12  PROGRAMS.] (a) For students' advanced placement and 
 97.13  international baccalaureate examination fees under Minnesota 
 97.14  Statutes, section 120B.13, subdivision 3, and the training and 
 97.15  related costs for teachers and other interested educators under 
 97.16  Minnesota Statutes, section 120B.13, subdivision 1: 
 97.17       $1,000,000     .....     2004 
 97.18       $1,000,000     .....     2005   
 97.19     (b) The advanced placement program shall receive 75 percent 
 97.20  of the appropriation each year and the international 
 97.21  baccalaureate program shall receive 25 percent of the 
 97.22  appropriation each year.  The department, in consultation with 
 97.23  representatives of the advanced placement and international 
 97.24  baccalaureate programs selected by the advanced placement 
 97.25  advisory council and IBMN, respectively, shall determine the 
 97.26  amounts of the expenditures each year for examination fees and 
 97.27  training and support programs for each program. 
 97.28     (c) Notwithstanding Minnesota Statutes, section 120B.13, 
 97.29  subdivision 1, $375,000 each year is for teachers to attend 
 97.30  subject matter summer training programs and follow-up support 
 97.31  workshops approved by the advanced placement or international 
 97.32  baccalaureate programs.  The amount of the subsidy for each 
 97.33  teacher attending an advanced placement or international 
 97.34  baccalaureate summer training program or workshop shall be the 
 97.35  same.  The commissioner shall determine the payment process and 
 97.36  the amount of the subsidy. 
 98.1      (d) The commissioner shall pay all examination fees for all 
 98.2   students of low-income families under Minnesota Statutes, 
 98.3   section 120B.13, subdivision 3, and to the extent of available 
 98.4   appropriations shall also pay examination fees for students 
 98.5   sitting for an advanced placement examination, international 
 98.6   baccalaureate examination, or both.  
 98.7      Any balance in the first year does not cancel but is 
 98.8   available in the second year. 
 98.9      Subd. 20.  [FIRST GRADE PREPAREDNESS.] For first grade 
 98.10  preparedness grants under Minnesota Statutes, section 124D.081: 
 98.11       $7,250,000     .....     2004 
 98.12       $7,250,000     .....     2005
 98.13     Subd. 21.  [YOUTH WORKS PROGRAM.] For funding youth works 
 98.14  programs under Minnesota Statutes, sections 124D.37 to 124D.45: 
 98.15       $900,000     .....     2004 
 98.16       $900,000     .....     2005 
 98.17     (a) $150,000 per year is for training in evaluating early 
 98.18  literacy skills and teaching reading to preschool children under 
 98.19  Minnesota Statutes, section 124D.42, subdivision 6, paragraph 
 98.20  (a), clause (3).  
 98.21     (b) A grantee organization may provide health and child 
 98.22  care coverage to the dependents of each participant enrolled in 
 98.23  a full-time youth works program to the extent such coverage is 
 98.24  not otherwise available. 
 98.25     Subd. 22.  [STUDENT ORGANIZATIONS.] For student 
 98.26  organizations: 
 98.27       $625,000       .....     2004
 98.28       $625,000       .....     2005
 98.29     Each student organization shall receive its fiscal year 
 98.30  2004 and 2005 appropriation using the allocation model that was 
 98.31  in effect for fiscal year 2002. 
 98.32     Subd. 23.  [DISTANCE EDUCATION.] For distance education 
 98.33  under Minnesota Statutes, section 124D.095:  
 98.34     $2,400,000       .....     2004
 98.35     $3,000,000       .....     2005
 98.36     Sec. 62.  [REVISOR'S INSTRUCTION.] 
 99.1      The revisor of statutes shall codify Laws 2001, First 
 99.2   Special Session chapter 6, article 2, section 68, as Minnesota 
 99.3   Statutes, section 120B.305. 
 99.4      Sec. 63.  [REPEALER.] 
 99.5      (a) Minnesota Statutes 2002, sections 122A.64; 122A.65; 
 99.6   124D.84, subdivision 2; and 124D.89, are repealed. 
 99.7      (b) Laws 1993, chapter 224, article 8, section 20, 
 99.8   subdivision 2, as amended by Laws 1994, chapter 647, article 8, 
 99.9   section 29, is repealed. 
 99.10     (c) Minnesota Statutes 2002, section 121A.49, is repealed 
 99.11  the day following final enactment. 
 99.12     (d) Minnesota Statutes 2002, section 123B.05, is repealed 
 99.13  the day following final enactment. 
 99.14                             ARTICLE 3
 99.15                          SPECIAL PROGRAMS
 99.16     Section 1.  Minnesota Statutes 2002, section 121A.41, 
 99.17  subdivision 10, is amended to read: 
 99.18     Subd. 10.  [SUSPENSION.] "Suspension" means an action by 
 99.19  the school administration, under rules promulgated by the school 
 99.20  board, prohibiting a pupil from attending school for a period of 
 99.21  no more than ten school days.  If a suspension is longer than 
 99.22  five days, the suspending administrator must provide the 
 99.23  superintendent with a reason for the longer suspension.  This 
 99.24  definition does not apply to dismissal from school for one 
 99.25  school day or less, except as provided in federal law for a 
 99.26  student with a disability.  Each suspension action may include a 
 99.27  readmission plan.  The readmission plan shall include, where 
 99.28  appropriate, a provision for implementing alternative 
 99.29  educational services upon readmission and may not be used to 
 99.30  extend the current suspension.  Consistent with section 125A.09, 
 99.31  subdivision 3, the readmission plan must not obligate a parent 
 99.32  to provide a sympathomimetic medication for the parent's child 
 99.33  as a condition of readmission.  The school administration may 
 99.34  not impose consecutive suspensions against the same pupil for 
 99.35  the same course of conduct, or incident of misconduct, except 
 99.36  where the pupil will create an immediate and substantial danger 
100.1   to self or to surrounding persons or property, or where the 
100.2   district is in the process of initiating an expulsion, in which 
100.3   case the school administration may extend the suspension to a 
100.4   total of 15 days.  In the case of a student with a disability, 
100.5   the student's individual education plan team must meet 
100.6   immediately but not more than ten school days after the date on 
100.7   which the decision to remove the student from the student's 
100.8   current education placement is made.  The individual education 
100.9   plan team and other qualified personnel shall at that meeting:  
100.10  conduct a review of the relationship between the child's 
100.11  disability and the behavior subject to disciplinary action; and 
100.12  determine the appropriateness of the child's education plan. 
100.13     The requirements of the individual education plan team 
100.14  meeting apply when: 
100.15     (1) the parent requests a meeting; 
100.16     (2) the student is removed from the student's current 
100.17  placement for five or more consecutive days; or 
100.18     (3) the student's total days of removal from the student's 
100.19  placement during the school year exceed ten cumulative days in a 
100.20  school year.  The school administration shall implement 
100.21  alternative educational services when the suspension exceeds 
100.22  five days.  A separate administrative conference is required for 
100.23  each period of suspension. 
100.24     Sec. 2.  [124D.452] [DISTRICT REPORT; CAREER AND TECHNICAL 
100.25  EDUCATION.] 
100.26     Each district and cooperative center must report data to 
100.27  the department of education for all career and technical 
100.28  education programs as required by the department. 
100.29     Sec. 3.  Minnesota Statutes 2002, section 124D.454, 
100.30  subdivision 1, is amended to read: 
100.31     Subdivision 1.  [PURPOSE.] The purpose of this section is 
100.32  to provide a method to fund transition career and technical 
100.33  education programs for children with a disability that are 
100.34  components of the student's transition plan.  As used in this 
100.35  section, the term "children with a disability" shall have the 
100.36  meaning ascribed to it in section 125A.02. 
101.1      Sec. 4.  Minnesota Statutes 2002, section 124D.454, 
101.2   subdivision 2, is amended to read: 
101.3      Subd. 2.  [DEFINITIONS.] For the purposes of this section, 
101.4   the definitions in this subdivision apply. 
101.5      (a) "Base year" for fiscal year 1996 means fiscal year 1995.
101.6   Base year for later fiscal years means the second fiscal year 
101.7   preceding the fiscal year for which aid will be paid. 
101.8      (b) "Basic revenue" has the meaning given it in section 
101.9   126C.10, subdivision 2.  For the purposes of computing basic 
101.10  revenue pursuant to this section, each child with a disability 
101.11  shall be counted as prescribed in section 126C.05, subdivision 1.
101.12     (c) "Average daily membership" has the meaning given it in 
101.13  section 126C.05. 
101.14     (d) "Program growth factor" means 1.00 for fiscal year 1998 
101.15  and later. 
101.16     (e) "Aid percentage factor" means 60 percent for fiscal 
101.17  year 1996, 70 percent for fiscal year 1997, 80 percent for 
101.18  fiscal year 1998, 90 percent for fiscal year 1999, and 100 
101.19  percent for fiscal year 2000 and later. 
101.20     (f) "Essential personnel" means a licensed teacher, 
101.21  licensed support services staff person, paraprofessional 
101.22  providing direct services to students, or licensed personnel 
101.23  under subdivision 12. 
101.24     Sec. 5.  Minnesota Statutes 2002, section 124D.454, 
101.25  subdivision 3, is amended to read: 
101.26     Subd. 3.  [BASE REVENUE.] (a) The transition 
101.27  program-disabled transition-disabled program base revenue equals 
101.28  the sum of the following amounts computed using base year data: 
101.29     (1) 68 percent of the salary of each essential licensed 
101.30  person or approved paraprofessional who provides direct 
101.31  instructional services to students employed during that fiscal 
101.32  year for services rendered in that district's transition program 
101.33  for children with a disability; 
101.34     (2) 47 percent of the costs of necessary equipment for 
101.35  transition programs for children with a disability; 
101.36     (3) 47 percent of the costs of necessary travel between 
102.1   instructional sites by transition program teachers of children 
102.2   with a disability but not including travel to and from local, 
102.3   regional, district, state, or national vocational career and 
102.4   technical student organization meetings; 
102.5      (4) 47 percent of the costs of necessary supplies for 
102.6   transition programs for children with a disability but not to 
102.7   exceed an average of $47 in any one school year for each child 
102.8   with a disability receiving these services; 
102.9      (5) for transition programs for children with disabilities 
102.10  provided by a contract approved by the commissioner with public, 
102.11  private, or voluntary agencies other than a Minnesota school 
102.12  district or cooperative center, in place of programs provided by 
102.13  the district, 52 percent of the difference between the amount of 
102.14  the contract and the basic revenue of the district for that 
102.15  pupil for the fraction of the school day the pupil receives 
102.16  services under the contract; 
102.17     (6) for transition programs for children with disabilities 
102.18  provided by a contract approved by the commissioner with public, 
102.19  private, or voluntary agencies other than a Minnesota school 
102.20  district or cooperative center, that are supplementary to a full 
102.21  educational program provided by the school district, 52 percent 
102.22  of the amount of the contract; and 
102.23     (7) for a contract approved by the commissioner with 
102.24  another Minnesota school district or cooperative center for 
102.25  vocational evaluation services for children with a disability 
102.26  for children that are not yet enrolled in grade 12, 52 percent 
102.27  of the amount of the contract. 
102.28     (b) If requested by a school district for transition 
102.29  programs during the base year for less than the full school 
102.30  year, the commissioner may adjust the base revenue to reflect 
102.31  the expenditures that would have occurred during the base year 
102.32  had the program been operated for the full year. 
102.33     Sec. 6.  Minnesota Statutes 2002, section 124D.454, 
102.34  subdivision 8, is amended to read: 
102.35     Subd. 8.  [USE OF AID.] The aid provided under this section 
102.36  shall be paid only for services rendered or for the costs which 
103.1   are incurred according to this section for transition programs 
103.2   for children with a disability which are approved by the 
103.3   commissioner of children, families, and learning education and 
103.4   operated in accordance with rules promulgated by the 
103.5   commissioner.  These rules shall be subject to the restrictions 
103.6   provided in section 124D.453, subdivision 6 12.  The procedure 
103.7   for application for approval of these programs shall be as 
103.8   provided in section 125A.75, subdivisions 4 and 6, and the 
103.9   application review process shall be conducted by the office 
103.10  division of lifework development federal programs in the 
103.11  department. 
103.12     Sec. 7.  Minnesota Statutes 2002, section 124D.454, 
103.13  subdivision 10, is amended to read: 
103.14     Subd. 10.  [EXCLUSION.] A district shall not receive aid 
103.15  pursuant to section 124D.453 or 125A.76 for salaries, supplies, 
103.16  travel or equipment for which the district receives aid pursuant 
103.17  to this section. 
103.18     Sec. 8.  Minnesota Statutes 2002, section 124D.454, is 
103.19  amended by adding a subdivision to read: 
103.20     Subd. 12.  [COMPLIANCE WITH RULES.] Aid must be paid under 
103.21  this section only for services rendered or for costs incurred in 
103.22  career and technical education programs approved by the 
103.23  commissioner and operated in accordance with rules promulgated 
103.24  by the commissioner.  This aid shall be paid only for services 
103.25  rendered and for costs incurred by essential, licensed personnel 
103.26  who meet the requirements for licensure pursuant to the rules of 
103.27  the Minnesota board of teaching.  Licensed personnel means 
103.28  persons holding a valid career and technical license issued by 
103.29  the commissioner.  If an average of five or fewer secondary 
103.30  full-time equivalent students are enrolled per teacher in an 
103.31  approved postsecondary program at intermediate district No. 287, 
103.32  916, or 917, licensed personnel means persons holding a valid 
103.33  vocational license issued by the commissioner or the board of 
103.34  trustees of the Minnesota state colleges and universities.  
103.35  Notwithstanding section 127A.42, the commissioner may modify or 
103.36  withdraw the program or aid approval and withhold aid under this 
104.1   section without proceeding under section 127A.42 at any time.  
104.2   To do so, the commissioner must determine that the program does 
104.3   not comply with rules of the department of education or that any 
104.4   facts concerning the program or its budget differ from the facts 
104.5   in the district's approved application. 
104.6      Sec. 9.  [125A.091] [ALTERNATIVE DISPUTE RESOLUTION AND DUE 
104.7   PROCESS HEARINGS.] 
104.8      Subdivision 1.  [DISTRICT OBLIGATION.] A school district 
104.9   must use the procedures in federal law and state law and rule to 
104.10  reach decisions about the identification, evaluation, 
104.11  educational placement, manifestation determination, interim 
104.12  alternative educational placement, or the provision of a free 
104.13  appropriate public education to a child with a disability. 
104.14     Subd. 2.  [PRIOR WRITTEN NOTICE.] A parent must receive 
104.15  prior written notice a reasonable time before the district 
104.16  proposes or refuses to initiate or change the identification, 
104.17  evaluation, educational placement, or the provision of a free 
104.18  appropriate public education to a child with a disability. 
104.19     Subd. 3.  [CONTENT OF NOTICE.] The notice under subdivision 
104.20  2 must: 
104.21     (1) describe the action the district proposes or refuses; 
104.22     (2) explain why the district proposes or refuses to take 
104.23  the action; 
104.24     (3) describe any other option the district considered and 
104.25  the reason why it rejected the option; 
104.26     (4) describe each evaluation procedure, test, record, or 
104.27  report the district used as a basis for the proposed or refused 
104.28  action; 
104.29     (5) describe any other factor affecting the proposal or 
104.30  refusal of the district to take the action; 
104.31     (6) state that the parent of a child with a disability is 
104.32  protected by procedural safeguards and, if this notice is not an 
104.33  initial referral for evaluation, how a parent can get a 
104.34  description of the procedural safeguards; and 
104.35     (7) identify where a parent can get help in understanding 
104.36  this law. 
105.1      Subd. 4.  [UNDERSTANDABLE NOTICE.] (a) The written notice 
105.2   under subdivision 2 must be understandable to the general public 
105.3   and available in the parent's native language or by another 
105.4   communication form, unless it is clearly not feasible to do so. 
105.5      (b) If the parent's native language or other communication 
105.6   form is not written, the district must take steps to ensure that:
105.7      (1) the notice is translated orally or by other means to 
105.8   the parent in the parent's native language or other 
105.9   communication form; 
105.10     (2) the parent understands the notice; and 
105.11     (3) written evidence indicates the requirements in 
105.12  subdivision 2 are met. 
105.13     Subd. 5.  [INITIAL ACTION; PARENT CONSENT.] The district 
105.14  must not proceed with the initial evaluation of a child, the 
105.15  initial placement of a child in a special education program, or 
105.16  the initial provision of special education services for a child 
105.17  without the prior written consent of the child's parent.  A 
105.18  district may not override the written refusal of a parent to 
105.19  consent to an initial evaluation or reevaluation. 
105.20     Subd. 6.  [DISPUTE RESOLUTION PROCESSES; 
105.21  GENERALLY.] Parties are encouraged to resolve disputes over the 
105.22  identification, evaluation, educational placement, manifestation 
105.23  determination, interim alternative educational placement, or the 
105.24  provision of a free appropriate public education to a child with 
105.25  a disability through conciliation, mediation, facilitated team 
105.26  meetings, or other alternative process.  All dispute resolution 
105.27  options are voluntary on the part of the parent and must not be 
105.28  used to deny or delay the right to a due process hearing.  All 
105.29  dispute resolution processes under this section are provided at 
105.30  no cost to the parent. 
105.31     Subd. 7.  [CONCILIATION CONFERENCE.] A parent must have an 
105.32  opportunity to meet with appropriate district staff in at least 
105.33  one conciliation conference if the parent objects to any 
105.34  proposal of which the parent receives notice under subdivision 2.
105.35  If the parent refuses district efforts to conciliate the 
105.36  dispute, the conciliation requirement is satisfied.  Following a 
106.1   conciliation conference, the district must prepare and provide 
106.2   to the parent a conciliation conference memorandum that 
106.3   describes the district's final proposed offer of service.  This 
106.4   memorandum is admissible in evidence in any subsequent 
106.5   proceeding. 
106.6      Subd. 8.  [VOLUNTARY DISPUTE RESOLUTION OPTIONS.] In 
106.7   addition to offering at least one conciliation conference, a 
106.8   district must inform a parent of other dispute resolution 
106.9   processes, including at least mediation and facilitated team 
106.10  meetings.  The fact that an alternative dispute resolution 
106.11  process was used is admissible in evidence at any subsequent 
106.12  proceeding.  State-provided mediators and team meeting 
106.13  facilitators shall not be subpoenaed to testify at a due process 
106.14  hearing or civil action under federal special education law nor 
106.15  are any records of mediators or state-provided team meeting 
106.16  facilitators accessible to the parties. 
106.17     Subd. 9.  [MEDIATION.] Mediation is a dispute resolution 
106.18  process that involves a neutral party provided by the state to 
106.19  assist a parent and a district in resolving disputes over the 
106.20  identification, evaluation, educational placement, manifestation 
106.21  determination, interim alternative educational placement, or the 
106.22  provision of a free appropriate public education to a child with 
106.23  a disability.  A mediation process is available as an informal 
106.24  alternative to a due process hearing but must not be used to 
106.25  deny or postpone the opportunity of a parent or district to 
106.26  obtain a due process hearing.  Mediation is voluntary for all 
106.27  parties.  All mediation discussions are confidential and 
106.28  inadmissible in evidence in any subsequent proceeding, unless 
106.29  the: 
106.30     (1) parties expressly agree otherwise; 
106.31     (2) evidence is otherwise available; or 
106.32     (3) evidence is offered to prove bias or prejudice of a 
106.33  witness. 
106.34     Subd. 10.  [MEDIATED AGREEMENTS.] Mediated agreements are 
106.35  not admissible unless the parties agree otherwise or a party to 
106.36  the agreement believes the agreement is not being implemented, 
107.1   in which case the aggrieved party may enter the agreement into 
107.2   evidence at a due process hearing.  The parties may request 
107.3   another mediation to resolve a dispute over implementing the 
107.4   mediated agreement.  After a due process hearing is requested, a 
107.5   party may request mediation and the commissioner must provide a 
107.6   mediator who conducts a mediation session no later than the 
107.7   third business day after the mediation request is made to the 
107.8   commissioner. 
107.9      Subd. 11.  [FACILITATED TEAM MEETING.] A facilitated team 
107.10  meeting is an IEP, IFSP, or IIIP team meeting led by an 
107.11  impartial state-provided facilitator to promote effective 
107.12  communication and assist a team in developing an individualized 
107.13  education plan. 
107.14     Subd. 12.  [IMPARTIAL DUE PROCESS HEARING.] (a) A parent or 
107.15  a district is entitled to an impartial due process hearing 
107.16  conducted by the state when a dispute arises over the 
107.17  identification, evaluation, educational placement, manifestation 
107.18  determination, interim alternative educational placement, or the 
107.19  provision of a free appropriate public education to a child with 
107.20  a disability.  The hearing must be held in the district 
107.21  responsible for ensuring that a free appropriate public 
107.22  education is provided according to state and federal law.  The 
107.23  proceedings must be recorded and preserved, at state expense, 
107.24  pending ultimate disposition of the action. 
107.25     (b) The due process hearing must be conducted according to 
107.26  the rules of the commissioner and federal law. 
107.27     (c) A party in a due process hearing may not raise a claim 
107.28  based upon an alleged violation that occurred more than two 
107.29  years before the date on which the commissioner received the 
107.30  hearing request. 
107.31     Subd. 13.  [HEARING OFFICER QUALIFICATIONS.] The 
107.32  commissioner must appoint an individual who is qualified under 
107.33  this subdivision to serve as a hearing officer.  The hearing 
107.34  officer must: 
107.35     (1) be knowledgeable and impartial; 
107.36     (2) have no personal interest in or specific involvement 
108.1   with the student who is a party to the hearing; 
108.2      (3) not have been employed as an administrator by the 
108.3   district that is a party to the hearing; 
108.4      (4) not have been involved in selecting the district 
108.5   administrator who is a party to the hearing; 
108.6      (5) have no personal, economic, or professional interest in 
108.7   the outcome of the hearing other than properly administering 
108.8   federal and state laws, rules, and policies; 
108.9      (6) have no substantial involvement in developing state or 
108.10  local policies or procedures challenged in the hearing; 
108.11     (7) not be a current employee or board member of a 
108.12  Minnesota public school district, education district, 
108.13  intermediate unit or regional education agency, or the 
108.14  department if the department is the service provider; and 
108.15     (8) not be a current employee or board member of a 
108.16  disability advocacy organization or group. 
108.17     Subd. 14.  [REQUEST FOR HEARING.] A request for a due 
108.18  process hearing must: 
108.19     (1) be in writing; 
108.20     (2) describe the nature of the dispute about providing 
108.21  special education services to the student including facts 
108.22  relating to the dispute; and 
108.23     (3) state, to the extent known, the relief sought. 
108.24     Any school district administrator receiving a request for a 
108.25  due process hearing must immediately forward the request to the 
108.26  commissioner.  Within two business days of receiving a request 
108.27  for a due process hearing, the commissioner must appoint a 
108.28  hearing officer.  The commissioner must not deny a request for 
108.29  hearing because the request is incomplete.  A party may 
108.30  disqualify a hearing officer only by affirmatively showing 
108.31  prejudice or bias to the commissioner or to the chief 
108.32  administrative law judge if the hearing officer is an 
108.33  administrative law judge.  If a party affirmatively shows 
108.34  prejudice against a hearing officer, the commissioner must 
108.35  assign another hearing officer to hear the matter. 
108.36     Subd. 15.  [PREHEARING CONFERENCE.] A prehearing conference 
109.1   must be held within five business days of the date the 
109.2   commissioner appoints the hearing officer.  The hearing officer 
109.3   must initiate the prehearing conference which may be conducted 
109.4   in person, at a location within the district, or by telephone. 
109.5   The hearing officer must create a written verbatim record of the 
109.6   prehearing conference which is available to either party upon 
109.7   request.  At the prehearing conference, the hearing officer must:
109.8      (1) identify the questions that must be answered to resolve 
109.9   the dispute and eliminate claims and complaints that are without 
109.10  merit; 
109.11     (2) set a scheduling order for the hearing and additional 
109.12  prehearing activities; 
109.13     (3) determine if the hearing can be disposed of without an 
109.14  evidentiary hearing and, if so, establish the schedule and 
109.15  procedure for doing so; and 
109.16     (4) establish the management, control, and location of the 
109.17  hearing to ensure its fair, efficient, and effective disposition.
109.18     Subd. 16.  [BURDEN OF PROOF.] The burden of proof at a due 
109.19  process hearing is on the district to demonstrate, by a 
109.20  preponderance of the evidence, that it is complying with the law 
109.21  and offered or provided a free appropriate public education to 
109.22  the child in the least restrictive environment.  If the district 
109.23  has not offered or provided a free appropriate public education 
109.24  in the least restrictive environment and the parent wants the 
109.25  district to pay for a private placement, the burden of proof is 
109.26  on the parent to demonstrate, by a preponderance of the 
109.27  evidence, that the private placement is appropriate. 
109.28     Subd. 17.  [ADMISSIBLE EVIDENCE.] The hearing officer may 
109.29  admit all evidence that possesses probative value, including 
109.30  hearsay, if it is the type of evidence on which reasonable, 
109.31  prudent persons are accustomed to rely in conducting their 
109.32  serious affairs.  The hearing officer must give effect to the 
109.33  rules of privilege recognized by law and exclude evidence that 
109.34  is incompetent, irrelevant, immaterial, or unduly repetitious. 
109.35     Subd. 18.  [HEARING OFFICER AUTHORITY.] (a) A hearing 
109.36  officer must limit an impartial due process hearing to the time 
110.1   sufficient for each party to present its case.  
110.2      (b) A hearing officer must establish and maintain control 
110.3   and manage the hearing.  This authority includes, but is not 
110.4   limited to: 
110.5      (1) requiring attorneys representing parties at the 
110.6   hearing, after notice and an opportunity to be heard, to pay 
110.7   court reporting and hearing officer costs, or fines payable to 
110.8   the state, for failing to:  (i) obey scheduling or prehearing 
110.9   orders, (ii) appear, (iii) be prepared, or (iv) participate in 
110.10  the hearing process in good faith; 
110.11     (2) administering oaths and affirmations; 
110.12     (3) issuing subpoenas; 
110.13     (4) determining the responsible and providing districts and 
110.14  joining those districts, if not already notified, in the 
110.15  proceedings; 
110.16     (5) making decisions involving identification, evaluation, 
110.17  educational placement, manifestation determination, interim 
110.18  alternative educational placement, or the provision of a free 
110.19  appropriate public education to a child with a disability; and 
110.20     (6) ordering an independent educational evaluation of a 
110.21  child at district expense. 
110.22     Subd. 19.  [EXPEDITED DUE PROCESS HEARINGS.] A parent has 
110.23  the right to an expedited due process hearing when there is a 
110.24  dispute over a manifestation determination or a proposed or 
110.25  actual placement in an interim alternative educational setting.  
110.26  A district has the right to an expedited due process hearing 
110.27  when proposing or seeking to maintain placement in an interim 
110.28  alternative educational setting.  A hearing officer must hold an 
110.29  expedited due process hearing and must issue a decision within 
110.30  ten calendar days of the request for a hearing.  A hearing 
110.31  officer may extend by up to five additional calendar days the 
110.32  time for issuing a decision in an expedited due process 
110.33  hearing.  All policies in this section apply to expedited due 
110.34  process hearings to the extent they do not conflict with federal 
110.35  law. 
110.36     Subd. 20.  [HEARING OFFICER'S DECISION; TIME PERIOD.] (a) 
111.1   The hearing officer must issue a decision within 45 calendar 
111.2   days of the date on which the commissioner receives the request 
111.3   for a due process hearing.  A hearing officer is encouraged to 
111.4   accelerate the time line to 30 days for a child under the age of 
111.5   three whose needs change rapidly and who requires quick 
111.6   resolution of a dispute.  A hearing officer may not extend the 
111.7   time beyond the 45-day period unless requested by either party 
111.8   for good cause shown on the record.  Extensions of time must not 
111.9   exceed a total of 30 calendar days unless both parties and the 
111.10  hearing officer agree or time is needed to complete an 
111.11  independent educational evaluation.  Good cause includes, but is 
111.12  not limited to, the time required for mediation or other 
111.13  settlement discussions, independent educational evaluation, 
111.14  complexity and volume of issues, or finding or changing counsel. 
111.15     (b) The hearing officer's decision must: 
111.16     (1) be in writing; 
111.17     (2) state the controlling and material facts upon which the 
111.18  decision is made in order to apprise the reader of the basis and 
111.19  reason for the decision; and 
111.20     (3) be based on local standards, state statute, the rules 
111.21  of the commissioner, and federal law. 
111.22     Subd. 21.  [COMPENSATORY EDUCATIONAL SERVICES.] The hearing 
111.23  officer may require the resident or responsible district to 
111.24  provide compensatory educational services to the child if the 
111.25  hearing officer finds that the district has not offered or made 
111.26  available to the child a free appropriate public education in 
111.27  the least restrictive environment and the child suffered a loss 
111.28  of educational benefit.  Such services take the form of direct 
111.29  and indirect special education and related services designed to 
111.30  address any loss of educational benefit that may have occurred.  
111.31  The hearing officer's finding must be based on a present 
111.32  determination of whether the child has suffered a loss of 
111.33  educational benefit. 
111.34     Subd. 22.  [CHILD'S EDUCATIONAL PLACEMENT DURING A DUE 
111.35  PROCESS HEARING.] (a) Until a due process hearing under this 
111.36  section is completed or the district and the parent agree 
112.1   otherwise, the child must remain in the child's current 
112.2   educational placement and must not be denied initial admission 
112.3   to school. 
112.4      (b) Until an expedited due process hearing challenging an 
112.5   interim alternative educational placement is completed, the 
112.6   child must remain in the interim alternative educational setting 
112.7   until the decision of the hearing officer or the expiration of 
112.8   the 45 days permitted for an interim alternative educational 
112.9   setting, whichever occurs first, unless the parent and district 
112.10  agree otherwise. 
112.11     Subd. 23.  [IMPLEMENTATION OF HEARING OFFICER ORDER.] (a) 
112.12  That portion of a hearing officer's decision granting relief 
112.13  requested by the parent must be implemented upon issuance. 
112.14     (b) Except as provided under paragraph (a) or the district 
112.15  and parent agree otherwise, following a hearing officer's 
112.16  decision granting relief requested by the district, the child 
112.17  must remain in the current educational placement until the time 
112.18  to request judicial review under subdivision 24 expires or, if 
112.19  judicial review is requested, at the time the Minnesota court of 
112.20  appeals or the federal district court issues its decision, 
112.21  whichever is later.  
112.22     Subd. 24.  [REVIEW OF HEARING OFFICER DECISIONS.] The 
112.23  parent or district may seek review of the hearing officer's 
112.24  decision in the Minnesota court of appeals or in the federal 
112.25  district court, consistent with federal law.  A party must 
112.26  appeal to the Minnesota court of appeals within 60 days of 
112.27  receiving the hearing officer's decision. 
112.28     Subd. 25.  [ENFORCEMENT OF ORDERS.] The commissioner must 
112.29  monitor final hearing officer decisions and ensure enforcement 
112.30  of hearing officer orders. 
