1.1                          A bill for an act 
  1.2             relating to education; providing for early childhood, 
  1.3             family, and kindergarten through grade 12 education 
  1.4             including general education, education excellence, 
  1.5             special programs, facilities and technology, 
  1.6             nutrition, school accounting, other programs, 
  1.7             libraries, early childhood family support, prevention, 
  1.8             self-sufficiency and life long learning, state 
  1.9             agencies, deficiencies, and technical amendments; 
  1.10            providing for rulemaking; appropriating money; 
  1.11            amending Minnesota Statutes 2002, sections 12.21, 
  1.12            subdivision 3; 84A.51, subdivision 4; 119A.52; 
  1.13            119A.53; 119B.011, subdivision 20; 120A.05, 
  1.14            subdivisions 9, 11; 120A.24, subdivision 4; 120A.41; 
  1.15            121A.21; 121A.41, subdivision 10; 121A.55; 121A.61, 
  1.16            subdivision 3; 121A.64; 122A.09, subdivisions 4, 10; 
  1.17            122A.12, subdivisions 1, 2; 122A.18, subdivision 7a; 
  1.18            122A.21; 122A.22; 122A.41, subdivision 2; 122A.414, by 
  1.19            adding a subdivision; 122A.415, subdivisions 1, 3; 
  1.20            122A.58; 122A.63, subdivision 3; 123A.06, subdivision 
  1.21            3; 123A.18, subdivision 2; 123A.73, subdivisions 3, 4, 
  1.22            5; 123B.02, subdivision 1; 123B.14, subdivision 1; 
  1.23            123B.51, subdivisions 3, 4; 123B.52, by adding a 
  1.24            subdivision; 123B.53, subdivision 4; 123B.57, 
  1.25            subdivisions 1, 4, 6; 123B.59, subdivisions 1, 2, 3, 
  1.26            5, by adding a subdivision; 123B.63, subdivisions 1, 
  1.27            2, 3, 4; 123B.72, subdivision 3; 123B.75, subdivision 
  1.28            5; 123B.88, subdivision 2; 123B.90, subdivisions 2, 3; 
  1.29            123B.91, subdivision 1; 123B.92, subdivisions 1, 3, 9; 
  1.30            123B.93; 124D.03, subdivision 12; 124D.081, by adding 
  1.31            a subdivision; 124D.09, subdivisions 3, 9, 10, 13, 16, 
  1.32            20; 124D.10, subdivisions 2a, 3, 4, 13, 16, 20, 23a; 
  1.33            124D.11, subdivisions 1, 2, 4, 6, 9; 124D.118, 
  1.34            subdivision 4; 124D.13, subdivisions 2, 4, 8; 
  1.35            124D.135, subdivisions 1, 8; 124D.15, subdivision 7; 
  1.36            124D.16, subdivisions 1, 6; 124D.19, subdivision 3; 
  1.37            124D.20, subdivisions 3, 5, by adding subdivisions; 
  1.38            124D.22, subdivision 3; 124D.42, subdivision 6; 
  1.39            124D.454, subdivisions 1, 2, 3, 8, 10, by adding a 
  1.40            subdivision; 124D.52, subdivisions 1, 3; 124D.531, 
  1.41            subdivisions 1, 2, 4, 7; 124D.59, subdivision 2; 
  1.42            124D.65, subdivision 5; 124D.86, subdivisions 1a, 3, 
  1.43            4, 5, 6; 125A.05; 125A.12; 125A.21, subdivision 2; 
  1.44            125A.28; 125A.30; 125A.76, subdivisions 1, 4; 125A.79, 
  1.45            subdivisions 1, 6; 126C.05, subdivisions 8, 14, 15, 
  1.46            16, 17, by adding a subdivision; 126C.10, subdivisions 
  2.1             1, 3, 4, 17, 24, 28, by adding subdivisions; 126C.13, 
  2.2             subdivision 4; 126C.15, subdivision 1; 126C.17, 
  2.3             subdivisions 1, 2, 5, 7, 7a, 9, 13; 126C.21, 
  2.4             subdivision 3; 126C.40, subdivision 1; 126C.42, 
  2.5             subdivision 1; 126C.43, subdivisions 2, 3; 126C.44; 
  2.6             126C.45; 126C.457; 126C.48, subdivision 3; 126C.63, 
  2.7             subdivisions 5, 8; 126C.69, subdivisions 2, 9; 
  2.8             127A.05, subdivision 4; 127A.45, subdivisions 2, 3, 
  2.9             7a, 10, 12, 13, 14, 14a, 16; 127A.47, subdivisions 7, 
  2.10            8; 127A.49, subdivisions 2, 3; 128C.02, subdivision 1; 
  2.11            128C.05, by adding a subdivision; 128D.11, subdivision 
  2.12            8; 134.34, subdivision 4; 134.47, subdivision 1; 
  2.13            169.26, subdivision 3; 169.28, subdivision 1; 169.435; 
  2.14            169.449, subdivision 1; 169.4501, subdivisions 3, 4; 
  2.15            169.4503, subdivision 4; 169.454, subdivisions 2, 6; 
  2.16            169.973, subdivision 1; 171.321, subdivision 5; 
  2.17            178.02, subdivision 1; 205A.03, subdivisions 1, 3, 4; 
  2.18            205A.06, subdivision 1a; 205A.07, by adding a 
  2.19            subdivision; 268.052, subdivisions 2, 4; 273.138, 
  2.20            subdivision 6; 298.28, subdivision 4; 475.61, 
  2.21            subdivisions 1, 3, 4; 611A.78, subdivision 1; Laws 
  2.22            1965, chapter 705, as amended; Laws 2001, First 
  2.23            Special Session chapter 6, article 2, section 72; 
  2.24            proposing coding for new law in Minnesota Statutes, 
  2.25            chapters 123B; 124D; 125A; 126C; 127A; 134; repealing 
  2.26            Minnesota Statutes 2002, sections 15.014, subdivision 
  2.27            3; 93.22, subdivision 2; 93.223, subdivision 1; 
  2.28            122A.62; 122A.64; 122A.65; 123A.73, subdivisions 7, 
  2.29            10, 11; 123B.81, subdivision 6; 123B.90, subdivision 
  2.30            1; 124D.09, subdivision 15; 124D.115; 124D.1156; 
  2.31            124D.17; 124D.21; 124D.221; 124D.54; 124D.65, 
  2.32            subdivision 4; 124D.84, subdivision 2; 124D.89; 
  2.33            124D.93; 125A.023, subdivision 5; 125A.09; 125A.47; 
  2.34            125A.79, subdivision 2; 125B.11; 126C.01, subdivision 
  2.35            4; 126C.05, subdivision 12; 126C.125; 126C.14; 
  2.36            126C.55, subdivision 5; 127A.41, subdivision 6; 
  2.37            128C.01, subdivision 5; 128C.02, subdivision 8; 
  2.38            128C.13; 144.401, subdivision 5; 169.441, subdivision 
  2.39            4; 239.004; Laws 1993, chapter 224, article 8, section 
  2.40            20, subdivision 2, as amended; Laws 2000, chapter 489, 
  2.41            article 2, section 36, as amended; Laws 2001, First 
  2.42            Special Session chapter 3, article 4, sections 1, 2; 
  2.43            Laws 2001, First Special Session chapter 6, article 2, 
  2.44            section 52; Laws 2001, First Special Session chapter 
  2.45            6, article 5, section 12, as amended; Minnesota Rules, 
  2.46            parts 3500.0600; 3520.0400; 3520.1400; 3520.3300; 
  2.47            3530.1500; 3530.2700; 3530.4400; 3530.4500; 3530.4700; 
  2.48            3550.0100. 
  2.49  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  2.50                             ARTICLE 1
  2.51                         GENERAL EDUCATION
  2.52     Section 1.  Minnesota Statutes 2002, section 123A.06, 
  2.53  subdivision 3, is amended to read: 
  2.54     Subd. 3.  [HOURS OF INSTRUCTION EXEMPTION.] Notwithstanding 
  2.55  any law to the contrary, the center programs must be available 
  2.56  throughout the entire year.  Pupils in a center may receive 
  2.57  instruction for more than or less than the daily number of hours 
  2.58  required by the rules of the commissioner of children, families, 
  2.59  and learning.  However, a pupil must receive instruction each 
  3.1   year for at least the total number of instructional hours 
  3.2   required by statutes and rules.  A center may petition the state 
  3.3   board under Minnesota Rules, part 3500.1000, for exemption from 
  3.4   other rules.  
  3.5      Sec. 2.  Minnesota Statutes 2002, section 123A.18, 
  3.6   subdivision 2, is amended to read: 
  3.7      Subd. 2.  [EXTENDED YEAR INSTRUCTION.] The agreement may 
  3.8   provide opportunities for pupils to receive instruction 
  3.9   throughout the entire year and for teachers to coordinate 
  3.10  educational opportunities and provide instruction throughout the 
  3.11  entire year.  Pupils may receive instruction for more than or 
  3.12  less than the daily number of hours required by the rules of the 
  3.13  commissioner of children, families, and learning.  However, the 
  3.14  pupil must receive instruction each year for at least the total 
  3.15  number of instructional hours required by statutes and rules.  A 
  3.16  teacher who is employed for the extended year may develop, in 
  3.17  consultation with pupils and parents, individual educational 
  3.18  programs for not more than 125 pupils.  
  3.19     Sec. 3.  Minnesota Statutes 2002, section 123A.73, 
  3.20  subdivision 3, is amended to read: 
  3.21     Subd. 3.  [VOLUNTARY DISSOLUTION; REFERENDUM REVENUE.] As 
  3.22  of the effective date of the voluntary dissolution of a district 
  3.23  and its attachment to one or more existing districts pursuant to 
  3.24  section 123A.46, the authorization for all referendum revenues 
  3.25  previously approved by the voters of all affected districts for 
  3.26  those districts pursuant to section 126C.17, subdivision 9, or 
  3.27  its predecessor provision, is canceled.  However, if all of the 
  3.28  territory of any independent district is included in the 
  3.29  enlarged district, and if the adjusted net tax capacity of 
  3.30  taxable property in that territory comprises 90 percent or more 
  3.31  of the adjusted net tax capacity of all taxable property in an 
  3.32  enlarged district, the enlarged district's referendum revenue 
  3.33  shall be determined as follows: 
  3.34     If the referendum revenue previously approved in the 
  3.35  preexisting district is authorized as a tax rate, the referendum 
  3.36  revenue in the enlarged district is the tax rate times the net 
  4.1   tax capacity of the enlarged district.  If referendum revenue 
  4.2   previously approved in the preexisting district is authorized as 
  4.3   revenue per resident pupil unit, The referendum revenue shall be 
  4.4   the revenue per resident marginal cost pupil unit times the 
  4.5   number of resident marginal cost pupil units in the enlarged 
  4.6   district.  If referendum revenue in the preexisting district is 
  4.7   authorized both as a tax rate and as revenue per resident pupil 
  4.8   unit, the referendum revenue in the enlarged district shall be 
  4.9   the sum of both plus any referendum revenue in the preexisting 
  4.10  district authorized as a dollar amount.  Any new referendum 
  4.11  revenue shall be authorized only after approval is granted by 
  4.12  the voters of the entire enlarged district in an election 
  4.13  pursuant to section 126C.17, subdivision 9. 
  4.14     Sec. 4.  Minnesota Statutes 2002, section 123A.73, 
  4.15  subdivision 4, is amended to read: 
  4.16     Subd. 4.  [CONSOLIDATION; MAXIMUM AUTHORIZED REFERENDUM 
  4.17  REVENUES.] As of the effective date of a consolidation pursuant 
  4.18  to section 123A.48, if the plan for consolidation so provides, 
  4.19  or if the plan for consolidation makes no provision concerning 
  4.20  referendum revenues, the authorization for all referendum 
  4.21  revenues previously approved by the voters of all affected 
  4.22  districts for those districts pursuant to section 126C.17, 
  4.23  subdivision 9, or its predecessor provision shall be 
  4.24  recalculated as provided in this subdivision.  The referendum 
  4.25  revenue authorization for the newly created district shall be 
  4.26  the net tax capacity rate revenue per resident marginal cost 
  4.27  pupil unit that would raise an amount equal to the combined 
  4.28  dollar amount of the referendum revenues authorized by each of 
  4.29  the component districts for the year preceding the 
  4.30  consolidation, unless the referendum revenue authorization of 
  4.31  the newly created district is subsequently modified pursuant to 
  4.32  section 126C.17, subdivision 9.  If the referendum revenue 
  4.33  authorizations for each of the component districts were limited 
  4.34  to a specified number of years, The referendum revenue 
  4.35  authorization for the newly created district shall continue for 
  4.36  a period of time equal to the longest period authorized for any 
  5.1   component district.  If the referendum revenue authorization of 
  5.2   any component district is not limited to a specified number of 
  5.3   years, the referendum revenue authorization for the newly 
  5.4   created district shall not be limited to a specified number of 
  5.5   years.  
  5.6      Sec. 5.  Minnesota Statutes 2002, section 123A.73, 
  5.7   subdivision 5, is amended to read: 
  5.8      Subd. 5.  [ALTERNATIVE METHOD.] As of the effective date of 
  5.9   a consolidation pursuant to section 123A.48, if the plan for 
  5.10  consolidation so provides, the authorization for all referendum 
  5.11  revenues previously approved by the voters of all affected 
  5.12  districts for those districts pursuant to section 126C.17, 
  5.13  subdivision 9, or its predecessor provision shall be combined as 
  5.14  provided in this subdivision.  The referendum revenue 
  5.15  authorization for the newly created district may be any 
  5.16  allowance per resident marginal cost pupil unit provided in the 
  5.17  plan for consolidation, but may not exceed the allowance per 
  5.18  resident marginal cost pupil unit that would raise an amount 
  5.19  equal to the combined dollar amount of the referendum revenues 
  5.20  authorized by each of the component districts for the year 
  5.21  preceding the consolidation.  If the referendum revenue 
  5.22  authorizations for each of the component districts were limited 
  5.23  to a specified number of years, The referendum revenue 
  5.24  authorization for the newly created district shall continue for 
  5.25  a period of time equal to the longest period authorized for any 
  5.26  component district.  If the referendum revenue authorization of 
  5.27  any component district is not limited to a specified number of 
  5.28  years, the referendum revenue authorization for the newly 
  5.29  created district shall not be limited to a specified number of 
  5.30  years.  The referendum revenue authorization for the newly 
  5.31  created district may be modified pursuant to section 126C.17, 
  5.32  subdivision 9. 
  5.33     Sec. 6.  Minnesota Statutes 2002, section 123B.90, 
  5.34  subdivision 2, is amended to read: 
  5.35     Subd. 2.  [STUDENT TRAINING.] (a) Each district must 
  5.36  provide public school pupils enrolled in grades kindergarten 
  6.1   through grade 10 with age-appropriate school bus safety training.
  6.2   The training must be results-oriented and shall consist of both 
  6.3   classroom instruction and practical training using a school 
  6.4   bus.  Upon completing the training, a student shall be able to 
  6.5   demonstrate knowledge and understanding, as described in this 
  6.6   section, of at least the following competencies and concepts: 
  6.7      (1) transportation by school bus is a privilege and not a 
  6.8   right; 
  6.9      (2) district policies for student conduct and school bus 
  6.10  safety; 
  6.11     (3) appropriate conduct while on the school bus; 
  6.12     (4) the danger zones surrounding a school bus; 
  6.13     (5) procedures for safely boarding and leaving a school 
  6.14  bus; 
  6.15     (6) procedures for safe street or road crossing; and 
  6.16     (7) school bus evacuation and other emergency procedures; 
  6.17  and 
  6.18     (8) appropriate training on the use of lap belts or lap and 
  6.19  shoulder belts, if the district uses buses equipped with lap 
  6.20  belts or lap and shoulder belts. 
  6.21     (b) Each nonpublic school located within the district must 
  6.22  provide all nonpublic school pupils enrolled in grades 
  6.23  kindergarten through grade 10 who are transported by school bus 
  6.24  at public expense and attend school within the district's 
  6.25  boundaries with training as required in paragraph (a).  The 
  6.26  school district shall make a bus available for the practical 
  6.27  training if the district transports the nonpublic students.  