112.31     Subd. 26.  [HEARING OFFICER AND PERSON CONDUCTING 
112.32  ALTERNATIVE DISPUTE RESOLUTION ARE STATE EMPLOYEES.] A hearing 
112.33  officer or person conducting alternative dispute resolution 
112.34  under this section is an employee of the state under section 
112.35  3.732 for purposes of section 3.736 only. 
112.36     Subd. 27.  [HEARING OFFICER TRAINING.] A hearing officer 
113.1   must participate in training and follow procedures established 
113.2   by the commissioner.  
113.3      Subd. 28.  [DISTRICT LIABILITY.] A district is not liable 
113.4   for harmless technical violations of this section or rules 
113.5   implementing this section if the school district can demonstrate 
113.6   on a case-by-case basis that the violations did not harm a 
113.7   student's educational progress or the parent's right to notice, 
113.8   participation, or due process. 
113.9      Sec. 10.  Minnesota Statutes 2002, section 125A.21, 
113.10  subdivision 2, is amended to read: 
113.11     Subd. 2.  [THIRD PARTY REIMBURSEMENT.] (a) Beginning July 
113.12  1, 2000, districts shall seek reimbursement from insurers and 
113.13  similar third parties for the cost of services provided by the 
113.14  district whenever the services provided by the district are 
113.15  otherwise covered by the child's health coverage.  Districts 
113.16  shall request, but may not require, the child's family to 
113.17  provide information about the child's health coverage when a 
113.18  child with a disability begins to receive services from the 
113.19  district of a type that may be reimbursable, and shall request, 
113.20  but may not require, updated information after that as needed.  
113.21     (b) For children enrolled in medical assistance under 
113.22  chapter 256B or MinnesotaCare under chapter 256L who have no 
113.23  other health coverage, a district shall provide an initial 
113.24  written notice to the enrolled child's parent or legal 
113.25  representative of its intent to seek reimbursement from medical 
113.26  assistance or MinnesotaCare for the individual education plan 
113.27  health-related services provided by the district. 
113.28     (c) The district shall give the parent or legal 
113.29  representative annual written notice of: 
113.30     (1) the district's intent to seek reimbursement from 
113.31  medical assistance or MinnesotaCare for individual education 
113.32  plan health-related services provided by the district; 
113.33     (2) the right of the parent or legal representative to 
113.34  request a copy of all records concerning individual education 
113.35  plan health-related services disclosed by the district to any 
113.36  third party; and 
114.1      (3) the right of the parent or legal representative to 
114.2   withdraw consent for disclosure of a child's records at any time 
114.3   without consequence. 
114.4   The written notice shall be provided as part of the written 
114.5   notice required by Code of Federal Regulations, title 34, 
114.6   section 300.503 300.504. 
114.7      (d) In order to access the private health care coverage of 
114.8   a child who is covered by private health care coverage in whole 
114.9   or in part, a district must: 
114.10     (1) obtain annual written informed consent from the parent 
114.11  or legal representative, in compliance with subdivision 5; and 
114.12     (2) inform the parent or legal representative that a 
114.13  refusal to permit the district or state Medicaid agency to 
114.14  access their private health care coverage does not relieve the 
114.15  district of its responsibility to provide all services necessary 
114.16  to provide free and appropriate public education at no cost to 
114.17  the parent or legal representative. 
114.18     (e) If the commissioner of human services obtains federal 
114.19  approval to exempt covered individual education plan 
114.20  health-related services from the requirement that private health 
114.21  care coverage refuse payment before medical assistance may be 
114.22  billed, paragraphs (b), (c), and (d) shall also apply to 
114.23  students with a combination of private health care coverage and 
114.24  health care coverage through medical assistance or MinnesotaCare.
114.25     (f) In the event that Congress or any federal agency or the 
114.26  Minnesota legislature or any state agency establishes lifetime 
114.27  limits, limits for any health care services, cost-sharing 
114.28  provisions, or otherwise provides that individual education plan 
114.29  health-related services impact benefits for persons enrolled in 
114.30  medical assistance or MinnesotaCare, the amendments to this 
114.31  subdivision adopted in 2002 are repealed on the effective date 
114.32  of any federal or state law or regulation that imposes the 
114.33  limits.  In that event, districts must obtain informed consent 
114.34  consistent with this subdivision as it existed prior to the 2002 
114.35  amendments and subdivision 5, before seeking reimbursement for 
114.36  children enrolled in medical assistance under chapter 256B or 
115.1   MinnesotaCare under chapter 256L who have no other health care 
115.2   coverage. 
115.3      Sec. 11.  Minnesota Statutes 2002, section 125A.28, is 
115.4   amended to read: 
115.5      125A.28 [STATE INTERAGENCY COORDINATING COUNCIL.] 
115.6      An interagency coordinating council of at least 17, but not 
115.7   more than 25 members is established, in compliance with Public 
115.8   Law Number 102-119, section 682.  The members must be appointed 
115.9   by the governor.  Council members must elect the council chair.  
115.10  The representative of the commissioner may not serve as the 
115.11  chair.  The council must be composed of at least five parents, 
115.12  including persons of color, of children with disabilities under 
115.13  age 12, including at least three parents of a child with a 
115.14  disability under age seven, five representatives of public or 
115.15  private providers of services for children with disabilities 
115.16  under age five, including a special education director, county 
115.17  social service director, local Head Start director, and a 
115.18  community health services or public health nursing 
115.19  administrator, one member of the senate, one member of the house 
115.20  of representatives, one representative of teacher preparation 
115.21  programs in early childhood-special education or other 
115.22  preparation programs in early childhood intervention, at least 
115.23  one representative of advocacy organizations for children with 
115.24  disabilities under age five, one physician who cares for young 
115.25  children with special health care needs, one representative each 
115.26  from the commissioners of commerce, children, families, and 
115.27  learning education, health, human services, a representative 
115.28  from the state agency responsible for child care, and a 
115.29  representative from Indian health services or a tribal council.  
115.30  Section 15.059, subdivisions 2 to 5, apply to the council.  The 
115.31  council must meet at least quarterly.  
115.32     The council must address methods of implementing the state 
115.33  policy of developing and implementing comprehensive, 
115.34  coordinated, multidisciplinary interagency programs of early 
115.35  intervention services for children with disabilities and their 
115.36  families. 
116.1      The duties of the council include recommending policies to 
116.2   ensure a comprehensive and coordinated system of all state and 
116.3   local agency services for children under age five with 
116.4   disabilities and their families.  The policies must address how 
116.5   to incorporate each agency's services into a unified state and 
116.6   local system of multidisciplinary assessment practices, 
116.7   individual intervention plans, comprehensive systems to find 
116.8   children in need of services, methods to improve public 
116.9   awareness, and assistance in determining the role of interagency 
116.10  early intervention committees.  
116.11     By September 1, the council must recommend to the governor 
116.12  and the commissioners of children, families, and learning 
116.13  education, health, human services, commerce, and economic 
116.14  security policies for a comprehensive and coordinated system. 
116.15     Notwithstanding any other law to the contrary, the state 
116.16  interagency coordinating council expires on June 30, 2003 2005.  
116.17     Sec. 12.  Minnesota Statutes 2002, section 125A.30, is 
116.18  amended to read: 
116.19     125A.30 [INTERAGENCY EARLY INTERVENTION COMMITTEES.] 
116.20     (a) A school district, group of districts, or special 
116.21  education cooperative, in cooperation with the health and human 
116.22  service agencies located in the county or counties in which the 
116.23  district or cooperative is located, must establish an 
116.24  interagency early intervention committee for children with 
116.25  disabilities under age five and their families under this 
116.26  section, and for children with disabilities ages three to 22 
116.27  consistent with the requirements under sections 125A.023 and 
116.28  125A.027.  Committees must include representatives of local and 
116.29  regional health, education, and county human service agencies, 
116.30  county boards, school boards, early childhood family education 
116.31  programs, Head Start, parents of young children with 
116.32  disabilities under age 12, child care resource and referral 
116.33  agencies, school readiness programs, current service providers, 
116.34  and may also include representatives from other private or 
116.35  public agencies and school nurses.  The committee must elect a 
116.36  chair from among its members and must meet at least quarterly. 
117.1      (b) The committee must develop and implement interagency 
117.2   policies and procedures concerning the following ongoing duties: 
117.3      (1) develop public awareness systems designed to inform 
117.4   potential recipient families of available programs and services; 
117.5      (2) implement interagency child find systems designed to 
117.6   actively seek out, identify, and refer infants and young 
117.7   children with, or at risk of, disabilities and their families; 
117.8      (3) establish and evaluate the identification, referral, 
117.9   child and family assessment systems, procedural safeguard 
117.10  process, and community learning systems to recommend, where 
117.11  necessary, alterations and improvements; 
117.12     (4) assure the development of individualized family service 
117.13  plans for all eligible infants and toddlers with disabilities 
117.14  from birth through age two, and their families, and individual 
117.15  education plans and individual service plans when necessary to 
117.16  appropriately serve children with disabilities, age three and 
117.17  older, and their families and recommend assignment of financial 
117.18  responsibilities to the appropriate agencies; 
117.19     (5) encourage agencies to develop individual family service 
117.20  plans for children with disabilities, age three and older; 
117.21     (6) implement a process for assuring that services involve 
117.22  cooperating agencies at all steps leading to individualized 
117.23  programs; 
117.24     (7) facilitate the development of a transitional plan if a 
117.25  service provider is not recommended to continue to provide 
117.26  services; 
117.27     (8) identify the current services and funding being 
117.28  provided within the community for children with disabilities 
117.29  under age five and their families; 
117.30     (9) develop a plan for the allocation and expenditure of 
117.31  additional state and federal early intervention funds under 
117.32  United States Code, title 20, section 1471 et seq.  (Part H, 
117.33  Public Law Number 102-119) and United States Code, title 20, 
117.34  section 631, et seq. (Chapter I, Public Law Number 89-313); and 
117.35     (10) develop a policy that is consistent with section 
117.36  13.05, subdivision 9, and federal law to enable a member of an 
118.1   interagency early intervention committee to allow another member 
118.2   access to data classified as not public. 
118.3      (c) The local committee shall also: 
118.4      (1) participate in needs assessments and program planning 
118.5   activities conducted by local social service, health and 
118.6   education agencies for young children with disabilities and 
118.7   their families; and 
118.8      (2) review and comment on the early intervention section of 
118.9   the total special education system for the district, the county 
118.10  social service plan, the section or sections of the community 
118.11  health services plan that address needs of and service 
118.12  activities targeted to children with special health care 
118.13  needs, the section on children with special needs in the county 
118.14  child care fund plan, sections in Head Start plans on 
118.15  coordinated planning and services for children with special 
118.16  needs, any relevant portions of early childhood education plans, 
118.17  such as early childhood family education or school readiness, or 
118.18  other applicable coordinated school and community plans for 
118.19  early childhood programs and services, and the section of the 
118.20  maternal and child health special project grants that address 
118.21  needs of and service activities targeted to children with 
118.22  chronic illness and disabilities. 
118.23     Sec. 13.  Minnesota Statutes 2002, section 125A.76, 
118.24  subdivision 1, is amended to read: 
118.25     Subdivision 1.  [DEFINITIONS.] For the purposes of this 
118.26  section, the definitions in this subdivision apply. 
118.27     (a) "Base year" for fiscal year 1998 and later fiscal years 
118.28  means the second fiscal year preceding the fiscal year for which 
118.29  aid will be paid. 
118.30     (b) "Basic revenue" has the meaning given it in section 
118.31  126C.10, subdivision 2.  For the purposes of computing basic 
118.32  revenue pursuant to this section, each child with a disability 
118.33  shall be counted as prescribed in section 126C.05, subdivision 1.
118.34     (c) "Essential personnel" means teachers, cultural 
118.35  liaisons, related services, and support services staff providing 
118.36  direct services to students.  Essential personnel may also 
119.1   include special education paraprofessionals or clericals 
119.2   providing support to teachers and students by preparing 
119.3   paperwork and making arrangements related to special education 
119.4   compliance requirements, including parent meetings and 
119.5   individual education plans. 
119.6      (d) "Average daily membership" has the meaning given it in 
119.7   section 126C.05. 
119.8      (e) "Program growth factor" means 1.08 for fiscal year 
119.9   2002, and 1.046 for fiscal year 2003, and 1.0 for fiscal year 
119.10  2004 and later. 
119.11     Sec. 14.  Minnesota Statutes 2002, section 125A.76, 
119.12  subdivision 4, is amended to read: 
119.13     Subd. 4.  [STATE TOTAL SPECIAL EDUCATION AID.] The state 
119.14  total special education aid for fiscal year 2000 2004 equals 
119.15  $463,000,000 $530,642,000.  The state total special education 
119.16  aid for fiscal year 2001 2005 equals $474,000,000 $529,164,000.  
119.17  The state total special education aid for later fiscal years 
119.18  equals:  
119.19     (1) the state total special education aid for the preceding 
119.20  fiscal year; times 
119.21     (2) the program growth factor; times 
119.22     (3) the ratio of the state total average daily membership 
119.23  for the current fiscal year to the state total average daily 
119.24  membership for the preceding fiscal year. 
119.25     Sec. 15.  Minnesota Statutes 2002, section 125A.79, 
119.26  subdivision 1, is amended to read: 
119.27     Subdivision 1.  [DEFINITIONS.] For the purposes of this 
119.28  section, the definitions in this subdivision apply. 
119.29     (a) "Unreimbursed special education cost" means the sum of 
119.30  the following: 
119.31     (1) expenditures for teachers' salaries, contracted 
119.32  services, supplies, equipment, and transportation services 
119.33  eligible for revenue under section 125A.76; plus 
119.34     (2) expenditures for tuition bills received under sections 
119.35  125A.03 to 125A.24 and 125A.65 for services eligible for revenue 
119.36  under section 125A.76, subdivision 2; minus 
120.1      (3) revenue for teachers' salaries, contracted services, 
120.2   supplies, and equipment under section 125A.76; minus 
120.3      (4) tuition receipts under sections 125A.03 to 125A.24 and 
120.4   125A.65 for services eligible for revenue under section 125A.76, 
120.5   subdivision 2. 
120.6      (b) "General revenue" means for fiscal year 1996, the sum 
120.7   of the general education revenue according to section 126C.10, 
120.8   subdivision 1, as adjusted according to section 127A.47, 
120.9   subdivision 7, plus the total referendum revenue according to 
120.10  section 126C.17, subdivision 4.  For fiscal years 1997 and 
120.11  later, "general revenue" means the sum of the general education 
120.12  revenue according to section 126C.10, subdivision 1, as adjusted 
120.13  according to section 127A.47, subdivisions 7 and 8, plus the 
120.14  total referendum revenue minus transportation sparsity revenue 
120.15  minus total operating capital revenue.  
120.16     (c) "Average daily membership" has the meaning given it in 
120.17  section 126C.05. 
120.18     (d) "Program growth factor" means 1.044 for fiscal year 
120.19  2002 and 1.02 for fiscal year 2003, and 1.0 for fiscal year 2004 
120.20  and later. 
120.21     Sec. 16.  Minnesota Statutes 2002, section 125A.79, 
120.22  subdivision 6, is amended to read: 
120.23     Subd. 6.  [STATE TOTAL SPECIAL EDUCATION EXCESS COST AID.] 
120.24  The state total special education excess cost aid for fiscal 
120.25  year 2004 equals $92,067,000.  The state total special education 
120.26  aid for fiscal year 2005 equals $91,811,000.  The state total 
120.27  special education excess cost aid for fiscal year 2002 2006 and 
120.28  later fiscal years equals: 
120.29     (1) the state total special education excess cost aid for 
120.30  the preceding fiscal year; times 
120.31     (2) the program growth factor; times 
120.32     (3) the ratio of the state total average daily membership 
120.33  for the current fiscal year to the state total average daily 
120.34  membership for the preceding fiscal year.  
120.35     Sec. 17.  [SPECIAL EDUCATION CROSS-SUBSIDY REDUCTION AID.] 
120.36     (a) For fiscal year 2004, a district shall receive special 
121.1   education cross-subsidy reduction aid equal to $5,000,000 times 
121.2   the ratio of the district's special education excess cost aid 
121.3   for the previous fiscal year according to Minnesota Statutes, 
121.4   section 125A.79, subdivision 7, to the state total special 
121.5   education excess cost aid for the previous fiscal year according 
121.6   to Minnesota Statutes, section 125A.79, subdivision 6. 
121.7      (b) For fiscal year 2005, a district shall receive special 
121.8   education cross-subsidy reduction aid equal to $15,000,000 times 
121.9   the ratio of the district's special education excess cost aid 
121.10  for the previous fiscal year according to Minnesota Statutes, 
121.11  section 125A.79, subdivision 7, to the state total special 
121.12  education excess cost aid for the previous fiscal year according 
121.13  to Minnesota Statutes, section 125A.79, subdivision 6. 
121.14     (c) Special education cross-subsidy reduction aid must be 
121.15  used to pay for a district's unfunded special education costs 
121.16  that would otherwise be cross-subsidized by a district's general 
121.17  education revenue. 
121.18     Sec. 18.  [IMPACT OF WAIVING SPECIFIC SPECIAL EDUCATION 
121.19  REQUIREMENTS THAT EXCEED FEDERAL LAW; THREE-YEAR PILOT PROJECT.] 
121.20     Subdivision 1.  [ESTABLISHMENT; GOAL.] A three-year pilot 
121.21  project is established to permit independent school district No. 
121.22  535, Rochester, and up to three other geographically diverse 
121.23  school districts or cooperative units under Minnesota Statutes, 
121.24  section 125A.11, subdivision 3, selected by the commissioner of 
121.25  education to determine the impact, if any, of waiving specific 
121.26  special education requirements listed in subdivision 3 on the 
121.27  quality and cost-effectiveness of the instructional services and 
121.28  educational outcomes provided to eligible students by the 
121.29  project participant. 
121.30     Subd. 2.  [ELIGIBILITY; APPLICATIONS.] The commissioner 
121.31  must transmit information about the pilot project and make 
121.32  application forms available to interested school districts or 
121.33  cooperative units.  Applications must be submitted to the 
121.34  commissioner by July 1, 2003.  An applicant must identify the 
121.35  specific special education requirements listed in subdivision 3 
121.36  for which the applicant seeks a waiver and indicate how the 
122.1   applicant proposes to modify the activities and procedures 
122.2   affected by the waiver.  The commissioner must approve the 
122.3   applications by August 1, 2003. 
122.4      Subd. 3.  [WAIVERS.] The following state special education 
122.5   requirements are waived for the 2003-2004, 2004-2005, and 
122.6   2005-2006 school years for independent school district No. 535, 
122.7   Rochester, and the other school districts or cooperative units 
122.8   participating in this pilot project: 
122.9      (1) Minnesota Statutes, section 125A.56, governing 
122.10  prereferral interventions; 
122.11     (2) Minnesota Statutes, section 125A.08, paragraph (a), 
122.12  clause (1), governing transitional services for students when 
122.13  reaching age 14 or grade 9, who transition from secondary 
122.14  services to postsecondary education and training, employment, 
122.15  community participation, recreation and leisure, and home 
122.16  living; 
122.17     (3) Minnesota Statutes, section 125A.22, governing 
122.18  community transition interagency committees; and 
122.19     (4) Minnesota Statutes, section 125A.023, governing 
122.20  coordinated interagency services but only affecting eligible 
122.21  children with disabilities age seven or older. 
122.22     Subd. 4.  [STUDENTS' RIGHTS.] Eligible students enrolled in 
122.23  a district or receiving special instruction and services through 
122.24  a cooperative unit that is participating in this pilot project 
122.25  remain entitled to the procedural protections provided under 
122.26  federal law in any matter that affects the students' 
122.27  identification, evaluation, and placement or change in 
122.28  placement, or protections provided under state law in dismissal 
122.29  proceedings that may result in students' suspension, exclusion, 
122.30  or expulsion.  Project participants must ensure that students' 
122.31  civil rights are protected, provide equal educational 
122.32  opportunities, and prohibit discrimination.  Failure to comply 
122.33  with this subdivision will at least cause a district or 
122.34  cooperative unit to become ineligible to participate in the 
122.35  pilot project. 
122.36     Subd. 5.  [TECHNICAL ASSISTANCE.] The commissioner must 
123.1   provide project participants, upon request, assistance in 
123.2   developing and implementing a valid and uniform procedure under 
123.3   subdivision 6 to evaluate the participants' experience. 
123.4      Subd. 6.  [EVALUATION; REPORT.] All participating school 
123.5   districts and cooperative units must evaluate the impact, if 
123.6   any, of waiving specific special education requirements listed 
123.7   in subdivision 3 on the quality and cost-effectiveness of the 
123.8   instructional services and educational outcomes provided to 
123.9   eligible students by the project participant.  Project 
123.10  participants must focus the evaluation on the overall efficacy 
123.11  of modifying the activities and procedures affected by the 
123.12  waiver.  The evaluation must include a mechanism for documenting 
123.13  parents' response to the pilot project.  Project participants 
123.14  must submit to the commissioner a progress report by September 
123.15  1, 2004, and a final report by November 1, 2005.  The 
123.16  commissioner must compile and present the results of the reports 
123.17  to the legislature by February 1, 2006, and recommend 
123.18  appropriate amendments to the statutory requirements listed in 
123.19  subdivision 3. 
123.20     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
123.21  following final enactment. 
123.22     Sec. 19.  [DEPARTMENT RESPONSIBILITY.] 
123.23     By January 1, 2004, the commissioner of education must 
123.24  adopt rules that: 
123.25     (1) establish criteria for selecting hearing officers, the 
123.26  standards of conduct to which a hearing officer must adhere, and 
123.27  a process to evaluate the hearing system; 
123.28     (2) ensure that appropriately trained and knowledgeable 
123.29  persons conduct due process hearings in compliance with federal 
123.30  law; and 
123.31     (3) create standards for expedited due process hearings 
123.32  under federal law. 
123.33     By March 1, 2004, the commissioner of education must 
123.34  develop and make available a notice for participants in 
123.35  state-provided dispute resolution processes that informs 
123.36  participants of their rights concerning dispute resolution. 
124.1      Sec. 20.  [APPROPRIATIONS.] 
124.2      Subdivision 1.  [DEPARTMENT OF EDUCATION.] The sums 
124.3   indicated in this section are appropriated from the general fund 
124.4   to the department of education for the fiscal years designated. 
124.5      Subd. 2.  [SPECIAL EDUCATION; REGULAR.] For special 
124.6   education aid under Minnesota Statutes, section 125A.75: 
124.7        $499,172,000   .....     2004 
124.8        $529,504,000   .....     2005 
124.9      The 2004 appropriation includes $90,577,000 for 2003 and 
124.10  $408,595,000 for 2004. 
124.11     The 2005 appropriation includes $122,047,000 for 2004 and 
124.12  $407,457,000 for 2005. 
124.13     Subd. 3.  [SPECIAL EDUCATION CROSS-SUBSIDY REDUCTION 
124.14  AID.] For special education cross-subsidy reduction aid under 
124.15  section 17: 
124.16       $ 5,000,000    .....     2004 
124.17       $15,000,000    .....     2005 
124.18     This is a onetime appropriation. 
124.19     Subd. 4.  [AID FOR CHILDREN WITH DISABILITIES.] For aid 
124.20  under Minnesota Statutes, section 125A.75, subdivision 3, for 
124.21  children with disabilities placed in residential facilities 
124.22  within the district boundaries for whom no district of residence 
124.23  can be determined: 
124.24       $2,177,000     .....     2004 
124.25       $2,244,000     .....     2005 
124.26     If the appropriation for either year is insufficient, the 
124.27  appropriation for the other year is available.  
124.28     Subd. 5.  [TRAVEL FOR HOME-BASED SERVICES.] For aid for 
124.29  teacher travel for home-based services under Minnesota Statutes, 
124.30  section 125A.75, subdivision 1: 
124.31       $213,000       .....     2004 
124.32       $260,000       .....     2005 
124.33     The 2004 appropriation includes $34,000 for 2003 and 
124.34  $179,000 for 2004. 
124.35     The 2005 appropriation includes $53,000 for 2004 and 
124.36  $207,000 for 2005. 
125.1      Subd. 6.  [SPECIAL EDUCATION; EXCESS COSTS.] For excess 
125.2   cost aid under Minnesota Statutes, section 125A.79, subdivision 
125.3   7: 
125.4        $90,699,000    .....     2004 
125.5        $92,950,000    .....     2005 
125.6      The 2004 appropriation includes $41,754,000 for 2003 and 
125.7   $48,945,000 for 2004. 
125.8      The 2005 appropriation includes $43,122,000 for 2004 and 
125.9   $49,828,000 for 2005.  
125.10     Subd. 7.  [LITIGATION COSTS FOR SPECIAL EDUCATION.] For 
125.11  paying the costs a district incurs under Minnesota Statutes, 
125.12  section 125A.75, subdivision 8: 
125.13       $346,000       .....     2004 
125.14       $356,000       .....     2005 
125.15     Subd. 8.  [TRANSITION FOR DISABLED STUDENTS.] For aid for 
125.16  transition programs for children with disabilities under 
125.17  Minnesota Statutes, section 124D.454: 
125.18       $8,359,000     .....     2004 
125.19       $8,867,000     .....     2005 
125.20     The 2004 appropriation includes $1,516,000 for 2003 and 
125.21  $6,843,000 for 2004.  
125.22     The 2005 appropriation includes $2,043,000 for 2004 and 
125.23  $6,824,000 for 2005.  
125.24     Subd. 9.  [COURT-PLACED SPECIAL EDUCATION REVENUE.] For 
125.25  reimbursing serving school districts for unreimbursed eligible 
125.26  expenditures attributable to children placed in the serving 
125.27  school district by court action under Minnesota Statutes, 
125.28  section 125A.79, subdivision 4: 
125.29       $152,000       .....     2004 
125.30       $160,000       .....     2005 
125.31     Subd. 10.  [OUT-OF-STATE TUITION SPECIAL EDUCATION.] For 
125.32  special education out-of-state tuition according to Minnesota 
125.33  Statutes, section 125A.79, subdivision 8: 
125.34       $250,000       .....     2004 
125.35       $250,000       .....     2005 
125.36     Sec. 21.  [REPEALER.] 
126.1      Minnesota Statutes 2002, sections 125A.023, subdivision 5; 
126.2   125A.09; 125A.47; and 125A.79, subdivision 2, are repealed. 
126.3                              ARTICLE 4
126.4                      FACILITIES AND TECHNOLOGY
126.5      Section 1.  Minnesota Statutes 2002, section 123B.51, 
126.6   subdivision 3, is amended to read: 
126.7      Subd. 3.  [LEASE ROOMS OR BUILDINGS REAL PROPERTY.] When 
126.8   necessary, the board may lease rooms or buildings real property 
126.9   for school purposes. 
126.10     Sec. 2.  Minnesota Statutes 2002, section 123B.51, 
126.11  subdivision 4, is amended to read: 
126.12     Subd. 4.  [LEASE FOR NONSCHOOL PURPOSE.] (a) The board may 
126.13  lease to any person, business, or organization a schoolhouse 
126.14  real property that is not needed for school purposes, or part of 
126.15  a schoolhouse the property that is not needed for school 
126.16  purposes if the board determines that leasing part of a 
126.17  schoolhouse the property does not interfere with the educational 
126.18  programs taking place in the rest of the building on the 
126.19  property.  The board may charge and collect reasonable 
126.20  consideration for the lease and may determine the terms and 
126.21  conditions of the lease. 
126.22     (b) In districts with outstanding bonds, the net proceeds 
126.23  of the lease must be first deposited in the debt retirement fund 
126.24  of the district in an amount sufficient to meet when due that 
126.25  percentage of the principal and interest payments for 
126.26  outstanding bonds that is ascribable to the payment of expenses 
126.27  necessary and incidental to the construction or purchase of the 
126.28  particular building or property that is leased.  Any remaining 
126.29  net proceeds in these districts may be deposited in either the 
126.30  debt redemption fund or operating capital expenditure 
126.31  fund account.  All net proceeds of the lease in districts 
126.32  without outstanding bonds shall be deposited in the operating 
126.33  capital expenditure fund account of the district. 
126.34     (c) The board may make capital improvements, including 
126.35  fixtures, to a schoolhouse or a portion thereof to the real 
126.36  property, not exceeding in cost the replacement value of 
127.1   the schoolhouse property, to facilitate its rental, and the 
127.2   lease of an the improved schoolhouse property, or part of it, 
127.3   shall provide for rentals which will recover the cost of the 
127.4   improvements over the initial term of the lease.  
127.5   Notwithstanding paragraph (b), the portion of the rentals 
127.6   representing the cost of the improvements shall be deposited in 
127.7   the operating capital expenditure fund account of the district 
127.8   and the balance of the rentals shall be used as provided in 
127.9   paragraph (b).  
127.10     Sec. 3.  Minnesota Statutes 2002, section 123B.52, is 
127.11  amended by adding a subdivision to read: 
127.12     Subd. 1a.  [CONSTRUCTION CONTRACTS.] In entering into a 
127.13  contract for, or in calling for bids for, the construction or 
127.14  repair of a facility, a board may not require that any 
127.15  contractor or subcontractor that is not signatory to an 
127.16  agreement with a labor organization at the time it makes a bid 
127.17  or is awarded a contract, do any of the following as a condition 
127.18  of performing work on the construction or repair project: 
127.19     (1) enter into or agree to adhere to or otherwise observe 
127.20  the wage, benefit, or economic terms of, or incur any economic 
127.21  detriment pursuant to, any agreement with any labor organization 
127.22  in connection with the public improvement; or 
127.23     (2) enter into any agreement that requires the employees of 
127.24  that contractor or subcontractor to do either of the following 
127.25  as a condition of employment or continued employment: 
127.26     (i) become members of or become affiliated with a labor 
127.27  organization; or 
127.28     (ii) pay dues or fees to a labor organization. 
127.29     Sec. 4.  Minnesota Statutes 2002, section 123B.53, 
127.30  subdivision 4, is amended to read: 
127.31     Subd. 4.  [DEBT SERVICE EQUALIZATION REVENUE.] (a) The debt 
127.32  service equalization revenue of a district equals the sum of the 
127.33  first tier debt service equalization revenue and the second tier 
127.34  debt service equalization revenue. 
127.35     (b) The first tier debt service equalization revenue of a 
127.36  district equals the greater of zero or the eligible debt service 
128.1   revenue minus the amount raised by a levy of 15 percent times 
128.2   the adjusted net tax capacity of the district minus the second 
128.3   tier debt service equalization revenue of the district. 
128.4      (c) The second tier debt service equalization revenue of a 
128.5   district equals the greater of zero or the eligible debt service 
128.6   revenue, excluding alternative facilities levies under section 
128.7   123B.59, subdivision 5, minus the amount raised by a levy of 25 
128.8   percent times the adjusted net tax capacity of the district. 
128.9      <b>[EFFECTIVE DATE.]</b> This section is effective for revenue for 
128.10  fiscal year 2005. 
128.11     Sec. 5.  Minnesota Statutes 2002, section 123B.57, 
128.12  subdivision 1, is amended to read: 
128.13     Subdivision 1.  [HEALTH AND SAFETY PROGRAM.] (a) To receive 
128.14  health and safety revenue for any fiscal year a district must 
128.15  submit to the commissioner an application for aid and levy by 
128.16  the date determined by the commissioner.  The application may be 
128.17  for hazardous substance removal, fire and life safety code 
128.18  repairs, labor and industry regulated facility and equipment 
128.19  violations, and health, safety, and environmental management, 
128.20  including indoor air quality management.  The application must 
128.21  include a health and safety program adopted by the school 
128.22  district board.  The program must include the estimated cost, 
128.23  per building, of the program by fiscal year.  Upon approval 
128.24  through the adoption of a resolution by each of an intermediate 
128.25  district's member school district boards and the approval of the 
128.26  department of children, families, and learning education, a 
128.27  school district may include its proportionate share of the costs 
128.28  of health and safety projects for an intermediate district in 
128.29  its application. 
128.30     (b) Health and safety projects with an estimated cost of 
128.31  $500,000 or more per site, approved after February 1, 2003, are 
128.32  not eligible for health and safety revenue.  Health and safety 
128.33  projects with an estimated cost of $500,000 or more per site, 
128.34  approved after February 1, 2003, that meet all other 
128.35  requirements for health and safety funding, are eligible for 
128.36  alternative facilities bonding and levy revenue according to 
129.1   section 123B.59.  A school board shall not separate portions of 
129.2   a single project into components to qualify for health and 
129.3   safety revenue, and shall not combine unrelated projects into a 
129.4   single project to qualify for alternative facilities bonding and 
129.5   levy revenue. 
129.6      <b>[EFFECTIVE DATE.]</b> This section is effective the day 
129.7   following final enactment and applies to projects approved after 
129.8   February 1, 2003, for taxes payable in 2004 and later. 
129.9      Sec. 6.  Minnesota Statutes 2002, section 123B.57, 
129.10  subdivision 4, is amended to read: 
129.11     Subd. 4.  [HEALTH AND SAFETY LEVY.] To receive health and 
129.12  safety revenue, a district may levy an amount equal to the 
129.13  district's health and safety revenue as defined in subdivision 3 
129.14  multiplied by the lesser of one, or the ratio of the quotient 
129.15  derived by dividing the adjusted net tax capacity of the 
129.16  district for the year preceding the year the levy is certified 
129.17  by the adjusted marginal cost pupil units in the district for 
129.18  the school year to which the levy is attributable, 
129.19  to $3,956 $2,935. 
129.20     Sec. 7.  Minnesota Statutes 2002, section 123B.57, 
129.21  subdivision 6, is amended to read: 
129.22     Subd. 6.  [USES OF HEALTH AND SAFETY REVENUE.] (a) Health 
129.23  and safety revenue may be used only for approved expenditures 
129.24  necessary to correct fire and life safety hazards, life safety 
129.25  hazards, or for the removal or encapsulation of asbestos from 
129.26  school buildings or property owned or being acquired by the 
129.27  district, asbestos-related repairs, cleanup and disposal of 
129.28  polychlorinated biphenyls found in school buildings or property 
129.29  owned or being acquired by the district, or the cleanup, 
129.30  removal, disposal, and repairs related to storing heating fuel 
129.31  or transportation fuels such as alcohol, gasoline, fuel oil, and 
129.32  special fuel, as defined in section 296A.01, labor and 
129.33  industry Minnesota occupational safety and health administration 
129.34  regulated facility and equipment hazards, indoor air quality 
129.35  mold abatement, upgrades or replacement of mechanical 
129.36  ventilation systems to meet American Society of Heating, 
130.1   Refrigerating and Air Conditioning Engineers standards and state 
130.2   mechanical code, department of health food code and swimming 
130.3   pool hazards excluding depth correction, and health, safety, and 
130.4   environmental management.  Health and safety revenue must not be 
130.5   used to finance a lease purchase agreement, installment purchase 
130.6   agreement, or other deferred payments agreement.  Health and 
130.7   safety revenue must not be used for the construction of new 
130.8   facilities or the purchase of portable classrooms, for interest 
130.9   or other financing expenses, or for energy efficiency projects 
130.10  under section 123B.65.  The revenue may not be used for a 
130.11  building or property or part of a building or property used for 
130.12  post-secondary instruction or administration or for a purpose 
130.13  unrelated to elementary and secondary education. 
130.14     (b) Notwithstanding paragraph (a), health and safety 
130.15  revenue must not be used for replacement of building materials 
130.16  or facilities including roof, walls, windows, internal fixtures 
130.17  and flooring, nonhealth and safety costs associated with 
130.18  demolition of facilities, structural repair or replacement of 
130.19  facilities due to unsafe conditions, violence prevention and 
130.20  facility security, ergonomics, building and heating, ventilating 
130.21  and air conditioning supplies, maintenance, cleaning, testing, 
130.22  and calibration activities.  All assessments, investigations, 
130.23  inventories, and support equipment not leading to the 
130.24  engineering or construction of a project shall be included in 
130.25  the health, safety, and environmental management costs in 
130.26  subdivision 8, paragraph (a). 
130.27     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
130.28  following final enactment and applies to projects approved after 
130.29  February 1, 2003, for taxes payable in 2004 and later. 
130.30     Sec. 8.  Minnesota Statutes 2002, section 123B.59, 
130.31  subdivision 1, is amended to read: 
130.32     Subdivision 1.  [TO QUALIFY.] (a) An independent or special 
130.33  school district qualifies to participate in the alternative 
130.34  facilities bonding and levy program if the district has: 
130.35     (1) more than 66 students per grade; 
130.36     (2) over 1,850,000 square feet of space and the average age 
131.1   of building space is 15 years or older or over 1,500,000 square 
131.2   feet and the average age of building space is 35 years or older; 
131.3      (3) insufficient funds from projected health and safety 
131.4   revenue and capital facilities revenue to meet the requirements 
131.5   for deferred maintenance, to make accessibility improvements, or 
131.6   to make fire, safety, or health repairs; and 
131.7      (4) a ten-year facility plan approved by the commissioner 
131.8   according to subdivision 2. 
131.9      (b) An independent or special school district not eligible 
131.10  to participate in the alternative facilities bonding and levy 
131.11  program under paragraph (a) qualifies for limited participation 
131.12  in the program if the district has: 
131.13     (1) one or more health and safety projects with an 
131.14  estimated cost of $500,000 or more per site that would qualify 
131.15  for health and safety revenue except for the project size 
131.16  limitation in section 123B.57, subdivision 1, paragraph (b); and 
131.17     (2) insufficient funds from capital facilities revenue to 
131.18  fund those projects. 
131.19     <b>[EFFECTIVE DATE.]</b> This section is effective for revenue for 
131.20  fiscal year 2005. 
131.21     Sec. 9.  Minnesota Statutes 2002, section 123B.59, 
131.22  subdivision 2, is amended to read: 
131.23     Subd. 2.  [TEN-YEAR FACILITY PLAN.] (a) A district 
131.24  qualifying district under subdivision 1, paragraph (a), must 
131.25  have a ten-year facility plan approved by the commissioner that 
131.26  includes an inventory of projects and costs that would be 
131.27  eligible for: 
131.28     (1) health and safety revenue, without restriction as to 
131.29  project size; 
131.30     (2) disabled access levy; and 
131.31     (3) deferred capital expenditures and maintenance projects 
131.32  necessary to prevent further erosion of facilities. 
131.33     (b) A district qualifying under subdivision 1, paragraph 
131.34  (b), must have a five-year plan approved by the commissioner 
131.35  that includes an inventory of projects and costs for health and 
131.36  safety projects with an estimated cost of $500,000 or more per 
132.1   site that would qualify for health and safety revenue except for 
132.2   the project size limitation in section 123B.57, subdivision 1, 
132.3   paragraph (b). 
132.4      (c) The school district must: 
132.5      (1) annually update the plan plans; 
132.6      (2) biennially submit a facility maintenance plan; and 
132.7      (3) indicate whether the district will issue bonds to 
132.8   finance the plan or levy for the costs. 
132.9      <b>[EFFECTIVE DATE.]</b> This section is effective for revenue for 
132.10  fiscal year 2005. 
132.11     Sec. 10.  Minnesota Statutes 2002, section 123B.59, 
132.12  subdivision 3, is amended to read: 
132.13     Subd. 3.  [BOND AUTHORIZATION.] (a) A school district, upon 
132.14  approval of its board and the commissioner, may issue general 
132.15  obligation bonds under this section to finance approved 
132.16  facilities plans approved by its board and the commissioner.  
132.17  Chapter 475, except sections 475.58 and 475.59, must be complied 
132.18  with.  The district may levy under subdivision 5 for the debt 
132.19  service revenue.  The authority to issue bonds under this 
132.20  section is in addition to any bonding authority authorized by 
132.21  this chapter, or other law.  The amount of bonding authority 
132.22  authorized under this section must be disregarded in calculating 
132.23  the bonding or net debt limits of this chapter, or any other law 
132.24  other than section 475.53, subdivision 4. 
132.25     (b) Before a district issues bonds under this subdivision, 
132.26  it must publish notice of the intended projects, the amount of 
132.27  the bond issue, and the total amount of district indebtedness. 
132.28     (c) A bond issue tentatively authorized by the board under 
132.29  this subdivision becomes finally authorized unless a petition 
132.30  signed by more than 15 percent of the registered voters of the 
132.31  district is filed with the school board within 30 days of the 
132.32  board's adoption of a resolution stating the board's intention 
132.33  to issue bonds.  The percentage is to be determined with 
132.34  reference to the number of registered voters in the district on 
132.35  the last day before the petition is filed with the board.  The 
132.36  petition must call for a referendum on the question of whether 
133.1   to issue the bonds for the projects under this section.  The 
133.2   approval of 50 percent plus one of those voting on the question 
133.3   is required to pass a referendum authorized by this section. 
133.4      <b>[EFFECTIVE DATE.]</b> This section is effective the day 
133.5   following final enactment and applies to bonds issued after 
133.6   April 1, 2003, for taxes payable in 2004 and later. 
133.7      Sec. 11.  Minnesota Statutes 2002, section 123B.59, is 
133.8   amended by adding a subdivision to read: 
133.9      Subd. 3a.  [LEVY AUTHORIZATION.] (a) A school district may 
133.10  levy under this section to finance the portion of facilities 
133.11  plans approved by its board and the commissioner that are not 
133.12  financed through bond issues according to subdivision 3. 
133.13     (b) Before a district levies under this subdivision, it 
133.14  must publish notice of the intended projects, including the 
133.15  total estimated project cost. 
133.16     (c) A levy tentatively authorized by the board under this 
133.17  subdivision becomes finally authorized unless a petition signed 
133.18  by more than 15 percent of the registered voters of the district 
133.19  is filed with the school board within 30 days of the board's 
133.20  adoption of a resolution stating the board's intention to levy.  
133.21  The percentage is to be determined with reference to the number 
133.22  of registered voters in the district on the last day before the 
133.23  petition is filed with the board.  The petition must call for a 
133.24  referendum on the question of whether to levy for the projects 
133.25  under this section.  The approval of 50 percent plus one of 
133.26  those voting on the question is required to pass a referendum 
133.27  authorized by this section.  The referendum must be held on a 
133.28  date set by the board.  The ballot must provide a general 
133.29  description of the proposed projects and state the estimated 
133.30  total cost of the projects, the specific number of years, not to 
133.31  exceed ten, for which the referendum authorization applies, the 
133.32  maximum amount of the levy for each year, and the estimated tax 
133.33  rate as a percentage of net tax capacity for the amount 
133.34  specified for the first year and for the maximum amount 
133.35  specified in the schedule.  The ballot must contain a textual 
133.36  portion with the information required in this subdivision and a 
134.1   question stating substantially the following: 
134.2      "Shall the alternative facilities levy proposed by the 
134.3   board of ............ School District No. ............ be 
134.4   approved?" 
134.5      If approved, the amount stated for each year may be 
134.6   certified for the number of years approved.  The district must 
134.7   notify the commissioner of the results of the referendum. 
134.8      <b>[EFFECTIVE DATE.]</b> This section is effective the day 
134.9   following final enactment and applies to levies for taxes 
134.10  payable in 2004 and later. 
134.11     Sec. 12.  Minnesota Statutes 2002, section 123B.59, 
134.12  subdivision 5, is amended to read: 
134.13     Subd. 5.  [LEVY AUTHORIZED.] A district, after local board 
134.14  approval, may levy for costs related to an approved facility 
134.15  plan as follows:  
134.16     (a) if the district has indicated to the commissioner that 
134.17  bonds will be issued, the district may levy for the principal 
134.18  and interest payments on outstanding bonds issued according to 
134.19  subdivision 3 after reduction for any alternative facilities aid 
134.20  receivable under subdivision 6; or 
134.21     (b) if the district has indicated to the commissioner that 
134.22  the plan will be funded through levy, the district may levy 
134.23  according to the schedule approved in the plan after reduction 
134.24  for any alternative facilities aid receivable under subdivision 
134.25  6 3a. 
134.26     <b>[EFFECTIVE DATE.]</b> This section is effective for taxes 
134.27  payable in 2004. 
134.28     Sec. 13.  Minnesota Statutes 2002, section 123B.63, 
134.29  subdivision 1, is amended to read: 
134.30     Subdivision 1.  [CREATION OF A DOWN PAYMENT CAPITAL PROJECT 
134.31  REFERENDUM ACCOUNT.] A district may create a down payment 
134.32  capital project referendum account as a separate account in 
134.33  its general fund or its building construction fund.  All 
134.34  proceeds from the down payment capital project levy must be 
134.35  deposited in the capital expenditure fund and transferred to 
134.36  this account project referendum account in its general fund.  
135.1   The portion of the proceeds to be used for building construction 
135.2   must be transferred to the capital project referendum account in 
135.3   its building construction fund.  Interest income attributable to 
135.4   the down payment capital project referendum account must be 
135.5   credited to the account. 
135.6      Sec. 14.  Minnesota Statutes 2002, section 123B.63, 
135.7   subdivision 2, is amended to read: 
135.8      Subd. 2.  [USES OF THE ACCOUNT.] Money in the down payment 
135.9   capital project referendum account must be used as a down 
135.10  payment for the future costs of acquisition and betterment for a 
135.11  project that has been reviewed under section 123B.71 and has 
135.12  been approved according to subdivision 3. 
135.13     Sec. 15.  Minnesota Statutes 2002, section 123B.63, 
135.14  subdivision 3, is amended to read: 
135.15     Subd. 3.  [FACILITIES DOWN PAYMENT CAPITAL PROJECT LEVY 
135.16  REFERENDUM.] A district may levy the local tax rate approved by 
135.17  a majority of the electors voting on the question to provide 
135.18  funds for a down payment for an approved project.  The election 
135.19  must take place no more than five years before the estimated 
135.20  date of commencement of the project.  The referendum must be 
135.21  held on a date set by the board.  A referendum for a project not 
135.22  receiving a positive review and comment by the commissioner 
135.23  under section 123B.71 must be approved by at least 60 percent of 
135.24  the voters at the election.  The referendum may be called by the 
135.25  school board and may be held: 
135.26     (1) separately, before an election for the issuance of 
135.27  obligations for the project under chapter 475; or 
135.28     (2) in conjunction with an election for the issuance of 
135.29  obligations for the project under chapter 475; or 
135.30     (3) notwithstanding section 475.59, as a conjunctive 
135.31  question authorizing both the down payment capital project levy 
135.32  and the issuance of obligations for the project under chapter 
135.33  475.  Any obligations authorized for a project may be issued 
135.34  within five years of the date of the election. 
135.35     The ballot must provide a general description of the 
135.36  proposed project, state the estimated total cost of the project, 
136.1   state whether the project has received a positive or negative 
136.2   review and comment from the commissioner, state the maximum 
136.3   amount of the down payment capital project levy as a percentage 
136.4   of net tax capacity, state the amount that will be raised by 
136.5   that local tax rate in the first year it is to be levied, and 
136.6   state the maximum number of years that the levy authorization 
136.7   will apply. 
136.8      The ballot must contain a textual portion with the 
136.9   information required in this section and a question stating 
136.10  substantially the following: 
136.11     "Shall the down payment capital project levy proposed by 
136.12  the board of .......... School District No. .......... be 
136.13  approved?" 
136.14     If approved, the amount provided by the approved local tax 
136.15  rate applied to the net tax capacity for the year preceding the 
136.16  year the levy is certified may be certified for the number of 
136.17  years approved. 
136.18     In the event a conjunctive question proposes to authorize 
136.19  both the down payment capital project levy and the issuance of 
136.20  obligations for the project, appropriate language authorizing 
136.21  the issuance of obligations must also be included in the 
136.22  question.  
136.23     The district must notify the commissioner of the results of 
136.24  the referendum. 
136.25     Sec. 16.  Minnesota Statutes 2002, section 123B.63, 
136.26  subdivision 4, is amended to read: 
136.27     Subd. 4.  [EXCESS BUILDING CONSTRUCTION FUND LEVY 
136.28  PROCEEDS.] Any funds remaining in the down payment capital 
136.29  project referendum account that are not applied to the payment 
136.30  of the costs of the approved project before its final completion 
136.31  must be transferred to the district's debt redemption fund.  
136.32     Sec. 17.  Minnesota Statutes 2002, section 125B.21, is 
136.33  amended to read: 
136.34     125B.21 [MINNESOTA EDUCATION TELECOMMUNICATIONS COUNCIL.] 
136.35     Subdivision 1.  [STATE COUNCIL MEMBERSHIP.] The membership 
136.36  of the Minnesota education telecommunications council 
137.1   established in Laws 1993, First Special Session chapter 2, is 
137.2   expanded to include representatives of elementary and secondary 
137.3   education.  The membership shall consist of three 
137.4   representatives from the University of Minnesota; three 
137.5   representatives of the board of trustees for Minnesota state 
137.6   colleges and universities; one representative of the higher 
137.7   education services offices; one representative appointed by the 
137.8   private college council; one representative selected by the 
137.9   commissioner of administration; eight representatives selected 
137.10  by the commissioner of children, families, and learning 
137.11  education, at least one of which must come from each of the six 
137.12  higher education telecommunication regions; a representative 
137.13  from the office of technology; two members each from the senate 
137.14  and the house of representatives selected by the subcommittee on 
137.15  committees of the committee on rules and administration of the 
137.16  senate and the speaker of the house, one member from each body 
137.17  must be a member of the minority party; and three 
137.18  representatives of libraries, one representing regional public 
137.19  libraries, one representing multitype libraries, and one 
137.20  representing community libraries, selected by the governor; and 
137.21  two members, one selected from and representing the higher 
137.22  education regional coordinators and one selected from and 
137.23  representing the kindergarten through grade 12 cluster regions.  
137.24  The council shall serve as a forum to establish and advocate for 
137.25  a statewide vision and plans for the use of distance learning 
137.26  technologies, including: 
137.27     (1) the coordination and collaboration of distance learning 
137.28  opportunities; 
137.29     (2) the implementation of the use of distance learning 
137.30  technologies; 
137.31     (3) the collaboration of distance learning users; 
137.32     (4) the implementation of educational policy relating to 
137.33  telecommunications; 
137.34     (5) the exchange of ideas; 
137.35     (6) the communications with state government and related 
137.36  agencies and entities; 
138.1      (7) the coordination of networks for post-secondary 
138.2   campuses, kindergarten through grade 12 education, and regional 
138.3   and community libraries; and 
138.4      (8) the promotion of consistency of the operation of the 
138.5   learning network with standards of an open system architecture. 
138.6      The council expires June 30, 2004. 
138.7      Sec. 18.  Minnesota Statutes 2002, section 126C.40, 
138.8   subdivision 1, is amended to read: 
138.9      Subdivision 1.  [TO LEASE BUILDING OR LAND.] (a) When an 
138.10  independent or a special school district or a group of 
138.11  independent or special school districts finds it economically 
138.12  advantageous to rent or lease a building or land for any 
138.13  instructional purposes or for school storage or furniture 
138.14  repair, and it determines that the operating capital revenue 
138.15  authorized under section 126C.10, subdivision 13, is 
138.16  insufficient for this purpose, it may apply to the commissioner 
138.17  for permission to make an additional capital expenditure levy 
138.18  for this purpose.  An application for permission to levy under 
138.19  this subdivision must contain financial justification for the 
138.20  proposed levy, the terms and conditions of the proposed lease, 
138.21  and a description of the space to be leased and its proposed use.
138.22     (b) The criteria for approval of applications to levy under 
138.23  this subdivision must include:  the reasonableness of the price, 
138.24  the appropriateness of the space to the proposed activity, the 
138.25  feasibility of transporting pupils to the leased building or 
138.26  land, conformity of the lease to the laws and rules of the state 
138.27  of Minnesota, and the appropriateness of the proposed lease to 
138.28  the space needs and the financial condition of the district.  
138.29  The commissioner must not authorize a levy under this 
138.30  subdivision in an amount greater than 90 percent of the cost to 
138.31  the district of renting or leasing a building or land for 
138.32  approved purposes.  The proceeds of this levy must not be used 
138.33  for custodial or other maintenance services.  A district may not 
138.34  levy under this subdivision for the purpose of leasing or 
138.35  renting a district-owned building or site to itself. 
138.36     (c) For agreements finalized after July 1, 1997, a district 
139.1   may not levy under this subdivision for the purpose of leasing:  
139.2   (1) a newly constructed building used primarily for regular 
139.3   kindergarten, elementary, or secondary instruction; or (2) a 
139.4   newly constructed building addition or additions used primarily 
139.5   for regular kindergarten, elementary, or secondary instruction 
139.6   that contains more than 20 percent of the square footage of the 
139.7   previously existing building. 
139.8      (d) Notwithstanding paragraph (b), a district may levy 
139.9   under this subdivision for the purpose of leasing or renting a 
139.10  district-owned building or site to itself only if the amount is 
139.11  needed by the district to make payments required by a lease 
139.12  purchase agreement, installment purchase agreement, or other 
139.13  deferred payments agreement authorized by law, and the levy 
139.14  meets the requirements of paragraph (c).  A levy authorized for 
139.15  a district by the commissioner under this paragraph may be in 
139.16  the amount needed by the district to make payments required by a 
139.17  lease purchase agreement, installment purchase agreement, or 
139.18  other deferred payments agreement authorized by law, provided 
139.19  that any agreement include a provision giving the school 
139.20  districts the right to terminate the agreement annually without 
139.21  penalty. 
139.22     (e) The total levy under this subdivision for a district 
139.23  for any year must not exceed $100 $90 times the resident pupil 
139.24  units for the fiscal year to which the levy is attributable. 
139.25     (f) For agreements for which a review and comment have been 
139.26  submitted to the department of children, families, and 
139.27  learning education after April 1, 1998, the term "instructional 
139.28  purpose" as used in this subdivision excludes expenditures on 
139.29  stadiums. 
139.30     (g) The commissioner of children, families, and 
139.31  learning education may authorize a school district to exceed the 
139.32  limit in paragraph (e) if the school district petitions the 
139.33  commissioner for approval.  The commissioner shall grant 
139.34  approval to a school district to exceed the limit in paragraph 
139.35  (e) for not more than five years if the district meets the 
139.36  following criteria: 
140.1      (1) the school district has been experiencing pupil 
140.2   enrollment growth in the preceding five years; 
140.3      (2) the purpose of the increased levy is in the long-term 
140.4   public interest; 
140.5      (3) the purpose of the increased levy promotes colocation 
140.6   of government services; and 
140.7      (4) the purpose of the increased levy is in the long-term 
140.8   interest of the district by avoiding over construction of school 
140.9   facilities. 
140.10     (h) A school district that is a member of an intermediate 
140.11  school district may include in its authority under this 
140.12  section 90 percent of the costs associated with leases of 
140.13  administrative and classroom space for intermediate school 
140.14  district programs.  This authority must not exceed $25 $22.50 
140.15  times the adjusted marginal cost pupil units of the member 
140.16  districts.  This authority is in addition to any other authority 
140.17  authorized under this section. 
140.18     (i) In addition to the allowable capital levies in 
140.19  paragraph (a), a district that is a member of the "Technology 
140.20  and Information Education Systems" data processing joint board, 
140.21  that finds it economically advantageous to enter into a lease 
140.22  purchase agreement for a building for a group of school 
140.23  districts or special school districts for staff development 
140.24  purposes, may levy for its portion of lease costs attributed to 
140.25  the district within the total levy limit in paragraph (e). 
140.26     <b>[EFFECTIVE DATE.]</b> This section is effective for taxes 
140.27  payable in 2004. 
140.28     Sec. 19.  Minnesota Statutes 2002, section 126C.63, 
140.29  subdivision 5, is amended to read: 
140.30     Subd. 5.  [LEVY.] "Levy" means a district's net debt 
140.31  service levy after the reduction of debt service equalization 
140.32  aid under section 123B.53, subdivision 6.  For taxes payable in 
140.33  1994 2003 and later, each district's maximum effort debt service 
140.34  levy for purposes of subdivision 8, must be reduced by an equal 
140.35  number of percentage points if the commissioner of finance 
140.36  determines that the levy reduction will not result in 
141.1   a statewide property tax payment from the general fund in the 
141.2   state treasury according to section 16A.641, as would be 
141.3   required under Minnesota Statutes 1992, section 124.46 126C.72, 
141.4   subdivision 3.  A district's levy that is adjusted under this 
141.5   section must not be reduced below 22.3 30.1 percent of the 
141.6   district's adjusted net tax capacity. 
141.7      Sec. 20.  Minnesota Statutes 2002, section 126C.63, 
141.8   subdivision 8, is amended to read: 
141.9      Subd. 8.  [MAXIMUM EFFORT DEBT SERVICE LEVY.] (a) "Maximum 
141.10  effort debt service levy" means the lesser of: 
141.11     (1) a levy in whichever of the following amounts is 
141.12  applicable: 
141.13     (a) (i) in any district receiving a debt service loan for a 
141.14  debt service levy payable in 2002 and thereafter, or granted a 
141.15  capital loan after January 1, 2001 2002, a levy in total dollar 
141.16  amount computed at a rate of 30 40 percent of adjusted net tax 
141.17  capacity for taxes payable in 2002 and thereafter; 
141.18     (b) (ii) in any district receiving a debt service loan for 
141.19  a debt service levy payable in 1991 and thereafter 2001 or 
141.20  earlier, or granted a capital loan after before January 1 
141.21  2, 1990 2001, a levy in a total dollar amount computed at a rate 
141.22  of 24 32 percent of adjusted net tax capacity for taxes payable 
141.23  in 1991 2002 and thereafter; 
141.24     (c) in any district granted a debt service loan after July 
141.25  31, 1981, or granted a capital loan which is approved after July 
141.26  31, 1981, a levy in a total dollar amount computed as a tax rate 
141.27  of 21.92 percent on the adjusted net tax capacity for taxes 
141.28  payable in 1991 and thereafter; or 
141.29     (2) a levy in any district for which a capital loan was 
141.30  approved prior to August 1, 1981, a levy in a total dollar 
141.31  amount equal to the sum of the amount of the required debt 
141.32  service levy and an amount which when levied annually will in 
141.33  the opinion of the commissioner be sufficient to retire the 
141.34  remaining interest and principal on any outstanding loans from 
141.35  the state within 30 years of the original date when the capital 
141.36  loan was granted.  
142.1      (b) The board in any district affected by the provisions of 
142.2   paragraph (a), clause (2), may elect instead to determine the 
142.3   amount of its levy according to the provisions of paragraph (a), 
142.4   clause (1).  If a district's capital loan is not paid within 30 
142.5   years because it elects to determine the amount of its levy 
142.6   according to the provisions of paragraph (a), clause (2), the 
142.7   liability of the district for the amount of the difference 
142.8   between the amount it levied under paragraph (a), clause (2), 
142.9   and the amount it would have levied under paragraph (a), clause 
142.10  (1), and for interest on the amount of that difference, must not 
142.11  be satisfied and discharged pursuant to Minnesota Statutes 1988, 
142.12  or an earlier edition of Minnesota Statutes if applicable, 
142.13  section 124.43, subdivision 4. 
142.14     Sec. 21.  Minnesota Statutes 2002, section 126C.69, 
142.15  subdivision 2, is amended to read: 
142.16     Subd. 2.  [CAPITAL LOANS ELIGIBILITY.] Beginning July 1, 
142.17  1999, a district is not eligible for a capital loan unless the 
142.18  district's estimated net debt tax rate as computed by the 
142.19  commissioner after debt service equalization aid would be more 
142.20  than 30 40 percent of adjusted net tax capacity.  The estimate 
142.21  must assume a 20-year maturity schedule for new debt. 
142.22     Sec. 22.  Minnesota Statutes 2002, section 126C.69, 
142.23  subdivision 9, is amended to read: 
142.24     Subd. 9.  [LOAN AMOUNT LIMITS.] (a) A loan must not be 
142.25  recommended for approval for a district exceeding an amount 
142.26  computed as follows: 
142.27     (1) the amount requested by the district under subdivision 
142.28  6; 
142.29     (2) plus the aggregate principal amount of general 
142.30  obligation bonds of the district outstanding on June 30 of the 
142.31  year following the year the application was received, not 
142.32  exceeding the limitation on net debt of the district in section 
142.33  475.53, subdivision 4, or 450 607 percent of its adjusted net 
142.34  tax capacity as most recently determined, whichever is less; 
142.35     (3) less the maximum net debt permissible for the district 
142.36  on December 1 of the year the application is received, under the 
143.1   limitation in section 475.53, subdivision 4, or 450 607 percent 
143.2   of its adjusted net tax capacity as most recently determined, 
143.3   whichever is less; 
143.4      (4) less any amount by which the amount voted exceeds the 
143.5   total cost of the facilities for which the loan is granted.  
143.6      (b) The loan may be approved in an amount computed as 
143.7   provided in paragraph (a), clauses (1) to (3), subject to later 
143.8   reduction according to paragraph (a), clause (4). 
143.9      Sec. 23.  Minnesota Statutes 2002, section 177.42, 
143.10  subdivision 2, is amended to read: 
143.11     Subd. 2.  [PROJECT.] "Project" means erection, 
143.12  construction, remodeling, or repairing of a public building or 
143.13  other public work, except a public school facility, financed in 
143.14  whole or part by state funds.  
143.15     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
143.16  following final enactment and applies to all contracts for 
143.17  erecting, constructing, remodeling, or repairing a public school 
143.18  facility for students in any grades kindergarten through 12 
143.19  entered into after that date.  
143.20     Sec. 24.  Minnesota Statutes 2002, section 475.61, 
143.21  subdivision 1, is amended to read: 
143.22     Subdivision 1.  [DEBT SERVICE RESOLUTION.] The governing 
143.23  body of any municipality issuing general obligations shall, 
143.24  prior to delivery of the obligations, levy by resolution a 
143.25  direct general ad valorem tax upon all taxable property in the 
143.26  municipality to be spread upon the tax rolls for each year of 
143.27  the term of the obligations.  The tax levies for all years for 
143.28  municipalities other than school districts shall be specified 
143.29  and such that if collected in full they, together with estimated 
143.30  collections of special assessments and other revenues pledged 
143.31  for the payment of said obligations, will produce at least five 
143.32  percent in excess of the amount needed to meet when due the 
143.33  principal and interest payments on the obligations.  The tax 
143.34  levies for school districts shall be specified and such that if 
143.35  collected in full they, together with estimated collection of 
143.36  other revenues pledged for the payment of the obligations, will 
144.1   produce between five and six percent in excess of the amount 
144.2   needed to meet when due the principal and interest payments on 
144.3   the obligations, rounded up to the nearest dollar; except that, 
144.4   with the permission of the commissioner of children, families, 
144.5   and learning education, a school board may specify a tax levy in 
144.6   a higher amount if necessary either to meet an anticipated tax 
144.7   delinquency or for cash flow needs to meet the required payments 
144.8   from the debt redemption fund.  Such resolution shall 
144.9   irrevocably appropriate the taxes so levied and any special 
144.10  assessments or other revenues so pledged to the municipality's 
144.11  debt service fund or a special debt service fund or account 
144.12  created for the payment of one or more issues of obligations.  