  6.28  Each nonpublic school shall provide the instruction. 
  6.29     (c) All Students enrolled in grades kindergarten through 3 
  6.30  grade 6 who are transported by school bus and are enrolled 
  6.31  during the first or second week of school must demonstrate 
  6.32  achievement of receive the school bus safety training 
  6.33  competencies by the end of the third week of school.  All 
  6.34  Students enrolled in grades 4 7 through 10 who are transported 
  6.35  by school bus and are enrolled during the first or second week 
  6.36  of school and have not received school bus safety training in 
  7.1   kindergarten through grade 6 must demonstrate achievement 
  7.2   of receive the competencies training by the end of the sixth 
  7.3   week of school.  Students in grades 9 and 10 must receive 
  7.4   training in the laws and proper procedures when operating a 
  7.5   motor vehicle in the vicinity of a school bus.  Students 
  7.6   enrolled in grades kindergarten through grade 10 who enroll in a 
  7.7   school after the second week of school and are transported by 
  7.8   school bus and have not received training in their previous 
  7.9   school district shall undergo school bus safety training and 
  7.10  demonstrate achievement of the school bus safety competencies or 
  7.11  receive bus safety instructional materials within four weeks of 
  7.12  the first day of attendance.  The school transportation safety 
  7.13  director in each district must certify to the commissioner 
  7.14  superintendent of schools annually that all students transported 
  7.15  by school bus within the district have satisfactorily 
  7.16  demonstrated knowledge and understanding of received the school 
  7.17  bus safety competencies training according to this section or 
  7.18  provide an explanation for a student's failure to demonstrate 
  7.19  the competencies.  The principal or other chief administrator of 
  7.20  each nonpublic school must certify annually to the school 
  7.21  transportation safety director of the district in which the 
  7.22  school is located that all of the school's students transported 
  7.23  by school bus at public expense have received training according 
  7.24  to this section.  A district may deny transportation to a 
  7.25  student who fails to demonstrate the competencies, unless the 
  7.26  student is unable to achieve the competencies due to a 
  7.27  disability, or to a student who attends a nonpublic school that 
  7.28  fails to provide training as required by this subdivision. 
  7.29     (d) A district and a nonpublic school with students 
  7.30  transported by school bus at public expense must, to the extent 
  7.31  possible, may provide kindergarten pupils with bus safety 
  7.32  training before the first day of school. 
  7.33     (e) A district and a nonpublic school with students 
  7.34  transported by school bus at public expense must may also 
  7.35  provide student safety education for bicycling and pedestrian 
  7.36  safety, for students enrolled in grades kindergarten through 
  8.1   grade 5. 
  8.2      (f) A district and a nonpublic school with students 
  8.3   transported by school bus at public expense must make reasonable 
  8.4   accommodations for the school bus, bicycle, and pedestrian 
  8.5   safety training of pupils known to speak English as a second 
  8.6   language and pupils with disabilities. 
  8.7      (g) The district must provide students enrolled in 
  8.8   kindergarten through grade 3 school bus safety training twice 
  8.9   during the school year.  
  8.10     Sec. 7.  Minnesota Statutes 2002, section 123B.90, 
  8.11  subdivision 3, is amended to read: 
  8.12     Subd. 3.  [MODEL TRAINING PROGRAM.] The commissioner shall 
  8.13  develop a comprehensive model school bus safety training program 
  8.14  for pupils who ride the bus that includes bus safety curriculum 
  8.15  for both classroom and practical instruction, methods for 
  8.16  assessing attainment of school bus safety competencies, and 
  8.17  age-appropriate instructional materials.  The model training 
  8.18  program for students riding buses with lap belts or lap and 
  8.19  shoulder belts must include information on the appropriate use 
  8.20  of lap belts or lap and shoulder belts.  The program must be 
  8.21  adaptable for use by students with disabilities. 
  8.22     Sec. 8.  Minnesota Statutes 2002, section 123B.91, 
  8.23  subdivision 1, is amended to read: 
  8.24     Subdivision 1.  [COMPREHENSIVE POLICY.] (a) Each district 
  8.25  shall develop and implement a comprehensive, written policy 
  8.26  governing pupil transportation safety, including transportation 
  8.27  of nonpublic school students, when applicable.  The policy, at 
  8.28  minimum, must contain: 
  8.29     (1) provisions for appropriate student bus safety training 
  8.30  under section 123B.90; 
  8.31     (2) rules governing student conduct on school buses and in 
  8.32  school bus loading and unloading areas; 
  8.33     (3) a statement of parent or guardian responsibilities 
  8.34  relating to school bus safety; 
  8.35     (4) provisions for notifying students and parents or 
  8.36  guardians of their responsibilities and the rules, including the 
  9.1   district's seat belt policy, if applicable; 
  9.2      (5) an intradistrict system for reporting school bus 
  9.3   accidents or misconduct and a system for dealing with local law 
  9.4   enforcement officials in cases of criminal conduct on a school 
  9.5   bus; 
  9.6      (6) (5) a discipline policy to address violations of school 
  9.7   bus safety rules, including procedures for revoking a student's 
  9.8   bus riding privileges in cases of serious or repeated 
  9.9   misconduct; 
  9.10     (7) (6) a system for integrating school bus misconduct 
  9.11  records with other discipline records; 
  9.12     (8) a statement of bus driver duties; 
  9.13     (9) (7) where applicable, provisions governing bus monitor 
  9.14  qualifications, training, and duties; 
  9.15     (10) (8) rules governing the use and maintenance of type 
  9.16  III vehicles, drivers of type III vehicles, qualifications to 
  9.17  drive a type III vehicle, qualifications for a type III vehicle, 
  9.18  and the circumstances under which a student may be transported 
  9.19  in a type III vehicle; 
  9.20     (11) (9) operating rules and procedures; 
  9.21     (12) provisions for annual bus driver in-service training 
  9.22  and evaluation; 
  9.23     (13) (10) emergency procedures; 
  9.24     (14) (11) a system for maintaining and inspecting 
  9.25  equipment; and 
  9.26     (15) (12) any other requirements of the school district, if 
  9.27  any, that exceed state law minimum requirements for school bus 
  9.28  operations; and 
  9.29     (16) requirements for basic first aid training, which must 
  9.30  include the Heimlich maneuver and procedures for dealing with 
  9.31  obstructed airways, shock, bleeding, and seizures. 
  9.32     (b) Districts are encouraged to use the model policy 
  9.33  developed by the Minnesota school boards association, the 
  9.34  department of public safety, and the department of children, 
  9.35  families, and learning, as well as the current edition of the 
  9.36  "National Standards for School Transportation," in developing 
 10.1   safety policies.  Each district shall review its policy annually 
 10.2   to ensure that it conforms to law. 
 10.3      Sec. 9.  Minnesota Statutes 2002, section 123B.92, 
 10.4   subdivision 1, is amended to read: 
 10.5      Subdivision 1.  [DEFINITIONS.] For purposes of this section 
 10.6   and section 125A.76, the terms defined in this subdivision have 
 10.7   the meanings given to them. 
 10.8      (a) "Actual expenditure per pupil transported in the 
 10.9   regular and excess transportation categories" means the quotient 
 10.10  obtained by dividing: 
 10.11     (1) the sum of: 
 10.12     (i) all expenditures for transportation in the regular 
 10.13  category, as defined in paragraph (b), clause (1), and the 
 10.14  excess category, as defined in paragraph (b), clause (2), plus 
 10.15     (ii) an amount equal to one year's depreciation on the 
 10.16  district's school bus fleet and mobile units computed on a 
 10.17  straight line basis at the rate of 15 percent per year for 
 10.18  districts operating a program under section 124D.128 for grades 
 10.19  1 to 12 for all students in the district and 12-1/2 percent per 
 10.20  year for other districts of the cost of the fleet, plus 
 10.21     (iii) an amount equal to one year's depreciation on the 
 10.22  district's type three school buses, as defined in section 
 10.23  169.01, subdivision 6, clause (5), which must be used a majority 
 10.24  of the time for pupil transportation purposes, computed on a 
 10.25  straight line basis at the rate of 20 percent per year of the 
 10.26  cost of the type three school buses by: 
 10.27     (2) the number of pupils eligible for transportation in the 
 10.28  regular category, as defined in paragraph (b), clause (1), and 
 10.29  the excess category, as defined in paragraph (b), clause (2).  
 10.30     (b) "Transportation category" means a category of 
 10.31  transportation service provided to pupils as follows:  
 10.32     (1) Regular transportation is:  
 10.33     (i) transportation to and from school during the regular 
 10.34  school year for resident elementary pupils residing one mile or 
 10.35  more from the public or nonpublic school they attend, and 
 10.36  resident secondary pupils residing two miles or more from the 
 11.1   public or nonpublic school they attend, excluding desegregation 
 11.2   transportation and noon kindergarten transportation; but with 
 11.3   respect to transportation of pupils to and from nonpublic 
 11.4   schools, only to the extent permitted by sections 123B.84 to 
 11.5   123B.87; 
 11.6      (ii) transportation of resident pupils to and from language 
 11.7   immersion programs; 
 11.8      (iii) transportation of a pupil who is a custodial parent 
 11.9   and that pupil's child between the pupil's home and the child 
 11.10  care provider and between the provider and the school, if the 
 11.11  home and provider are within the attendance area of the school; 
 11.12  and 
 11.13     (iv) transportation to and from or board and lodging in 
 11.14  another district, of resident pupils of a district without a 
 11.15  secondary school; and 
 11.16     (v) transportation to and from school during the regular 
 11.17  school year required under subdivision 3 for nonresident 
 11.18  elementary pupils when the distance from the attendance area 
 11.19  border to the public school is one mile or more, and for 
 11.20  nonresident secondary pupils when the distance from the 
 11.21  attendance area border to the public school is two miles or 
 11.22  more, excluding desegregation transportation and noon 
 11.23  kindergarten transportation. 
 11.24     For the purposes of this paragraph, a district may 
 11.25  designate a licensed day care facility, respite care facility, 
 11.26  the residence of a relative, or the residence of a person chosen 
 11.27  by the pupil's parent or guardian as the home of a pupil for 
 11.28  part or all of the day, if requested by the pupil's parent or 
 11.29  guardian, and if that facility or residence is within the 
 11.30  attendance area of the school the pupil attends. 
 11.31     (2) Excess transportation is: 
 11.32     (i) transportation to and from school during the regular 
 11.33  school year for resident secondary pupils residing at least one 
 11.34  mile but less than two miles from the public or nonpublic school 
 11.35  they attend, and transportation to and from school for resident 
 11.36  pupils residing less than one mile from school who are 
 12.1   transported because of extraordinary traffic, drug, or crime 
 12.2   hazards; and 
 12.3      (ii) transportation to and from school during the regular 
 12.4   school year required under subdivision 3 for nonresident 
 12.5   secondary pupils when the distance from the attendance area 
 12.6   border to the school is at least one mile but less than two 
 12.7   miles from the public school they attend, and for nonresident 
 12.8   pupils when the distance from the attendance area border to the 
 12.9   school is less than one mile from the school and who are 
 12.10  transported because of extraordinary traffic, drug, or crime 
 12.11  hazards. 
 12.12     (3) Desegregation transportation is transportation within 
 12.13  and outside of the district during the regular school year of 
 12.14  pupils to and from schools located outside their normal 
 12.15  attendance areas under a plan for desegregation mandated by the 
 12.16  commissioner or under court order.  
 12.17     (4) "Transportation services for pupils with disabilities" 
 12.18  is: 
 12.19     (i) transportation of pupils with disabilities who cannot 
 12.20  be transported on a regular school bus between home or a respite 
 12.21  care facility and school; 
 12.22     (ii) necessary transportation of pupils with disabilities 
 12.23  from home or from school to other buildings, including centers 
 12.24  such as developmental achievement centers, hospitals, and 
 12.25  treatment centers where special instruction or services required 
 12.26  by sections 125A.03 to 125A.24, 125A.26 to 125A.48, and 125A.65 
 12.27  are provided, within or outside the district where services are 
 12.28  provided; 
 12.29     (iii) necessary transportation for resident pupils with 
 12.30  disabilities required by sections 125A.12, and 125A.26 to 
 12.31  125A.48; 
 12.32     (iv) board and lodging for pupils with disabilities in a 
 12.33  district maintaining special classes; 
 12.34     (v) transportation from one educational facility to another 
 12.35  within the district for resident pupils enrolled on a 
 12.36  shared-time basis in educational programs, and necessary 
 13.1   transportation required by sections 125A.18, and 125A.26 to 
 13.2   125A.48, for resident pupils with disabilities who are provided 
 13.3   special instruction and services on a shared-time basis; 
 13.4      (vi) transportation for resident pupils with disabilities 
 13.5   to and from board and lodging facilities when the pupil is 
 13.6   boarded and lodged for educational purposes; and 
 13.7      (vii) services described in clauses (i) to (vi), when 
 13.8   provided for pupils with disabilities in conjunction with a 
 13.9   summer instructional program that relates to the pupil's 
 13.10  individual education plan or in conjunction with a learning year 
 13.11  program established under section 124D.128. 
 13.12     (5) "Nonpublic nonregular transportation" is: 
 13.13     (i) transportation from one educational facility to another 
 13.14  within the district for resident pupils enrolled on a 
 13.15  shared-time basis in educational programs, excluding 
 13.16  transportation for nonpublic pupils with disabilities under 
 13.17  clause (4); 
 13.18     (ii) transportation within district boundaries between a 
 13.19  nonpublic school and a public school or a neutral site for 
 13.20  nonpublic school pupils who are provided pupil support services 
 13.21  pursuant to section 123B.44; and 
 13.22     (iii) late transportation home from school or between 
 13.23  schools within a district for nonpublic school pupils involved 
 13.24  in after-school activities. 
 13.25     (c) "Mobile unit" means a vehicle or trailer designed to 
 13.26  provide facilities for educational programs and services, 
 13.27  including diagnostic testing, guidance and counseling services, 
 13.28  and health services.  A mobile unit located off nonpublic school 
 13.29  premises is a neutral site as defined in section 123B.41, 
 13.30  subdivision 13. 
 13.31     Sec. 10.  Minnesota Statutes 2002, section 123B.92, 
 13.32  subdivision 3, is amended to read: 
 13.33     Subd. 3.  [ALTERNATIVE ATTENDANCE PROGRAMS.] A district 
 13.34  that enrolls nonresident pupils in programs under sections 
 13.35  124D.03, 124D.06, 124D.07, 124D.08, 123A.05 to 123A.08, and 
 13.36  124D.68, must provide authorized transportation to the pupil 
 14.1   within the attendance area for the school that the pupil attends 
 14.2   at the same level of service that is provided to resident pupils 
 14.3   within the attendance area.  The resident district need not 
 14.4   provide or pay for transportation between the pupil's residence 
 14.5   and the district's border. 
 14.6      Sec. 11.  Minnesota Statutes 2002, section 123B.92, 
 14.7   subdivision 9, is amended to read: 
 14.8      Subd. 9.  [NONPUBLIC PUPIL TRANSPORTATION AID.] (a) A 
 14.9   district's nonpublic pupil transportation aid for the 1996-1997 
 14.10  and later school years for transportation services for nonpublic 
 14.11  school pupils according to sections 123B.88, 123B.84 to 123B.86, 
 14.12  and this section, equals the sum of the amounts computed in 
 14.13  paragraphs (b) and (c).  This aid does not limit the obligation 
 14.14  to transport pupils under sections 123B.84 to 123B.87. 
 14.15     (b) For regular and excess transportation according to 
 14.16  subdivision 1, paragraph (b), clauses (1) and (2), an amount 
 14.17  equal to the product of: 
 14.18     (1) the district's actual expenditure per pupil transported 
 14.19  in the regular and excess transportation categories during the 
 14.20  second preceding school year; times 
 14.21     (2) the number of nonpublic school pupils residing in the 
 14.22  district who receive regular or excess transportation service or 
 14.23  reimbursement for the current school year; times 
 14.24     (3) the ratio of the formula allowance pursuant to section 
 14.25  126C.10, subdivision 2, for the current school year to the 
 14.26  formula allowance pursuant to section 126C.10, subdivision 2, 
 14.27  for the second preceding school year. 