144.13  The governing body may, in its discretion, at any time after the 
144.14  obligations have been authorized, adopt a resolution levying 
144.15  only a portion of such taxes, to be filed, assessed, extended, 
144.16  collected, and remitted as hereinafter provided, and the amount 
144.17  or amounts therein levied shall be credited against the tax 
144.18  required to be levied prior to delivery of the obligations. 
144.19     Sec. 25.  Minnesota Statutes 2002, section 475.61, 
144.20  subdivision 3, is amended to read: 
144.21     Subd. 3.  [IRREVOCABILITY.] (a) Tax levies so made and 
144.22  filed shall be irrevocable, except as provided in this 
144.23  subdivision. 
144.24     (b) For purposes of this subdivision, "excess debt 
144.25  redemption fund balance" means the greater of zero or the 
144.26  balance in the district's debt redemption fund as of June 30 of 
144.27  the fiscal year ending in the year before the year the levy is 
144.28  certified, minus any debt redemption fund balance attributable 
144.29  to refunding of existing bonds, minus the amount of the levy 
144.30  reduction for the current year and the prior year under 
144.31  paragraphs (e) and (f), minus five percent of the district's 
144.32  required debt service levy for the next year. 
144.33     (c) By July 15 each year, a district shall report to the 
144.34  commissioner of children, families, and learning education the 
144.35  amount of the districts' debt redemption fund balance as of June 
144.36  30 of the prior year attributable to refunding of existing bonds.
145.1      (d) By August 15 each year, the commissioner shall 
145.2   determine the excess debt redemption fund balance for each 
145.3   school district, and shall certify the amount of the excess 
145.4   balance to the school district superintendent.  
145.5      (e) In each year when a district has an excess debt 
145.6   redemption fund balance, the commissioner shall report the 
145.7   amount of the excess to the county auditor and the auditor shall 
145.8   reduce the tax levy otherwise to be included in the rolls next 
145.9   prepared by the amount certified.  
145.10     (f) The school board may, with the approval of the 
145.11  commissioner, retain all or part of the excess balance if it is 
145.12  necessary to ensure the prompt and full payment of its 
145.13  obligations and any call premium on its obligations, will be 
145.14  used for redemption of its obligations in accordance with their 
145.15  terms, or to level out the debt service tax rate, excluding the 
145.16  debt excess adjustment, for its obligations over the next two 
145.17  years.  A school district requesting authority to retain all or 
145.18  part of the excess balance shall provide written documentation 
145.19  to the commissioner describing the rationale for its request by 
145.20  September 15 including the issuance of new obligations within 
145.21  the next year or the refunding of existing obligations.  A 
145.22  school district that retains an excess may request to transfer 
145.23  the excess to its operating capital account in the general fund 
145.24  under section 123B.80.  The school board may, with the approval 
145.25  of the commissioner, specify a tax levy in a higher amount if 
145.26  necessary because of anticipated tax delinquency or for cash 
145.27  flow needs to meet the required payments from the debt 
145.28  redemption fund.  
145.29     (g) If the governing body, including the governing body of 
145.30  a school district, in any year makes an irrevocable 
145.31  appropriation to the debt service fund of money actually on hand 
145.32  or if there is on hand any excess amount in the debt service 
145.33  fund, the recording officer may certify to the county auditor 
145.34  the fact and amount thereof and the auditor shall reduce by the 
145.35  amount so certified the amount otherwise to be included in the 
145.36  rolls next thereafter prepared. 
146.1      Sec. 26.  [BONDS; MOUNDS VIEW.] 
146.2      Notwithstanding Minnesota Statutes, section 123B.59, 
146.3   subdivision 3, independent school district No. 621, Mounds View, 
146.4   may issue bonds according to Minnesota Statutes 2002, section 
146.5   123B.59, subdivision 3, for projects approved by the 
146.6   commissioner before February 1, 2003. 
146.7      <b>[EFFECTIVE DATE.]</b> This section is effective the day 
146.8   following final enactment. 
146.9      Sec. 27.  [LEASE LEVY EXCEPTION.] 
146.10     Notwithstanding Minnesota Statutes, section 126C.40, 
146.11  subdivision 1, a school district that has entered into a 
146.12  completed agreement under Laws 2000, chapter 492, article 1, 
146.13  section 3, subdivision 4, may continue to levy for 100 percent 
146.14  of the costs of any lease required by the agreement. 
146.15     Sec. 28.  [PROPERTY SALE; ST. FRANCIS SCHOOL DISTRICT.] 
146.16     Notwithstanding Minnesota Statutes, section 123B.51, 
146.17  subdivision 6, or any other law to the contrary, independent 
146.18  school district No. 15, St. Francis, may deposit the proceeds 
146.19  from the sale of land that was purchased with funds obtained 
146.20  according to Laws 1992, chapter 558, section 7, subdivision 7, 
146.21  in the district's general fund reserved for operating capital 
146.22  account.  The district may only use the proceeds of the sale for 
146.23  projects designed to create or improve safe walking routes for 
146.24  the students of independent school district No. 15, St. Francis. 
146.25     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
146.26  following final enactment. 
146.27     Sec. 29.  [STUDY OF SCHOOL FACILITIES FORMULAS.] 
146.28     The commissioner of children, families and learning must 
146.29  develop for the task force on school finance reform a report 
146.30  that examines issues of facility maintenance where the 
146.31  renovation or maintenance costs of a facility exceed the cost of 
146.32  facility replacement.  The plan must examine the effects of the 
146.33  changes in the health and safety revenue program and the 
146.34  alternative facilities program contained in this article on 
146.35  facilities maintenance.  To the extent possible, the 
146.36  commissioner must include a case study, including the microbe 
147.1   growth infestation at Forest elementary school located in 
147.2   independent school district No. 281, Robbinsdale.  If the 
147.3   commissioner and the task force determine that the existing 
147.4   facility formulas are insufficient to address the needs of 
147.5   schools such as Forest elementary school, the commissioner must 
147.6   recommend formula changes to the education committees of the 
147.7   legislature by January 15, 2004, that appropriately respond to 
147.8   school district needs. 
147.9      Sec. 30.  [APPROPRIATIONS.] 
147.10     Subdivision 1.  [DEPARTMENT OF EDUCATION.] The sums 
147.11  indicated in this section are appropriated from the general fund 
147.12  to the department of education for the fiscal years designated.  
147.13     Subd. 2.  [HEALTH AND SAFETY REVENUE.] For health and 
147.14  safety aid according to Minnesota Statutes, section 123B.57, 
147.15  subdivision 5: 
147.16       $7,602,000     .....     2004 
147.17       $6,137,000     .....     2005 
147.18     The 2004 appropriation includes $1,516,000 for 2003 and 
147.19  $6,086,000 for 2004. 
147.20     The 2005 appropriation includes $1,817,000 for 2004 and 
147.21  $4,320,000 for 2005. 
147.22     Subd. 3.  [DEBT SERVICE EQUALIZATION.] For debt service aid 
147.23  according to Minnesota Statutes, section 123B.53, subdivision 6: 
147.24       $33,416,000    .....     2004 
147.25       $37,521,000    .....     2005 
147.26     The 2004 appropriation includes $5,586,000 for 2003 and 
147.27  $27,830,000 for 2004. 
147.28     The 2005 appropriation includes $8,312,000 for 2004 and 
147.29  $29,209,000 for 2005. 
147.30     Subd. 4.  [ALTERNATIVE FACILITIES BONDING AID.] For 
147.31  alternative facilities bonding aid, according to Minnesota 
147.32  Statutes, section 123B.59, subdivision 1: 
147.33       $18,129,000    .....     2004 
147.34       $ 4,436,000    .....     2005 
147.35     The 2004 appropriation includes $3,278,000 for 2003 and 
147.36  $14,851,000 for 2004. 
148.1      The 2005 appropriation includes $4,436,000 for 2004 and $0 
148.2   for 2005. 
148.3      Sec. 31.  [REPEALER.] 
148.4      (a) Minnesota Statutes 2002, section 125B.11, is repealed. 
148.5      (b) Minnesota Statutes 2002, section 123B.59, subdivisions 
148.6   6 and 7, are repealed effective for revenue for fiscal year 2005.
148.7                              ARTICLE 5
148.8             NUTRITION; SCHOOL ACCOUNTING; OTHER PROGRAMS
148.9      Section 1.  Minnesota Statutes 2002, section 12.21, 
148.10  subdivision 3, is amended to read: 
148.11     Subd. 3.  [SPECIFIC AUTHORITY.] In performing duties under 
148.12  this chapter and to effect its policy and purpose, the governor 
148.13  may: 
148.14     (1) make, amend, and rescind the necessary orders and rules 
148.15  to carry out the provisions of this chapter and section 216C.15 
148.16  within the limits of the authority conferred by this section, 
148.17  with due consideration of the plans of the federal government 
148.18  and without complying with sections 14.001 to 14.69, but no 
148.19  order or rule has the effect of law except as provided by 
148.20  section 12.32; 
148.21     (2) ensure that a comprehensive emergency operations plan 
148.22  and emergency management program for this state are developed 
148.23  and maintained, and are integrated into and coordinated with the 
148.24  emergency plans of the federal government and of other states to 
148.25  the fullest possible extent; 
148.26     (3) in accordance with the emergency operations plan and 
148.27  the emergency management program of this state, procure 
148.28  supplies, equipment, and facilities; institute training programs 
148.29  and public information programs; and take all other preparatory 
148.30  steps, including the partial or full activation of emergency 
148.31  management organizations in advance of actual disaster to ensure 
148.32  the furnishing of adequately trained and equipped forces of 
148.33  emergency management personnel in time of need; 
148.34     (4) make studies and surveys of the industries, resources, 
148.35  and facilities in this state as may be necessary to ascertain 
148.36  the capabilities of the state for emergency management and to 
149.1   plan for the most efficient emergency use of those industries, 
149.2   resources, and facilities; 
149.3      (5) on behalf of this state, enter into mutual aid 
149.4   arrangements or cooperative agreements with other states, tribal 
149.5   authorities, and Canadian provinces, and coordinate mutual aid 
149.6   plans between political subdivisions of this state; 
149.7      (6) delegate administrative authority vested in the 
149.8   governor under this chapter, except the power to make rules, and 
149.9   provide for the subdelegation of that authority; 
149.10     (7) cooperate with the president and the heads of the armed 
149.11  forces, the emergency management agency of the United States and 
149.12  other appropriate federal officers and agencies, and with the 
149.13  officers and agencies of other states in matters pertaining to 
149.14  the emergency management of the state and nation, including the 
149.15  direction or control of: 
149.16     (i) emergency preparedness drills and exercises; 
149.17     (ii) warnings and signals for drills or actual emergencies 
149.18  and the mechanical devices to be used in connection with them; 
149.19     (iii) shutting off water mains, gas mains, electric power 
149.20  connections and the suspension of all other utility services; 
149.21     (iv) the conduct of persons in the state, including 
149.22  entrance or exit from any stricken or threatened public place, 
149.23  occupancy of facilities, and the movement and cessation of 
149.24  movement of pedestrians, vehicular traffic, and all forms of 
149.25  private and public transportation during, prior, and subsequent 
149.26  to drills or actual emergencies; 
149.27     (v) public meetings or gatherings; and 
149.28     (vi) the evacuation, reception, and sheltering of persons; 
149.29     (8) contribute to a political subdivision, within the 
149.30  limits of the appropriation for that purpose, not more than 25 
149.31  percent of the cost of acquiring organizational equipment that 
149.32  meets standards established by the governor; 
149.33     (9) formulate and execute, with the approval of the 
149.34  executive council, plans and rules for the control of traffic in 
149.35  order to provide for the rapid and safe movement over public 
149.36  highways and streets of troops, vehicles of a military nature, 
150.1   and materials for national defense and war or for use in any war 
150.2   industry, for the conservation of critical materials, or for 
150.3   emergency management purposes; coordinate the activities of the 
150.4   departments or agencies of the state and its political 
150.5   subdivisions concerned directly or indirectly with public 
150.6   highways and streets, in a manner that will best effectuate 
150.7   those plans; 
150.8      (10) alter or adjust by executive order, without complying 
150.9   with sections 14.01 to 14.69, the working hours, work days and 
150.10  work week of, and annual and sick leave provisions and payroll 
150.11  laws regarding all state employees in the executive branch as 
150.12  the governor deems necessary to minimize the impact of the 
150.13  disaster or emergency, conforming the alterations or adjustments 
150.14  to existing state laws, rules, and collective bargaining 
150.15  agreements to the extent practicable; 
150.16     (11) authorize the commissioner of children, families, and 
150.17  learning education to alter school schedules, curtail school 
150.18  activities, or order schools closed without affecting state aid 
150.19  to schools, as defined in section 120A.05, subdivisions 9, 11, 
150.20  13, and 17, and including charter schools under section 124D.10, 
150.21  and elementary schools enrolling prekindergarten pupils in 
150.22  district programs; and 
150.23     (12) transfer the direction, personnel, or functions of 
150.24  state agencies to perform or facilitate response and recovery 
150.25  programs. 
150.26     Sec. 2.  Minnesota Statutes 2002, section 84A.51, 
150.27  subdivision 4, is amended to read: 
150.28     Subd. 4.  [COUNTY'S USE OF FUNDS.] The funds received by 
150.29  each county must be apportioned by the county auditor as follows:
150.30     (1) 30 percent to a county development fund, which is 
150.31  created, to be spent under the direction of the county board for 
150.32  the rehabilitation and development of the portion of the county 
150.33  within the conservation area; 
150.34     (2) 40 percent to the capital outlay general fund of the 
150.35  school district from which derived; 
150.36     (3) 20 percent to the county revenue fund; and 
151.1      (4) ten percent to the township road and bridge fund of the 
151.2   township from which derived. 
151.3      If the proceeds are derived from an unorganized township 
151.4   with no levy for road and bridge purposes, the township portion 
151.5   must be credited to the county revenue fund. 
151.6      Sec. 3.  Minnesota Statutes 2002, section 120A.05, 
151.7   subdivision 9, is amended to read: 
151.8      Subd. 9.  [ELEMENTARY SCHOOL.] "Elementary school" means 
151.9   any school with building, equipment, courses of study, class 
151.10  schedules, enrollment of pupils ordinarily in prekindergarten 
151.11  through grade 6 or any portion thereof, and staff meeting the 
151.12  standards established by the commissioner. 
151.13     The commissioner of children, families, and learning shall 
151.14  not close a school or deny any state aids to a district for its 
151.15  elementary schools because of enrollment limitations classified 
151.16  in accordance with the provisions of this subdivision. 
151.17     Sec. 4.  Minnesota Statutes 2002, section 124D.11, 
151.18  subdivision 9, is amended to read: 
151.19     Subd. 9.  [PAYMENT OF AIDS TO CHARTER SCHOOLS.] (a) 
151.20  Notwithstanding section 127A.45, subdivision 3, aid payments for 
151.21  the current fiscal year to a charter school not in its first 
151.22  year of operation shall be of an equal amount on each of the 23 
151.23  payment dates.  A charter school in its first year of operation 
151.24  shall receive, on its first payment date, ten percent of its 
151.25  cumulative amount guaranteed for the year and 22 payments of an 
151.26  equal amount thereafter the sum of which shall be 90 percent of 
151.27  the cumulative amount guaranteed. 
151.28     (b) Notwithstanding paragraph (a), for a charter school 
151.29  ceasing operation prior to the end of a school year, 83 77 
151.30  percent of the amount due for the school year may be paid to the 
151.31  school after audit of prior fiscal year and current fiscal year 
151.32  pupil counts. 
151.33     (c) Notwithstanding section 127A.45, subdivision 3, and 
151.34  paragraph (a), 83 77 percent of the start-up cost aid under 
151.35  subdivision 8 shall be paid within 45 days after the first day 
151.36  of student attendance for that school year. 
152.1      (d) In order to receive state aid payments under this 
152.2   subdivision, a charter school in its first three years of 
152.3   operation must submit a quarterly report to the department of 
152.4   children, families, and learning education.  The report must 
152.5   list each student by grade, show the student's start and end 
152.6   dates, if any, with the charter school, and for any student 
152.7   participating in a learning year program, the report must list 
152.8   the hours and times of learning year activities.  The report 
152.9   must be submitted not more than two weeks after the end of the 
152.10  calendar quarter to the department.  The department must develop 
152.11  a Web-based reporting form for charter schools to use when 
152.12  submitting enrollment reports.  A charter school in its fourth 
152.13  and subsequent year of operation must submit enrollment 
152.14  information to the department in the form and manner requested 
152.15  by the department. 
152.16     <b>[EFFECTIVE DATE.]</b> This section is effective for revenue for 
152.17  fiscal year 2004. 
152.18     Sec. 5.  [124D.1158] [SCHOOL BREAKFAST PROGRAM.] 
152.19     Subdivision 1.  [PURPOSE.] The purpose of the school 
152.20  breakfast program is to provide affordable morning nutrition to 
152.21  children so that they can effectively learn.  Public and 
152.22  nonpublic schools that participate in the federal school 
152.23  breakfast program may receive state breakfast aid.  Schools 
152.24  shall encourage all children to eat a nutritious breakfast, 
152.25  either at home or at school, and shall work to eliminate 
152.26  barriers to breakfast participation at school such as inadequate 
152.27  facilities and transportation. 
152.28     Subd. 2.  [PROGRAM; ELIGIBILITY.] Each school year, public 
152.29  and nonpublic schools that participate in the federal school 
152.30  breakfast program are eligible for the state breakfast program.  
152.31     Subd. 3.  [PROGRAM REIMBURSEMENT.] Each school year, the 
152.32  state must reimburse each participating school 30 cents for each 
152.33  reduced price breakfast and 55 cents for each fully paid 
152.34  breakfast. 
152.35     Subd. 4.  [NO FEES.] A school that receives school 
152.36  breakfast aid under this section must make breakfast available 
153.1   without charge to all participating students who qualify for 
153.2   free or reduced price meals. 
153.3      Sec. 6.  Minnesota Statutes 2002, section 124D.118, 
153.4   subdivision 4, is amended to read: 
153.5      Subd. 4.  [REIMBURSEMENT.] In accordance with program 
153.6   guidelines, the commissioner shall prepay or reimburse each 
153.7   participating districts for the state share of the district's 
153.8   cost for providing public or nonpublic school nine cents for 
153.9   each half-pint of milk that is served to kindergarten students 
153.10  and is not part of a school lunch or breakfast reimbursed under 
153.11  section 124D.111 or 124D.1158. 
153.12     Sec. 7.  Minnesota Statutes 2002, section 126C.42, 
153.13  subdivision 1, is amended to read: 
153.14     Subdivision 1.  [1977 STATUTORY OPERATING DEBT.] (a) In 
153.15  each year in which so required by this subdivision, a district 
153.16  must make an additional levy to eliminate its statutory 
153.17  operating debt, determined as of June 30, 1977, and certified 
153.18  and adjusted by the commissioner.  This levy shall not be made 
153.19  in more than 30 successive years and each year before it is 
153.20  made, it must be approved by the commissioner and the approval 
153.21  shall specify its amount.  This levy shall be an amount which is 
153.22  equal to the amount raised by a levy of a net tax rate of 1.98 
153.23  2.67 percent times the adjusted net tax capacity of the district 
153.24  for the preceding year for taxes payable in 2000 2002 and 
153.25  thereafter; provided that in the last year in which the district 
153.26  is required to make this levy, it must levy an amount not to 
153.27  exceed the amount raised by a levy of a net tax rate of 1.98 
153.28  2.67 percent times the adjusted net tax capacity of the district 
153.29  for the preceding year for taxes payable in 2000 2002 and 
153.30  thereafter.  When the sum of the cumulative levies made pursuant 
153.31  to this subdivision and transfers made according to section 
153.32  123B.79, subdivision 6, equals an amount equal to the statutory 
153.33  operating debt of the district, the levy shall be discontinued. 
153.34     (b) The district must establish a special account in the 
153.35  general fund which shall be designated "appropriated fund 
153.36  balance reserve account for purposes of reducing statutory 
154.1   operating debt" on its books and records.  This account shall 
154.2   reflect the levy authorized pursuant to this subdivision.  The 
154.3   proceeds of this levy must be used only for cash flow 
154.4   requirements and must not be used to supplement district 
154.5   revenues or income for the purposes of increasing the district's 
154.6   expenditures or budgets. 
154.7      (c) Any district which is required to levy pursuant to this 
154.8   subdivision must certify the maximum levy allowable under 
154.9   section 126C.13, subdivision 2, in that same year. 
154.10     (d) Each district shall make permanent fund balance 
154.11  transfers so that the total statutory operating debt of the 
154.12  district is reflected in the general fund as of June 30, 1977. 
154.13     Sec. 8.  Minnesota Statutes 2002, section 126C.43, 
154.14  subdivision 2, is amended to read: 
154.15     Subd. 2.  [PAYMENT TO UNEMPLOYMENT INSURANCE PROGRAM TRUST 
154.16  FUND BY STATE AND POLITICAL SUBDIVISIONS.] A district may 
154.17  levy 90 percent of the amounts amount exceeding $10 times the 
154.18  district's adjusted marginal cost pupil units for the fiscal 
154.19  year ending in the year before the year the levy is certified 
154.20  necessary (i) to pay the district's obligations under section 
154.21  268.052, subdivision 1, and the amounts necessary (ii) to pay 
154.22  for job placement services offered to employees who may become 
154.23  eligible for benefits pursuant to section 268.085 for the fiscal 
154.24  year the levy is certified. 
154.25     <b>[EFFECTIVE DATE.]</b> This section is effective for taxes 
154.26  payable in 2004. 
154.27     Sec. 9.  Minnesota Statutes 2002, section 126C.43, 
154.28  subdivision 3, is amended to read: 
154.29     Subd. 3.  [TAX LEVY FOR JUDGMENT.] A district may levy 90 
154.30  percent of the amounts amount exceeding $10 times the district's 
154.31  adjusted marginal cost pupil units for the fiscal year ending in 
154.32  the year before the year the levy is certified necessary to pay 
154.33  judgments against the district under section 123B.25 that became 
154.34  final after the date the district certified its proposed levy in 
154.35  the previous year.  With the approval of the commissioner, a 
154.36  district may spread this levy over a period not to exceed three 
155.1   years.  Upon approval through the adoption of a resolution by 
155.2   each of an intermediate district's member school district 
155.3   boards, a member school district may include its proportionate 
155.4   share of the costs of a judgment against an intermediate school 
155.5   district that became final under section 123B.25 after the date 
155.6   that the earliest member school district certified its proposed 
155.7   levy in the previous year.  With the approval of the 
155.8   commissioner, an intermediate school district member school 
155.9   district may spread this levy over a period not to exceed three 
155.10  years. 
155.11     <b>[EFFECTIVE DATE.]</b> This section is effective for taxes 
155.12  payable in 2004. 
155.13     Sec. 10.  Minnesota Statutes 2002, section 126C.45, is 
155.14  amended to read: 
155.15     126C.45 [ICE ARENA LEVY.] 
155.16     (a) Each year, an independent school district operating and 
155.17  maintaining an ice arena, may levy for the net operational costs 
155.18  of the ice arena.  The levy may not exceed 90 percent of the net 
155.19  actual costs of operation of the arena for the previous year.  
155.20  Net actual costs are defined as operating costs less any 
155.21  operating revenues. 
155.22     (b) Any district operating and maintaining an ice arena 
155.23  must demonstrate to the satisfaction of the office of monitoring 
155.24  in the department that the district will offer equal sports 
155.25  opportunities for male and female students to use its ice arena, 
155.26  particularly in areas of access to prime practice time, team 
155.27  support, and providing junior varsity and younger level teams 
155.28  for girls' ice sports and ice sports offerings. 
155.29     <b>[EFFECTIVE DATE.]</b> This section is effective for taxes 
155.30  payable in 2004. 
155.31     Sec. 11.  Minnesota Statutes 2002, section 126C.48, 
155.32  subdivision 3, is amended to read: 
155.33     Subd. 3.  [ADJUSTMENTS.] If any district levy is found to 
155.34  be excessive as a result of a decision of the tax court or a 
155.35  redetermination by the commissioner of revenue under section 
155.36  127A.48, subdivisions 7 to 16, or for any other reason, the 
156.1   amount of the excess shall be deducted from the levy certified 
156.2   in the next year for the same purpose.  If no levy is certified 
156.3   in the next year for the same purpose or if the amount certified 
156.4   is less than the amount of the excess, the excess must be 
156.5   deducted from that levy and the general fund levy certified 
156.6   pursuant to section 126C.13, subdivision 2 chapters 122A, 123A, 
156.7   123B, 124D, and 126C.  If the amount of any aid would have been 
156.8   increased in a prior year as a result of a decision of the tax 
156.9   court or a redetermination by the commissioner of revenue, the 
156.10  amount of the increase shall be added to the amount of current 
156.11  aid for the same purposes. 
156.12     Sec. 12.  Minnesota Statutes 2002, section 127A.45, 
156.13  subdivision 2, is amended to read: 
156.14     Subd. 2.  [DEFINITIONS.] (a) The term "other district 
156.15  receipts" means payments by county treasurers pursuant to 
156.16  section 276.10, apportionments from the school endowment fund 
156.17  pursuant to section 127A.33, apportionments by the county 
156.18  auditor pursuant to section 127A.34, subdivision 2, and payments 
156.19  to school districts by the commissioner of revenue pursuant to 
156.20  chapter 298.  
156.21     (b) The term "cumulative amount guaranteed" means the 
156.22  product of 
156.23     (1) the cumulative disbursement percentage shown in 
156.24  subdivision 3; times 
156.25     (2) the sum of 
156.26     (i) 83 77 percent of the estimated aid and credit 
156.27  entitlements paid according to subdivision 13; plus 
156.28     (ii) 100 percent of the entitlements paid according to 
156.29  subdivisions 11 and 12; plus 
156.30     (iii) the other district receipts.  
156.31     (c) The term "payment date" means the date on which state 
156.32  payments to districts are made by the electronic funds transfer 
156.33  method.  If a payment date falls on a Saturday, a Sunday, or a 
156.34  weekday which is a legal holiday, the payment shall be made on 
156.35  the immediately preceding business day.  The commissioner may 
156.36  make payments on dates other than those listed in subdivision 3, 
157.1   but only for portions of payments from any preceding payment 
157.2   dates which could not be processed by the electronic funds 
157.3   transfer method due to documented extenuating circumstances.  
157.4      Sec. 13.  Minnesota Statutes 2002, section 127A.45, 
157.5   subdivision 3, is amended to read: 
157.6      Subd. 3.  [PAYMENT DATES AND PERCENTAGES.] (a) For fiscal 
157.7   year 2003, the commissioner shall pay to a district on the dates 
157.8   indicated an amount computed as follows:  the cumulative amount 
157.9   guaranteed minus the sum of (a) the district's other district 
157.10  receipts through the current payment, and (b) the aid and credit 
157.11  payments through the immediately preceding payment.  For 
157.12  purposes of this computation, the payment dates and the 
157.13  cumulative disbursement percentages are as follows:  
157.14                           Payment date               Percentage 
157.15  Payment 1    July 15:                                         5.1
157.16  Payment 2    July 30:                                         7.7
157.17  Payment 3    August 15:                                      16.9
157.18  Payment 4    August 30:                                      19.3
157.19  Payment 5    September 15:                                   21.8
157.20  Payment 6    September 30:                                   24.3
157.21  Payment 7    October 15:                                     26.3
157.22  Payment 8    October 30:                                     28.3
157.23  Payment 9    November 15:                                    32.8
157.24  Payment 10   November 30:                                    39.1
157.25  Payment 11   December 15:                                    42.4
157.26  Payment 12   December 30:                                    45.6
157.27  Payment 13   January 15:                                     50.5
157.28  Payment 14   January 30:                                     55.0
157.29  Payment 15   February 15:                                    60.2
157.30  Payment 16   February 28:                                    65.0
157.31  Payment 17   March 15:                                       69.7
157.32  Payment 18   March 30:                                       74.3
157.33  Payment 19   April 15:                                       78.3
157.34  Payment 20   April 30:                                       84.2
157.35  Payment 21   May 15:                                         88.7
157.36  Payment 22   May 30:                                         93.3
158.1   Payment 23   June 20:                                       100.0
158.2      (b) In addition to the amounts paid under paragraph (a), 
158.3   for fiscal year 2003, the commissioner shall pay to a district 
158.4   on the dates indicated an amount computed as follows: 
158.5   Payment 3    August 15:  the final adjustment for the
158.6                prior fiscal year for the state paid
158.7                property tax credits established in
158.8                section 273.1392
158.9   Payment 7    October 15:  one-half of the final adjustment
158.10               for the prior fiscal year for all aid
158.11               entitlements except state paid property
158.12               tax credits 
158.13  Payment 8    October 30:  one-half of the final adjustment
158.14               for the prior fiscal year for all aid
158.15               entitlements except state paid property
158.16               tax credits 
158.17     (c) For fiscal year 2004 and later, the commissioner shall 
158.18  pay to a district on the dates indicated an amount computed as 
158.19  follows:  the cumulative amount guaranteed minus the sum of (a) 
158.20  the district's other district receipts through the current 
158.21  payment, and (b) the aid and credit payments through the 
158.22  immediately preceding payment.  For purposes of this 
158.23  computation, the payment dates and the cumulative disbursement 
158.24  percentages are as follows: 
158.25             Payment date                      Percentage 
158.26  Payment 1    July 15:                                     5.1 5.5
158.27  Payment 2    July 30:                                     7.7 8.0
158.28  Payment 3    August 15:                                 16.9 17.5
158.29  Payment 4    August 30:                                 19.3 20.0
158.30  Payment 5    September 15:                              21.8 22.5
158.31  Payment 6    September 30:                              24.3 25.0
158.32  Payment 7    October 15:                                26.3 27.0
158.33  Payment 8    October 30:                                28.3 30.0
158.34  Payment 9    November 15:                               30.3 32.5
158.35  Payment 10   November 30:                               35.0 36.5
158.36  Payment 11   December 15:                               40.0 42.0
159.1   Payment 12   December 30:                               43.0 45.0
159.2   Payment 13   January 15:                                48.0 50.0
159.3   Payment 14   January 30:                                52.0 54.0
159.4   Payment 15   February 15:                               56.0 58.0
159.5   Payment 16   February 28:                               61.0 63.0
159.6   Payment 17   March 15:                                  66.0 68.0
159.7   Payment 18   March 30:                                  72.0 74.0
159.8   Payment 19   April 15:                                  76.0 78.0
159.9   Payment 20   April 30:                                  83.0 85.0
159.10  Payment 21   May 15:                                    88.0 90.0
159.11  Payment 22   May 30:                                    95.0
159.12  Payment 23   June 20:                                  100.0
159.13     (d) (b) In addition to the amounts paid under paragraph 
159.14  (c) (a), for fiscal year 2004 and later, the commissioner shall 
159.15  pay to a district on the dates indicated an amount computed as 
159.16  follows: 
159.17  Payment 3    August 15:  the final adjustment for the
159.18               prior fiscal year for the state paid
159.19               property tax credits established in 
159.20               section 273.1392 
159.21  Payment 4    August 30:  one-third of the final adjustment
159.22               for the prior fiscal year for all aid
159.23               entitlements except state paid property
159.24               tax credits 
159.25  Payment 6    September 30:  one-third of the final adjustment
159.26               for the prior fiscal year for all aid
159.27               entitlements except state paid property
159.28               tax credits
159.29  Payment 8    October 30:  one-third of the final adjustment
159.30               for the prior fiscal year for all aid
159.31               entitlements except state paid property
159.32               tax credits
159.33     (c) In addition to the amounts paid under paragraph (a), 
159.34  for fiscal year 2005 and later, the commissioner shall pay to a 
159.35  district on the dates indicated an amount computed as follows: 
159.36  Payment 3    August 15:  the final adjustment for the
160.1                prior fiscal year for the state paid
160.2                property tax credits established in
160.3                section 273.1392
160.4   Payment 4    August 30:  30 percent of the final adjustment
160.5                for the prior fiscal year for all aid
160.6                entitlements except state paid property
160.7                tax credits
160.8   Payment 6    September 30:  40 percent of the final adjustment
160.9                for the prior fiscal year for all aid
160.10               entitlements except state paid property
160.11               tax credits
160.12  Payment 8    October 30:  30 percent of the final adjustment
160.13               for the prior fiscal year for all aid
160.14               entitlements except state paid property
160.15               tax credits
160.16     Sec. 14.  Minnesota Statutes 2002, section 127A.45, 
160.17  subdivision 7a, is amended to read: 
160.18     Subd. 7a.  [ADVANCE FINAL PAYMENT.] (a) Notwithstanding 
160.19  subdivisions 3 and 7, a school district or a charter school 
160.20  exceeding its expenditure limitations under section 123B.83 as 
160.21  of June 30 of the prior fiscal year may receive a portion of its 
160.22  final payment for the current fiscal year on June 20, if 
160.23  requested by the district.  The amount paid under this 
160.24  subdivision must not exceed the lesser of: 
160.25     (1) seven percent of the district or charter school's 
160.26  general education aid for the current fiscal year; or 
160.27     (2) the amount by which the district or charter school's 
160.28  net negative unreserved general fund balance as of June 30 of 
160.29  the prior fiscal year exceeds 2.5 percent of the district or 
160.30  charter school's expenditures for that fiscal year. 