 14.28     (c) For nonpublic nonregular transportation according to 
 14.29  subdivision 1, paragraph (b), clause (5), an amount equal to the 
 14.30  product of: 
 14.31     (1) the district's actual expenditure for nonpublic 
 14.32  nonregular transportation during the second preceding school 
 14.33  year; times 
 14.34     (2) the ratio of the formula allowance pursuant to section 
 14.35  126C.10, subdivision 2, for the current school year to the 
 14.36  formula allowance pursuant to section 126C.10, subdivision 2, 
 15.1   for the second preceding school year. 
 15.2      (d) Notwithstanding the amount of the formula allowance for 
 15.3   fiscal years 2000, 2001, and 2002 year 2004 in section 126C.10, 
 15.4   subdivision 2, the commissioner shall use the amount of the 
 15.5   formula allowance for the current year plus $87 minus $415 in 
 15.6   determining the nonpublic pupil transportation revenue in 
 15.7   paragraphs (b) and (c) for fiscal year 2000, and the amount of 
 15.8   the formula allowance less $110 in determining the nonpublic 
 15.9   pupil transportation revenue in paragraphs (b) and (c) for 
 15.10  fiscal years 2001 and 2002 2004. 
 15.11     <b>[EFFECTIVE DATE.]</b> This section is effective for revenue for 
 15.12  fiscal year 2004. 
 15.13     Sec. 12.  Minnesota Statutes 2002, section 124D.09, 
 15.14  subdivision 13, is amended to read: 
 15.15     Subd. 13.  [FINANCIAL ARRANGEMENTS.] For a pupil enrolled 
 15.16  in a course under this section, the department must make 
 15.17  payments according to this subdivision for courses that were 
 15.18  taken for secondary credit.  
 15.19     The department must not make payments to a school district 
 15.20  or post-secondary institution for a course taken for 
 15.21  post-secondary credit only.  The department must not make 
 15.22  payments to a post-secondary institution for a course from which 
 15.23  a student officially withdraws during the first 14 days of the 
 15.24  quarter or semester or who has been absent from the 
 15.25  post-secondary institution for the first 15 consecutive school 
 15.26  days of the quarter or semester and is not receiving instruction 
 15.27  in the home or hospital. 
 15.28     A post-secondary institution shall receive the following: 
 15.29     (1) for an institution granting quarter credit, the 
 15.30  reimbursement per credit hour shall be an amount equal to 88 
 15.31  percent of the product of the formula allowance minus $415, 
 15.32  multiplied by 1.3, and divided by 45; or 
 15.33     (2) for an institution granting semester credit, the 
 15.34  reimbursement per credit hour shall be an amount equal to 88 
 15.35  percent of the product of the general revenue formula 
 15.36  allowance minus $415, multiplied by 1.3, and divided by 30. 
 16.1      The department must pay to each post-secondary institution 
 16.2   100 percent of the amount in clause (1) or (2) within 30 days of 
 16.3   receiving initial enrollment information each quarter or 
 16.4   semester.  If changes in enrollment occur during a quarter or 
 16.5   semester, the change shall be reported by the post-secondary 
 16.6   institution at the time the enrollment information for the 
 16.7   succeeding quarter or semester is submitted.  At any time the 
 16.8   department notifies a post-secondary institution that an 
 16.9   overpayment has been made, the institution shall promptly remit 
 16.10  the amount due.  
 16.11     Sec. 13.  Minnesota Statutes 2002, section 124D.59, 
 16.12  subdivision 2, is amended to read: 
 16.13     Subd. 2.  [PUPIL OF LIMITED ENGLISH PROFICIENCY.] 
 16.14  (a) "Pupil of limited English proficiency" means a pupil in 
 16.15  kindergarten through grade 12 who meets the following 
 16.16  requirements: 
 16.17     (1) the pupil in kindergarten through grade 12, as declared 
 16.18  by a parent or guardian first learned a language other than 
 16.19  English, comes from a home where the language usually spoken is 
 16.20  other than English, or usually speaks a language other than 
 16.21  English; and 
 16.22     (2) for a pupil in kindergarten through grade 2, the pupil 
 16.23  is determined by developmentally appropriate measures, which 
 16.24  might include observations, teacher judgment, parent 
 16.25  recommendations, or developmentally appropriate assessment 
 16.26  instruments, to lack the necessary English skills to participate 
 16.27  fully in classes taught in English; or. 
 16.28     (3) the (b) Notwithstanding paragraph (a), a pupil in 
 16.29  grades 3 4 through 12 scores who was enrolled in a Minnesota 
 16.30  public school on the dates during the previous school year when 
 16.31  a commissioner provided assessment that measures the pupil's 
 16.32  emerging academic English was administered, shall not be counted 
 16.33  as a pupil of limited English proficiency in calculating limited 
 16.34  English proficiency pupil units under section 126C.05, 
 16.35  subdivision 17, and shall not generate state limited English 
 16.36  proficiency aid under section 124D.65, subdivision 5, unless the 
 17.1   pupil scored below the state cutoff score on an assessment 
 17.2   measuring emerging academic English provided by the commissioner 
 17.3   during the previous school year. 
 17.4      (c) Notwithstanding paragraphs (a) and (b), a pupil in 
 17.5   kindergarten through grade 12 shall not be counted as a pupil of 
 17.6   limited English proficiency in calculating limited English 
 17.7   proficiency pupil units under section 126C.05, subdivision 17, 
 17.8   and shall not generate state limited English proficiency aid 
 17.9   under section 124D.65, subdivision 5, if: 
 17.10     (i) the pupil is not enrolled during the current fiscal 
 17.11  year in an educational program for pupils of limited English 
 17.12  proficiency in accordance with sections 124D.58 to 124D.64; or 
 17.13     (ii) the pupil has generated five or more years of average 
 17.14  daily membership in Minnesota public schools since July 1, 1996. 
 17.15     Sec. 14.  Minnesota Statutes 2002, section 124D.65, 
 17.16  subdivision 5, is amended to read: 
 17.17     Subd. 5.  [SCHOOL DISTRICT LEP REVENUE.] (a) A school 
 17.18  district's limited English proficiency programs revenue for 
 17.19  fiscal year 2000 equals the state total limited English 
 17.20  proficiency programs revenue, minus the amount determined under 
 17.21  paragraph (b), times the ratio of the district's adjusted 
 17.22  limited English proficiency programs base revenue to the state 
 17.23  total adjusted limited English proficiency programs base revenue.
 17.24     (b) Notwithstanding paragraph (a), if the limited English 
 17.25  proficiency programs base revenue for a district equals zero, 
 17.26  the limited English proficiency programs revenue equals the sum 
 17.27  of the following amounts, computed using current year data: 
 17.28     (1) 68 percent of the salary of one full-time equivalent 
 17.29  teacher for each 40 pupils of limited English proficiency 
 17.30  enrolled, or 68 percent of the salary of one-half of a full-time 
 17.31  teacher in a district with 20 or fewer pupils of limited English 
 17.32  proficiency enrolled; and 
 17.33     (2) for supplies and equipment purchased or rented for use 
 17.34  in the instruction of pupils of limited English proficiency an 
 17.35  amount equal to 47 percent of the sum actually spent by the 
 17.36  district but not to exceed an average of $47 in any one school 
 18.1   year for each pupil of limited English proficiency receiving 
 18.2   instruction. 
 18.3      (c) A district's limited English proficiency programs 
 18.4   revenue for fiscal year 2001 and later equals the product 
 18.5   of $584 (1) $700 in fiscal year 2004 and later times (2) the 
 18.6   greater of 20 or the number of adjusted marginal cost average 
 18.7   daily membership of eligible pupils of limited English 
 18.8   proficiency enrolled in the district during the current fiscal 
 18.9   year. 
 18.10     (d) (b) A pupil ceases to generate state limited English 
 18.11  proficiency aid in the school year following the school year in 
 18.12  which the pupil attains the state cutoff score on a 
 18.13  commissioner-provided assessment that measures the pupil's 
 18.14  emerging academic English. 
 18.15     Sec. 15.  Minnesota Statutes 2002, section 126C.05, 
 18.16  subdivision 8, is amended to read: 
 18.17     Subd. 8.  [AVERAGE DAILY MEMBERSHIP.] (a) Membership for 
 18.18  pupils in grades kindergarten through 12 and for prekindergarten 
 18.19  pupils with disabilities shall mean the number of pupils on the 
 18.20  current roll of the school, counted from the date of entry until 
 18.21  withdrawal.  The date of withdrawal shall mean the day the pupil 
 18.22  permanently leaves the school or the date it is officially known 
 18.23  that the pupil has left or has been legally excused.  However, a 
 18.24  pupil, regardless of age, who has been absent from school for 15 
 18.25  consecutive school days during the regular school year or for 
 18.26  five consecutive school days during summer school or 
 18.27  intersession classes of flexible school year programs without 
 18.28  receiving instruction in the home or hospital shall be dropped 
 18.29  from the roll and classified as withdrawn.  Nothing in this 
 18.30  section shall be construed as waiving the compulsory attendance 
 18.31  provisions cited in section 120A.22.  Average daily membership 
 18.32  equals the sum for all pupils of the number of days of the 
 18.33  school year each pupil is enrolled in the district's schools 
 18.34  divided by the number of days the schools are in session.  Days 
 18.35  of summer school or intersession classes of flexible school year 
 18.36  programs are only included in the computation of membership for 
 19.1   pupils with a disability not appropriately served primarily in 
 19.2   the regular classroom.  A student must not be counted as more 
 19.3   than 1.2 pupils in average daily membership under this section.  
 19.4   When the initial total average daily membership exceeds 1.2 for 
 19.5   a pupil enrolled in more than one school district during the 
 19.6   fiscal year, each district's average daily membership must be 
 19.7   reduced proportionately. 
 19.8      (b) A student must not be counted as more than one pupil in 
 19.9   average daily membership except for purposes of section 126C.10, 
 19.10  subdivision 2a.  
 19.11     Sec. 16.  Minnesota Statutes 2002, section 126C.05, 
 19.12  subdivision 14, is amended to read: 
 19.13     Subd. 14.  [COMPUTING PUPIL UNITS FOR A PRIOR YEAR.] In 
 19.14  computing pupil units for a prior year, the number of pupil 
 19.15  units shall be adjusted to reflect any change for the current 
 19.16  year in relative weightings by grade level or category of 
 19.17  special assistance, any change in measurement from average daily 
 19.18  attendance to average daily membership, any change in the limit 
 19.19  on average daily membership that can be generated by a pupil for 
 19.20  a fiscal year as provided in subdivisions 8 and 15, and any 
 19.21  change in school district boundaries, but not for the addition 
 19.22  for the first time in the current year of a specified category 
 19.23  of special assistance as provided in subdivision 1, clause (4). 
 19.24     Sec. 17.  Minnesota Statutes 2002, section 126C.05, 
 19.25  subdivision 15, is amended to read: 
 19.26     Subd. 15.  [LEARNING YEAR PUPIL UNITS.] (a) When a pupil is 
 19.27  enrolled in a learning year program under section 124D.128, an 
 19.28  area learning center under sections 123A.05 and 123A.06, an 
 19.29  alternative program approved by the commissioner, or a contract 
 19.30  alternative program under section 124D.68, subdivision 3, 
 19.31  paragraph (d), or subdivision 3a, for more than 1,020 hours in a 
 19.32  school year for a secondary student, more than 935 hours in a 
 19.33  school year for an elementary student, or more than 425 hours in 
 19.34  a school year for a kindergarten student without a disability, 
 19.35  that pupil may be counted as more than one pupil in average 
 19.36  daily membership for purposes of section 126C.10, subdivision 
 20.1   2a.  The amount in excess of one pupil must be determined by the 
 20.2   ratio of the number of hours of instruction provided to that 
 20.3   pupil in excess of:  (i) the greater of 1,020 hours or the 
 20.4   number of hours required for a full-time secondary pupil in the 
 20.5   district to 1,020 for a secondary pupil; (ii) the greater of 935 
 20.6   hours or the number of hours required for a full-time elementary 
 20.7   pupil in the district to 935 for an elementary pupil in grades 1 
 20.8   through 6; and (iii) the greater of 425 hours or the number of 
 20.9   hours required for a full-time kindergarten student without a 
 20.10  disability in the district to 425 for a kindergarten student 
 20.11  without a disability.  Hours that occur after the close of the 
 20.12  instructional year in June shall be attributable to the 
 20.13  following fiscal year.  A kindergarten student must not be 
 20.14  counted as more than 1.2 pupils in average daily membership 
 20.15  under this subdivision.  A student in grades 1 through 12 must 
 20.16  not be counted as more than 1.5 1.2 pupils in average daily 
 20.17  membership under this subdivision. 
 20.18     (b)(i) To receive general education revenue for a pupil in 
 20.19  an alternative program that has an independent study component, 
 20.20  a district must meet the requirements in this paragraph.  The 
 20.21  district must develop, for the pupil, a continual learning plan 
 20.22  consistent with section 124D.128, subdivision 3.  Each school 
 20.23  district that has a state-approved public alternative program 
 20.24  must reserve revenue in an amount equal to at least 90 percent 
 20.25  of the district average general education revenue per pupil unit 
 20.26  less compensatory revenue per pupil unit times the number of 
 20.27  pupil units generated by students attending a state-approved 
 20.28  public alternative program.  The amount of reserved revenue 
 20.29  available under this subdivision may only be spent for program 
 20.30  costs associated with the state-approved public alternative 
 20.31  program.  Compensatory revenue must be allocated according to 
 20.32  section 126C.15, subdivision 2. 
 20.33     (ii) General education revenue for a pupil in an approved 
 20.34  alternative program without an independent study component must 
 20.35  be prorated for a pupil participating for less than a full year, 
 20.36  or its equivalent.  The district must develop a continual 
 21.1   learning plan for the pupil, consistent with section 124D.128, 
 21.2   subdivision 3.  Each school district that has a state-approved 
 21.3   public alternative program must reserve revenue in an amount 
 21.4   equal to at least 90 percent of the district average general 
 21.5   education revenue per pupil unit less compensatory revenue per 
 21.6   pupil unit times the number of pupil units generated by students 
 21.7   attending a state-approved public alternative program.  The 
 21.8   amount of reserved revenue available under this subdivision may 
 21.9   only be spent for program costs associated with the 
 21.10  state-approved public alternative program.  Compensatory revenue 
 21.11  must be allocated according to section 126C.15, subdivision 2.  
 21.12     (iii) General education revenue for a pupil in an approved 
 21.13  alternative program that has an independent study component must 
 21.14  be paid for each hour of teacher contact time and each hour of 
 21.15  independent study time completed toward a credit or graduation 
 21.16  standards necessary for graduation.  Average daily membership 
 21.17  for a pupil shall equal the number of hours of teacher contact 
 21.18  time and independent study time divided by 1,020. 
 21.19     (iv) For an alternative program having an independent study 
 21.20  component, the commissioner shall require a description of the 
 21.21  courses in the program, the kinds of independent study involved, 
 21.22  the expected learning outcomes of the courses, and the means of 
 21.23  measuring student performance against the expected outcomes.  
 21.24     Sec. 18.  Minnesota Statutes 2002, section 126C.05, 
 21.25  subdivision 16, is amended to read: 
 21.26     Subd. 16.  [FREE AND REDUCED PRICED LUNCHES.] The 
 21.27  commissioner shall determine the number of children eligible to 
 21.28  receive either a free or reduced priced lunch on October 1 each 
 21.29  year.  Children enrolled in a building on October 1 and 
 21.30  determined to be eligible to receive free or reduced price lunch 
 21.31  by January December 15 of the following that school year shall 
 21.32  be counted as eligible on October 1 for purposes of subdivision 
 21.33  3.  The commissioner may use federal definitions for these 
 21.34  purposes and may adjust these definitions as appropriate.  The 
 21.35  commissioner may adopt reporting guidelines to assure accuracy 
 21.36  of data counts and eligibility.  Districts shall use any 
 22.1   guidelines adopted by the commissioner. 