160.31     (b) The state total advance final payment under this 
160.32  subdivision for any year must not exceed $17,500,000 $12,000,000.
160.33  If the amount requested exceeds $17,500,000 $12,000,000, the 
160.34  advance final payment for each eligible district must be reduced 
160.35  proportionately. 
160.36     Sec. 15.  Minnesota Statutes 2002, section 127A.45, 
161.1   subdivision 10, is amended to read: 
161.2      Subd. 10.  [PAYMENTS TO SCHOOL NONOPERATING FUNDS.] Each 
161.3   fiscal year state general fund payments for a district 
161.4   nonoperating fund must be made at 83 77 percent of the estimated 
161.5   entitlement during the fiscal year of the entitlement.  This 
161.6   amount shall be paid in 12 equal monthly installments.  The 
161.7   amount of the actual entitlement, after adjustment for actual 
161.8   data, minus the payments made during the fiscal year of the 
161.9   entitlement must be paid prior to October 31 of the following 
161.10  school year.  The commissioner may make advance payments of debt 
161.11  service equalization aid or homestead and agricultural credit 
161.12  aid for a district's debt service fund earlier than would occur 
161.13  under the preceding schedule if the district submits evidence 
161.14  showing a serious cash flow problem in the fund.  The 
161.15  commissioner may make earlier payments during the year and, if 
161.16  necessary, increase the percent of the entitlement paid to 
161.17  reduce the cash flow problem. 
161.18     Sec. 16.  Minnesota Statutes 2002, section 127A.45, 
161.19  subdivision 13, is amended to read: 
161.20     Subd. 13.  [AID PAYMENT PERCENTAGE.] Except as provided in 
161.21  subdivisions 11, 12, 12a, and 14, each fiscal year, all 
161.22  education aids and credits in this chapter and chapters 120A, 
161.23  120B, 121A, 122A, 123A, 123B, 124D, 125A, 125B, 126C, 134, and 
161.24  section 273.1392, shall be paid at 83 77 percent of the 
161.25  estimated entitlement during the fiscal year of the 
161.26  entitlement.  For the purposes of this subdivision, a district's 
161.27  estimated entitlement for special education excess cost aid 
161.28  under section 125A.79 equals 70 percent of the district's 
161.29  entitlement for the second prior fiscal year.  The final 
161.30  adjustment payment, according to subdivision 9, must be the 
161.31  amount of the actual entitlement, after adjustment for actual 
161.32  data, minus the payments made during the fiscal year of the 
161.33  entitlement. 
161.34     Sec. 17.  Minnesota Statutes 2002, section 127A.45, 
161.35  subdivision 14, is amended to read: 
161.36     Subd. 14.  [NONPUBLIC AIDS.] The state shall pay aid 
162.1   according to sections 123B.40 to 123B.48 for pupils attending 
162.2   nonpublic schools as follows: 
162.3      (1) an advance payment by November 30 equal to 83 77 
162.4   percent of the estimated entitlement for the current fiscal 
162.5   year; and 
162.6      (2) a final payment by October 31 of the following fiscal 
162.7   year, adjusted for actual data.  
162.8      If a payment advance to meet cash flow needs is requested 
162.9   by a district and approved by the commissioner, the state shall 
162.10  pay nonpublic pupil transportation aid according to section 
162.11  123B.92 by October 31. 
162.12     Sec. 18.  Minnesota Statutes 2002, section 127A.45, 
162.13  subdivision 14a, is amended to read: 
162.14     Subd. 14a.  [STATE NUTRITION PROGRAMS.] Notwithstanding 
162.15  subdivision 3, the state shall pay 100 percent of the aid for 
162.16  the current year according to sections 124D.111, 
162.17  124D.115, 124D.1158, and 124D.118 and 83 percent of the aid for 
162.18  the current year according to section 124D.1156 based on 
162.19  submitted monthly vouchers showing meals and milk served.  The 
162.20  remaining 17 percent according to section 124D.1156 shall be 
162.21  paid by October 30 of the following fiscal year. 
162.22     Sec. 19.  Minnesota Statutes 2002, section 127A.45, 
162.23  subdivision 16, is amended to read: 
162.24     Subd. 16.  [PAYMENTS TO THIRD PARTIES.] Notwithstanding 
162.25  subdivision 3, 83 77 percent of the amounts under section 
162.26  123A.26, subdivision 3, shall be paid in equal installments on 
162.27  August 30, December 30, and March 30, with a 17 23 percent final 
162.28  adjustment payment on October 30 of the next fiscal year. 
162.29     Sec. 20.  Minnesota Statutes 2002, section 127A.47, 
162.30  subdivision 7, is amended to read: 
162.31     Subd. 7.  [ALTERNATIVE ATTENDANCE PROGRAMS.] The general 
162.32  education aid for districts must be adjusted for each pupil 
162.33  attending a nonresident district under sections 123A.05 to 
162.34  123A.08, 124D.03, 124D.06, 124D.07, 124D.08, and 124D.68.  The 
162.35  adjustments must be made according to this subdivision. 
162.36     (a) General education aid paid to a resident district must 
163.1   be reduced by an amount equal to the referendum equalization aid 
163.2   attributable to the pupil in the resident district. 
163.3      (b) General education aid paid to a district serving a 
163.4   pupil in programs listed in this subdivision must be increased 
163.5   by an amount equal to the referendum equalization aid 
163.6   attributable to the pupil in the nonresident district.  
163.7      (c) If the amount of the reduction to be made from the 
163.8   general education aid of the resident district is greater than 
163.9   the amount of general education aid otherwise due the district, 
163.10  the excess reduction must be made from other state aids due the 
163.11  district. 
163.12     (d) The district of residence must pay tuition to a 
163.13  district or an area learning center, operated according to 
163.14  paragraph (e), providing special instruction and services to a 
163.15  pupil with a disability, as defined in section 125A.02, or a 
163.16  pupil, as defined in section 125A.51, who is enrolled in a 
163.17  program listed in this subdivision.  The tuition must be equal 
163.18  to (1) the actual cost of providing special instruction and 
163.19  services to the pupil, including a proportionate amount for debt 
163.20  service and for capital expenditure facilities and equipment, 
163.21  and debt service but not including any amount for 
163.22  transportation, minus (2) the amount of general education 
163.23  revenue and special education aid but not including any amount 
163.24  for transportation, attributable to that pupil, that is received 
163.25  by the district providing special instruction and services. 
163.26     (e) An area learning center operated by a service 
163.27  cooperative, intermediate district, education district, or a 
163.28  joint powers cooperative may elect through the action of the 
163.29  constituent boards to charge the resident district tuition for 
163.30  pupils rather than to calculate general education aid 
163.31  adjustments under paragraph (a), (b), or (c).  The tuition must 
163.32  be equal to the greater of the average general education revenue 
163.33  per pupil unit attributable to the pupil, or the actual cost of 
163.34  providing the instruction, excluding transportation costs, if 
163.35  the pupil meets the requirements of section 125A.02 or 
163.36  125A.51 have the general education revenue paid to a fiscal 
164.1   agent school district.  Except as provided in paragraph (d), the 
164.2   district of residence must pay tuition equal to at least 90 
164.3   percent of the district average general education revenue per 
164.4   pupil unit minus an amount equal to the product of the formula 
164.5   allowance according to section 126C.10, subdivision 2, times 
164.6   .0485, calculated without basic skills revenue and 
164.7   transportation sparsity revenue, times the number of pupil units 
164.8   for pupils attending the area learning center, plus the amount 
164.9   of compensatory revenue generated by pupils attending the area 
164.10  learning center. 
164.11     Sec. 21.  Minnesota Statutes 2002, section 127A.47, 
164.12  subdivision 8, is amended to read: 
164.13     Subd. 8.  [CHARTER SCHOOLS.] (a) The general education aid 
164.14  for districts must be adjusted for each pupil attending a 
164.15  charter school under section 124D.10.  The adjustments must be 
164.16  made according to this subdivision. 
164.17     (b) General education aid paid to a district in which a 
164.18  charter school not providing transportation according to section 
164.19  124D.10, subdivision 16, is located must be increased by an 
164.20  amount equal to the product of:  (1) the sum of an amount equal 
164.21  to the product of the formula allowance according to section 
164.22  126C.10, subdivision 2, times .0485, plus the transportation 
164.23  sparsity allowance for the district, plus the transportation 
164.24  transition allowance for the district; times (2) the pupil units 
164.25  attributable to the pupil.  
164.26     Sec. 22.  Minnesota Statutes 2002, section 127A.49, 
164.27  subdivision 2, is amended to read: 
164.28     Subd. 2.  [ABATEMENTS.] Whenever by virtue of chapter 278, 
164.29  sections 270.07, 375.192, or otherwise, the net tax capacity of 
164.30  any district for any taxable year is changed after the taxes for 
164.31  that year have been spread by the county auditor and the local 
164.32  tax rate as determined by the county auditor based upon the 
164.33  original net tax capacity is applied upon the changed net tax 
164.34  capacities, the county auditor shall, prior to February 1 of 
164.35  each year, certify to the commissioner of children, families, 
164.36  and learning education the amount of any resulting net revenue 
165.1   loss that accrued to the district during the preceding year.  
165.2   Each year, the commissioner shall pay an abatement adjustment to 
165.3   the district in an amount calculated according to the provisions 
165.4   of this subdivision.  This amount shall be deducted from the 
165.5   amount of the levy authorized by section 126C.46.  The amount of 
165.6   the abatement adjustment must be the product of:  
165.7      (1) the net revenue loss as certified by the county 
165.8   auditor, times 
165.9      (2) the ratio of:  
165.10     (i) the sum of the amounts of the district's certified levy 
165.11  in the preceding year according to the following:  
165.12     (A) section 126C.13 if the district received general 
165.13  education aid according to that section for the second preceding 
165.14  year; 
165.15     (B) section 123B.57, if the district received health and 
165.16  safety aid according to that section for the second preceding 
165.17  year; 
165.18     (C) sections (B) section 124D.20, 124D.21, and 124D.56, if 
165.19  the district received aid for community education programs 
165.20  according to any of those sections that section for the second 
165.21  preceding year; 
165.22     (D) (C) section 124D.135, subdivision 3, if the district 
165.23  received early childhood family education aid according to 
165.24  section 124D.135 for the second preceding year; and 
165.25     (E) (D) section 126C.17, subdivision 6, if the district 
165.26  received referendum equalization aid according to that section 
165.27  for the second preceding year; to 
165.28     (ii) the total amount of the district's certified levy in 
165.29  the preceding December, plus or minus auditor's adjustments. 
165.30     Sec. 23.  Minnesota Statutes 2002, section 127A.49, 
165.31  subdivision 3, is amended to read: 
165.32     Subd. 3.  [EXCESS TAX INCREMENT.] (a) If a return of excess 
165.33  tax increment is made to a district pursuant to section 469.176, 
165.34  subdivision 2, or upon decertification of a tax increment 
165.35  district, the school district's aid and levy limitations must be 
165.36  adjusted for the fiscal year in which the excess tax increment 
166.1   is paid under the provisions of this subdivision. 
166.2      (b) An amount must be subtracted from the district's aid 
166.3   for the current fiscal year equal to the product of: 
166.4      (1) the amount of the payment of excess tax increment to 
166.5   the district, times 
166.6      (2) the ratio of: 
166.7      (i) the sum of the amounts of the district's certified levy 
166.8   for the fiscal year in which the excess tax increment is paid 
166.9   according to the following: 
166.10     (A) section 126C.13, if the district received general 
166.11  education aid according to that section for the second preceding 
166.12  year; 
166.13     (B) section 123B.57, if the district received health and 
166.14  safety aid according to that section for the second preceding 
166.15  year; 
166.16     (C) sections (B) section 124D.20, 124D.21, and 124D.56, if 
166.17  the district received aid for community education programs 
166.18  according to any of those sections that section for the second 
166.19  preceding year; 
166.20     (D) (C) section 124D.135, subdivision 3, if the district 
166.21  received early childhood family education aid according to 
166.22  section 124D.135 for the second preceding year; and 
166.23     (E) (D) section 126C.17, subdivision 6, if the district 
166.24  received referendum equalization aid according to that section 
166.25  for the second preceding year; to 
166.26     (ii) the total amount of the district's certified levy for 
166.27  the fiscal year, plus or minus auditor's adjustments. 
166.28     (c) An amount must be subtracted from the school district's 
166.29  levy limitation for the next levy certified equal to the 
166.30  difference between: 
166.31     (1) the amount of the distribution of excess increment; and 
166.32     (2) the amount subtracted from aid pursuant to clause (a). 
166.33     If the aid and levy reductions required by this subdivision 
166.34  cannot be made to the aid for the fiscal year specified or to 
166.35  the levy specified, the reductions must be made from aid for 
166.36  subsequent fiscal years, and from subsequent levies.  The school 
167.1   district must use the payment of excess tax increment to replace 
167.2   the aid and levy revenue reduced under this subdivision. 
167.3      (d) This subdivision applies only to the total amount of 
167.4   excess increments received by a district for a calendar year 
167.5   that exceeds $25,000. 
167.6      Sec. 24.  Minnesota Statutes 2002, section 128D.11, 
167.7   subdivision 8, is amended to read: 
167.8      Subd. 8.  [NET DEBT LIMIT.] The school district shall not 
167.9   be subject to a net debt in excess of 102 144 percent of the net 
167.10  tax capacity of all taxable property therein. 
167.11     Sec. 25.  Minnesota Statutes 2002, section 268.052, 
167.12  subdivision 2, is amended to read: 
167.13     Subd. 2.  [ELECTION BY STATE OR POLITICAL SUBDIVISION TO BE 
167.14  A TAXPAYING EMPLOYER.] (a) The state or political 
167.15  subdivision excluding a school district may elect to be a 
167.16  taxpaying employer for any calendar year if a notice of election 
167.17  is filed within 30 calendar days following January 1 of that 
167.18  calendar year.  Upon election, the state or political 
167.19  subdivision shall be assigned the new employer tax rate under 
167.20  section 268.051, subdivision 5, for the calendar year of the 
167.21  election and until it qualifies for an experience rating under 
167.22  section 268.051, subdivision 3. 
167.23     (b) An election shall be for a minimum period of two 
167.24  calendar years following the effective date of the election and 
167.25  continue unless a notice terminating the election is filed not 
167.26  later than 30 calendar days before the beginning of the calendar 
167.27  year.  The termination shall be effective at the beginning of 
167.28  the next calendar year.  Upon election, the commissioner shall 
167.29  establish a reimbursable account for the state or political 
167.30  subdivision.  A termination of election shall be allowed only if 
167.31  the state or political subdivision has, since the beginning of 
167.32  the experience rating period under section 268.051, subdivision 
167.33  3, paid taxes and made voluntary payments under section 268.051, 
167.34  subdivision 7, equal to or more than 125 percent of the 
167.35  unemployment benefits used in computing the experience rating.  
167.36  In addition, any unemployment benefits paid after the experience 
168.1   rating period shall be transferred to the new reimbursable 
168.2   account of the state or political subdivision.  If the amount of 
168.3   taxes and voluntary payments paid since the beginning of the 
168.4   experience rating period exceeds 125 percent of the amount of 
168.5   unemployment benefits paid during the experience rating period, 
168.6   that amount in excess shall be applied against any unemployment 
168.7   benefits paid after the experience rating period. 
168.8      (c) The method of payments to the fund under subdivisions 3 
168.9   and 4 shall apply to all taxes paid by or due from the state or 
168.10  political subdivision that elects to be taxpaying employers 
168.11  under this subdivision. 
168.12     (d) The commissioner may allow a notice of election or a 
168.13  notice terminating election to be filed by mail or electronic 
168.14  transmission.  
168.15     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
168.16  following final enactment. 
168.17     Sec. 26.  Minnesota Statutes 2002, section 268.052, 
168.18  subdivision 4, is amended to read: 
168.19     Subd. 4.  [METHOD OF PAYMENT BY POLITICAL SUBDIVISION.] A 
168.20  political subdivision or instrumentality thereof is authorized 
168.21  and directed to pay its liabilities by money collected from 
168.22  taxes or other revenues.  Every political subdivision authorized 
168.23  to levy taxes except school districts may include in its tax 
168.24  levy the amount necessary to pay its liabilities.  School 
168.25  districts may levy according to section 126C.43, subdivision 2.  
168.26  If the taxes authorized to be levied cause the total amount of 
168.27  taxes levied to exceed any limitation upon the power of a 
168.28  political subdivision to levy taxes, the political subdivision 
168.29  may levy taxes in excess of the limitations in the amounts 
168.30  necessary to meet its liability.  The expenditures authorized 
168.31  shall not be included in computing the cost of government as 
168.32  defined in any home rule charter.  The governing body of a 
168.33  municipality, for the purpose of meeting its liabilities, in the 
168.34  event of a deficit, may issue its obligations payable in not 
168.35  more than two years, in an amount that may cause its 
168.36  indebtedness to exceed any statutory or charter limitations, 
169.1   without an election, and may levy taxes in the manner provided 
169.2   in section 475.61. 
169.3      <b>[EFFECTIVE DATE.]</b> This section is effective for taxes 
169.4   payable in 2004. 
169.5      Sec. 27.  Minnesota Statutes 2002, section 273.138, 
169.6   subdivision 6, is amended to read: 
169.7      Subd. 6.  The amount of aid calculated for a school 
169.8   district pursuant to subdivision 3, clauses (2), (3), (4), and 
169.9   (5) shall be deducted from the school district's general fund 
169.10  levy limitation established pursuant to section 126C.13 chapters 
169.11  122A, 123A, 123B, 124D, and 126C in determining the amount of 
169.12  taxes the school district may levy for general and special 
169.13  purposes. 
169.14     Sec. 28.  Minnesota Statutes 2002, section 298.28, 
169.15  subdivision 4, is amended to read: 
169.16     Subd. 4.  [SCHOOL DISTRICTS.] (a) 17.15 cents per taxable 
169.17  ton plus the increase provided in paragraph (d) must be 
169.18  allocated to qualifying school districts to be distributed, 
169.19  based upon the certification of the commissioner of revenue, 
169.20  under paragraphs (b) and (c), except as otherwise provided in 
169.21  paragraph (f). 
169.22     (b) 3.43 cents per taxable ton must be distributed to the 
169.23  school districts in which the lands from which taconite was 
169.24  mined or quarried were located or within which the concentrate 
169.25  was produced.  The distribution must be based on the 
169.26  apportionment formula prescribed in subdivision 2. 
169.27     (c)(i) 13.72 cents per taxable ton, less any amount 
169.28  distributed under paragraph (e), shall be distributed to a group 
169.29  of school districts comprised of those school districts in which 
169.30  the taconite was mined or quarried or the concentrate produced 
169.31  or in which there is a qualifying municipality as defined by 
169.32  section 273.134, paragraph (b), in direct proportion to school 
169.33  district indexes as follows:  for each school district, its 
169.34  pupil units determined under section 126C.05 for the prior 
169.35  school year shall be multiplied by the ratio of the average 
169.36  adjusted net tax capacity per pupil unit for school districts 
170.1   receiving aid under this clause as calculated pursuant to 
170.2   chapters 122A, 126C, and 127A for the school year ending prior 
170.3   to distribution to the adjusted net tax capacity per pupil unit 
170.4   of the district.  Each district shall receive that portion of 
170.5   the distribution which its index bears to the sum of the indices 
170.6   for all school districts that receive the distributions.  
170.7      (ii) Notwithstanding clause (i), each school district that 
170.8   receives a distribution under sections 298.018; 298.23 to 
170.9   298.28, exclusive of any amount received under this clause; 
170.10  298.34 to 298.39; 298.391 to 298.396; 298.405; or any law 
170.11  imposing a tax on severed mineral values after reduction for any 
170.12  portion distributed to cities and towns under section 126C.48, 
170.13  subdivision 8, paragraph (5), that is less than the amount of 
170.14  its levy reduction under section 126C.48, subdivision 8, for the 
170.15  second year prior to the year of the distribution shall receive 
170.16  a distribution equal to the difference; the amount necessary to 
170.17  make this payment shall be derived from proportionate reductions 
170.18  in the initial distribution to other school districts under 
170.19  clause (i).  
170.20     (d) Any school district described in paragraph (c) where a 
170.21  levy increase pursuant to section 126C.17, subdivision 9, was 
170.22  authorized by referendum for taxes payable in 2001, shall 
170.23  receive a distribution from a fund that receives a distribution 
170.24  in 1998 of 21.3 cents per ton.  On July 15 of 1999, and each 
170.25  year thereafter, the increase over the amount established for 
170.26  the prior year shall be determined according to the increase in 
170.27  the implicit price deflator as provided in section 298.24, 
170.28  subdivision 1.  Each district shall receive $175 times the pupil 
170.29  units identified in section 126C.05, subdivision 1, enrolled in 
170.30  the second previous year or the 1983-1984 school year, whichever 
170.31  is greater, less the product of 1.8 percent times the district's 
170.32  taxable net tax capacity in the second previous year. 
170.33     If the total amount provided by paragraph (d) is 
170.34  insufficient to make the payments herein required then the 
170.35  entitlement of $175 per pupil unit shall be reduced uniformly so 
170.36  as not to exceed the funds available.  Any amounts received by a 
171.1   qualifying school district in any fiscal year pursuant to 
171.2   paragraph (d) shall not be applied to reduce general education 
171.3   aid which the district receives pursuant to section 126C.13 or 
171.4   the permissible levies of the district.  Any amount remaining 
171.5   after the payments provided in this paragraph shall be paid to 
171.6   the commissioner of iron range resources and rehabilitation who 
171.7   shall deposit the same in the taconite environmental protection 
171.8   fund and the northeast Minnesota economic protection trust fund 
171.9   as provided in subdivision 11. 
171.10     Each district receiving money according to this paragraph 
171.11  shall reserve the lesser of the amount received under this 
171.12  paragraph or $25 times the number of pupil units served in the 
171.13  district.  It may use the money for early childhood programs or 
171.14  for outcome-based learning programs that enhance the academic 
171.15  quality of the district's curriculum.  The outcome-based 
171.16  learning programs must be approved by the commissioner of 
171.17  children, families, and learning education. 
171.18     (e) There shall be distributed to any school district the 
171.19  amount which the school district was entitled to receive under 
171.20  section 298.32 in 1975. 
171.21     (f) Effective for the distribution in 2003 only, five 
171.22  percent of the distributions to school districts under 
171.23  paragraphs (b), (c), and (e); subdivision 6, paragraph (c); 
171.24  subdivision 11; and section 298.225, shall be distributed to the 
171.25  general fund.  The remainder less any portion distributed to 
171.26  cities and towns under section 126C.48, subdivision 8, paragraph 
171.27  (5), shall be distributed to the northeast Minnesota economic 
171.28  protection trust fund created in section 298.292.  Fifty percent 
171.29  of the amount distributed to the northeast Minnesota economic 
171.30  protection trust fund shall be made available for expenditure 
171.31  under section 298.293 as governed by section 298.296.  Effective 
171.32  in 2003 only, 100 percent of the distributions to school 
171.33  districts under section 477A.15 less any portion distributed to 
171.34  cities and towns under section 126C.48, subdivision 8, paragraph 
171.35  (5), shall be distributed to the general fund. 
171.36     Sec. 29.  Minnesota Statutes 2002, section 475.61, 
172.1   subdivision 4, is amended to read: 
172.2      Subd. 4.  [SURPLUS FUNDS.] (a) All such taxes shall be 
172.3   collected and remitted to the municipality by the county 
172.4   treasurer as other taxes are collected and remitted, and shall 
172.5   be used only for payment of the obligations on account of which 
172.6   levied or to repay advances from other funds used for such 
172.7   payments, except that any surplus remaining in the debt service 
172.8   fund when the obligations and interest thereon are paid may be 
172.9   appropriated to any other general purpose by the municipality.  
172.10  However, the amount of any surplus remaining in the debt service 
172.11  fund of a school district when the obligations and interest 
172.12  thereon are paid shall be used to reduce the general education 
172.13  fund levy authorized pursuant to section 126C.13 chapters 122A, 
172.14  123A, 123B, 124D, and 126C and the state aids authorized 
172.15  pursuant to chapters 122A, 123A, 123B, 124D, 125A, 126C, and 
172.16  127A. 
172.17     (b) The reduction to state aids equals the lesser of (1) 
172.18  the amount of the surplus times the ratio of the district's debt 
172.19  service equalization aid to the district's debt service 
172.20  equalization revenue for the last year that the district 
172.21  qualified for debt service equalization aid; or (2) the 
172.22  district's cumulative amount of debt service equalization aid.  
172.23     (c) The reduction to the general education fund levy equals 
172.24  the total amount of the surplus minus the reduction to state 
172.25  aids. 
172.26     Sec. 30.  Laws 1965, chapter 705, as amended by Laws 1975, 
172.27  chapter 261, section 4; Laws 1980, chapter 609, article 6, 
172.28  section 37; and Laws 1989, chapter 329, article 13, section 18, 
172.29  is amended to read: 
172.30     Sec. 6.  [ST. PAUL SEVERANCE LEVY.] The school board of 
172.31  independent school district No. 625, St. Paul, for the purpose 
172.32  of providing moneys for the payment of its severance pay 
172.33  obligations under a plan approved by resolution of the district, 
172.34  in addition to all other powers possessed by the school district 
172.35  and in addition to and in excess of any existing limitation upon 
172.36  the amount it is otherwise authorized by law to levy as taxes, 
173.1   is authorized to levy taxes annually not exceeding in any one 
173.2   year an amount equal to a gross tax capacity rate of .17 percent 
173.3   for taxes payable in 1990 or a net tax capacity rate of .21 .34 
173.4   percent for taxes payable in 1991 2002 and thereafter upon all 
173.5   taxable property within the school district which taxes as 
173.6   levied shall be spread upon the tax rolls, and all corrections 
173.7   thereof shall be held by the school district, and allocated 
173.8   therefor to be disbursed and expended by the school district in 
173.9   payment of any public school severance pay obligations and for 
173.10  no other purpose.  Disbursements and expenditures previously 
173.11  authorized on behalf of the school district for payment of 
173.12  severance pay obligations shall not be deemed to constitute any 
173.13  part of the cost of the operation and maintenance of the school 
173.14  district within the meaning of any statutory limitation of any 
173.15  school district expenditures.  
173.16     The amount of such severance pay allowable or to become 
173.17  payable in respect of any such employment or to any such 
173.18  employee shall not exceed the amount permitted by Minnesota 
173.19  Statutes, Section 465.72.  
173.20     <b>[EFFECTIVE DATE.]</b> This section is effective retroactively 
173.21  for taxes payable in 2002 and thereafter. 
173.22     Sec. 31.  [APPROPRIATIONS.] 
173.23     Subdivision 1.  [DEPARTMENT OF EDUCATION.] The sums 
173.24  indicated in this section are appropriated from the general fund 
173.25  to the department of education for the fiscal years designated. 
173.26     Subd. 2.  [SCHOOL LUNCH.] (a) For school lunch aid 
173.27  according to Minnesota Statutes, section 124D.111, and Code of 
173.28  Federal Regulations, title 7, section 210.17:  
173.29       $7,800,000     .....     2004 
173.30       $7,950,000     .....     2005 
173.31     Subd. 3.  [TRADITIONAL SCHOOL BREAKFAST; KINDERGARTEN 
173.32  MILK.] For traditional school breakfast aid and kindergarten 
173.33  milk under Minnesota Statutes, sections 124D.1158 and 124D.118: 
173.34       $3,088,000     .....     2004 
173.35       $3,217,000     .....     2005 
173.36     Subd. 4.  [FAST BREAK TO LEARNING BREAKFAST.] For fast 
174.1   break to learning breakfast under Minnesota Statutes, section 
174.2   124D.1156: 
174.3        $747,000     .....     2004 
174.4      The 2004 appropriation includes $747,000 for 2003 and $0 
174.5   for 2004. 
174.6      Subd. 5.  [SUMMER SCHOOL SERVICE REPLACEMENT AID.] For 
174.7   summer food service replacement aid under Minnesota Statutes, 
174.8   section 124D.119: 
174.9        $150,000       .....     2004 
174.10       $150,000       .....     2005 
174.11     Sec. 32.  [REVISOR INSTRUCTION.] 
174.12     In the next and subsequent editions of Minnesota Statutes, 
174.13  the revisor shall codify section 30 as Minnesota Statutes, 
174.14  section 126C.41, subdivision 5.  