 22.2      Sec. 19.  Minnesota Statutes 2002, section 126C.05, 
 22.3   subdivision 17, is amended to read: 
 22.4      Subd. 17.  [LEP PUPIL UNITS.] (a) Limited English 
 22.5   proficiency pupil units for fiscal year 1998 2004 and thereafter 
 22.6   shall be determined according to this subdivision. 
 22.7      (b) The limited English proficiency concentration 
 22.8   percentage for a district equals the product of 100 times the 
 22.9   ratio of: 
 22.10     (1) the number of eligible pupils of limited English 
 22.11  proficiency in average daily membership enrolled in the district 
 22.12  during the current fiscal year; to 
 22.13     (2) the number of pupils in average daily membership 
 22.14  enrolled in the district. 
 22.15     (c) The limited English proficiency pupil units for 
 22.16  each eligible pupil enrolled in a program for pupils of limited 
 22.17  English proficiency in accordance with sections 124D.58 to 
 22.18  124D.64 in average daily membership equals the lesser of one or 
 22.19  the quotient obtained by dividing the limited English 
 22.20  proficiency concentration percentage for the pupil's district of 
 22.21  enrollment by 11.5. 
 22.22     (d) Limited English proficiency pupil units shall be 
 22.23  counted by the district of enrollment. 
 22.24     (e) Notwithstanding paragraph (d), for the purposes of this 
 22.25  subdivision, pupils enrolled in a cooperative or intermediate 
 22.26  school district shall be counted by the district of residence. 
 22.27     (f) For the purposes of this subdivision, the terms defined 
 22.28  in section 124D.59 have the same meaning. 
 22.29     Sec. 20.  Minnesota Statutes 2002, section 126C.10, 
 22.30  subdivision 1, is amended to read: 
 22.31     Subdivision 1.  [GENERAL EDUCATION REVENUE.] (a) For fiscal 
 22.32  year 2002, the general education revenue for each district 
 22.33  equals the sum of the district's basic revenue, basic skills 
 22.34  revenue, training and experience revenue, secondary sparsity 
 22.35  revenue, elementary sparsity revenue, transportation sparsity 
 22.36  revenue, total operating capital revenue, equity revenue, 
 23.1   transition revenue, and supplemental revenue. 
 23.2      (b) For fiscal year 2003 and later, the general education 
 23.3   revenue for each district equals the sum of the district's basic 
 23.4   revenue, basic skills revenue, training and experience revenue, 
 23.5   secondary sparsity revenue, elementary sparsity revenue, 
 23.6   transportation sparsity revenue, total operating capital 
 23.7   revenue, and equity revenue. 
 23.8      (b) For fiscal year 2004 and later, the general education 
 23.9   revenue for each district equals the sum of the district's basic 
 23.10  revenue, extended time revenue, basic skills revenue, secondary 
 23.11  sparsity revenue, elementary sparsity revenue, transportation 
 23.12  sparsity revenue, total operating capital revenue, equity 
 23.13  revenue, and transition revenue. 
 23.14     Sec. 21.  Minnesota Statutes 2002, section 126C.10, is 
 23.15  amended by adding a subdivision to read: 
 23.16     Subd. 2a.  [EXTENDED TIME REVENUE.] (a) A school district's 
 23.17  extended time revenue is equal to the product of $4,601 and the 
 23.18  sum of the adjusted marginal cost pupil units of the district 
 23.19  for each pupil in average daily membership in excess of 1.0 and 
 23.20  less than 1.2 according to section 126C.05, subdivision 8. 
 23.21     (b) A school district's extended time revenue may be used 
 23.22  for extended day programs, extended week programs, summer 
 23.23  school, and other programming authorized under the learning year 
 23.24  program.  
 23.25     Sec. 22.  Minnesota Statutes 2002, section 126C.10, 
 23.26  subdivision 3, is amended to read: 
 23.27     Subd. 3.  [COMPENSATORY EDUCATION REVENUE.] The 
 23.28  compensatory education revenue for each building in the district 
 23.29  equals the formula allowance minus $415 times the compensation 
 23.30  revenue pupil units computed according to section 126C.05, 
 23.31  subdivision 3.  Revenue shall be paid to the district and must 
 23.32  be allocated according to section 126C.15, subdivision 2. 
 23.33     Sec. 23.  Minnesota Statutes 2002, section 126C.10, 
 23.34  subdivision 4, is amended to read: 
 23.35     Subd. 4.  [BASIC SKILLS REVENUE.] (a) For fiscal year 2002, 
 23.36  a school district's basic skills revenue equals the sum of: 
 24.1      (1) compensatory revenue under subdivision 3; plus 
 24.2      (2) limited English proficiency revenue according to 
 24.3   section 124D.65, subdivision 5; plus 
 24.4      (3) $190 times the limited English proficiency pupil units 
 24.5   according to section 126C.05, subdivision 17; plus 
 24.6      (4) $22.50 times the number of adjusted marginal cost pupil 
 24.7   units in kindergarten to grade 8. 
 24.8      (b) For fiscal year 2003 and later, A school district's 
 24.9   basic skills revenue equals the sum of: 
 24.10     (1) compensatory revenue under subdivision 3; plus 
 24.11     (2) limited English proficiency revenue under section 
 24.12  124D.65, subdivision 5; plus 
 24.13     (3) $190 $250 times the limited English proficiency pupil 
 24.14  units under section 126C.05, subdivision 17. 
 24.15     Sec. 24.  Minnesota Statutes 2002, section 126C.10, is 
 24.16  amended by adding a subdivision to read: 
 24.17     Subd. 13a.  [OPERATING CAPITAL LEVY.] To obtain operating 
 24.18  capital revenue for fiscal year 2005 and later, a district may 
 24.19  levy an amount not more than the product of its operating 
 24.20  capital revenue for the fiscal year times the lesser of one or 
 24.21  the ratio of its adjusted net tax capacity per adjusted marginal 
 24.22  pupil cost to $22,222. 
 24.23     Sec. 25.  Minnesota Statutes 2002, section 126C.10, is 
 24.24  amended by adding a subdivision to read: 
 24.25     Subd. 13b.  [OPERATING CAPITAL AID.] A district's operating 
 24.26  capital aid equals its operating capital revenue minus its 
 24.27  operating capital levy times the ratio of the actual amount 
 24.28  levied to the permitted levy. 
 24.29     Sec. 26.  Minnesota Statutes 2002, section 126C.10, 
 24.30  subdivision 17, is amended to read: 
 24.31     Subd. 17.  [TRANSPORTATION SPARSITY DEFINITIONS.] The 
 24.32  definitions in this subdivision apply to subdivisions 18 and 19. 
 24.33     (a) "Sparsity index" for a district means the greater of .2 
 24.34  or the ratio of the square mile area of the district to the 
 24.35  resident pupil units of the district. 
 24.36     (b) "Density index" for a district means the ratio of the 
 25.1   square mile area of the district to the resident pupil units of 
 25.2   the district.  However, the density index for a district cannot 
 25.3   be greater than .2 or less than .005. 
 25.4      (c) "Fiscal year 1996 base allowance" for a district means 
 25.5   the result of the following computation: 
 25.6      (1) sum the following amounts: 
 25.7      (i) the fiscal year 1996 regular transportation revenue for 
 25.8   the district according to Minnesota Statutes 1996, section 
 25.9   124.225, subdivision 7d, paragraph (a), excluding the revenue 
 25.10  attributable nonpublic school pupils and to pupils with 
 25.11  disabilities receiving special transportation services; plus 
 25.12     (ii) the fiscal year 1996 nonregular transportation revenue 
 25.13  for the district according to Minnesota Statutes 1996, section 
 25.14  124.225, subdivision 7d, paragraph (b), excluding the revenue 
 25.15  for desegregation transportation according to Minnesota Statutes 
 25.16  1996, section 124.225, subdivision 1, paragraph (c), clause (4), 
 25.17  and the revenue attributable to nonpublic school pupils and to 
 25.18  pupils with disabilities receiving special transportation 
 25.19  services or board and lodging; plus 
 25.20     (iii) the fiscal year 1996 excess transportation levy for 
 25.21  the district according to Minnesota Statutes 1996, section 
 25.22  124.226, subdivision 5, excluding the levy attributable to 
 25.23  nonpublic school pupils; plus 
 25.24     (iv) the fiscal year 1996 late activity bus levy for the 
 25.25  district according to Minnesota Statutes 1996, section 124.226, 
 25.26  subdivision 9, excluding the levy attributable to nonpublic 
 25.27  school pupils; plus 
 25.28     (v) an amount equal to one-third of the fiscal year 1996 
 25.29  bus depreciation for the district according to Minnesota 
 25.30  Statutes 1996, section 124.225, subdivision 1, paragraph (b), 
 25.31  clauses (2), (3), and (4). 
 25.32     (2) divide the result in clause (1) by the district's 
 25.33  1995-1996 fund balance pupil units. 
 25.34     Sec. 27.  Minnesota Statutes 2002, section 126C.10, 
 25.35  subdivision 24, is amended to read: 
 25.36     Subd. 24.  [EQUITY REVENUE.] (a) A school district 
 26.1   qualifies for equity revenue if: 
 26.2      (1) the school district's adjusted marginal cost pupil unit 
 26.3   amount of basic revenue, supplemental revenue, transition 
 26.4   revenue, and referendum revenue is less than the value of the 
 26.5   school district at or immediately above the 95th percentile of 
 26.6   school districts in its equity region for those revenue 
 26.7   categories; and 
 26.8      (2) the school district's administrative offices are not 
 26.9   located in a city of the first class on July 1, 1999. 
 26.10     (b) Equity revenue for a qualifying district that receives 
 26.11  referendum revenue under section 126C.17, subdivision 4, equals 
 26.12  the product of (1) the district's adjusted marginal cost pupil 
 26.13  units for that year; times (2) the sum of (i) $10 $13, plus (ii) 
 26.14  $55 $75, times the school district's equity index computed under 
 26.15  subdivision 27. 
 26.16     (c) Equity revenue for a qualifying district that does not 
 26.17  receive referendum revenue under section 126C.17, subdivision 4, 
 26.18  equals the product of the district's adjusted marginal cost 
 26.19  pupil units for that year times $10 $13. 
 26.20     <b>[EFFECTIVE DATE.]</b> This section is effective for revenue for 
 26.21  fiscal year 2005.  
 26.22     Sec. 28.  Minnesota Statutes 2002, section 126C.10, is 
 26.23  amended by adding a subdivision to read: 
 26.24     Subd. 29.  [EQUITY LEVY.] To obtain equity revenue for 
 26.25  fiscal year 2005 and later, a district may levy an amount not 
 26.26  more than the product of its equity revenue for the fiscal year 
 26.27  times the lesser of one or the ratio of its referendum market 
 26.28  value per resident marginal cost pupil unit to $476,000. 
 26.29     Sec. 29.  Minnesota Statutes 2002, section 126C.10, is 
 26.30  amended by adding a subdivision to read: 
 26.31     Subd. 30.  [EQUITY AID.] A district's equity aid equals its 
 26.32  equity revenue minus its equity levy times the ratio of the 
 26.33  actual amount levied to the permitted levy. 
 26.34     Sec. 30.  Minnesota Statutes 2002, section 126C.10, is 
 26.35  amended by adding a subdivision to read: 
 26.36     Subd. 31.  [TRANSITION REVENUE.] (a) A district's 
 27.1   transition allowance for fiscal years 2004 through 2008 equals 
 27.2   the greater of zero or the product of the ratio of the number of 
 27.3   adjusted marginal cost pupil units the district would have 
 27.4   counted for fiscal year 2004 under Minnesota Statutes 2002 to 
 27.5   the district's adjusted marginal cost pupil units for fiscal 
 27.6   year 2004, times the difference between:  (1) the lesser of the 
 27.7   district's general education revenue per adjusted marginal cost 
 27.8   pupil unit for fiscal year 2003 or the amount of general 
 27.9   education revenue the district would have received per adjusted 
 27.10  marginal cost pupil unit for fiscal year 2004 according to 
 27.11  Minnesota Statutes 2002, and (2) the district's general 
 27.12  education revenue for fiscal year 2004 excluding transition 
 27.13  revenue divided by the number of adjusted marginal cost pupil 
 27.14  units the district would have counted for fiscal year 2004 under 
 27.15  Minnesota Statutes 2002.  A district's transition allowance for 
 27.16  fiscal year 2009 and later is zero. 
 27.17     (b) A district's transition revenue for fiscal year 2004 
 27.18  and later equals the product of the district's transition 
 27.19  allowance times the district's adjusted marginal cost pupil 
 27.20  units. 
 27.21     Sec. 31.  Minnesota Statutes 2002, section 126C.10, is 
 27.22  amended by adding a subdivision to read: 
 27.23     Subd. 32.  [TRANSITION LEVY.] To obtain transition revenue 
 27.24  for fiscal year 2005 and later, a district may levy an amount 
 27.25  not more than the product of its transition revenue for the 
 27.26  fiscal year times the lesser of one or the ratio of its 
 27.27  referendum market value per resident marginal cost pupil unit to 
 27.28  $476,000. 
 27.29     Sec. 32.  Minnesota Statutes 2002, section 126C.10, is 
 27.30  amended by adding a subdivision to read: 
 27.31     Subd. 33.  [TRANSITION AID.] (a) For fiscal year 2004, a 
 27.32  district's transition aid equals its transition revenue. 
 27.33     (b) For fiscal year 2005 and later, a district's transition 
 27.34  aid equals its transition revenue minus its transition levy 
 27.35  times the ratio of the actual amount levied to the permitted 
 27.36  levy. 
 28.1      Sec. 33.  Minnesota Statutes 2002, section 126C.13, 
 28.2   subdivision 4, is amended to read: 
 28.3      Subd. 4.  [GENERAL EDUCATION AID.] (a) For fiscal year 
 28.4   2004, a district's general education aid is the sum of the 
 28.5   following amounts:  
 28.6      (1) general education revenue; 
 28.7      (2) shared time aid according to section 126C.01, 
 28.8   subdivision 7; and 
 28.9      (3) referendum aid according to section 126C.17; and 
 28.10     (4) distance education aid according to section 126C.24. 
 28.11     (b) For fiscal year 2005 and later, a district's general 
 28.12  education aid is the sum of the following amounts: 
 28.13     (1) general education revenue, excluding equity revenue and 
 28.14  transition revenue; 
 28.15     (2) equity aid according to section 126C.10, subdivision 
 28.16  30; 
 28.17     (3) transition aid according to section 126C.10, 
 28.18  subdivision 33; 
 28.19     (4) shared time aid according to section 126C.01, 
 28.20  subdivision 7; 
 28.21     (5) referendum aid according to section 126C.17; and 
 28.22     (6) distance education aid according to section 126C.24. 
 28.23     Sec. 34.  Minnesota Statutes 2002, section 126C.15, 
 28.24  subdivision 1, is amended to read: 
 28.25     Subdivision 1.  [USE OF THE REVENUE.] The basic skills 
 28.26  revenue under section 126C.10, subdivision 4, and the portion of 
 28.27  the transition revenue adjustment under section 126C.10, 
 28.28  subdivision 20, attributable to the compensatory transition 
 28.29  allowance under section 126C.10, subdivision 19, paragraph (b), 
 28.30  must be reserved and used to meet the educational needs of 
 28.31  pupils who enroll under-prepared to learn and whose progress 
 28.32  toward meeting state or local content or performance standards 
 28.33  is below the level that is appropriate for learners of their 
 28.34  age.  Any of the following may be provided to meet these 
 28.35  learners' needs: 
 28.36     (1) direct instructional services under the assurance of 
 29.1   mastery program according to section 124D.66; 
 29.2      (2) remedial instruction in reading, language arts, 
 29.3   mathematics, other content areas, or study skills to improve the 
 29.4   achievement level of these learners; 
 29.5      (3) additional teachers and teacher aides to provide more 
 29.6   individualized instruction to these learners through individual 
 29.7   tutoring, lower instructor-to-learner ratios, or team teaching; 
 29.8      (4) a longer school day or week during the regular school 
 29.9   year or through a summer program that may be offered directly by 
 29.10  the site or under a performance-based contract with a 
 29.11  community-based organization; 
 29.12     (5) comprehensive and ongoing staff development consistent 
 29.13  with district and site plans according to section 122A.60, for 
 29.14  teachers, teacher aides, principals, and other personnel to 
 29.15  improve their ability to identify the needs of these learners 
 29.16  and provide appropriate remediation, intervention, 
 29.17  accommodations, or modifications; 
 29.18     (6) instructional materials and technology appropriate for 
 29.19  meeting the individual needs of these learners; 
 29.20     (7) programs to reduce truancy, encourage completion of 
 29.21  high school, enhance self-concept, provide health services, 
 29.22  provide nutrition services, provide a safe and secure learning 
 29.23  environment, provide coordination for pupils receiving services 
 29.24  from other governmental agencies, provide psychological services 
 29.25  to determine the level of social, emotional, cognitive, and 
 29.26  intellectual development, and provide counseling services, 
 29.27  guidance services, and social work services; 
 29.28     (8) bilingual programs, bicultural programs, and programs 
 29.29  for learners of limited English proficiency; 
 29.30     (9) all day kindergarten; 
 29.31     (10) extended school day and extended school year programs; 
 29.32  and 
 29.33     (11) substantial parent involvement in developing and 
 29.34  implementing remedial education or intervention plans for a 
 29.35  learner, including learning contracts between the school, the 
 29.36  learner, and the parent that establish achievement goals and 
 30.1   responsibilities of the learner and the learner's parent or 
 30.2   guardian. 
 30.3      Sec. 35.  Minnesota Statutes 2002, section 126C.17, 
 30.4   subdivision 1, is amended to read: 
 30.5      Subdivision 1.  [REFERENDUM ALLOWANCE.] (a) For fiscal year 
 30.6   2002, a district's referendum revenue allowance equals the sum 
 30.7   of the allowance under section 126C.16, subdivision 2, plus any 
 30.8   additional allowance per resident marginal cost pupil unit 
 30.9   authorized under subdivision 9 for fiscal year 2002. 
 30.10     (b) For fiscal year 2003 and later, a district's initial 
 30.11  referendum revenue allowance equals the sum of the allowance 
 30.12  under section 126C.16, subdivision 2, plus any additional 
 30.13  allowance per resident marginal cost pupil unit authorized under 
 30.14  subdivision 9 before May 1, 2001, for fiscal year 2002 and 
 30.15  later, plus the referendum conversion allowance approved under 
 30.16  subdivision 13, minus $415.  For districts with more than one 
 30.17  referendum authority, the reduction must be computed separately 
 30.18  for each authority.  The reduction must be applied first to the 
 30.19  referendum conversion allowance and next to the authority with 
 30.20  the earliest expiration date.  A district's initial referendum 
 30.21  revenue allowance may not be less than zero. 
 30.22     (c) (b) For fiscal year 2003 and later, a district's 
 30.23  referendum revenue allowance equals the initial referendum 
 30.24  allowance plus any additional allowance per resident marginal 
 30.25  cost pupil unit authorized under subdivision 9 after between 
 30.26  April 30, 2001, and December 30, 2001, for fiscal year 2003 and 
 30.27  later. 
 30.28     (c) For fiscal year 2004 and later, a district's referendum 
 30.29  revenue allowance equals the sum of: 
 30.30     (1) the product of (i) the ratio of the resident marginal 
 30.31  cost pupil units the district would have counted for fiscal year 
 30.32  2004 under Minnesota Statutes 2002, section 126C.05, to the 
 30.33  district's resident marginal cost pupil units for fiscal year 
 30.34  2004, times (ii) the initial referendum allowance plus any 
 30.35  additional allowance per resident marginal cost pupil unit 
 30.36  authorized under subdivision 9 between April 30, 2001, and May 
 31.1   30, 2003, for fiscal year 2003 and later, plus 
 31.2      (2) any additional allowance per resident marginal cost 
 31.3   pupil unit authorized under subdivision 9 after May 30, 2003, 
 31.4   for fiscal year 2005 and later. 
 31.5      Sec. 36.  Minnesota Statutes 2002, section 126C.17, 
 31.6   subdivision 2, is amended to read: 
 31.7      Subd. 2.  [REFERENDUM ALLOWANCE LIMIT.] (a) Notwithstanding 
 31.8   subdivision 1, for fiscal year 2002, a district's referendum 
 31.9   allowance must not exceed the greater of:  
 31.10     (1) the district's referendum allowance for fiscal year 
 31.11  1994; 
 31.12     (2) 25 percent of the formula allowance; or 
 31.13     (3) for a newly reorganized district created after July 1, 
 31.14  1994, the sum of the referendum revenue authority for the 
 31.15  reorganizing districts for the fiscal year preceding the 
 31.16  reorganization, divided by the sum of the resident marginal cost 
 31.17  pupil units of the reorganizing districts for the fiscal year 
 31.18  preceding the reorganization. 
 31.19     (b) Notwithstanding subdivision 1, for fiscal year 2003 and 
 31.20  later fiscal years, a district's referendum allowance must not 
 31.21  exceed the greater of: 
 31.22     (1) the sum of a district's referendum allowance for fiscal 
 31.23  year 1994 times 1.162 plus its referendum conversion allowance 
 31.24  for fiscal year 2003, minus $415; 
 31.25     (2) 18.2 percent of the formula allowance; 
 31.26     (3) for a newly reorganized district created on July 1, 
 31.27  2002, the referendum revenue authority for each reorganizing 
 31.28  district in the year preceding reorganization divided by its 
 31.29  resident marginal cost pupil units for the year preceding 
 31.30  reorganization, minus $415; or 
 31.31     (4) for a newly reorganized district created after July 1, 
 31.32  2002, the referendum revenue authority for each reorganizing 
 31.33  district in the year preceding reorganization divided by its 
 31.34  resident marginal cost pupil units for the year preceding 
 31.35  reorganization. 
 31.36     (b) Notwithstanding subdivision 1, for fiscal year 2004 and 
 32.1   later, a district's referendum allowance must not exceed the 
 32.2   greater of: 
 32.3      (1) the sum of:  (i) a district's referendum allowance for 
 32.4   fiscal year 1994 times 1.177 times the annual inflationary 
 32.5   increase as calculated under paragraph (c) plus (ii) its 
 32.6   referendum conversion allowance for fiscal year 2003, minus 
 32.7   (iii) $415; 
 32.8      (2) the greater of (i) 18.6 percent of the formula 
 32.9   allowance or (ii) the previous year's referendum allowance times 
 32.10  the annual inflationary increase as calculated under paragraph 
 32.11  (c); or 
 32.12     (3) for a newly reorganized district created after July 1, 
 32.13  2002, the referendum revenue authority for each reorganizing 
 32.14  district in the year preceding reorganization divided by its 
 32.15  resident marginal cost pupil units for the year preceding 
 32.16  reorganization. 
 32.17     (c) For purposes of this subdivision, for fiscal year 2005 
 32.18  and later, "inflationary increase" means one plus the percentage 
 32.19  change in the Consumer Price Index for urban consumers, as 
 32.20  prepared by the United States Bureau of Labor Standards, for the 
 32.21  current fiscal year to fiscal year 2004.  For fiscal years 2009 
 32.22  and later, for purposes of paragraph (b), clause (1), the 
 32.23  inflationary increase equals the inflationary increase for 
 32.24  fiscal year 2008 plus one-fourth of the percentage increase in 
 32.25  the formula allowance for that year compared with the formula 
 32.26  allowance for fiscal year 2008. 
 32.27     <b>[EFFECTIVE DATE.]</b> This section is effective for taxes 
 32.28  payable in 2004. 
 32.29     Sec. 37.  Minnesota Statutes 2002, section 126C.17, 
 32.30  subdivision 5, is amended to read: 
 32.31     Subd. 5.  [REFERENDUM EQUALIZATION REVENUE.] (a) For fiscal 
 32.32  year 2003 and later, a district's referendum equalization 
 32.33  revenue equals the sum of the first tier referendum equalization 
 32.34  revenue and the second tier referendum equalization revenue. 
 32.35     (b) A district's first tier referendum equalization revenue 
 32.36  equals the district's first tier referendum equalization 
 33.1   allowance times the district's resident marginal cost pupil 
 33.2   units for that year.  
 33.3      (c) For fiscal years 2003 and 2004, a district's first tier 
 33.4   referendum equalization allowance equals the lesser of the 
 33.5   district's referendum allowance under subdivision 1 or 
 33.6   $126.  For fiscal year 2005, a district's first tier referendum 
 33.7   equalization allowance equals the lesser of the district's 
 33.8   referendum allowance under subdivision 1 or $405.  For fiscal 
 33.9   year 2006 and later, a district's first tier referendum 
 33.10  equalization allowance equals the lesser of the district's 
 33.11  referendum allowance under subdivision 1 or $500. 
 33.12     (d) A district's second tier referendum equalization 
 33.13  revenue equals the district's second tier referendum 
 33.14  equalization allowance times the district's resident marginal 
 33.15  cost pupil units for that year. 
 33.16     (e) A district's second tier referendum equalization 
 33.17  allowance equals the lesser of the district's referendum 
 33.18  allowance under subdivision 1 or 18.2 18.6 percent of the 
 33.19  formula allowance, minus the district's first tier referendum 
 33.20  equalization allowance. 
 33.21     (f) Notwithstanding paragraph (e), the second tier 
 33.22  referendum allowance for a district qualifying for secondary 
 33.23  sparsity revenue under section 126C.10, subdivision 7, or 
 33.24  elementary sparsity revenue under section 126C.10, subdivision 
 33.25  8, equals the district's referendum allowance under subdivision 
 33.26  1 minus the district's first tier referendum equalization 
 33.27  allowance. 
 33.28     Sec. 38.  Minnesota Statutes 2002, section 126C.17, 
 33.29  subdivision 7, is amended to read: 
 33.30     Subd. 7.  [REFERENDUM EQUALIZATION AID.] (a) A district's 
 33.31  referendum equalization aid equals the difference between its 
 33.32  referendum equalization revenue and levy. 
 33.33     (b) If a district's actual levy for first or second tier 
 33.34  referendum equalization revenue is less than its maximum levy 
 33.35  limit for that tier, aid shall be proportionately reduced. 
 33.36     (c) Notwithstanding paragraph (a), the referendum 
 34.1   equalization aid for a district, where the referendum 
 34.2   equalization aid under paragraph (a) exceeds 90 percent of the 
 34.3   referendum revenue, must not exceed 18.2 18.6 percent of the 
 34.4   formula allowance times the district's resident marginal cost 
 34.5   pupil units.  A district's referendum levy is increased by the 
 34.6   amount of any reduction in referendum aid under this paragraph. 
 34.7      Sec. 39.  Minnesota Statutes 2002, section 126C.17, 
 34.8   subdivision 7a, is amended to read: 
 34.9      Subd. 7a.  [REFERENDUM TAX BASE REPLACEMENT AID.] For each 
 34.10  school district that had a referendum allowance for fiscal year 
 34.11  2002 exceeding $415, for each separately authorized referendum 
 34.12  levy, the commissioner of revenue, in consultation with the 
 34.13  commissioner of children, families, and learning education, 
 34.14  shall certify the amount of the referendum levy in taxes payable 
 34.15  year 2001 attributable to the portion of the referendum 
 34.16  allowance exceeding $415 levied against property classified as 
 34.17  class 2, noncommercial 4c(1), or 4c(4), under section 273.13, 
 34.18  excluding the portion of the tax paid by the portion of class 2a 
 34.19  property consisting of the house, garage, and surrounding one 
 34.20  acre of land.  The resulting amount must be used to reduce the 
 34.21  district's referendum levy amount otherwise determined, and must 
 34.22  be paid to the district each year that the referendum authority 
 34.23  remains in effect, is renewed, or new referendum authority is 
 34.24  approved.  The aid payable under this subdivision must be 
 34.25  subtracted from the district's referendum equalization aid under 
 34.26  subdivision 7.  The referendum equalization aid after the 
 34.27  subtraction must not be less than zero. 
 34.28     For the purposes of this subdivision, the referendum levy 
 34.29  with the latest year of expiration is assumed to be at the 
 34.30  highest level of equalization, and the referendum levy with the 
 34.31  earliest year of expiration is assumed to be at the lowest level 
 34.32  of equalization. 
 34.33     Sec. 40.  Minnesota Statutes 2002, section 126C.17, 
 34.34  subdivision 9, is amended to read: 
 34.35     Subd. 9.  [REFERENDUM REVENUE.] (a) The revenue authorized 
 34.36  by section 126C.10, subdivision 1, may be increased in the 
 35.1   amount approved by the voters of the district at a referendum 
 35.2   called for the purpose.  The referendum may be called by the 
 35.3   board or shall be called by the board upon written petition of 
 35.4   qualified voters of the district.  The referendum must be 
 35.5   conducted one or two calendar years before the increased levy 
 35.6   authority, if approved, first becomes payable.  Only one 
 35.7   election to approve an increase may be held in a calendar year.  
 35.8   Unless the referendum is conducted by mail under paragraph (g), 
 35.9   the referendum must be held on the first Tuesday after the first 
 35.10  Monday in November.  The ballot must state the maximum amount of 
 35.11  the increased revenue per resident marginal cost pupil unit, the 
 35.12  estimated referendum tax rate as a percentage of referendum 
 35.13  market value in the first year it is to be levied, and that the 
 35.14  revenue must be used to finance school operations.  The ballot 
 35.15  may state a schedule, determined by the board, of increased 
 35.16  revenue per resident marginal cost pupil unit that differs from 
 35.17  year to year over the number of years for which the increased 
 35.18  revenue is authorized.  If the ballot contains a schedule 
 35.19  showing different amounts, it must also indicate the estimated 
 35.20  referendum tax rate as a percent of referendum market value for 
 35.21  the amount specified for the first year and for the maximum 
 35.22  amount specified in the schedule.  The ballot may state that 
 35.23  existing referendum levy authority is expiring.  In this case, 
 35.24  the ballot may also compare the proposed levy authority to the 
 35.25  existing expiring levy authority, and express the proposed 
 35.26  increase as the amount, if any, over the expiring referendum 
 35.27  levy authority.  The ballot must designate the specific number 
 35.28  of years, not to exceed ten, for which the referendum 
 35.29  authorization applies.  The notice required under section 275.60 
 35.30  may be modified to read, in cases of renewing existing levies: 
 35.31     "BY VOTING "YES" ON THIS BALLOT QUESTION, YOU MAY BE VOTING 
 35.32     FOR A PROPERTY TAX INCREASE." 
 35.33     The ballot may contain a textual portion with the 
 35.34  information required in this subdivision and a question stating 
 35.35  substantially the following:  
 35.36     "Shall the increase in the revenue proposed by (petition 
 36.1   to) the board of ........., School District No. .., be approved?"
 36.2      If approved, an amount equal to the approved revenue per 
 36.3   resident marginal cost pupil unit times the resident marginal 
 36.4   cost pupil units for the school year beginning in the year after 
 36.5   the levy is certified shall be authorized for certification for 
 36.6   the number of years approved, if applicable, or until revoked or 
 36.7   reduced by the voters of the district at a subsequent referendum.
 36.8      (b) The board must prepare and deliver by first class mail 
 36.9   at least 15 days but no more than 30 days before the day of the 
 36.10  referendum to each taxpayer a notice of the referendum and the 
 36.11  proposed revenue increase.  The board need not mail more than 
 36.12  one notice to any taxpayer.  For the purpose of giving mailed 
 36.13  notice under this subdivision, owners must be those shown to be 
 36.14  owners on the records of the county auditor or, in any county 
 36.15  where tax statements are mailed by the county treasurer, on the 
 36.16  records of the county treasurer.  Every property owner whose 
 36.17  name does not appear on the records of the county auditor or the 
 36.18  county treasurer is deemed to have waived this mailed notice 
 36.19  unless the owner has requested in writing that the county 
 36.20  auditor or county treasurer, as the case may be, include the 
 36.21  name on the records for this purpose.  The notice must project 
 36.22  the anticipated amount of tax increase in annual dollars and 
 36.23  annual percentage for typical residential homesteads, 
 36.24  agricultural homesteads, apartments, and commercial-industrial 
 36.25  property within the school district. 