174.15     Sec. 33.  [REPEALER.] 
174.16     Minnesota Statutes 2002, sections 93.22, subdivision 2; 
174.17  93.223, subdivision 1; 124D.115; 124D.1156; and 127A.41, 
174.18  subdivision 6, are repealed. 
174.19                             ARTICLE 6 
174.20                             LIBRARIES 
174.21     Section 1.  Minnesota Statutes 2002, section 134.34, 
174.22  subdivision 4, is amended to read: 
174.23     Subd. 4.  [LIMITATION.] A regional library basic system 
174.24  support grant shall not be made to a regional public library 
174.25  system for a participating city or county which decreases the 
174.26  dollar amount provided for support for operating purposes of 
174.27  public library service below 90 percent of the amount provided 
174.28  by it for the second preceding year.  This subdivision shall not 
174.29  apply to participating cities or counties where the adjusted net 
174.30  tax capacity of that city or county has decreased, if the dollar 
174.31  amount of the reduction in support is not greater than the 
174.32  dollar amount by which support would be decreased if the 
174.33  reduction in support were made in direct proportion to the 
174.34  decrease in adjusted net tax capacity. 
174.35     <b>[EFFECTIVE DATE.]</b> This section is effective for grants 
174.36  distributed in 2004 and 2005 only. 
175.1      Sec. 2.  [APPROPRIATIONS.] 
175.2      Subdivision 1.  [DEPARTMENT OF EDUCATION.] The sums 
175.3   indicated in this section are appropriated from the general fund 
175.4   to the department of education for the fiscal years designated.  
175.5      Subd. 2.  [BASIC SUPPORT.] For basic support grants 
175.6   according to Minnesota Statutes, sections 134.32 to 134.35: 
175.7        $8,979,000     .....     2004 
175.8        $9,770,000     .....     2005 
175.9      The 2004 appropriation includes $1,456,000 for 2003 and 
175.10  $7,523,000 for 2004. 
175.11     The 2005 appropriation includes $2,247,000 for 2004 and 
175.12  $7,523,000 for 2005. 
175.13     Subd. 3.  [MULTICOUNTY, MULTITYPE LIBRARY SYSTEMS.] For 
175.14  grants according to Minnesota Statutes, sections 134.353 and 
175.15  134.354, to multicounty, multitype library systems: 
175.16       $849,000       .....     2004 
175.17       $903,000       .....     2005 
175.18     The 2004 appropriation includes $153,000 for 2003 and 
175.19  $696,000 for 2004. 
175.20     The 2005 appropriation includes $207,000 for 2004 and 
175.21  $696,000 for 2005.  
175.22     Subd. 4.  [ELECTRONIC LIBRARY FOR MINNESOTA.] For statewide 
175.23  licenses to on-line databases selected in cooperation with the 
175.24  higher education services office for school media centers, 
175.25  public libraries, state government agency libraries, and public 
175.26  or private college or university libraries: 
175.27        $400,000     .....     2004 
175.28        $400,000     .....     2005 
175.29     Any balance in the first year does not cancel but is 
175.30  available in the second year. 
175.31     Sec. 3.  [REPEALER.] 
175.32     The changes made to Minnesota Statutes, section 134.34, 
175.33  subdivision 4, in section 1 are repealed July 1, 2005. 
175.34                             ARTICLE 7
175.35                   EARLY CHILDHOOD FAMILY SUPPORT
175.36     Section 1.  Minnesota Statutes 2002, section 119A.52, is 
176.1   amended to read: 
176.2      119A.52 [DISTRIBUTION OF APPROPRIATION AND PROGRAM 
176.3   COORDINATION.] 
176.4      Subdivision 1.  [DISTRIBUTION OF APPROPRIATION; WORK PLAN.] 
176.5   (a) The commissioner of children, families, and learning 
176.6   education must distribute money appropriated for that purpose to 
176.7   Head Start program grantees to expand services and to serve 
176.8   additional low-income children.  Money must be allocated to each 
176.9   project Head Start grantee in existence on the effective date of 
176.10  Laws 1989, chapter 282.  Migrant and Indian reservation grantees 
176.11  must be initially allocated money based on the grantees' share 
176.12  of federal funds.  The remaining money must be initially 
176.13  allocated to the remaining local agencies based equally on the 
176.14  agencies' share of federal funds and on the proportion of 
176.15  eligible children in the agencies' service area who are not 
176.16  currently being served.  A Head Start grantee must be funded at 
176.17  a per child rate equal to its contracted, federally funded base 
176.18  level for program accounts 20, 22, and 25 at the start of the 
176.19  fiscal year.  In allocating funds under this paragraph, the 
176.20  commissioner of children, families, and learning education must 
176.21  assure that each Head Start grantee is allocated no less funding 
176.22  in any fiscal year than was allocated to that grantee in fiscal 
176.23  year 1993.  The commissioner may provide additional funding to 
176.24  grantees for start-up costs incurred by grantees due to the 
176.25  increased number of children to be served.  Before paying money 
176.26  to the grantees, the commissioner must notify each grantee of 
176.27  its initial allocation, how the money must be used, and the 
176.28  number of low-income children that must be served with the 
176.29  allocation.  Each grantee must notify present a work plan to the 
176.30  commissioner of for approval.  The work plan must include the 
176.31  estimated number of low-income children and families it will be 
176.32  able to serve, a description of the program design and service 
176.33  delivery area which meets the needs of and encourages access by 
176.34  low-income working families, a program design that ensures fair 
176.35  and equitable access to Head Start services for all populations 
176.36  and parts of the service area, and a plan for coordinating 
177.1   services to maximize assistance for child care costs available 
177.2   to families under chapter 119B.  For any grantee that cannot 
177.3   utilize its full allocation, the commissioner must reduce the 
177.4   allocation proportionately.  Money available after the initial 
177.5   allocations are reduced must be redistributed to eligible 
177.6   grantees. 
177.7      (b) Up to 11 percent of the funds appropriated annually may 
177.8   be used to provide grants to local Head Start agencies to 
177.9   provide funds for innovative programs designed either to target 
177.10  Head Start resources to particular at-risk groups of children or 
177.11  to provide services in addition to those currently allowable 
177.12  under federal Head Start regulations.  The commissioner must 
177.13  award funds for innovative programs under this paragraph on a 
177.14  competitive basis. 
177.15     Subd. 2.  [PROGRAM COORDINATION.] Each Head Start grantee 
177.16  must submit a plan, as part of the work plan requirement in 
177.17  subdivision 1, to coordinate and maximize use of existing public 
177.18  and private community resources and reduce duplication of 
177.19  services. 
177.20     Sec. 2.  Minnesota Statutes 2002, section 124D.13, 
177.21  subdivision 2, is amended to read: 
177.22     Subd. 2.  [PROGRAM CHARACTERISTICS.] Early childhood family 
177.23  education programs are programs for children in the period of 
177.24  life from birth to kindergarten, for the parents of such 
177.25  children, and for expectant parents.  The To the extent that 
177.26  funds are insufficient to provide programs for all children, 
177.27  early childhood family education programs should emphasize 
177.28  programming for a child from birth to age three and encourage 
177.29  parents to involve four- and five-year-old children in school 
177.30  readiness programs, and other public and nonpublic early 
177.31  learning programs.  Early childhood family education programs 
177.32  may include the following:  
177.33     (1) programs to educate parents about the physical, mental, 
177.34  and emotional development of children; 
177.35     (2) programs to enhance the skills of parents in providing 
177.36  for their children's learning and development; 
178.1      (3) learning experiences for children and parents that 
178.2   promote children's development; 
178.3      (4) activities designed to detect children's physical, 
178.4   mental, emotional, or behavioral problems that may cause 
178.5   learning problems; 
178.6      (5) activities and materials designed to encourage 
178.7   self-esteem, skills, and behavior that prevent sexual and other 
178.8   interpersonal violence; 
178.9      (6) educational materials which may be borrowed for home 
178.10  use; 
178.11     (7) information on related community resources; 
178.12     (8) programs to prevent child abuse and neglect; 
178.13     (9) other programs or activities to improve the health, 
178.14  development, and school readiness of children; or 
178.15     (10) activities designed to maximize development during 
178.16  infancy.  
178.17     The programs must not include activities for children that 
178.18  do not require substantial involvement of the children's 
178.19  parents.  The programs must be reviewed periodically to assure 
178.20  the instruction and materials are not racially, culturally, or 
178.21  sexually biased.  The programs must encourage parents to be 
178.22  aware of practices that may affect equitable development of 
178.23  children. 
178.24     Sec. 3.  Minnesota Statutes 2002, section 124D.13, 
178.25  subdivision 4, is amended to read: 
178.26     Subd. 4.  [HOME VISITING PROGRAM.] (a) The commissioner A 
178.27  district that levies for home visiting under section 124D.135, 
178.28  subdivision 6, shall use this revenue to include as part of the 
178.29  early childhood family education programs a parent education 
178.30  component to prevent child abuse and neglect.  This parent 
178.31  education component must include: 
178.32     (1) expanding statewide the home visiting component of the 
178.33  early childhood family education programs; 
178.34     (2) training parent educators, child educators, community 
178.35  outreach workers, and home visitors in the dynamics of child 
178.36  abuse and neglect and positive parenting and discipline 
179.1   practices; and 
179.2      (3) developing and disseminating education and public 
179.3   information materials that promote positive parenting skills and 
179.4   prevent child abuse and neglect. 
179.5      (b) The parent education component must: 
179.6      (1) offer to isolated or at-risk families home visiting 
179.7   parent education services that at least address parenting 
179.8   skills, a child's development and stages of growth, 
179.9   communication skills, managing stress, problem-solving skills, 
179.10  positive child discipline practices, methods of improving 
179.11  parent-child interactions and enhancing self-esteem, using 
179.12  community support services and other resources, and encouraging 
179.13  parents to have fun with and enjoy their children; 
179.14     (2) develop a that is designed to reach isolated or at-risk 
179.15  families. 
179.16     The home visiting program must use: 
179.17     (1) an established risk assessment tool to determine the 
179.18  family's level of risk; 
179.19     (3) (2) establish clear objectives and protocols for home 
179.20  visits; 
179.21     (4) determine the frequency and duration of home visits 
179.22  based on a risk-need assessment of the client, with home visits 
179.23  beginning in the second trimester of pregnancy and continuing, 
179.24  based on client need, until a child is six years old; 
179.25     (5) (3) encourage families to make a transition from home 
179.26  visits to site-based parenting programs to build a family 
179.27  support network and reduce the effects of isolation; 
179.28     (6) develop and distribute education materials on 
179.29  preventing child abuse and neglect that may be used in home 
179.30  visiting programs and parent education classes and distributed 
179.31  to the public; 
179.32     (7) initially provide at least 40 hours of training and 
179.33  thereafter ongoing training for parent educators, child 
179.34  educators, community outreach workers, and home visitors that 
179.35  covers the dynamics of child abuse and neglect, domestic 
179.36  violence and victimization within family systems, signs of abuse 
180.1   or other indications that a child may be at risk of being abused 
180.2   or neglected, what child abuse and neglect are, how to properly 
180.3   report cases of child abuse and neglect, respect for cultural 
180.4   preferences in child rearing, what community resources, social 
180.5   service agencies, and family support activities and programs are 
180.6   available, child development and growth, parenting skills, 
180.7   positive child discipline practices, identifying stress factors 
180.8   and techniques for reducing stress, home visiting techniques, 
180.9   and risk assessment measures; 
180.10     (8) (4) provide program services that are community-based, 
180.11  accessible, and culturally relevant; and 
180.12     (9) (5) foster collaboration among existing agencies and 
180.13  community-based organizations that serve young children and 
180.14  their families. 
180.15     (c) Home visitors should reflect the demographic 
180.16  composition of the community the home visitor is serving to the 
180.17  extent possible.  
180.18     Sec. 4.  Minnesota Statutes 2002, section 124D.13, 
180.19  subdivision 8, is amended to read: 
180.20     Subd. 8.  [COORDINATION.] (a) A district is encouraged to 
180.21  coordinate the program with its special education and vocational 
180.22  education programs and with related services provided by other 
180.23  governmental agencies and nonprofit agencies. must describe 
180.24  strategies to coordinate and maximize public and private 
180.25  community resources and reduce duplication of services. 
180.26     (b) A district is encouraged to coordinate adult basic 
180.27  education programs provided to parents and early childhood 
180.28  family education programs provided to children to accomplish the 
180.29  goals of section 124D.895. 
180.30     Sec. 5.  Minnesota Statutes 2002, section 124D.13, 
180.31  subdivision 11, is amended to read: 
180.32     Subd. 11.  [TEACHERS.] A school board must employ necessary 
180.33  qualified teachers or professionals licensed in a field related 
180.34  to health, child development or parent education supervised by a 
180.35  licensed teacher for its early childhood family education 
180.36  programs. 
181.1      Sec. 6.  Minnesota Statutes 2002, section 124D.135, 
181.2   subdivision 1, is amended to read: 
181.3      Subdivision 1.  [REVENUE.] The revenue for early childhood 
181.4   family education programs for a school district equals $113.50 
181.5   for fiscal years 2000 and 2001 and $120 for 2002 and later 
181.6   fiscal years for fiscal years 2003 and 2004 and $105 for fiscal 
181.7   year 2005 and later, times the greater of: 
181.8      (1) 150; or 
181.9      (2) the number of people under five years of age residing 
181.10  in the district on October 1 of the previous school year. 
181.11     Sec. 7.  Minnesota Statutes 2002, section 124D.135, 
181.12  subdivision 8, is amended to read: 
181.13     Subd. 8.  [RESERVE ACCOUNT LIMIT.] (a) Under this section, 
181.14  the average balance, during the most recent three-year period in 
181.15  a district's early childhood family education reserve account on 
181.16  June 30 of each year, adjusted for any prior reductions under 
181.17  this subdivision, must not be greater than 25 percent of the sum 
181.18  of the district's maximum early childhood family education 
181.19  annual revenue under subdivision 1, excluding adjustments under 
181.20  this subdivision, plus any fees, grants, or other revenue 
181.21  received by the district for early childhood family education 
181.22  programs for the prior year. 
181.23     (b) If a district's adjusted average early childhood family 
181.24  education reserve over the three-year period is in excess of 25 
181.25  percent of the prior year annual revenue the limit under 
181.26  paragraph (a), the district's early childhood family education 
181.27  state aid and levy authority for the current school year must be 
181.28  reduced by the lesser of the current year revenue under 
181.29  subdivision 1 or the excess reserve amount.  The aid reduction 
181.30  equals the product of the lesser of the excess reserve amount or 
181.31  the current year revenue under subdivision 1 times the ratio of 
181.32  the district's aid for the prior current year under subdivision 
181.33  4 to the district's revenue for the prior current year under 
181.34  subdivision 1.  The levy reduction equals the excess reserve 
181.35  amount minus the aid reduction.  The commissioner must 
181.36  reallocate aid and levy reduced under this subdivision to other 
182.1   eligible early childhood family education programs in proportion 
182.2   to each district's revenue for the prior year under subdivision 
182.3   1.  For purposes of this paragraph, if a district does not levy 
182.4   the entire amount permitted under subdivision 3, the revenue 
182.5   under subdivision 1 must be reduced in proportion to the actual 
182.6   amount levied.  
182.7      (b) (c) Notwithstanding paragraph (a), for fiscal year 
182.8   2003, the excess reserve amount shall be computed using the 
182.9   balance in a district's early childhood family education reserve 
182.10  account on June 30, 2002.  For fiscal year 2004, the excess 
182.11  reserve amount shall be computed using the adjusted average 
182.12  balance in a district's early childhood family education reserve 
182.13  account on June 30, 2002, and June 30, 2003. 
182.14     <b>[EFFECTIVE DATE.]</b> This section is effective for revenue for 
182.15  fiscal year 2003. 
182.16     Sec. 8.  Minnesota Statutes 2002, section 124D.15, 
182.17  subdivision 7, is amended to read: 
182.18     Subd. 7.  [ADVISORY COUNCIL.] Each school readiness program 
182.19  must have an advisory council composed of members of existing 
182.20  early education-related boards, parents of participating 
182.21  children, child care providers, culturally specific service 
182.22  organizations, local resource and referral agencies, local early 
182.23  intervention committees, and representatives of early childhood 
182.24  service providers.  The council must advise the board in 
182.25  creating and administering the program and must monitor the 
182.26  progress of the program.  The council must ensure that children 
182.27  at greatest risk receive appropriate services.  If the board is 
182.28  unable to appoint to the advisory council members of existing 
182.29  early education-related boards, it must appoint parents of 
182.30  children enrolled in the program who represent the racial, 
182.31  cultural, and economic diversity of the district and 
182.32  representatives of early childhood service providers as 
182.33  representatives to an existing advisory council. 
182.34     Sec. 9.  Minnesota Statutes 2002, section 124D.16, 
182.35  subdivision 1, is amended to read: 
182.36     Subdivision 1.  [PROGRAM REVIEW AND APPROVAL.] A school 
183.1   district shall biennially by May 1 submit to the commissioners 
183.2   of children, families, and learning education and health the 
183.3   program plan required under this subdivision.  As determined by 
183.4   the commissioners, one-half of the districts shall first submit 
183.5   the plan by May 1 of the 2000-2001 school year and one-half of 
183.6   the districts shall first submit the plan by May 1 of the 
183.7   2001-2002 school year.  The program plan must include: 
183.8      (1) a description of the services to be provided; 
183.9      (2) a plan to ensure children at greatest risk receive 
183.10  appropriate services; 
183.11     (3) a description of procedures and methods to be used 
183.12  strategies to coordinate and maximize public and private 
183.13  community resources to maximize use of existing community 
183.14  resources, including school districts, health care facilities, 
183.15  government agencies, neighborhood organizations, and other 
183.16  resources knowledgeable in early childhood development and 
183.17  reduce duplication of services; 
183.18     (4) comments about the district's proposed program by the 
183.19  advisory council required by section 124D.15, subdivision 7; and 
183.20     (5) agreements with all participating service providers.  
183.21     Each commissioner may review and comment on the program, 
183.22  and make recommendations to the commissioner of children, 
183.23  families, and learning education, within 30 90 days of receiving 
183.24  the plan. 
183.25     Sec. 10.  Minnesota Statutes 2002, section 124D.16, 
183.26  subdivision 6, is amended to read: 
183.27     Subd. 6.  [RESERVE ACCOUNT LIMIT.] (a) Under this section, 
183.28  the average balance, during the most recent three-year period, 
183.29  in a district's school readiness reserve account on June 30 of 
183.30  each year, adjusted for any prior reductions under this 
183.31  subdivision, must not be greater than 25 percent of the 
183.32  district's school readiness annual revenue for the prior year, 
183.33  excluding adjustments under this subdivision.  
183.34     (b) If a district's adjusted average school readiness 
183.35  reserve over the three-year period is in excess of 25 percent of 
183.36  the prior year annual revenue the limit under paragraph (a), the 
184.1   district's current year school readiness state aid must be 
184.2   reduced by the lesser of the excess reserve amount or the 
184.3   current year aid.  The commissioner must reallocate aid reduced 
184.4   under this subdivision to other eligible school readiness 
184.5   programs in proportion to each district's aid for the prior year 
184.6   under subdivision 2.  
184.7      (b) (c) Notwithstanding paragraph (a), for fiscal year 
184.8   2003, the excess reserve amount shall be computed using the 
184.9   balance in a district's school readiness reserve account on June 
184.10  30, 2002.  For fiscal year 2004, the excess reserve amount shall 
184.11  be computed using the adjusted average balance in a district's 
184.12  school readiness reserve account on June 30, 2002, and June 30, 
184.13  2003. 
184.14     <b>[EFFECTIVE DATE.]</b> This section is effective for revenue for 
184.15  fiscal year 2003. 
184.16     Sec. 11.  [STUDY ON EFFECTIVELY SERVING LOW-INCOME 
184.17  CHILDREN.] 
184.18     The commissioner of education, in order to effectively 
184.19  serve low-income children between the ages of three and five, 
184.20  must study how to redistribute to various qualifying early 
184.21  childhood program providers the state funds currently 
184.22  appropriated to Head Start grantees.  The commissioner must 
184.23  determine the eligibility criteria and the parameters of service 
184.24  delivery costs for awarding grants to early childhood program 
184.25  providers throughout the state, including Head Start grantees.  
184.26  The commissioner must expect eligible program providers to 
184.27  demonstrate relevant experience serving low-income children in 
184.28  unserved and underserved areas and a strong learning component 
184.29  in their program.  The commissioner, by February 15, 2004, must 
184.30  present study findings and recommendations in writing to the 
184.31  committees of the legislature having jurisdiction over early 
184.32  childhood through grade 12 education policy and finance. 
184.33     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
184.34  following final enactment. 
184.35     Sec. 12.  [APPROPRIATIONS.] 
184.36     Subdivision 1.  [DEPARTMENT OF EDUCATION.] The sums 
185.1   indicated in this section are appropriated from the general fund 
185.2   to the department of education for the fiscal years designated.  
185.3      Subd. 2.  [SCHOOL READINESS.] For revenue for school 
185.4   readiness programs under Minnesota Statutes, sections 124D.15 
185.5   and 124D.16: 
185.6        $ 9,239,000    .....     2004
185.7        $ 9,283,000    .....     2005
185.8      The 2004 appropriation includes $1,605,000 for 2003 and 
185.9   $7,634,000 for 2004. 
185.10     The 2005 appropriation includes $2,279,000 for 2004 and 
185.11  $7,004,000 for 2005.  
185.12     Subd. 3.  [EARLY CHILDHOOD FAMILY EDUCATION AID.] For early 
185.13  childhood family education aid under Minnesota Statutes, section 
185.14  124D.135: 
185.15       $19,059,000    .....     2004 
185.16       $17,862,000    .....     2005 
185.17     The 2004 appropriation includes $3,239,000 for 2003 and 
185.18  $15,820,000 for 2004.  
185.19     The 2005 appropriation includes $4,725,000 for 2004 and 
185.20  $13,137,000 for 2005.  
185.21     Subd. 4.  [HEALTH AND DEVELOPMENTAL SCREENING AID.] For 
185.22  health and developmental screening aid under Minnesota Statutes, 
185.23  sections 121A.17 and 121A.19: 
185.24       $2,501,000     .....     2004 
185.25       $2,661,000     .....     2005 
185.26     The 2004 appropriation includes $452,000 for 2003 and 
185.27  $2,049,000 for 2004.  
185.28     The 2005 appropriation includes $612,000 for 2004 and 
185.29  $2,049,000 for 2005.  
185.30     Subd. 5.  [HEAD START PROGRAM.] For Head Start programs 
185.31  under Minnesota Statutes, section 119A.52: 
185.32       $16,475,000    .....     2004
185.33       $12,000,000    .....     2005
185.34     Sec. 13.  [REPEALER.] 
185.35     Minnesota Statutes 2002, section 124D.17, is repealed. 
185.36                             ARTICLE 8
186.1                              PREVENTION
186.2      Section 1.  Minnesota Statutes 2002, section 124D.19, 
186.3   subdivision 3, is amended to read: 
186.4      Subd. 3.  [COMMUNITY EDUCATION DIRECTOR.] (a) Except as 
186.5   provided under paragraphs (b) and (c), each board shall employ a 
186.6   licensed community education director.  The board shall submit 
186.7   the name of the person who is serving as director of community 
186.8   education under this section on the district's annual community 
186.9   education report to the commissioner. 
186.10     (b) A board may apply to the commissioner Minnesota board 
186.11  of school administrators under Minnesota Rules, part 3512.3500, 
186.12  subpart 9, for authority to use an individual who is not 
186.13  licensed as a community education director. 
186.14     (c) A board of a district with a total population of 2,000 
186.15  or less may identify an employee who holds a valid Minnesota 
186.16  principal or superintendent license under Minnesota Rules, 
186.17  chapter 3512, to serve as director of community education.  To 
186.18  be eligible for an exception under this paragraph, the board 
186.19  shall certify in writing to the commissioner that the district 
186.20  has not placed a licensed director of community education on 
186.21  unrequested leave. 
186.22     Sec. 2.  Minnesota Statutes 2002, section 124D.20, 
186.23  subdivision 3, is amended to read: 
186.24     Subd. 3.  [GENERAL COMMUNITY EDUCATION REVENUE.] The 
186.25  general community education revenue for a district equals 
186.26  $5.95 for fiscal year 2003 and 2004 and $5.23 for fiscal year 
186.27  2005 and later, times the greater of 1,335 or the population of 
186.28  the district.  The population of the district is determined 
186.29  according to section 275.14.  
186.30     <b>[EFFECTIVE DATE.]</b> This section is effective for revenue for 
186.31  fiscal year 2005. 
186.32     Sec. 3.  Minnesota Statutes 2002, section 124D.20, 
186.33  subdivision 5, is amended to read: 
186.34     Subd. 5.  [TOTAL COMMUNITY EDUCATION LEVY.] To obtain total 
186.35  community education revenue, a district operating a youth 
186.36  after-school enrichment program under section 124D.19, 
187.1   subdivision 12, may levy the amount raised by a maximum tax rate 
187.2   of .7431 .985 percent times the adjusted net tax capacity of the 
187.3   district.  To obtain total community education revenue, a 
187.4   district not operating a youth after-school enrichment program 
187.5   may levy the amount raised by a maximum tax rate of .4795 
187.6   percent times the adjusted net tax capacity of the district.  If 
187.7   the amount of the total community education levy would exceed 
187.8   the total community education revenue, the total community 
187.9   education levy shall be determined according to subdivision 6. 
187.10     <b>[EFFECTIVE DATE.]</b> This section is effective for revenue for 
187.11  fiscal year 2005. 
187.12     Sec. 4.  Minnesota Statutes 2002, section 124D.20, is 
187.13  amended by adding a subdivision to read: 
187.14     Subd. 11.  [RESERVE ACCOUNT LIMIT.] (a) Under this section, 
187.15  the sum of the average balances during the most recent 
187.16  three-year period in a district's community education reserve 
187.17  account and unreserved/undesignated community service fund 
187.18  account on June 30 of each year, adjusted for any prior 
187.19  reductions under this subdivision, must not be greater than 25 
187.20  percent of the sum of the district's maximum total community 
187.21  education revenue under subdivision 1, excluding adjustments 
187.22  under this subdivision, plus the district's additional community 
187.23  education levy under section 124D.21, plus any fees, grants, or 
187.24  other revenue received by the district for community education 
187.25  programs for the prior year.  For purposes of this paragraph, 
187.26  "community education programs" means programs according to 
187.27  subdivisions 8, paragraph (a), and 9, and section 124D.19, 
187.28  subdivision 12, excluding early childhood family education 
187.29  programs under section 124D.13, school readiness programs under 
187.30  sections 124D.15 and 124D.17, and adult basic education programs 
187.31  under section 124D.52. 
187.32     (b) If the sum of the average balances during the most 
187.33  recent three-year period in a district's community education 
187.34  reserve account and unreserved/undesignated community service 
187.35  fund account on June 30 of each year, adjusted for any prior 
187.36  reductions under this subdivision, is in excess of the limit 
188.1   under paragraph (a), the district's community education state 
188.2   aid and levy authority for the current school year must be 
188.3   reduced by the lesser of the current year revenue under 
188.4   subdivision 1 or the excess reserve amount.  The aid reduction 
188.5   equals the product of the lesser of the excess reserve amount or 
188.6   the current year revenue under subdivision 1 times the ratio of 
188.7   the district's aid for the current year under subdivision 7 to 
188.8   the district's revenue for the current year under subdivision 
188.9   1.  The levy reduction equals the excess reserve amount minus 
188.10  the aid reduction.  For purposes of this paragraph, if a 
188.11  district does not levy the entire amount permitted under 
188.12  subdivision 5 or 6, the revenue under subdivision 1 must be 
188.13  reduced in proportion to the actual amount levied. 
188.14     (c) Notwithstanding paragraph (a), for fiscal year 2003, 
188.15  the excess reserve amount shall be computed using the balances 
188.16  in a district's community education reserve account and 
188.17  unreserved/undesignated community service fund account on June 
188.18  30, 2002.  For fiscal year 2004, the excess reserve amount shall 
188.19  be computed using the adjusted average balances in a district's 
188.20  community education reserve account and unreserved/undesignated 
188.21  community service fund account on June 30, 2002, and June 30, 
188.22  2003. 
188.23     <b>[EFFECTIVE DATE.]</b> This section is effective for revenue for 
188.24  fiscal year 2003. 
188.25     Sec. 5.  Minnesota Statutes 2002, section 124D.20, is 
188.26  amended by adding a subdivision to read: 
188.27     Subd. 12.  [WAIVER.] (a) If a district anticipates that the 
188.28  reserve account may exceed the 25 percent limit established 
188.29  under subdivision 11 because of extenuating circumstances, prior 
188.30  approval to exceed the limit must be obtained in writing from 
188.31  the commissioner. 
188.32     (b) Notwithstanding paragraph (a), for fiscal year 2003, a 
188.33  district may submit a waiver request within 30 days of the date 
188.34  of final enactment. 
188.35     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
188.36  following final enactment for revenue for fiscal year 2003. 
189.1      Sec. 6.  Minnesota Statutes 2002, section 124D.22, 
189.2   subdivision 3, is amended to read: 
189.3      Subd. 3.  [SCHOOL-AGE CARE LEVY.] To obtain school-age care 
189.4   revenue, a school district may levy an amount equal to the 
189.5   district's school-age care revenue as defined in subdivision 2 
189.6   multiplied by the lesser of one, or the ratio of the quotient 
189.7   derived by dividing the adjusted net tax capacity of the 
189.8   district for the year before the year the levy is certified by 
189.9   the resident pupil units in the district for the school year to 
189.10  which the levy is attributable, to $3,280 $2,433. 
189.11     Sec. 7.  [APPROPRIATIONS.] 
189.12     Subdivision 1.  [DEPARTMENT OF EDUCATION.] The sums 
189.13  indicated in this section are appropriated from the general fund 
189.14  to the department of education for the fiscal years designated. 
189.15     Subd. 2.  [COMMUNITY EDUCATION AID.] For community 
189.16  education aid under Minnesota Statutes, section 124D.20: 
189.17       $5,325,000     .....     2004 
189.18       $3,491,000     .....     2005 
189.19     The 2004 appropriation includes $956,000 for 2003 and 
189.20  $4,369,000 for 2004.  
189.21     The 2005 appropriation includes $1,304,000 for 2004 and 
189.22  $2,187,000 for 2005.  
189.23     Subd. 3.  [ADULTS WITH DISABILITIES PROGRAM AID.] For 
189.24  adults with disabilities programs under Minnesota Statutes, 
189.25  section 124D.56: 
189.26       $667,000       .....     2004 
189.27       $710,000       .....     2005 
189.28     The 2004 appropriation includes $120,000 for 2003 and 
189.29  $547,000 for 2004.  
189.30     The 2005 appropriation includes $163,000 for 2004 and 
189.31  $547,000 for 2005. 