 36.26     The notice for a referendum may state that an existing 
 36.27  referendum levy is expiring and project the anticipated amount 
 36.28  of increase over the existing referendum levy in the first year, 
 36.29  if any, in annual dollars and annual percentage for typical 
 36.30  residential homesteads, agricultural homesteads, apartments, and 
 36.31  commercial-industrial property within the district. 
 36.32     The notice must include the following statement:  "Passage 
 36.33  of this referendum will result in an increase in your property 
 36.34  taxes."  However, in cases of renewing existing levies, the 
 36.35  notice may include the following statement:  "Passage of this 
 36.36  referendum may result in an increase in your property taxes." 
 37.1      (c) A referendum on the question of revoking or reducing 
 37.2   the increased revenue amount authorized pursuant to paragraph 
 37.3   (a) may be called by the board and shall be called by the board 
 37.4   upon the written petition of qualified voters of the district.  
 37.5   A referendum to revoke or reduce the levy revenue amount must be 
 37.6   based upon the dollar amount, local tax rate, or state the 
 37.7   amount per resident marginal cost pupil unit, that was stated to 
 37.8   be the basis for the initial authorization by which the 
 37.9   authority is to be reduced.  Revenue authority approved by the 
 37.10  voters of the district pursuant to paragraph (a) must 
 37.11  be received available to the school district at least once 
 37.12  before it is subject to a referendum on its revocation or 
 37.13  reduction for subsequent years.  Only one revocation or 
 37.14  reduction referendum may be held to revoke or reduce referendum 
 37.15  revenue for any specific year and for years thereafter. 
 37.16     (d) A petition authorized by paragraph (a) or (c) is 
 37.17  effective if signed by a number of qualified voters in excess of 
 37.18  15 percent of the registered voters of the district on the day 
 37.19  the petition is filed with the board.  A referendum invoked by 
 37.20  petition must be held on the date specified in paragraph (a). 
 37.21     (e) The approval of 50 percent plus one of those voting on 
 37.22  the question is required to pass a referendum authorized by this 
 37.23  subdivision. 
 37.24     (f) At least 15 days before the day of the referendum, the 
 37.25  district must submit a copy of the notice required under 
 37.26  paragraph (b) to the commissioner and to the county auditor of 
 37.27  each county in which the district is located.  Within 15 days 
 37.28  after the results of the referendum have been certified by the 
 37.29  board, or in the case of a recount, the certification of the 
 37.30  results of the recount by the canvassing board, the district 
 37.31  must notify the commissioner of the results of the referendum. 
 37.32     Sec. 41.  Minnesota Statutes 2002, section 126C.17, 
 37.33  subdivision 13, is amended to read: 
 37.34     Subd. 13.  [REFERENDUM CONVERSION ALLOWANCE.] (a) A school 
 37.35  district that received supplemental or transition revenue in 
 37.36  fiscal year 2002 may convert its supplemental revenue conversion 
 38.1   allowance and transition revenue conversion allowance to 
 38.2   additional referendum allowance under subdivision 1 for fiscal 
 38.3   year 2003 and thereafter.  A majority of the school board must 
 38.4   approve the conversion at a public meeting before November 1, 
 38.5   2001.  For a district with other referendum authority, the 
 38.6   referendum conversion allowance approved by the board continues 
 38.7   until the portion of the district's other referendum authority 
 38.8   with the earliest expiration date after June 30, 2006, expires.  
 38.9   For a district with no other referendum authority, the 
 38.10  referendum conversion allowance approved by the board continues 
 38.11  until June 30, 2012. 
 38.12     (b) A school district that received transition revenue in 
 38.13  fiscal year 2004 may convert all or part of its transition 
 38.14  revenue to referendum revenue with voter approval in a 
 38.15  referendum called for the purpose.  The referendum must be held 
 38.16  in accordance with subdivision 9, except that the ballot may 
 38.17  state that existing transition revenue authority is being 
 38.18  canceled or is expiring.  In this case, the ballot shall compare 
 38.19  the proposed referendum allowance to the canceled or expiring 
 38.20  transition revenue allowance.  For purposes of this comparison, 
 38.21  the canceled or expiring transition revenue allowance per 
 38.22  adjusted marginal cost pupil unit shall be converted to an 
 38.23  allowance per resident marginal cost pupil unit based on the 
 38.24  district's ratio of adjusted marginal cost pupil units to 
 38.25  resident marginal cost pupil units for the preceding fiscal 
 38.26  year.  The referendum must be held on the first Tuesday after 
 38.27  the first Monday in November.  The notice required under section 
 38.28  275.60 may be modified to read:  "BY VOTING 'YES' ON THIS BALLOT 
 38.29  QUESTION, YOU MAY BE VOTING FOR A PROPERTY TAX INCREASE."  
 38.30  Elections under this paragraph must be held in 2007 or earlier.  
 38.31     Sec. 42.  Minnesota Statutes 2002, section 126C.21, 
 38.32  subdivision 3, is amended to read: 
 38.33     Subd. 3.  [COUNTY APPORTIONMENT DEDUCTION.] Each year the 
 38.34  amount of money apportioned to a district for that year pursuant 
 38.35  to section 127A.34, subdivision 2, excluding any district where 
 38.36  the general education levy is determined according to section 
 39.1   126C.13, subdivision 3, must be deducted from the general 
 39.2   education aid earned by that district for the same year or from 
 39.3   aid earned from other state sources.  
 39.4      Sec. 43.  Minnesota Statutes 2002, section 126C.457, is 
 39.5   amended to read: 
 39.6      126C.457 [CAREER AND TECHNICAL LEVY.] 
 39.7      For taxes payable in 2003 only, A school district may levy 
 39.8   an amount equal to the greater of (1) $10,000, or (2) the 
 39.9   district's fiscal year 2001 entitlement for career and technical 
 39.10  aid under section 124D.453.  The district must recognize the 
 39.11  full amount of this levy as revenue for the fiscal year in which 
 39.12  it is certified.  Revenue received under this section must be 
 39.13  reserved and used only for career and technical programs.  
 39.14     <b>[EFFECTIVE DATE.]</b> This section is effective for taxes 
 39.15  payable in 2004.  
 39.16     Sec. 44.  Minnesota Statutes 2002, section 169.28, 
 39.17  subdivision 1, is amended to read: 
 39.18     Subdivision 1.  [STOP REQUIRED.] (a) The driver of any 
 39.19  motor vehicle carrying passengers for hire, or of any school bus 
 39.20  whether carrying passengers or not, or of any Head Start bus 
 39.21  whether carrying passengers or not, or of any vehicle that is 
 39.22  required to stop at railroad grade crossings under Code of 
 39.23  Federal Regulations, title 49, section 392.10, before crossing 
 39.24  at grade any track or tracks of a railroad, shall stop the 
 39.25  vehicle not less than 15 feet nor more than 50 feet from the 
 39.26  nearest rail of the railroad and while so stopped shall listen 
 39.27  and look in both directions along the track for any approaching 
 39.28  train, and for signals indicating the approach of a train, 
 39.29  except as hereinafter provided, and shall not proceed until safe 
 39.30  to do so.  The driver must not shift gears while crossing the 
 39.31  railroad tracks.  
 39.32     (b) A school bus or Head Start bus shall not be flagged 
 39.33  across railroad grade crossings except at those railroad grade 
 39.34  crossings that the local school administrative officer may 
 39.35  designate. 
 39.36     (c) A type III school bus, as defined in section 169.01, is 
 40.1   exempt from the requirement of school buses to stop at railroad 
 40.2   grade crossings. 
 40.3      Sec. 45.  Minnesota Statutes 2002, section 169.4503, 
 40.4   subdivision 4, is amended to read: 
 40.5      Subd. 4.  [CERTIFICATION.] A body manufacturer, school bus 
 40.6   dealer, or certified Minnesota Commercial Vehicle Inspector who 
 40.7   is also an employee of an organization purchasing a school bus 
 40.8   shall certify provide preliminary certification to the 
 40.9   department of public safety that the product meets Minnesota 
 40.10  standards.  Final certification will be granted within 30 days 
 40.11  upon reinspection by the department of public safety. 
 40.12     Sec. 46.  Minnesota Statutes 2002, section 169.454, 
 40.13  subdivision 2, is amended to read: 
 40.14     Subd. 2.  [AGE OF VEHICLE.] Vehicles ten 12 years or older 
 40.15  must not be used as type III vehicles to transport school 
 40.16  children, except those vehicles that are manufactured to meet 
 40.17  the structural requirements of federal motor vehicle safety 
 40.18  standard 222, Code of Federal Regulations, title 49, part 571. 
 40.19     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
 40.20  following final enactment. 
 40.21     Sec. 47.  Minnesota Statutes 2002, section 169.454, 
 40.22  subdivision 6, is amended to read: 
 40.23     Subd. 6.  [IDENTIFICATION.] (a) The vehicle must not have 
 40.24  the words "school bus" in any location on the exterior of the 
 40.25  vehicle, or in any interior location visible to a motorist. 
 40.26     (b) The vehicle must display to the rear of the vehicle 
 40.27  this sign:  "VEHICLE STOPS AT RR CROSSINGS." 
 40.28     (c) The lettering (except for "AT," which may be one inch 
 40.29  smaller) must be a minimum two-inch "Series D" as specified in 
 40.30  standard alphabets for highway signs as specified by the Federal 
 40.31  Highway Administration.  The printing must be in a color giving 
 40.32  a marked contrast with that of the part of the vehicle on which 
 40.33  it is placed. 
 40.34     (d) The sign must have provisions for being covered, or be 
 40.35  of a removable or fold-down type. 
 40.36     Sec. 48.  Minnesota Statutes 2002, section 171.321, 
 41.1   subdivision 5, is amended to read: 
 41.2      Subd. 5.  [ANNUAL EVALUATION AND LICENSE VERIFICATION.] (a) 
 41.3   A school district's pupil transportation safety director, the 
 41.4   chief administrator of a nonpublic school, or a private 
 41.5   contractor shall certify annually to the school board or 
 41.6   governing board of a nonpublic school that, at minimum, each 
 41.7   school bus driver meets the school bus driver training 
 41.8   competencies under subdivision 4.  A school district, nonpublic 
 41.9   school, or private contractor also shall provide in-service 
 41.10  training annually to each school bus driver.  
 41.11     (b) A school district, nonpublic school, or private 
 41.12  contractor shall annually verify the validity of the driver's 
 41.13  license of each person who transports students for the district 
 41.14  with the National Drivers Register or with the department of 
 41.15  public safety. 
 41.16     Sec. 49.  Minnesota Statutes 2002, section 205A.07, is 
 41.17  amended by adding a subdivision to read: 
 41.18     Subd. 3a.  [NOTICE TO COMMISSIONER OF EDUCATION.] At least 
 41.19  49 days prior to every school district election, under section 
 41.20  123B.62, 123B.63, 126C.17, 126C.69, or 475.58, the school 
 41.21  district clerk shall provide a written notice to the 
 41.22  commissioner of education.  The notice must include the date of 
 41.23  the election and the title and language for each ballot question 
 41.24  to be voted on at the election.  The certified vote totals for 
 41.25  each ballot question shall be provided in a written notice to 
 41.26  the commissioner in a timely manner. 
 41.27     Sec. 50.  [NONPUBLIC PUPIL MATERIALS AND TESTS.] 
 41.28     Notwithstanding Minnesota Statutes, section 123B.42, 
 41.29  subdivision 3, paragraph (b), the inflation adjustment for 
 41.30  nonpublic pupil textbooks, individualized instructional or 
 41.31  cooperative learning materials, and standardized tests for 
 41.32  fiscal year 2004 must be computed using the fiscal year 2004 
 41.33  formula allowance minus $415. 
 41.34     Sec. 51.  [STAFF DEVELOPMENT RESERVED REVENUE; FISCAL YEARS 
 41.35  2004 AND 2005.] 
 41.36     Notwithstanding Minnesota Statutes, section 122A.61, 
 42.1   subdivision 1, for fiscal years 2004 and 2005 only, a school 
 42.2   district must reserve an amount equal to at least zero percent 
 42.3   of the basic revenue under Minnesota Statutes, section 126C.10, 
 42.4   subdivision 2.  A district may waive this requirement by a 
 42.5   majority vote of the licensed teachers in the district and a 
 42.6   majority vote of the school board.  A district in statutory 
 42.7   operating debt is exempt from this requirement. 
 42.8      Sec. 52.  [LEASE RATE; COOK COUNTY.] 
 42.9      (a) Notwithstanding Minnesota Statutes, section 92.46, and 
 42.10  Minnesota Rules, chapter 6122, in 2003, the lease rate for lands 
 42.11  leased under Minnesota Statutes, section 92.46, that are located 
 42.12  in Section 16, Township 62 North, Range 4 East, Cook county, 
 42.13  shall be two percent of the appraised value of the land as 
 42.14  determined by the commissioner of natural resources at the fifth 
 42.15  anniversary of the lease. 
 42.16     (b) In 2004 and every year thereafter, the amount payable 
 42.17  shall be adjusted for inflation and shall be increased to an 
 42.18  amount equal to:  (1) the amount before the inflation adjustment 
 42.19  multiplied by (2) one plus the percentage increase in the 
 42.20  implicit price deflator for government consumption expenditures 
 42.21  and gross investment for state and local governments prepared by 
 42.22  the Bureau of Economic Analysis of the United States Department 
 42.23  of Commerce for the last month of the third quarter of the 
 42.24  calendar year prior to the year for which the rent is paid. 
 42.25     Sec. 53.  [APPROPRIATIONS.] 
 42.26     Subdivision 1.  [DEPARTMENT OF EDUCATION.] The sums 
 42.27  indicated in this section are appropriated from the general fund 
 42.28  to the department of education for the fiscal years designated.  
 42.29     Subd. 2.  [GENERAL EDUCATION AID.] For general education 
 42.30  aid under Minnesota Statutes, section 126C.13, subdivision 4: 
 42.31    $4,764,384,000    .....     2004
 42.32    $5,090,303,000    .....     2005
 42.33     The 2004 appropriation includes $857,432,000 for 2003 and 
 42.34  $3,906,952,000 for 2004. 
 42.35     The 2005 appropriation includes $1,009,856,000 for 2004 and 
 42.36  $4,080,447,000 for 2005.  
 43.1      Subd. 3.  [REFERENDUM TAX BASE REPLACEMENT AID.] For 
 43.2   referendum tax base replacement aid under Minnesota Statutes, 
 43.3   section 126C.17, subdivision 7a: 
 43.4        $ 7,841,000    .....     2004 
 43.5        $ 8,543,000    .....     2005 
 43.6      The 2004 appropriation includes $1,419,000 for 2003 and 
 43.7   $6,422,000 for 2004.  
 43.8      The 2005 appropriation includes $1,605,000 for 2004 and 
 43.9   $6,938,000 for 2005. 
 43.10     Subd. 4.  [ENROLLMENT OPTIONS TRANSPORTATION.] For 
 43.11  transportation of pupils attending postsecondary institutions 
 43.12  under Minnesota Statutes, section 124D.09, or for transportation 
 43.13  of pupils attending nonresident districts under Minnesota 
 43.14  Statutes, section 124D.03: 
 43.15       $50,000        .....     2004
 43.16       $55,000        .....     2005
 43.17     Subd. 5.  [ABATEMENT REVENUE.] For abatement aid under 
 43.18  Minnesota Statutes, section 127A.49:  
 43.19       $2,680,000     .....     2004 
 43.20       $2,937,000     .....     2005 
 43.21     The 2004 appropriation includes $472,000 for 2003 and 
 43.22  $2,208,000 for 2004.  
 43.23     The 2005 appropriation includes $551,000 for 2004 and 
 43.24  $2,386,000 for 2005.  
 43.25     Subd. 6.  [CONSOLIDATION TRANSITION.] For districts 
 43.26  consolidating under Minnesota Statutes, section 123A.485: 
 43.27       $207,000        .....     2004 
 43.28       $607,000        .....     2005 
 43.29     The 2004 appropriation includes $35,000 for 2003 and 
 43.30  $172,000 for 2004. 
 43.31     The 2005 appropriation includes $42,000 for 2004 and 
 43.32  $565,000 for 2005. 