189.32     Subd. 4.  [HEARING-IMPAIRED ADULTS.] For programs for 
189.33  hearing-impaired adults under Minnesota Statutes, section 
189.34  124D.57: 
189.35       $70,000        .....     2004
189.36       $70,000        .....     2005
190.1      Subd. 5.  [ABUSED CHILDREN.] For abused children programs 
190.2   under Minnesota Statutes, section 119A.21: 
190.3        $945,000       .....     2004 
190.4        $945,000       .....     2005 
190.5      Subd. 6.  [SCHOOL-AGE CARE REVENUE.] For extended day care 
190.6   aid under Minnesota Statutes, section 124D.22: 
190.7        $40,000        .....     2004 
190.8        $23,000        .....     2005
190.9      The 2004 appropriation includes $14,000 for 2003 and 
190.10  $26,000 for 2004. 
190.11     The 2005 appropriation includes $7,000 for 2004 and $16,000 
190.12  for 2005. 
190.13     Sec. 8.  [REPEALER.] 
190.14     Minnesota Statutes 2002, sections 120B.23; 124D.21; 
190.15  124D.221; 124D.93; and 144.401, subdivision 5, are repealed. 
190.16                             ARTICLE 9
190.17              SELF-SUFFICIENCY AND LIFE LONG LEARNING
190.18     Section 1.  Minnesota Statutes 2002, section 124D.52, 
190.19  subdivision 1, is amended to read: 
190.20     Subdivision 1.  [PROGRAM REQUIREMENTS.] (a) An adult basic 
190.21  education program is a day or evening program offered by a 
190.22  district that is for people over 16 years of age who do not 
190.23  attend an elementary or secondary school.  The program offers 
190.24  academic instruction necessary to earn a high school diploma or 
190.25  equivalency certificate.  Tuition and fees may not be charged to 
190.26  a learner for instruction paid under this section, except for 
190.27     (b) Notwithstanding any law to the contrary, a school board 
190.28  or the governing body of a consortium offering an adult basic 
190.29  education program may adopt a sliding fee schedule based on a 
190.30  family's income, but must waive the fee for participants who are 
190.31  under the age of 21 or unable to pay.  The fees charged must be 
190.32  designed to enable individuals of all socioeconomic levels to 
190.33  participate in the program.  A program may charge a security 
190.34  deposit to assure return of materials, supplies, and equipment. 
190.35     (c) Each approved adult basic education program must 
190.36  develop a memorandum of understanding with the local workforce 
191.1   development centers located in the approved program's service 
191.2   delivery area.  The memorandum of understanding must describe 
191.3   how the adult basic education program and the workforce 
191.4   development centers will cooperate and coordinate services to 
191.5   provide unduplicated, efficient, and effective services to 
191.6   clients.  
191.7      (d) Adult basic education aid must be spent for adult basic 
191.8   education purposes as specified in sections 124D.518 to 124D.531.
191.9      Sec. 2.  Minnesota Statutes 2002, section 124D.52, 
191.10  subdivision 3, is amended to read: 
191.11     Subd. 3.  [ACCOUNTS; REVENUE; AID.] (a) Each district, 
191.12  group of districts, or private nonprofit organization providing 
191.13  adult basic education programs must establish and 
191.14  maintain accounts separate from all other district accounts a 
191.15  reserve account within the community service fund for the 
191.16  receipt and disbursement of all funds related to these 
191.17  programs.  All revenue received pursuant to this section must be 
191.18  utilized solely for the purposes of adult basic education 
191.19  programs.  State aid must not equal more than 100 percent of the 
191.20  unreimbursed expenses of providing these programs, excluding 
191.21  in-kind costs.  
191.22     (b) Notwithstanding section 123A.26 or any other law to the 
191.23  contrary, an adult basic education consortium providing an 
191.24  approved adult basic education program may be its own fiscal 
191.25  agent and is eligible to receive state-aid payments directly 
191.26  from the commissioner. 
191.27     Sec. 3.  Minnesota Statutes 2002, section 124D.531, 
191.28  subdivision 1, is amended to read: 
191.29     Subdivision 1.  [STATE TOTAL ADULT BASIC EDUCATION AID.] 
191.30  (a) The state total adult basic education aid for fiscal year 
191.31  2001 2004 equals $30,157,000 $34,388,000.  The state total adult 
191.32  basic education aid for fiscal year 2005 and later is 
191.33  $36,509,000.  The state total adult basic education aid for 
191.34  later years equals: 
191.35     (1) the state total adult basic education aid for the 
191.36  preceding fiscal year; times 
192.1      (2) the lesser of: 
192.2      (i) 1.08, or 
192.3      (ii) the greater of 1.00 or the ratio of the state total 
192.4   contact hours in the first prior program year to the state total 
192.5   contact hours in the second prior program year.  Beginning in 
192.6   fiscal year 2002, two percent of the state total adult basic 
192.7   education aid must be set aside for adult basic education 
192.8   supplemental service grants under section 124D.522.  
192.9      (b) The state total adult basic education aid, excluding 
192.10  basic population aid, equals the difference between the amount 
192.11  computed in paragraph (a), and the state total basic population 
192.12  aid under subdivision 2. 
192.13     Sec. 4.  Minnesota Statutes 2002, section 124D.531, 
192.14  subdivision 2, is amended to read: 
192.15     Subd. 2.  [BASIC POPULATION AID.] A district is eligible 
192.16  for basic population aid if the district has a basic service 
192.17  level approved by the commissioner under section 124D.52, 
192.18  subdivision 5, or is a member of a consortium with an approved 
192.19  basic service level.  Basic population aid is equal to the 
192.20  greater of $4,000 $3,844 or $1.80 $1.73 times the population of 
192.21  the district.  District population is determined according to 
192.22  section 275.14. 
192.23     Sec. 5.  Minnesota Statutes 2002, section 124D.531, 
192.24  subdivision 4, is amended to read: 
192.25     Subd. 4.  [ADULT BASIC EDUCATION PROGRAM AID LIMIT.] (a) 
192.26  Notwithstanding subdivisions 2 and 3, the total adult basic 
192.27  education aid for a program per prior year contact hour must not 
192.28  exceed four times the rate $21 per prior year contact hour 
192.29  computed under subdivision 3, clause (2). 
192.30     (b) For fiscal year 2004, the aid for a program under 
192.31  subdivision 3, clause (2), adjusted for changes in program 
192.32  membership, must not exceed the aid for that program under 
192.33  subdivision 3, clause (2), for fiscal year 2003 by more than the 
192.34  greater of eight percent or $10,000. 
192.35     (c) For fiscal year 2005, the aid for a program under 
192.36  subdivision 3, clause (2), adjusted for changes in program 
193.1   membership, must not exceed the sum of the aid for that program 
193.2   under subdivision 3, clause (2), and section 8, paragraph (a), 
193.3   for the preceding fiscal year by more than the greater of eight 
193.4   percent or $10,000.  
193.5      (d) For fiscal year 2002 2006 and later, the aid for a 
193.6   program under subdivision 3, clause (2), adjusted for changes in 
193.7   program membership, must not exceed the aid for that program 
193.8   under subdivision 3, clause (2), for the first preceding fiscal 
193.9   year by more than the greater of 17 eight percent or 
193.10  $20,000 $10,000. 
193.11     (c) (d) Adult basic education aid is payable to a program 
193.12  for unreimbursed costs. 
193.13     Sec. 6.  Minnesota Statutes 2002, section 124D.531, 
193.14  subdivision 7, is amended to read: 
193.15     Subd. 7.  [PROGRAM AUDITS.] Programs that receive aid under 
193.16  this section must maintain records that support the aid 
193.17  payments.  The commissioner may audit these records upon 
193.18  request.  The commissioner must establish procedures for 
193.19  conducting fiscal audits of adult basic education programs 
193.20  according to the schedule in this subdivision.  In calendar year 
193.21  2003, the commissioner must audit one-half of approved adult 
193.22  basic education programs that received aid for fiscal year 2002, 
193.23  and in calendar year 2004, the commissioner must audit the 
193.24  remaining unaudited programs for aid received in fiscal year 
193.25  2003.  Beginning with fiscal year 2005, the commissioner must, 
193.26  at a minimum, audit each adult basic education program once 
193.27  every five years.  The commissioner must establish procedures to 
193.28  reconcile any discrepancies between aid payments based on 
193.29  information reported to the commissioner and aid estimates based 
193.30  on a program audit. 
193.31     Sec. 7.  [ADULT BASIC EDUCATION PROGRAM APPROVAL AND AID, 
193.32  FISCAL YEAR 2004.] 
193.33     (a) Notwithstanding Minnesota Statutes 2002, section 
193.34  124D.54, subdivision 2, a district or consortium of districts 
193.35  that provided a program funded under Minnesota Statutes 2002, 
193.36  section 124D.54, in fiscal year 2003 may request an extension of 
194.1   the application deadline for approval of an adult basic 
194.2   education program for fiscal year 2004. 
194.3      (b) For purposes of computing the fiscal year 2005 adult 
194.4   basic education aid for a program under Minnesota Statutes, 
194.5   section 124D.531, subdivision 3, clause (2), the contact hours 
194.6   for students participating in the program during the first prior 
194.7   program year must be increased by 17 percent of the adult 
194.8   graduation aid average daily attendance for fiscal year 2002.  
194.9      Sec. 8.  [ADULT BASIC EDUCATION TRANSITION AID.] 
194.10     (a) For fiscal year 2004, adult basic education transition 
194.11  aid for each qualifying district equals the district's adult 
194.12  high school graduation aid for fiscal year 2002.  This aid 
194.13  amount must be used to provide an adult basic education program 
194.14  under Minnesota Statutes, section 124D.52.  To qualify for aid 
194.15  under this section a district must establish or join an approved 
194.16  adult basic education program according to Minnesota Statutes, 
194.17  section 124D.52, subdivision 2.  
194.18     (b) For fiscal year 2005, the adult high school graduation 
194.19  aid program is eliminated.  
194.20     Sec. 9.  [APPROPRIATIONS.] 
194.21     Subdivision 1.  [DEPARTMENT OF EDUCATION.] The sums 
194.22  indicated in this section are appropriated from the general fund 
194.23  to the department of education for the fiscal years designated. 
194.24     Subd. 2.  [ADULT BASIC EDUCATION AID.] For adult basic 
194.25  education aid under Minnesota Statutes, section 124D.52, in 
194.26  fiscal year 2004 and Minnesota Statutes, section 124D.531, in 
194.27  fiscal year 2005:  
194.28       $32,131,000    .....     2004 
194.29       $35,758,000    .....     2005 
194.30     The 2004 appropriation includes $5,905,000 for 2003 and 
194.31  $26,226,000 for 2004.  
194.32     The 2005 appropriation includes $7,833,000 for 2004 and 
194.33  $27,925,000 for 2005.  
194.34     Subd. 3.  [ADULT GRADUATION AID.] For adult graduation aid 
194.35  under Minnesota Statutes, section 124D.54:  
194.36       $396,000       .....     2004
195.1      Subd. 4.  [ADULT BASIC EDUCATION TRANSITION AID.] (a) For 
195.2   adult basic transition aid under section 8: 
195.3        $1,634,000     .....     2004
195.4        $  488,000       .....     2005
195.5      The 2004 appropriation includes $1,634,000 for 2004.  
195.6      The 2005 appropriation includes $488,000 for 2004 and $0 
195.7   for 2005.  
195.8      Subd. 5.  [GED TESTS.] For payment of 60 percent of the 
195.9   costs of GED tests under Laws 1993, chapter 224, article 4, 
195.10  section 44, subdivision 10: 
195.11       $125,000       .....     2004
195.12       $125,000       .....     2005
195.13     Subd. 6.  [FAMILY ASSETS FOR INDEPENDENCE.] For family 
195.14  assets for independence: 
195.15       $500,000       .....     2004
195.16     Any balance in the first year does not cancel but is 
195.17  available in the second year. 
195.18     Sec. 10.  [REPEALER.] 
195.19     Minnesota Statutes 2002, sections 124D.09, subdivision 15; 
195.20  124D.54; and 126C.05, subdivision 12, are repealed. 
195.21                             ARTICLE 10
195.22                           STATE AGENCIES
195.23     Section 1.  Minnesota Statutes 2002, section 15.01, is 
195.24  amended to read: 
195.25     15.01 [DEPARTMENTS OF THE STATE.] 
195.26     The following agencies are designated as the departments of 
195.27  the state government:  the department of administration; the 
195.28  department of agriculture; the department of commerce; the 
195.29  department of corrections; the department of children, families, 
195.30  and learning education; the department of economic security; the 
195.31  department of trade and economic development; the department of 
195.32  finance; the department of health; the department of human 
195.33  rights; the department of labor and industry; the department of 
195.34  military affairs; the department of natural resources; the 
195.35  department of employee relations; the department of public 
195.36  safety; the department of human services; the department of 
196.1   revenue; the department of transportation; the department of 
196.2   veterans affairs; and their successor departments. 
196.3      Sec. 2.  Minnesota Statutes 2002, section 119A.01, 
196.4   subdivision 2, is amended to read: 
196.5      Subd. 2.  [ESTABLISHMENT.] The department of children, 
196.6   families, and learning education is established. 
196.7      Sec. 3.  Minnesota Statutes 2002, section 119A.02, 
196.8   subdivision 2, is amended to read: 
196.9      Subd. 2.  [COMMISSIONER.] "Commissioner" means the 
196.10  commissioner of children, families, and learning education. 
196.11     Sec. 4.  Minnesota Statutes 2002, section 119A.02, 
196.12  subdivision 3, is amended to read: 
196.13     Subd. 3.  [DEPARTMENT.] "Department" means the department 
196.14  of children, families, and learning education. 
196.15     Sec. 5.  Minnesota Statutes 2002, section 119B.011, 
196.16  subdivision 8, is amended to read: 
196.17     Subd. 8.  [COMMISSIONER.] "Commissioner" means the 
196.18  commissioner of children, families, and learning education. 
196.19     Sec. 6.  Minnesota Statutes 2002, section 119B.011, 
196.20  subdivision 10, is amended to read: 
196.21     Subd. 10.  [DEPARTMENT.] "Department" means the department 
196.22  of children, families, and learning education. 
196.23     Sec. 7.  Minnesota Statutes 2002, section 120A.02, is 
196.24  amended to read: 
196.25     120A.02 [DEPARTMENT OF CHILDREN, FAMILIES, AND LEARNING 
196.26  EDUCATION.] 
196.27     The department of children, families, and learning 
196.28  education shall carry out the provisions of chapters 120A to 
196.29  129C and other related education provisions under law. 
196.30     Sec. 8.  Minnesota Statutes 2002, section 120A.05, 
196.31  subdivision 4, is amended to read: 
196.32     Subd. 4.  [COMMISSIONER.] "Commissioner" means the 
196.33  commissioner of children, families, and learning education. 
196.34     Sec. 9.  Minnesota Statutes 2002, section 120A.05, 
196.35  subdivision 7, is amended to read: 
196.36     Subd. 7.  [DEPARTMENT.] "Department" means the department 
197.1   of children, families, and learning education. 
197.2      Sec. 10.  Minnesota Statutes 2002, section 122A.09, 
197.3   subdivision 10, is amended to read: 
197.4      Subd. 10.  [VARIANCES.] (a) Notwithstanding subdivision 9 
197.5   and section 14.05, subdivision 4, the board of teaching may 
197.6   grant a variance to its rules upon application by a school 
197.7   district for purposes of implementing experimental programs in 
197.8   learning or management. 
197.9      (b) To enable a school district to meet the needs of 
197.10  students enrolled in an alternative education program and to 
197.11  enable licensed teachers instructing those students to satisfy 
197.12  content area licensure requirements, the board of teaching 
197.13  annually may permit a licensed teacher teaching in an 
197.14  alternative education program to instruct students in a content 
197.15  area for which the teacher is not licensed, consistent with 
197.16  paragraph (a). 
197.17     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
197.18  following final enactment.  
197.19     Sec. 11.  Minnesota Statutes 2002, section 122A.12, 
197.20  subdivision 1, is amended to read: 
197.21     Subdivision 1.  [MEMBERSHIP.] A board of school 
197.22  administrators is established and must consist of nine ten 
197.23  members appointed by the governor with the advice and consent of 
197.24  the senate, including at least: 
197.25     (1) one elementary school principal; 
197.26     (2) one secondary school principal; 
197.27     (3) one higher education faculty member in an educational 
197.28  administration program approved by the board; 
197.29     (4) one higher education administrator for an educational 
197.30  administration program approved by the board; 
197.31     (5) one school superintendent; 
197.32     (6) one classroom teacher; 
197.33     (7) one community education director or a and one special 
197.34  education director; and 
197.35     (8) two members of the public, one of whom must be a 
197.36  present or former school board member. 
198.1      In making appointments, the governor shall solicit 
198.2   recommendations from groups representing persons in clauses (1) 
198.3   to (8). 
198.4      <b>[EFFECTIVE DATE.]</b> This section is effective the day 
198.5   following final enactment.  
198.6      Sec. 12.  Minnesota Statutes 2002, section 122A.12, 
198.7   subdivision 2, is amended to read: 
198.8      Subd. 2.  [TERMS; COMPENSATION; REMOVAL; ADMINISTRATION.] 
198.9   Membership terms, removal of members, and the filling of 
198.10  membership vacancies are as provided in section 214.09.  The 
198.11  terms of the initial board members must be determined by lot as 
198.12  follows: 
198.13     (1) three members must be appointed for terms that expire 
198.14  August 1, 2002; 
198.15     (2) three members must be appointed for terms that expire 
198.16  August 1, 2003; and 
198.17     (3) three four members must be appointed for terms that 
198.18  expire August 1, 2004. 
198.19     Members shall not receive the daily payment under section 
198.20  214.09, subdivision 3.  The public employer of a member shall 
198.21  not reduce the member's compensation or benefits for the 
198.22  member's absence from employment when engaging in the business 
198.23  of the board.  The provision of staff, administrative services, 
198.24  and office space; the review and processing of complaints; the 
198.25  setting of fees; the selection and duties of an executive 
198.26  secretary to serve the board; and other provisions relating to 
198.27  board operations are as provided in chapter 214.  Fiscal year 
198.28  and reporting requirements are as provided in sections 214.07 
198.29  and 214.08. 
198.30     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
198.31  following final enactment.  
198.32     Sec. 13.  Minnesota Statutes 2002, section 122A.18, 
198.33  subdivision 7a, is amended to read: 
198.34     Subd. 7a.  [PERMISSION TO SUBSTITUTE TEACH.] (a) The board 
198.35  of teaching may allow a person who is enrolled in and making 
198.36  satisfactory progress in a board-approved teacher program and 
199.1   who has successfully completed student teaching to be employed 
199.2   as a short-call substitute teacher.  
199.3      (b) The board of teaching may issue a lifetime qualified 
199.4   short-call substitute teaching license to a person who: 
199.5      (1) was a qualified teacher under section 122A.16 while 
199.6   holding a continuing five-year teaching license issued by the 
199.7   board, and receives a retirement annuity from the teachers 
199.8   retirement association, Minneapolis teachers retirement fund 
199.9   association, St. Paul teachers retirement fund association, or 
199.10  Duluth teachers retirement fund association; 
199.11     (2) holds an out-of-state teaching license and receives a 
199.12  retirement annuity as a result of the person's teaching 
199.13  experience; or 
199.14     (3) held a continuing five-year license issued by the 
199.15  board, taught at least three school years in an accredited 
199.16  nonpublic school in Minnesota, and receives a retirement annuity 
199.17  as a result of the person's teaching experience. 
199.18  A person holding a lifetime qualified short-call substitute 
199.19  teaching license is not required to complete continuing 
199.20  education clock hours.  A person holding this license may 
199.21  reapply to the board for a continuing five-year license and must 
199.22  again complete continuing education clock hours one school year 
199.23  after receiving the continuing five-year license. 
199.24     <b>[EFFECTIVE DATE.]</b> This section is effective for the 
199.25  2003-2004 school year. 
199.26     Sec. 14.  Minnesota Statutes 2002, section 122A.21, is 
199.27  amended to read: 
199.28     122A.21 [TEACHERS' AND ADMINISTRATORS' LICENSES; FEES.] 
199.29     Each application for the issuance, renewal, or extension of 
199.30  a license to teach must be accompanied by a processing fee in an 
199.31  amount set by the board of teaching by rule of $57.  Each 
199.32  application for issuing, renewing, or extending the license of a 
199.33  school administrator or supervisor must be accompanied by a 
199.34  processing fee in the amount set by the board of teaching.  The 
199.35  processing fee for a teacher's license and for the licenses of 
199.36  supervisory personnel must be paid to the executive secretary of 
200.1   the appropriate board.  The executive secretary of the board 
200.2   shall deposit the fees with the state treasurer, as provided by 
200.3   law, and report each month to the commissioner of finance the 
200.4   amount of fees collected.  The fees as set by the board are 
200.5   nonrefundable for applicants not qualifying for a license.  
200.6   However, a fee must be refunded by the state treasurer in any 
200.7   case in which the applicant already holds a valid unexpired 
200.8   license.  The board may waive or reduce fees for applicants who 
200.9   apply at the same time for more than one license. 
200.10     Sec. 15.  Minnesota Statutes 2002, section 122A.22, is 
200.11  amended to read: 
200.12     122A.22 [DISTRICT RECORDING VERIFICATION OF TEACHER 
200.13  LICENSES.] 
200.14     No person shall be accounted a qualified teacher until the 
200.15  person has filed for record with the district superintendent 
200.16  where the person intends to teach a license, or certified copy 
200.17  of a license, authorizing the person to teach school in the 
200.18  district school system school district or charter school 
200.19  contracting with the person for teaching services verifies 
200.20  through the Minnesota education licensing system available on 
200.21  the department Web site that the person is a qualified teacher, 
200.22  consistent with sections 122A.16 and 122A.44, subdivision 1. 
200.23     <b>[EFFECTIVE DATE.]</b> This section is effective for the 
200.24  2003-2004 school year and later.  
200.25     Sec. 16.  Minnesota Statutes 2002, section 127A.05, 
200.26  subdivision 1, is amended to read: 
200.27     Subdivision 1.  [APPOINTMENT AND DUTIES.] The department 
200.28  shall be under the administrative control of the commissioner of 
200.29  children, families, and learning education which office is 
200.30  established.  The governor shall appoint the commissioner under 
200.31  the provisions of section 15.06.  
200.32     The commissioner shall be a person who possesses 
200.33  educational attainment and breadth of experience in the 
200.34  administration of public education and of the finances 
200.35  pertaining thereto commensurate with the spirit and intent of 
200.36  this code.  Notwithstanding any other law to the contrary, the 
201.1   commissioner may appoint two deputy commissioners who shall 
201.2   serve in the unclassified service.  The commissioner shall also 
201.3   appoint other employees as may be necessary for the organization 
201.4   of the department.  The commissioner shall perform such duties 
201.5   as the law and rules may provide and be held responsible for the 
201.6   efficient administration and discipline of the department.  The 
201.7   commissioner is charged with the execution of powers and duties 
201.8   to promote public education in the state and to safeguard the 
201.9   finances pertaining thereto. 
201.10     Sec. 17.  Minnesota Statutes 2002, section 127A.05, 
201.11  subdivision 3, is amended to read: 
201.12     Subd. 3.  [GENERAL SUPERVISION OVER PUBLIC SCHOOLS AND 
201.13  EDUCATIONAL AGENCIES.] The commissioner of children, families, 
201.14  and learning education shall adopt goals for and exercise 
201.15  general supervision over public schools and public educational 
201.16  agencies in the state, classify and standardize public 
201.17  elementary and secondary schools, and prepare for them outlines 
201.18  and suggested courses of study.  The commissioner shall develop 
201.19  a plan to attain the adopted goals.  The commissioner may 
201.20  recognize educational accrediting agencies for the sole purposes 
201.21  of sections 120A.22, 120A.24, and 120A.26. 
201.22     Sec. 18.  Minnesota Statutes 2002, section 169.26, 
201.23  subdivision 3, is amended to read: 
201.24     Subd. 3.  [DRIVER TRAINING.] All driver education courses 
201.25  approved by the commissioner of children, families, and learning 
201.26  and the commissioner of public safety must include instruction 
201.27  on railroad-highway grade crossing safety.  The commissioner of 
201.28  children, families, and learning and the commissioner of public 
201.29  safety shall by rule establish minimum standards of course 
201.30  content relating to operation of vehicles at railroad-highway 
201.31  grade crossings.  
201.32     Sec. 19.  Minnesota Statutes 2002, section 169.973, 
201.33  subdivision 1, is amended to read: 
201.34     Subdivision 1.  [COMMISSIONER'S AUTHORITY; RULES; 
201.35  CURRICULUM.] The commissioner of public safety shall supervise 
201.36  the administration and conduct of driver improvement clinics and 
202.1   youth-oriented driver improvement clinics.  The commissioner of 
202.2   public safety shall promulgate rules setting forth standards for 
202.3   the curriculum and mode of instruction of driver improvement 
202.4   clinics and youth-oriented driver improvement clinics and such 
202.5   other matters as the commissioner of public safety considers 
202.6   necessary for the proper administration of such clinics.  In the 
202.7   preparation of such standards the commissioner of public safety 
202.8   shall consult with the commissioner of children, families, and 
202.9   learning and state associations of judges.  A driver improvement 
202.10  clinic established under sections 169.971 to 169.973 and 171.20, 
202.11  subdivision 3, shall conform to the standards promulgated by the 
202.12  commissioner of public safety.  The course of study at a driver 
202.13  improvement clinic and youth-oriented driver improvement clinic 
202.14  may not exceed a cumulative total of nine hours with no single 
202.15  class session lasting more than three hours.  The course of 
202.16  study at a driver improvement clinic and youth-oriented driver 
202.17  improvement clinic shall include instruction in railroad 
202.18  crossing safety. 
202.19     Sec. 20.  Minnesota Statutes 2002, section 178.02, 
202.20  subdivision 1, is amended to read: 
202.21     Subdivision 1.  [MEMBERS.] The commissioner of labor and 
202.22  industry, hereinafter called the commissioner, shall appoint an 
202.23  apprenticeship advisory council, hereinafter referred to as the 
202.24  council, composed of three representatives each from employer 
202.25  and employee organizations, and two representatives of the 
202.26  general public.  The assistant commissioner director of 
202.27  children, families, and learning education responsible for 
202.28  vocational career and technical education or designee shall be 
202.29  an ex officio member of the council and shall serve in an 
202.30  advisory capacity only.  
202.31     Sec. 21.  [FINANCIAL ANALYSIS; CONTRACTS.] 
202.32     The office of the legislative auditor shall submit to the 
202.33  chair of the senate education committee, the chair of the senate 
202.34  E-12 education budget division, the chair of the house of 
202.35  representatives education policy committee, and the chair of the 
202.36  house of representatives education finance committee before 
203.1   January 15, 2004, a detailed financial analysis and report that 
203.2   provides the following information: 
203.3      (1) the total amount of projected additional costs, direct 
203.4   and indirect, associated with the No Child Left Behind Act of 
203.5   2001 compliance for the state and local school districts during 
203.6   the fiscal year 2004 and fiscal year 2005 biennium and through 
203.7   the fiscal year 2013 and fiscal year 2014; 
203.8      (2) the amount of new federal funds that are reasonably 
203.9   expected to be provided to the state and local school districts 
203.10  during the fiscal year 2004 and fiscal year 2005 biennium for 
203.11  the costs identified in clause (1); and 
203.12     (3) the financial consequences to the state and each 
203.13  individual school district of noncompliance with the No Child 
203.14  Left Behind Act of 2001. 
203.15     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
203.16  following final enactment and applies to existing agency 
203.17  contracts or agreements. 
203.18     Sec. 22.  [APPROPRIATIONS; DEPARTMENT OF EDUCATION.] 
203.19     Subdivision 1.  [DEPARTMENT OF EDUCATION.] Unless otherwise 
203.20  indicated, the sums indicated in this section are appropriated 
203.21  from the general fund to the department of education for the 
203.22  fiscal years designated. 
203.23     Subd. 2.  [DEPARTMENT.] (a) For the department of education:
203.24       $23,653,000    .....     2004 
203.25       $23,653,000    .....     2005 
203.26     Any balance in the first year does not cancel but is 
203.27  available in the second year. 
203.28     (b) $260,000 each year is for the Minnesota children's 
203.29  museum. 
203.30     (c) $41,000 each year is for the Minnesota academy of 
203.31  science. 
203.32     (d) $237,000 of the balance in the state education 
203.33  courseware development account in the state government special 
203.34  revenue fund as of July 1, 2004, is canceled to the general fund.
203.35     (e) $160,000 of the balance in the state item bank 
203.36  revolving account in the state government special revenue fund 
204.1   as of July 1, 2004, is canceled to the general fund. 
204.2      (f) $621,000 each year is for the board of teaching. 
204.3      (g) $165,000 each year is for the board of school 
204.4   administrators.  
204.5      (h) The commissioner is encouraged to give priority 
204.6   consideration to the Minnesota humanities commission when 
204.7   issuing grants for professional development of teachers or 
204.8   content development from best practices, Federal Title II, Part 
204.9   A, Federal Title V, Part A, or other appropriate grant resources 
204.10  that have a stated objective of improvement of teacher 
204.11  performance. 
204.12     Subd. 3.  [FEDERAL GRANTS AND AIDS.] The expenditures of 
204.13  federal grants and aids as shown in the biennial budget document 
204.14  and its supplements are approved and appropriated and shall be 
204.15  spent as indicated. 
204.16     Sec. 23.  [APPROPRIATIONS; MINNESOTA STATE ACADEMIES.] 
204.17     The sums indicated in this section are appropriated from 
204.18  the general fund to the Minnesota state academies for the deaf 
204.19  and the blind for the fiscal years designated:  
204.20       $10,966,000    .....     2004 
204.21       $10,966,000    .....     2005 
204.22     Any balance in the first year does not cancel but is 
204.23  available in the second year. 
204.24     Sec. 24.  [APPROPRIATIONS; PERPICH CENTER FOR ARTS 
204.25  EDUCATION.] 
204.26     The sums indicated in this section are appropriated from 
204.27  the general fund to the Perpich center for arts education for 
204.28  the fiscal years designated: 
204.29       $6,864,000     .....     2004 
204.30       $6,423,000     .....     2005 
204.31     Any balance in the first year does not cancel but is 
204.32  available in the second year. 
204.33     Sec. 25.  [REVISOR'S INSTRUCTION.] 
204.34     (a) In Minnesota Statutes, the revisor shall renumber 
204.35  section 119A.02, subdivision 2, as 120A.02, paragraph (a), and 
204.36  section 120A.02 as 120A.02, paragraph (b). 
205.1      (b) In Minnesota Statutes and Minnesota Rules, the revisor 
205.2   shall change the term "children, families, and learning" to 
205.3   "education." 
205.4      (c) In the next and subsequent editions of Minnesota 
205.5   Statutes, the revisor shall change all references to the 
205.6   "commissioner of children, families, and learning" to the 
205.7   "commissioner of public safety" in Minnesota Statutes, sections 
205.8   123B.88, subdivision 9; 168.102; 169.441, subdivision 5; and 
205.9   171.321, subdivision 4c; and "Part H" to "Part C" in Minnesota 
205.10  Statutes, sections 125A.27, subdivisions 7 and 8; 125A.32; 
205.11  125A.35; 125A.37; 125A.39; 125A.44; and 125A.45. 