 43.33     Subd. 7.  [TORNADO IMPACT; YELLOW MEDICINE EAST.] For a 
 43.34  grant to independent school district No. 2190, Yellow Medicine 
 43.35  East, for tornado impact declining enrollment aid: 
 43.36       $78,000         .....     2004
 44.1        $39,000         .....     2005
 44.2      Subd. 8.  [DECLINING PUPIL AID; ALBERT LEA.] For declining 
 44.3   pupil aid to independent school district No. 241, Albert Lea: 
 44.4        $225,000        .....     2004
 44.5        $150,000        .....     2005
 44.6      Subd. 9.  [DECLINING PUPIL AID; MESABI EAST.] For declining 
 44.7   pupil aid to independent school district No. 2711, Mesabi East: 
 44.8        $150,000        .....     2004
 44.9        $100,000        .....     2005
 44.10     Subd. 10.  [DECLINING PUPIL AID; ROSEAU.] For declining 
 44.11  pupil aid to independent school district No. 682, Roseau: 
 44.12       $30,000         .....     2004
 44.13       $20,000         .....     2005
 44.14     Subd. 11.  [NONPUBLIC PUPIL AID.] For nonpublic pupil 
 44.15  education aid under Minnesota Statutes, sections 123B.40 to 
 44.16  123B.43 and 123B.87: 
 44.17       $14,626,000    .....     2004 
 44.18       $15,594,000    .....     2005 
 44.19     The 2004 appropriation includes $2,715,000 for 2003 and 
 44.20  $11,911,000 for 2004. 
 44.21     The 2005 appropriation includes $2,977,000 for 2004 and 
 44.22  $12,617,000 for 2005. 
 44.23     Subd. 12.  [NONPUBLIC PUPIL TRANSPORTATION.] For nonpublic 
 44.24  pupil transportation aid under Minnesota Statutes, section 
 44.25  123B.92, subdivision 9: 
 44.26       $21,477,000     .....     2004 
 44.27       $21,982,000     .....     2005 
 44.28     The 2004 appropriation includes $3,990,000 for 2003 and 
 44.29  $17,487,000 for 2004. 
 44.30     The 2005 appropriation includes $4,371,000 for 2004 and 
 44.31  $17,611,000 for 2005. 
 44.32     Subd. 13.  [ONE-ROOM SCHOOLHOUSE.] For a grant to 
 44.33  independent school district No. 690, Warroad, to operate the 
 44.34  Angle Inlet school: 
 44.35       $50,000     .....     2004
 44.36       $50,000     .....     2005
 45.1      The budget base for this item for fiscal year 2006 and each 
 45.2   year thereafter is $50,000. 
 45.3      Sec. 54.  [REPEALER.] 
 45.4      (a) Minnesota Statutes 2002, sections 123A.73, subdivisions 
 45.5   7, 10, and 11; 123B.81, subdivision 6; 124D.65, subdivision 4; 
 45.6   126C.01, subdivision 4; and 126C.125, are repealed.  
 45.7      (b) Minnesota Statutes 2002, section 126C.14, is repealed 
 45.8   effective for revenue for fiscal year 2003. 
 45.9      (c) Minnesota Statutes 2002, section 122A.62, is repealed 
 45.10  effective for taxes payable in 2004. 
 45.11     (d) Laws 2001, First Special Session chapter 6, article 5, 
 45.12  section 12, as amended by Laws 2002, chapter 377, article 12, 
 45.13  section 15, is repealed. 
 45.14     (e) Laws 2000, chapter 489, article 2, section 36, as 
 45.15  amended by Laws 2001, First Special Session chapter 6, article 
 45.16  1, section 44, is repealed effective for revenue for fiscal year 
 45.17  2004. 
 45.18                             ARTICLE 2 
 45.19                        EDUCATION EXCELLENCE 
 45.20     Section 1.  Minnesota Statutes 2002, section 120A.05, 
 45.21  subdivision 11, is amended to read: 
 45.22     Subd. 11.  [MIDDLE SCHOOL.] "Middle school" means any 
 45.23  school other than a secondary school giving an approved course 
 45.24  of study in a minimum of three two consecutive grades above 4th 
 45.25  but below 10th with building, equipment, courses of study, class 
 45.26  schedules, enrollment, and staff meeting the standards 
 45.27  established by the commissioner of children, families, and 
 45.28  learning education. 
 45.29     <b>[EFFECTIVE DATE.]</b> This section is effective for the 
 45.30  2003-2004 school year and later. 
 45.31     Sec. 2.  Minnesota Statutes 2002, section 120A.24, 
 45.32  subdivision 4, is amended to read: 
 45.33     Subd. 4.  [REPORTS TO THE STATE.] A superintendent must 
 45.34  make an annual report to the commissioner of children, families, 
 45.35  and learning education.  The report must include the following 
 45.36  information: 
 46.1      (1) the number of children residing in the district 
 46.2   attending nonpublic schools or receiving instruction from 
 46.3   persons or institutions other than a public school; 
 46.4      (2) the number of children in clause (1) who are in 
 46.5   compliance with section 120A.22 and this section; and 
 46.6      (3) the names, ages, and addresses number of children whom 
 46.7   in clause (1) who the superintendent has determined are not in 
 46.8   compliance with section 120A.22 and this section.  
 46.9      Sec. 3.  Minnesota Statutes 2002, section 120A.41, is 
 46.10  amended to read: 
 46.11     120A.41 [LENGTH OF SCHOOL YEAR; DAYS OF INSTRUCTION.] 
 46.12     A school board's annual school calendar must include at 
 46.13  least three additional days of student instruction or staff 
 46.14  development training related to implementing section 120B.031, 
 46.15  subdivision 1, paragraph (f), beyond the number of days of 
 46.16  student instruction the board formally adopted as its school 
 46.17  calendar at the beginning of the 1996-1997 school year. 
 46.18     <b>[EFFECTIVE DATE.]</b> This section is effective for the 
 46.19  2003-2004 school year. 
 46.20     Sec. 4.  Minnesota Statutes 2002, section 121A.55, is 
 46.21  amended to read: 
 46.22     121A.55 [POLICIES TO BE ESTABLISHED.] 
 46.23     (a) The commissioner of children, families, and 
 46.24  learning education shall promulgate guidelines to assist each 
 46.25  school board.  Each school board shall establish uniform 
 46.26  criteria for dismissal and adopt written policies and rules to 
 46.27  effectuate the purposes of sections 121A.40 to 121A.56.  The 
 46.28  policies shall emphasize preventing dismissals through early 
 46.29  detection of problems and shall be designed to address students' 
 46.30  inappropriate behavior from recurring.  The policies shall 
 46.31  recognize the continuing responsibility of the school for the 
 46.32  education of the pupil during the dismissal period.  The 
 46.33  alternative educational services, if the pupil wishes to take 
 46.34  advantage of them, must be adequate to allow the pupil to make 
 46.35  progress towards meeting the graduation standards adopted under 
 46.36  section 120B.02 and help prepare the pupil for readmission.  
 47.1      (b) An area learning center under section 123A.05 may not 
 47.2   prohibit an expelled or excluded pupil from enrolling solely 
 47.3   because a district expelled or excluded the pupil.  The board of 
 47.4   the area learning center may use the provisions of the Pupil 
 47.5   Fair Dismissal Act to exclude a pupil or to require an admission 
 47.6   plan. 
 47.7      (c) The commissioner shall actively encourage and assist 
 47.8   school districts to cooperatively establish alternative 
 47.9   educational services within school buildings or at alternative 
 47.10  program sites that offer instruction to pupils who are dismissed 
 47.11  from school for willfully engaging in dangerous, disruptive, or 
 47.12  violent behavior, including for possessing a firearm in a school 
 47.13  zone.  Each school district shall develop a policy and report it 
 47.14  to the commissioner on the appropriate use of peace officers and 
 47.15  crisis teams to remove students who have an individualized 
 47.16  education plan from school grounds. 
 47.17     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
 47.18  following final enactment.  
 47.19     Sec. 5.  Minnesota Statutes 2002, section 121A.61, 
 47.20  subdivision 3, is amended to read: 
 47.21     Subd. 3.  [POLICY COMPONENTS.] The policy must include at 
 47.22  least the following components:  
 47.23     (a) rules governing student conduct and procedures for 
 47.24  informing students of the rules; 
 47.25     (b) the grounds for removal of a student from a class; 
 47.26     (c) the authority of the classroom teacher to remove 
 47.27  students from the classroom pursuant to procedures and rules 
 47.28  established in the district's policy; 
 47.29     (d) the procedures for removal of a student from a class by 
 47.30  a teacher, school administrator, or other school district 
 47.31  employee; 
 47.32     (e) the period of time for which a student may be removed 
 47.33  from a class, which may not exceed five class periods for a 
 47.34  violation of a rule of conduct; 
 47.35     (f) provisions relating to the responsibility for and 
 47.36  custody of a student removed from a class; 
 48.1      (g) the procedures for return of a student to the specified 
 48.2   class from which the student has been removed; 
 48.3      (h) the procedures for notifying a student and the 
 48.4   student's parents or guardian of violations of the rules of 
 48.5   conduct and of resulting disciplinary actions; 
 48.6      (i) any procedures determined appropriate for encouraging 
 48.7   early involvement of parents or guardians in attempts to improve 
 48.8   a student's behavior; 
 48.9      (j) any procedures determined appropriate for encouraging 
 48.10  early detection of behavioral problems; 
 48.11     (k) any procedures determined appropriate for referring a 
 48.12  student in need of special education services to those services; 
 48.13     (1) the procedures for consideration of whether there is a 
 48.14  need for a further assessment or of whether there is a need for 
 48.15  a review of the adequacy of a current individual education plan 
 48.16  of a student with a disability who is removed from class; 
 48.17     (m) procedures for detecting and addressing chemical abuse 
 48.18  problems of a student while on the school premises; 
 48.19     (n) the minimum consequences for violations of the code of 
 48.20  conduct; 
 48.21     (o) procedures for immediate and appropriate interventions 
 48.22  tied to violations of the code; and 
 48.23     (p) a provision that states that a teacher, school 
 48.24  employee, school bus driver, or other agent of a district may 
 48.25  use reasonable force in compliance with section 121A.582 and 
 48.26  other laws; and 
 48.27     (q) an agreement regarding procedures to coordinate crisis 
 48.28  services to the extent funds are available with the county board 
 48.29  responsible for implementing sections 245.487 to 245.4888 for 
 48.30  students with a serious emotional disturbance or other students 
 48.31  who have an individualized education plan whose behavior may be 
 48.32  addressed by crisis intervention. 
 48.33     Sec. 6.  Minnesota Statutes 2002, section 121A.64, is 
 48.34  amended to read: 
 48.35     121A.64 [NOTIFICATION; TEACHERS' LEGITIMATE EDUCATIONAL 
 48.36  INTEREST.] 
 49.1      (a) A classroom teacher has a legitimate educational 
 49.2   interest in knowing which students placed in the teacher's 
 49.3   classroom have a history of violent behavior and must be 
 49.4   notified before such students are placed in the teacher's 
 49.5   classroom.  
 49.6      (b) Representatives of the school board and the exclusive 
 49.7   representative of the teachers shall discuss issues related to 
 49.8   notification prior to placement the model policy on student 
 49.9   records adopted under Laws 1999, chapter 241, article 9, section 
 49.10  50, and any modifications adopted under this act for notifying 
 49.11  classroom teachers and other school district employees having a 
 49.12  legitimate educational interest in knowing about students with a 
 49.13  history of violent behavior placed in classrooms of students 
 49.14  with histories of violent behavior and any.  The representatives 
 49.15  of the school board and the exclusive representative of the 
 49.16  teachers also may discuss the need for intervention services or 
 49.17  conflict resolution or training for staff in these cases related 
 49.18  to placing students with a history of violent behavior in 
 49.19  teachers' classrooms. 
 49.20     <b>[EFFECTIVE DATE.]</b> This section is effective for the 
 49.21  2003-2004 school year and later. 
 49.22     Sec. 7.  Minnesota Statutes 2002, section 122A.09, 
 49.23  subdivision 4, is amended to read: 
 49.24     Subd. 4.  [LICENSE AND RULES.] (a) The board must adopt 
 49.25  rules to license public school teachers and interns subject to 
 49.26  chapter 14. 
 49.27     (b) The board must adopt rules requiring a person to 
 49.28  successfully complete a skills examination in reading, writing, 
 49.29  and mathematics as a requirement for initial teacher licensure.  
 49.30  Such rules must require college and universities offering a 
 49.31  board approved teacher preparation program to provide remedial 
 49.32  assistance to persons who did not achieve a qualifying score on 
 49.33  the skills examination, including those for whom English is a 
 49.34  second language. 
 49.35     (c) The board must adopt rules to approve teacher 
 49.36  preparation programs.  The board, upon the request of a 
 50.1   post-secondary student preparing for teacher licensure or a 
 50.2   licensed graduate of a teacher preparation program, shall assist 
 50.3   in resolving a dispute between the person and a post-secondary 
 50.4   institution providing a teacher preparation program when the 
 50.5   dispute involves an institution's recommendation for licensure 
 50.6   affecting the person or the person's credentials.  At the 
 50.7   board's discretion, assistance may include the application of 
 50.8   chapter 14. 
 50.9      (d) The board must provide the leadership and shall adopt 
 50.10  rules for the redesign of teacher education programs to 
 50.11  implement a research based, results-oriented curriculum that 
 50.12  focuses on the skills teachers need in order to be effective.  
 50.13  The board shall implement new systems of teacher preparation 
 50.14  program evaluation to assure program effectiveness based on 
 50.15  proficiency of graduates in demonstrating attainment of program 
 50.16  outcomes. 
 50.17     (e) The board must adopt rules requiring successful 
 50.18  completion of an examination of general pedagogical knowledge 
 50.19  and examinations of licensure-specific teaching skills.  The 
 50.20  rules shall be effective on the dates determined by the board 
 50.21  but not later than September 1, 2001.  
 50.22     (f) The board must adopt rules requiring teacher educators 
 50.23  to work directly with elementary or secondary school teachers in 
 50.24  elementary or secondary schools to obtain periodic exposure to 
 50.25  the elementary or secondary teaching environment. 
 50.26     (g) The board must grant licenses to interns and to 
 50.27  candidates for initial licenses. 
 50.28     (h) The board must design and implement an assessment 
 50.29  system which requires a candidate for an initial license and 
 50.30  first continuing license to demonstrate the abilities necessary 
 50.31  to perform selected, representative teaching tasks at 
 50.32  appropriate levels. 
 50.33     (i) The board must receive recommendations from local 
 50.34  committees as established by the board for the renewal of 
 50.35  teaching licenses. 
 50.36     (j) The board must grant life licenses to those who qualify 
 51.1   according to requirements established by the board, and suspend 
 51.2   or revoke licenses pursuant to sections 122A.20 and 214.10.  The 
 51.3   board must not establish any expiration date for application for 
 51.4   life licenses.  
 51.5      (k) The board must adopt rules that require all licensed 
 51.6   teachers who are renewing their continuing license to include in 
 51.7   their renewal requirements further preparation in the areas of 
 51.8   using positive behavior interventions and in accommodating, 
 51.9   modifying, and adapting curricula, materials, and strategies to 
 51.10  appropriately meet the needs of individual students and ensure 
 51.11  adequate progress toward the state's graduation rule.  
 51.12     (l) In adopting rules to license public school teachers who 
 51.13  provide health-related services for disabled children, the board 
 51.14  shall adopt rules consistent with license or registration 
 51.15  requirements of the commissioner of health and the 
 51.16  health-related boards who license personnel who perform similar 
 51.17  services outside of the school. 
 51.18     (m) The board must adopt rules that require all licensed 
 51.19  teachers who are renewing their continuing license to include in 
 51.20  their renewal requirements further reading preparation, 
 51.21  consistent with section 122A.06, subdivision 4.  The rules do 
 51.22  not take effect until they are approved by law.  
 51.23     (n) The board must adopt rules that require all licensed 
 51.24  teachers who are renewing their continuing license to include in 
 51.25  their renewal requirements further preparation in understanding 
 51.26  the key warning signs of early-onset mental illness in children 
 51.27  and adolescents. 