205.12     Sec. 26.  [REPEALER.] 
205.13     (a) Minnesota Statutes 2002, sections 15.014, subdivision 
205.14  3; 119A.01, subdivision 1; 123B.90, subdivision 1; 169.441, 
205.15  subdivision 4; and 239.004, are repealed. 
205.16     (b) Minnesota Rules, parts 3500.0600; 3520.0400; 3520.1400; 
205.17  3520.3300; 3530.1500; 3530.2700; 3530.4400; 3530.4500; 
205.18  3530.4700; and 3550.0100, are repealed. 
205.19                             ARTICLE 11
205.20                            DEFICIENCIES
205.21  Section 1.  [DEPARTMENT OF EDUCATION.] 
205.22     The dollar amounts shown are added to or, if shown in 
205.23  parentheses, are subtracted from the appropriations in Laws 
205.24  2001, First Special Session chapter 6, as amended by Laws 2002, 
205.25  chapter 220, and Laws 2002, chapter 374, or other law, and are 
205.26  appropriated from the general fund to the department of 
205.27  education for the purposes specified in this article, to be 
205.28  available for the fiscal year indicated for each purpose.  The 
205.29  figure "2003" used in this article means that the appropriation 
205.30  or appropriations listed are available for the fiscal year 
205.31  ending June 30, 2003. 
205.32                                                         2003 
205.33  APPROPRIATION ADJUSTMENTS                         $  10,869,000 
205.34                                             APPROPRIATION CHANGE
205.35  Sec. 2.  APPROPRIATIONS; DEPARTMENT OF 
205.36  EDUCATION 
206.1   Subdivision 1.  Community Education Aid                 219,000 
206.2   Subd. 2.  General and Supplemental 
206.3   Education Aid                                         8,791,000 
206.4   This change includes ($7,420,000) for 
206.5   2002 and $16,211,000 for 2003. 
206.6   Subd. 3.  Nonpublic Pupil Aid                           437,000 
206.7   Subd. 4.  Consolidation Transition Aid                    5,000 
206.8   Subd. 5.  Interdistrict Desegregation 
206.9   or Integration Transportation Grants                    169,000 
206.10  Subd. 6.  Travel for Home-Based 
206.11  Services                                                 48,000  
206.12  Subd. 7.  Debt Service Aid                               19,000 
206.13  Subd. 8.  School Breakfast                              100,000 
206.14  Subd. 9.  Fast Break to Learning                      1,081,000 
206.15     Sec. 3.  [EFFECTIVE DATE.] 
206.16     Sections 1 and 2 are effective the day following final 
206.17  enactment. 
206.18                             ARTICLE 12
206.19                        TECHNICAL AMENDMENTS
206.20     Section 1.  Minnesota Statutes 2002, section 119B.011, 
206.21  subdivision 20, is amended to read: 
206.22     Subd. 20.  [TRANSITION YEAR FAMILIES.] "Transition year 
206.23  families" means families who have received MFIP assistance, or 
206.24  who were eligible to receive MFIP assistance after choosing to 
206.25  discontinue receipt of the cash portion of MFIP assistance under 
206.26  section 256J.31, subdivision 12, for at least three of the last 
206.27  six months before losing eligibility for MFIP or families 
206.28  participating in work first under chapter 256K who meet the 
206.29  requirements of section 256K.07.  Transition year child care may 
206.30  be used to support employment or job search.  Transition year 
206.31  child care is not available to families who have been 
206.32  disqualified from MFIP due to fraud.  
206.33     Sec. 2.  Minnesota Statutes 2002, section 121A.21, is 
206.34  amended to read: 
206.35     121A.21 [SCHOOL HEALTH SERVICES.] 
206.36     (a) Every school board must provide services to promote the 
206.37  health of its pupils. 
206.38     (b) The board of a district with 1,000 pupils or more in 
207.1   average daily membership in early childhood family education, 
207.2   preschool handicapped, elementary, and secondary programs must 
207.3   comply with the requirements of this paragraph.  It may use one 
207.4   or a combination of the following methods: 
207.5      (1) employ personnel, including at least one full-time 
207.6   equivalent licensed school nurse or continue to employ a 
207.7   registered nurse not yet certified as a public health nurse as 
207.8   defined in section 145A.02, subdivision 18, who is enrolled in a 
207.9   program that would lead to certification within four years of 
207.10  August 1, 1988; 
207.11     (2) contract with a public or private health organization 
207.12  or another public agency for personnel during the regular school 
207.13  year, determined appropriate by the board, who are currently 
207.14  licensed under chapter 148 and who are certified public health 
207.15  nurses; or 
207.16     (3) enter into another arrangement approved by the 
207.17  commissioner.  
207.18     Sec. 3.  Minnesota Statutes 2002, section 122A.41, 
207.19  subdivision 2, is amended to read: 
207.20     Subd. 2.  [PROBATIONARY PERIOD; DISCHARGE OR DEMOTION.] All 
207.21  teachers in the public schools in cities of the first class 
207.22  during the first three years of consecutive employment shall be 
207.23  deemed to be in a probationary period of employment during which 
207.24  period any annual contract with any teacher may, or may not, be 
207.25  renewed as the school board, after consulting with the peer 
207.26  review committee charged with evaluating the probationary 
207.27  teachers under subdivision 2a or 3, shall see fit.  The school 
207.28  site management team or the school board if there is no school 
207.29  site management team, shall adopt a plan for a written 
207.30  evaluation of teachers during the probationary period according 
207.31  to subdivision 2a 3.  Evaluation by the peer review committee 
207.32  charged with evaluating probationary teachers under subdivision 
207.33  2a 3 shall occur at least three times each year for a teacher 
207.34  performing services on 120 or more school days, at least two 
207.35  times each year for a teacher performing services on 60 to 119 
207.36  school days, and at least one time each year for a teacher 
208.1   performing services on fewer than 60 school days.  Days devoted 
208.2   to parent-teacher conferences, teachers' workshops, and other 
208.3   staff development opportunities and days on which a teacher is 
208.4   absent from school shall not be included in determining the 
208.5   number of school days on which a teacher performs services.  The 
208.6   school board may, during such probationary period, discharge or 
208.7   demote a teacher for any of the causes as specified in this 
208.8   code.  A written statement of the cause of such discharge or 
208.9   demotion shall be given to the teacher by the school board at 
208.10  least 30 days before such removal or demotion shall become 
208.11  effective, and the teacher so notified shall have no right of 
208.12  appeal therefrom. 
208.13     Sec. 4.  Minnesota Statutes 2002, section 123B.02, 
208.14  subdivision 1, is amended to read: 
208.15     Subdivision 1.  [BOARD AUTHORITY.] The board must have the 
208.16  general charge of the business of the district, the school 
208.17  houses, and of the interests of the schools thereof.  The 
208.18  board's authority to govern, manage, and control the district; 
208.19  to carry out its duties and responsibilities; and to conduct the 
208.20  business of the district includes implied powers in addition to 
208.21  any specific powers granted by the legislature.  
208.22     Sec. 5.  Minnesota Statutes 2002, section 123B.72, 
208.23  subdivision 3, is amended to read: 
208.24     Subd. 3.  [CERTIFICATION.] Prior to occupying or 
208.25  reoccupying a school facility affected by this section, a school 
208.26  board or its designee shall submit a document prepared by a 
208.27  system inspector to the building official or to the 
208.28  commissioner, verifying that the facility's heating, 
208.29  ventilation, and air conditioning system has been installed and 
208.30  operates according to design specifications and code, according 
208.31  to section 123B.71, subdivision 10 9, clause (3) (11).  A 
208.32  systems inspector shall also verify that the facility's design 
208.33  will provide the ability for monitoring of outdoor airflow and 
208.34  total airflow of ventilation systems in new school facilities 
208.35  and that any heating, ventilation, or air conditioning system 
208.36  that is installed or modified for a project subject to this 
209.1   section must provide a filtration system with a current ASHRAE 
209.2   standard. 
209.3      Sec. 6.  Minnesota Statutes 2002, section 123B.93, is 
209.4   amended to read: 
209.5      123B.93 [ADVERTISING ON SCHOOL BUSES.] 
209.6      (a) The commissioner, through a competitive process, and 
209.7   with the approval of the school bus safety advisory committee 
209.8   may contract with advertisers regarding advertising on school 
209.9   buses.  At a minimum, the contract must prohibit advertising and 
209.10  advertising images that: 
209.11     (1) solicit the sale of, or promote the use of, alcoholic 
209.12  beverages and tobacco products; 
209.13     (2) are discriminatory in nature or content; 
209.14     (3) imply or declare an endorsement of the product or 
209.15  service by the school district; 
209.16     (4) contain obscene material; 
209.17     (5) are false, misleading, or deceptive; or 
209.18     (6) relate to an illegal activity or antisocial behavior. 
209.19     (b) Advertisement must meet the following conditions: 
209.20     (1) the advertising attached to the school bus does not 
209.21  interfere with bus identification under section 169.441; and 
209.22     (2) the bus with attached advertising meets the school bus 
209.23  equipment standards under sections 169.4501 to 169.4504. 
209.24     (c) All buses operated by school districts may be attached 
209.25  with advertisements under the state contract.  All school 
209.26  district contracts shall include a provision for advertisement.  
209.27  Each school district shall be reimbursed by the advertiser for 
209.28  all costs incurred by the district and its contractors for 
209.29  supporting the advertising program, including, but not limited 
209.30  to, retrofitting buses, storing advertising, attaching 
209.31  advertising to the bus, and related maintenance. 
209.32     (d) The commissioner shall hold harmless and indemnify each 
209.33  district for all liabilities arising from the advertising 
209.34  program.  Each district must tender defense of all such claims 
209.35  to the commissioner within five days of receipt. 
209.36     (e) All revenue from the contract shall be deposited in the 
210.1   general fund. 
210.2      Sec. 7.  Minnesota Statutes 2002, section 124D.03, 
210.3   subdivision 12, is amended to read: 
210.4      Subd. 12.  [TERMINATION OF ENROLLMENT.] A district may 
210.5   terminate the enrollment of a nonresident student enrolled under 
210.6   this section or section 124D.07 or 124D.08 at the end of a 
210.7   school year if the student meets the definition of a habitual 
210.8   truant under section 260C.007, subdivision 19, the student has 
210.9   been provided appropriate services under chapter 260A, and the 
210.10  student's case has been referred to juvenile court.  A district 
210.11  may also terminate the enrollment of a nonresident student over 
210.12  the age of 16 enrolled under this section if the student is 
210.13  absent without lawful excuse for one or more periods on 15 
210.14  school days and has not lawfully withdrawn from school under 
210.15  section 120A.22, subdivision 8. 
210.16     Sec. 8.  Minnesota Statutes 2002, section 124D.09, 
210.17  subdivision 3, is amended to read: 
210.18     Subd. 3.  [DEFINITIONS.] For purposes of this section, the 
210.19  following terms have the meanings given to them. 
210.20     (a) "Eligible institution" means a Minnesota public 
210.21  post-secondary institution, a private, nonprofit two-year trade 
210.22  and technical school granting associate degrees, an 
210.23  opportunities industrialization center accredited by the North 
210.24  Central Association of Colleges and Schools, or a private, 
210.25  residential, two-year or four-year, liberal arts, 
210.26  degree-granting college or university located in Minnesota.  
210.27  "Course" means a course or program.  
210.28     (b) "Course" means a course or program.  
210.29     Sec. 9.  Minnesota Statutes 2002, section 124D.10, 
210.30  subdivision 13, is amended to read: 
210.31     Subd. 13.  [LENGTH OF SCHOOL YEAR.] A charter school must 
210.32  provide instruction each year for at least the number of days 
210.33  required by section 120A.22, subdivision 5 120A.41.  It may 
210.34  provide instruction throughout the year according to sections 
210.35  124D.12 to 124D.127 or 124D.128.  
210.36     Sec. 10.  Minnesota Statutes 2002, section 124D.10, 
211.1   subdivision 23a, is amended to read: 
211.2      Subd. 23a.  [RELATED PARTY LEASE COSTS.] (a) A charter 
211.3   school is prohibited from entering a lease of real property with 
211.4   a related party as defined in this subdivision, unless the 
211.5   lessor is a nonprofit corporation under chapter 317A or a 
211.6   cooperative under chapter 308A, and the lease cost is reasonable 
211.7   under section 124D.11, subdivision 4, clause (1). 
211.8      (b) For purposes of this subdivision: 
211.9      (1) A "related party" is an affiliate or close relative of 
211.10  the other party in question, an affiliate of a close relative, 
211.11  or a close relative of an affiliate.  
211.12     (2) "Affiliate" means a person that directly, or indirectly 
211.13  through one or more intermediaries, controls, or is controlled 
211.14  by, or is under common control with, another person. 
211.15     (3) "Close relative" means an individual whose relationship 
211.16  by blood, marriage, or adoption to another individual is no more 
211.17  remote than first cousin. 
211.18     (4) "Person" means an individual or entity of any kind. 
211.19     (5) "Control" includes the terms "controlling," "controlled 
211.20  by," and "under common control with" and means the possession, 
211.21  direct or indirect, of the power to direct or cause the 
211.22  direction of the management, operations, or policies of a 
211.23  person, whether through the ownership of voting securities, by 
211.24  contract, or otherwise. 
211.25     (c) A lease of real property to be used for a charter 
211.26  school, not excluded in paragraph (b), must contain the 
211.27  following statement:  "This lease is subject to Minnesota 
211.28  Statutes, section 124D.10, subdivision 23a." 
211.29     (d) If a charter school enters into as lessee a lease with 
211.30  a related party and the charter school subsequently closes, the 
211.31  commissioner has the right to recover from the lessor any lease 
211.32  payments in excess of those that are reasonable under section 
211.33  124.11 124D.11, subdivision 4, clause (1). 
211.34     Sec. 11.  Minnesota Statutes 2002, section 125A.05, is 
211.35  amended to read: 
211.36     125A.05 [METHOD OF SPECIAL INSTRUCTION.] 
212.1      (a) As defined in this subdivision section, to the extent 
212.2   required by federal law as of July 1, 1999, special instruction 
212.3   and services for children with a disability must be based on the 
212.4   assessment and individual education plan.  The instruction and 
212.5   services may be provided by one or more of the following methods:
212.6      (1) in connection with attending regular elementary and 
212.7   secondary school classes; 
212.8      (2) establishment of special classes; 
212.9      (3) at the home or bedside of the child; 
212.10     (4) in other districts; 
212.11     (5) instruction and services by special education 
212.12  cooperative centers established under this section, or in 
212.13  another member district of the cooperative center to which the 
212.14  resident district of the child with a disability belongs; 
212.15     (6) in a state residential school or a school department of 
212.16  a state institution approved by the commissioner; 
212.17     (7) in other states; 
212.18     (8) by contracting with public, private or voluntary 
212.19  agencies; 
212.20     (9) for children under age five and their families, 
212.21  programs and services established through collaborative efforts 
212.22  with other agencies; 
212.23     (10) for children under age five and their families, 
212.24  programs in which children with a disability are served with 
212.25  children without a disability; and 
212.26     (11) any other method approved by the commissioner. 
212.27     (b) Preference shall be given to providing special 
212.28  instruction and services to children under age three and their 
212.29  families in the residence of the child with the parent or 
212.30  primary caregiver, or both, present. 
212.31     (c) The primary responsibility for the education of a child 
212.32  with a disability must remain with the district of the child's 
212.33  residence regardless of which method of providing special 
212.34  instruction and services is used.  If a district other than a 
212.35  child's district of residence provides special instruction and 
212.36  services to the child, then the district providing the special 
213.1   instruction and services must notify the child's district of 
213.2   residence before the child's individual education plan is 
213.3   developed and must provide the district of residence an 
213.4   opportunity to participate in the plan's development.  The 
213.5   district of residence must inform the parents of the child about 
213.6   the methods of instruction that are available. 
213.7      Sec. 12.  Minnesota Statutes 2002, section 125A.12, is 
213.8   amended to read: 
213.9      125A.12 [ATTENDANCE IN ANOTHER DISTRICT.] 
213.10     No resident of a district who is eligible for special 
213.11  instruction and services pursuant to this section may be denied 
213.12  provision of this instruction and service because of attending a 
213.13  public school in another district pursuant to section 123B.88, 
213.14  subdivision 5, if the attendance is not subject to section 
213.15  124D.06, 124D.07, or 124D.08.  If the pupil attends a public 
213.16  school located in a contiguous district and the district of 
213.17  attendance does not provide special instruction and services, 
213.18  the district of residence must provide necessary transportation 
213.19  for the pupil between the boundary of the district of residence 
213.20  and the educational facility where special instruction and 
213.21  services are provided within the district of residence.  The 
213.22  district of residence may provide necessary transportation for 
213.23  the pupil between its boundary and the school attended in the 
213.24  contiguous district, but must not pay the cost of transportation 
213.25  provided outside the boundary of the district of residence.  
213.26     Sec. 13.  Minnesota Statutes 2002, section 126C.10, 
213.27  subdivision 28, is amended to read: 
213.28     Subd. 28.  [EQUITY REGION.] For the purposes of computing 
213.29  equity revenue under subdivision 23 24, a district whose 
213.30  administrative offices on July 1, 1999, is located in Anoka, 
213.31  Carver, Dakota, Hennepin, Ramsey, Scott, or Washington county is 
213.32  part of the metro equity region.  Districts whose administrative 
213.33  offices on July 1, 1999, are not located in Anoka, Carver, 
213.34  Dakota, Hennepin, Ramsey, Scott, or Washington county are part 
213.35  of the rural equity region. 
213.36     Sec. 14.  Minnesota Statutes 2002, section 126C.55, 
214.1   subdivision 5, is amended to read: 
214.2      Subd. 5.  [AID REDUCTION FOR REPAYMENT.] Except as provided 
214.3   in this subdivision, the state must reduce the state aid payable 
214.4   to the district under this chapter and chapters 120B, 122A, 
214.5   123A, 123B, 124D, 125A, 127A, and 273, according to the schedule 
214.6   in section 127A.44, subdivision 2, by the amount paid by the 
214.7   state under this section on behalf of the district, plus the 
214.8   interest due on it, and the amount reduced must revert from the 
214.9   appropriate account to the state general fund.  Payments from 
214.10  the school endowment fund or any federal aid payments shall not 
214.11  be reduced.  If, after review of the financial situation of the 
214.12  district, the commissioner advises the commissioner of finance 
214.13  that a total reduction of the aids would cause an undue hardship 
214.14  on or an undue disruption of the educational program of the 
214.15  district, the commissioner, with the approval of the 
214.16  commissioner of finance, may establish a different schedule for 
214.17  reduction of those aids to repay the state.  The amount of aids 
214.18  to be reduced are decreased by any amounts repaid to the state 
214.19  by the school district from other revenue sources. 
214.20     Sec. 15.  Minnesota Statutes 2002, section 127A.05, 
214.21  subdivision 4, is amended to read: 
214.22     Subd. 4.  [ADMINISTRATIVE RULES.] The commissioner may 
214.23  adopt new rules or amend any existing rules only under specific 
214.24  authority and consistent with the requirements of chapter 14.  
214.25  The commissioner may repeal any existing rules adopted by the 
214.26  commissioner.  Notwithstanding the provisions of section 14.05, 
214.27  subdivision 4, The commissioner may grant a variance to rules 
214.28  adopted by the commissioner upon application by a school 
214.29  district for purposes of implementing experimental programs in 
214.30  learning or school management.  This subdivision shall not 
214.31  prohibit the commissioner from making technical changes or 
214.32  corrections to rules adopted by the commissioner. 
214.33     Sec. 16.  Minnesota Statutes 2002, section 127A.45, 
214.34  subdivision 12, is amended to read: 
214.35     Subd. 12.  [PAYMENT PERCENTAGE FOR CERTAIN AIDS.] (a) One 
214.36  hundred percent of the aid for the current fiscal year must be 
215.1   paid for the following aids:  reimbursement for enrollment 
215.2   options transportation, according to sections 124D.03, 
215.3   subdivision 8, 124D.09, subdivision 22, and 124D.10; school 
215.4   lunch aid, according to section 124D.111; hearing impaired 
215.5   support services aid, according to section 124D.57; and Indian 
215.6   post-secondary preparation grants according to section 124D.85 
215.7   124D.80. 
215.8      (b) One hundred percent of the aid for the current fiscal 
215.9   year, based on enrollment in the previous year, must be paid for 
215.10  the first grade preparedness program according to section 
215.11  124D.081. 
215.12     Sec. 17.  Minnesota Statutes 2002, section 169.435, is 
215.13  amended to read: 
215.14     169.435 [STATE SCHOOL BUS SAFETY ADMINISTRATION.] 
215.15     Subdivision 1.  [RESPONSIBILITY; DEPARTMENT OF PUBLIC 
215.16  SAFETY.] The department of public safety has the primary 
215.17  responsibility for school transportation safety.  To oversee 
215.18  school transportation safety, the commissioner of public safety 
215.19  shall establish a school bus safety advisory committee according 
215.20  to subdivision 2.  The commissioner or the commissioner's 
215.21  designee shall serve as state director of pupil transportation 
215.22  according to subdivision 3. 
215.23     Subd. 3.  [PUPIL TRANSPORTATION SAFETY DIRECTOR.] (a) The 
215.24  commissioner of public safety or the commissioner's designee 
215.25  shall serve as pupil transportation safety director. 
215.26     (b) The duties of the pupil transportation safety director 
215.27  shall include: 
215.28     (1) overseeing all department activities related to school 
215.29  bus safety; 
215.30     (2) assisting in the development, interpretation, and 
215.31  implementation of laws and policies relating to school bus 
215.32  safety; 
215.33     (3) supervising preparation of the school bus inspection 
215.34  manual; and 
215.35     (4) in conjunction with the department of children, 
215.36  families, and learning education, assisting school districts in 
216.1   developing and implementing comprehensive transportation 
216.2   policies; and 
216.3      (5) providing information requested by the school bus 
216.4   safety advisory committee. 
216.5      Sec. 18.  Minnesota Statutes 2002, section 169.449, 
216.6   subdivision 1, is amended to read: 
216.7      Subdivision 1.  [RULES.] The commissioner of public safety, 
216.8   in consultation with the school bus safety advisory committee, 
216.9   shall adopt rules governing the operation of school buses used 
216.10  for transportation of school children, when owned or operated by 
216.11  a school or privately owned and operated under a contract with a 
216.12  school, and these rules must be made a part of that contract by 
216.13  reference.  Each school, its officers and employees, and each 
216.14  person employed under the contract is subject to these rules. 
216.15     Sec. 19.  Minnesota Statutes 2002, section 169.4501, 
216.16  subdivision 3, is amended to read: 
216.17     Subd. 3.  [INSPECTION MANUAL.] The department of public 
216.18  safety shall develop a school bus inspection manual based on the 
216.19  national standards adopted in subdivision 1 and Minnesota 
216.20  standards adopted in sections 169.4502 to 169.4504.  The 
216.21  Minnesota state patrol shall use the manual as the basis for 
216.22  inspecting buses as provided in section 169.451.  When 
216.23  appropriate, the school bus safety advisory committee shall 
216.24  recommend to the education committees of the legislature 
216.25  modifications to the standards upon which the school bus 
216.26  inspection manual is based.  The department of public safety has 
216.27  no rulemaking authority to alter the standards upon which school 
216.28  buses are inspected. 
216.29     Sec. 20.  Minnesota Statutes 2002, section 169.4501, 
216.30  subdivision 4, is amended to read: 
216.31     Subd. 4.  [VARIANCE.] The commissioner of public safety may 
216.32  grant a variance to any of the school bus standards to 
216.33  accommodate testing of new equipment related to school buses.  A 
216.34  variance from the standards must be for the sole purpose of 
216.35  testing and evaluating new equipment for increased safety, 
216.36  efficiency, and economy of pupil transportation.  The variance 
217.1   expires 18 months from the date on which it is granted unless 
217.2   the commissioner specifies an earlier expiration date.  The 
217.3   school bus safety advisory committee shall annually review all 
217.4   variances that are granted under this subdivision and consider 
217.5   whether to recommend modifications to the Minnesota school bus 
217.6   equipment standards based on the variances. 
217.7      Sec. 21.  [REPEALER.] 
217.8      (a) Minnesota Statutes 2002, section 126C.55, subdivision 
217.9   5, is repealed. 
217.10     (b) Laws 2001, First Special Session chapter 3, article 4, 
217.11  sections 1 and 2; and Laws 2001, First Special Session chapter 
217.12  6, article 2, section 52, are repealed. 
217.13                             ARTICLE 13
217.14                     ACADEMIC CONTENT STANDARDS
217.15     Section 1.  [120B.001] [REPEALING PROFILE OF LEARNING 
217.16  STATUTES AND RULES AND RELATED STATEWIDE TESTING REQUIREMENT.] 
217.17     (a) Notwithstanding sections 120B.02, 120B.031, 120B.30, 
217.18  120B.31, and 120B.35, or other law to the contrary, the 
217.19  commissioner of education must not implement the profile of 
217.20  learning portion of the state's results-oriented graduation rule 
217.21  and all rules under Minnesota Rules, chapter 3501, related to 
217.22  the profile of learning portion of the state's results-oriented 
217.23  graduation rule described in this chapter are repealed. 
217.24     (b) The requirement under section 120B.30 for a test 
217.25  aligned with the profile of learning portion of the state's 
217.26  graduation standards that is administered annually to all 
217.27  students in grades 3, 5, 7, 8, 10, and 11 is repealed.  This 
217.28  repeal does not apply to the state's basic skills tests in 
217.29  reading, mathematics, and written composition. 
217.30     <b>[EFFECTIVE DATE.]</b> Paragraph (a) is effective the day 
217.31  following final enactment and applies to the 2003-2004 school 
217.32  year and later.  Paragraph (b) is effective immediately and 
217.33  applies to the 2005-2006 school year and later. 
217.34     Sec. 2.  [REPLACING PROFILE OF LEARNING STATUTES AND 
217.35  RULES.] 
217.36     Subdivision 1.  [STAKEHOLDER ADVICE ON STANDARDS.] The 
218.1   commissioner of education must consider advice from at least the 
218.2   following stakeholders in developing statewide rigorous core 
218.3   academic standards in English, mathematics, science, and history 
218.4   and geography to replace the profile of learning: 
218.5      (1) parents of school-age children and members of the 
218.6   public throughout the state; 
218.7      (2) teachers throughout the state currently licensed and 
218.8   providing instruction in English, mathematics, science, or 
218.9   history and geography and licensed elementary and secondary 
218.10  school principals throughout the state currently administering a 
218.11  school site; 
218.12     (3) currently serving members of local school boards and 
218.13  charter school boards throughout the state; 
218.14     (4) faculty teaching core subjects at postsecondary 
218.15  institutions in Minnesota; and 
218.16     (5) representatives of the Minnesota business community. 
218.17     Subd. 2.  [PARAMETERS FOR ACADEMIC STANDARDS.] The academic 
218.18  standards must: 
218.19     (1) be based on factual, objective, verifiable knowledge in 
218.20  English, mathematics, science, and history and geography; 
218.21     (2) be clear, concise, measurable, and grade-level 
218.22  appropriate; 
218.23     (3) preserve and promote fundamental American principles 
218.24  stated in the Declaration of Independence and the Constitution 
218.25  of the United States and other such principles as national 
218.26  sovereignty, natural law, and free market enterprise; 
218.27     (4) not mandate a specific teaching methodology nor include 
218.28  work-based learning or any other content standard inconsistent 
218.29  with this subdivision; and 
218.30     (5) be assessed using tests aligned with the academic 
218.31  standards established under this section. 
218.32     Subd. 3.  [COMMISSIONER TO PRESENT PROPOSED RULES TO THE 
218.33  LEGISLATURE.] (a) The commissioner must present to the 
218.34  legislature proposed rules for implementing statewide rigorous 
218.35  core academic standards in English, mathematics, science, and 
218.36  history and geography as follows: 
219.1      (1) by April 15, 2003, present proposed rules for 
219.2   implementing statewide rigorous core academic standards in 
219.3   English and mathematics; 
219.4      (2) present a statewide plan for students, educators, 
219.5   schools, and school districts to make the transition from the 
219.6   profile of learning to the standards described under this act; 
219.7      (3) by March 1, 2004, present proposed rules for 
219.8   implementing statewide rigorous core academic standards in 
219.9   science; 
219.10     (4) by March 1, 2005, present proposed rules for 
219.11  implementing statewide rigorous core academic standards in 
219.12  history and geography. 
219.13     (b) All proposed rules the commissioner presents must 
219.14  comply with the requirements of this section. 
219.15     (c) A school district, no later than the 2007-2008 school 
219.16  year, must incorporate into its existing locally established 
219.17  graduation requirements the state graduation requirements 
219.18  premised on rules proposed under this section.  A school 
219.19  district that incorporates these state graduation requirements 
219.20  before the 2007-2008 school year must provide students who enter 
219.21  the ninth grade in or before the 2004-2005 school year with the 
219.22  opportunity to earn a diploma based on existing locally 
219.23  established graduation requirements in effect when the students 
219.24  entered grade 9.  District efforts to develop, implement, or 
219.25  improve instruction or curriculum as a result of the provisions 
219.26  of this section must be consistent with sections 120B.10, 
219.27  120B.11, and 120B.20.  
219.28     Subd. 4.  [RULES IMPLEMENTING READING AND MATH 
219.29  STANDARDS.] The commissioner must adopt rules under section 
219.30  14.388, clause (2), for implementing the statewide rigorous core 
219.31  academic standards in English and mathematics described in 
219.32  subdivision 3, paragraph (a), clause (1). 
219.33     <b>[EFFECTIVE DATE.]</b> Subdivisions 1, 2, and 3 are effective 
219.34  the day following final enactment.  Subdivision 4 is effective 
219.35  April 30, 2003. 
219.36     Sec. 3.  [INTERIM ALTERNATIVE.] 
220.1      If the legislature does not authorize the commissioner 
220.2   under section 2, subdivision 4, to adopt rules to implement 
220.3   statewide rigorous core academic standards in English and 
220.4   mathematics that are effective for the 2003-2004 school year, 
220.5   each school district and charter school shall continue to 
220.6   implement academic English and mathematics standards consistent 
220.7   with Minnesota Statutes, section 120A.22, subdivision 9, until 
220.8   such rules to implement statewide rigorous core academic 
220.9   standards in English and mathematics are adopted. 
220.10     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
220.11  following final enactment. 
220.12     Sec. 4.  [RULES FOR SUPPLEMENTAL SERVICE PROVIDERS.] 
220.13     The commissioner of children, families, and learning may 
220.14  adopt rules under Minnesota Statutes, section 14.388, 
220.15  establishing criteria for identifying, annually reviewing, and 
220.16  formally listing eligible supplemental education service 
220.17  providers throughout Minnesota, consistent with applicable 
220.18  federal requirements and Minnesota's application for 
220.19  supplemental education service providers under Title 1, Part A, 
220.20  of the No Child Left Behind Act. 
220.21     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
220.22  following final enactment and applies to supplemental education 
220.23  service providers delivering supplemental English or math 
220.24  services to eligible students in the 2003-2004 school year and 
220.25  later.