 51.28     Sec. 8.  Minnesota Statutes 2002, section 122A.414, is 
 51.29  amended by adding a subdivision to read: 
 51.30     Subd. 3.  [REPORT.] Participating districts and school 
 51.31  sites must report on the implementation and effectiveness of the 
 51.32  alternative teacher compensation plan, particularly addressing 
 51.33  each requirement under subdivision 2 and make biennial 
 51.34  recommendations by January 1 to their school boards.  The school 
 51.35  boards shall transmit a summary of the findings and 
 51.36  recommendations of their district to the commissioner. 
 52.1      Sec. 9.  Minnesota Statutes 2002, section 122A.415, 
 52.2   subdivision 1, is amended to read: 
 52.3      Subdivision 1.  [AID AMOUNT.] (a) A school district that 
 52.4   meets the conditions of section 122A.414 and submits an 
 52.5   application approved by the commissioner is eligible for 
 52.6   alternative compensation aid.  The commissioner must consider 
 52.7   only applications submitted jointly by a school district and the 
 52.8   exclusive representative of the teachers for participation in 
 52.9   the program.  The application must contain a formally adopted 
 52.10  collective bargaining agreement, memorandum of understanding, or 
 52.11  other binding agreement that implements an alternative teacher 
 52.12  professional pay system consistent with section 122A.414 and 
 52.13  includes all teachers in a district, all teachers at a school 
 52.14  site, or at least 25 percent of the teachers in a district.  The 
 52.15  commissioner, in approving applications, may give preference to 
 52.16  applications involving entire districts or sites in approving 
 52.17  applications or to applications that align measures of teacher 
 52.18  performance with student academic achievement and progress under 
 52.19  section 120B.35, subdivision 1.  
 52.20     (b) Alternative compensation aid for a qualifying school 
 52.21  district, site, or portion of a district or school site is as 
 52.22  follows: 
 52.23     (1) for a school district in which the school board and the 
 52.24  exclusive representative of the teachers agree to place all 
 52.25  teachers in the district or at the site on the alternative 
 52.26  compensation schedule, alternative compensation aid equals $150 
 52.27  times the district's or the site's number of pupils enrolled on 
 52.28  October 1 of the previous fiscal year; or 
 52.29     (2) for a district in which the school board and the 
 52.30  exclusive representative of the teachers agree that at least 25 
 52.31  percent of the district's licensed teachers will be paid on the 
 52.32  alternative compensation schedule, alternative compensation aid 
 52.33  equals $150 times the percentage of participating teachers times 
 52.34  the district's number of pupils enrolled as of October 1 of the 
 52.35  previous fiscal year.  
 52.36     Sec. 10.  Minnesota Statutes 2002, section 122A.415, 
 53.1   subdivision 3, is amended to read: 
 53.2      Subd. 3.  [AID TIMING.] (a) Districts or sites with 
 53.3   approved applications must receive alternative compensation aid 
 53.4   for each school year that the district or site participates in 
 53.5   the program as described in this subdivision.  Districts or 
 53.6   sites with applications received by the commissioner before June 
 53.7   1 of the first year of a two-year contract shall receive 
 53.8   alternative compensation aid for both years of the contract.  
 53.9   Districts or sites with applications received by the 
 53.10  commissioner after June 1 of the first year of a two-year 
 53.11  contract shall receive alternative compensation aid only for the 
 53.12  second year of the contract.  A qualifying district or site that 
 53.13  received alternative compensation aid for the previous fiscal 
 53.14  year must receive at least an amount equal to the lesser of the 
 53.15  amount it received for the previous fiscal year or its 
 53.16  proportionate share of the previous year's appropriation if the 
 53.17  district or site submits a timely application and the 
 53.18  commissioner determines that the district or site continues to 
 53.19  implement an alternative teacher professional pay system, 
 53.20  consistent with its application under this section.  The 
 53.21  commissioner must approve initial applications for school 
 53.22  districts qualifying under subdivision 1, paragraph (b), clause 
 53.23  (1), by January 15 of each year.  If any money remains, the 
 53.24  commissioner must approve aid amounts for school districts 
 53.25  qualifying under subdivision 1, paragraph (b), clause (2), by 
 53.26  February 15 of each year.  
 53.27     (b) The commissioner shall select applicants that qualify 
 53.28  for this program, notify school districts and school sites about 
 53.29  the program, develop and disseminate application materials, and 
 53.30  carry out other activities needed to implement this section.  
 53.31     Sec. 11.  Minnesota Statutes 2002, section 122A.63, 
 53.32  subdivision 3, is amended to read: 
 53.33     Subd. 3.  [REVIEW AND COMMENT.] The commissioner must 
 53.34  submit the joint application to the Minnesota American Indian 
 53.35  scholarship education committee for review and comment. 
 53.36     Sec. 12.  [123B.025] [SCHOOL SPONSORSHIP AND ADVERTISING 
 54.1   REVENUE.] 
 54.2      Subdivision 1.  [BOARD AUTHORITY; CONTRACTS.] A school 
 54.3   board may enter into a contract with advertisers, sponsors, or 
 54.4   others regarding advertising and naming rights to school 
 54.5   facilities under the general charge of the district.  A contract 
 54.6   authorized under this section must be approved by the school 
 54.7   board.  The powers granted to a school board under this section 
 54.8   are in addition to any other authority the school district may 
 54.9   have. 
 54.10     Subd. 2.  [AUTHORIZED AGREEMENTS.] A school district may 
 54.11  enter into a contract to: 
 54.12     (1) lease the naming rights for school facilities, 
 54.13  including school buildings, ice arenas, and stadiums; 
 54.14     (2) sell advertising on or in the facilities listed in 
 54.15  clause (1); and 
 54.16     (3) otherwise enter into an agreement with a sponsoring 
 54.17  agent. 
 54.18     Subd. 3.  [REVENUE USES.] Revenue generated under this 
 54.19  section must be used according to a plan specified by the school 
 54.20  board. 
 54.21     Sec. 13.  Minnesota Statutes 2002, section 123B.14, 
 54.22  subdivision 1, is amended to read: 
 54.23     Subdivision 1.  [OFFICER SELECTION.] Within ten days after 
 54.24  the election of the first board in independent districts and 
 54.25  annually thereafter on July 1, On the first Monday of January of 
 54.26  each year, or as soon thereafter as practicable, the board must 
 54.27  meet and organize by selecting a chair, clerk, and a treasurer, 
 54.28  who shall hold their offices for one year and until their 
 54.29  successors are selected and qualify. The persons who perform the 
 54.30  duties of the clerk and treasurer need not be members of the 
 54.31  board and the board by resolution may combine the duties of the 
 54.32  offices of clerk and treasurer in a single person in the office 
 54.33  of business affairs.  They may appoint a superintendent who 
 54.34  shall be ex officio a member of the board, but not entitled to 
 54.35  vote therein.  In districts in which board members are elected 
 54.36  at the general election in November, the annual meeting of the 
 55.1   board must be held on the first Monday of January or as soon 
 55.2   thereafter as practicable. 
 55.3      Sec. 14.  Minnesota Statutes 2002, section 123B.88, 
 55.4   subdivision 2, is amended to read: 
 55.5      Subd. 2.  [VOLUNTARY SURRENDER OF TRANSPORTATION 
 55.6   PRIVILEGES.] The parent or guardian of a secondary student may 
 55.7   voluntarily surrender the secondary student's to and from school 
 55.8   transportation privileges granted under subdivision 1. 
 55.9      Sec. 15.  Minnesota Statutes 2002, section 124D.081, is 
 55.10  amended by adding a subdivision to read: 
 55.11     Subd. 9.  [RESERVE ACCOUNT.] First grade preparedness 
 55.12  revenue must be placed in a reserve account within the general 
 55.13  fund and may only be used for first grade preparedness programs 
 55.14  at qualifying school sites. 
 55.15     Sec. 16.  Minnesota Statutes 2002, section 124D.09, 
 55.16  subdivision 9, is amended to read: 
 55.17     Subd. 9.  [ENROLLMENT PRIORITY.] A post-secondary 
 55.18  institution shall give priority to its post-secondary students 
 55.19  when enrolling 11th and 12th grade pupils in its courses.  A 
 55.20  post-secondary institution may provide information about its 
 55.21  programs to a secondary school or to a pupil or parent, but it 
 55.22  may not advertise or otherwise recruit or solicit the 
 55.23  participation on financial grounds, of secondary pupils to 
 55.24  enroll in its programs on financial grounds.  An institution 
 55.25  must not enroll secondary pupils, for post-secondary enrollment 
 55.26  options purposes, in remedial, developmental, or other courses 
 55.27  that are not college level.  Once a pupil has been enrolled in a 
 55.28  post-secondary course under this section, the pupil shall not be 
 55.29  displaced by another student.  
 55.30     Sec. 17.  Minnesota Statutes 2002, section 124D.09, 
 55.31  subdivision 10, is amended to read: 
 55.32     Subd. 10.  [COURSES ACCORDING TO AGREEMENTS.] An eligible 
 55.33  pupil, according to subdivision 4 5, may enroll in a 
 55.34  nonsectarian course taught by a secondary teacher or a 
 55.35  post-secondary faculty member and offered at a secondary school, 
 55.36  or another location, according to an agreement between a public 
 56.1   school board and the governing body of an eligible public 
 56.2   post-secondary system or an eligible private post-secondary 
 56.3   institution, as defined in subdivision 3.  All provisions of 
 56.4   this section shall apply to a pupil, public school board, 
 56.5   district, and the governing body of a post-secondary 
 56.6   institution, except as otherwise provided.  
 56.7      Sec. 18.  Minnesota Statutes 2002, section 124D.09, 
 56.8   subdivision 16, is amended to read: 
 56.9      Subd. 16.  [FINANCIAL ARRANGEMENTS FOR COURSES PROVIDED 
 56.10  ACCORDING TO AGREEMENTS.] (a) The agreement between a board and 
 56.11  the governing body of a public post-secondary system or private 
 56.12  post-secondary institution shall set forth the payment amounts 
 56.13  and arrangements, if any, from the board to the post-secondary 
 56.14  institution.  No payments shall be made by the department 
 56.15  according to subdivision 14 13 or 15.  For the purpose of 
 56.16  computing state aids for a district, a pupil enrolled according 
 56.17  to subdivision 10 shall be counted in the average daily 
 56.18  membership of the district as though the pupil were enrolled in 
 56.19  a secondary course that is not offered in connection with an 
 56.20  agreement.  Nothing in this subdivision shall be construed to 
 56.21  prohibit a public post-secondary system or private 
 56.22  post-secondary institution from receiving additional state 
 56.23  funding that may be available under any other law.  
 56.24     (b) If a course is provided under subdivision 10, offered 
 56.25  at a secondary school, and taught by a secondary teacher, the 
 56.26  post-secondary system or institution must not require a payment 
 56.27  from the school board that exceeds the cost to the 
 56.28  post-secondary institution that is directly attributable to 
 56.29  providing that course.  
 56.30     Sec. 19.  Minnesota Statutes 2002, section 124D.09, 
 56.31  subdivision 20, is amended to read: 
 56.32     Subd. 20.  [TEXTBOOKS; MATERIALS.] All textbooks and 
 56.33  equipment provided to a pupil, and paid for under subdivision 
 56.34  13, are the property of the pupil's school district of residence 
 56.35  postsecondary institution.  Each pupil is required to return all 
 56.36  textbooks and equipment to the district postsecondary 
 57.1   institution after the course has ended. 
 57.2      Sec. 20.  [124D.095] [ON-LINE LEARNING OPTION.] 
 57.3      Subdivision 1.  [CITATION.] This section may be cited as 
 57.4   the "On-line Learning Option Act." 
 57.5      Subd. 2.  [DEFINITIONS.] For purposes of this section, the 
 57.6   following terms have the meanings given them. 
 57.7      (a) "On-line learning" is an interactive course or program 
 57.8   that delivers instruction to a student by computer; is combined 
 57.9   with other traditional delivery methods that include frequent 
 57.10  student assessment and may include actual teacher contact time; 
 57.11  and meets or exceeds state academic standards. 
 57.12     (b) "On-line learning provider" is a school district, an 
 57.13  organization of two or more school districts operating under a 
 57.14  joint powers agreement, or a charter school located in Minnesota 
 57.15  that provides on-line learning to students. 
 57.16     (c) "Student" is a Minnesota resident enrolled in a school 
 57.17  under section 120A.22, subdivision 4, in kindergarten through 
 57.18  grade 12. 
 57.19     (d) "On-line learning student" is a student enrolled in an 
 57.20  on-line learning course or program delivered by an on-line 
 57.21  provider under paragraph (b). 
 57.22     (e) "Enrolling district" means the school district or 
 57.23  charter school in which a student is enrolled under section 
 57.24  120A.22, subdivision 4, for purposes of compulsory attendance.  
 57.25     Subd. 3.  [AUTHORIZATION; NOTICE; LIMITATIONS ON 
 57.26  ENROLLMENT.] (a) A student may apply to an on-line learning 
 57.27  provider to enroll in on-line learning.  A student age 17 or 
 57.28  younger must have the written consent of a parent or guardian to 
 57.29  apply.  No school district or charter school may prohibit a 
 57.30  student from applying to enroll in on-line learning.  An on-line 
 57.31  learning provider that accepts a student under this section 
 57.32  must, within ten days, notify the student and the enrolling 
 57.33  district if the enrolling district is not the on-line learning 
 57.34  provider.  The notice must report the student's course or 
 57.35  program and hours of instruction. 
 57.36     (b) An on-line learning student must notify the enrolling 
 58.1   district at least 30 days before taking an on-line learning 
 58.2   course or program if the enrolling district is not providing the 
 58.3   on-line learning.  An on-line learning provider must notify the 
 58.4   commissioner that it is delivering on-line learning and report 
 58.5   the number of on-line learning students it is accepting and the 
 58.6   on-line learning courses and programs it is delivering.  
 58.7      (c) An on-line learning provider may limit enrollment if 
 58.8   the provider's school board or board of directors adopts by 
 58.9   resolution specific standards for accepting and rejecting 
 58.10  students' applications. 
 58.11     (d) An enrolling district may reduce an on-line learning 
 58.12  student's regular classroom instructional membership in 
 58.13  proportion to the student's membership in on-line learning 
 58.14  courses. 
 58.15     Subd. 4.  [ON-LINE LEARNING PARAMETERS.] (a) An on-line 
 58.16  learning student must receive academic credit for completing the 
 58.17  requirements of an on-line learning course or program.  
 58.18  Secondary credits granted to an on-line learning student must be 
 58.19  counted toward the graduation and credit requirements of the 
 58.20  enrolling district.  The enrolling district must apply the same 
 58.21  graduation requirements to all students, including on-line 
 58.22  learning students, and must continue to provide nonacademic 
 58.23  services to on-line learning students.  If a student completes 
 58.24  an on-line learning course or program that meets or exceeds a 
 58.25  graduation standard or grade progression requirement at the 
 58.26  enrolling district, that standard or requirement is met.  The 
 58.27  enrolling district must use the same criteria for accepting 
 58.28  on-line learning credits or courses as it does for accepting 
 58.29  credits or courses for transfer students under section 124D.03, 
 58.30  subdivision 9.  The enrolling district may reduce the teacher 
 58.31  contact time of an on-line learning student in proportion to the 
 58.32  number of on-line learning courses the student takes from an 
 58.33  on-line learning provider that is not the enrolling district.  
 58.34     (b) An on-line learning student may: 
 58.35     (1) enroll during a single school year in a maximum of 12 
 58.36  semester-long courses or their equivalent delivered by an 
 59.1   on-line learning provider or the enrolling district; 
 59.2      (2) complete course work at a grade level that is different 
 59.3   from the student's current grade level; and 
 59.4      (3) enroll in additional courses with the on-line learning 
 59.5   provider under a separate agreement that includes terms for 
 59.6   payment of any tuition or course fees.  
 59.7      (c) A student with a disability may enroll in an on-line 
 59.8   learning course or program if the student's IEP team determines 
 59.9   that on-line learning is appropriate education for the student. 
 59.10     (d) An on-line learning student has the same access to the 
 59.11  computer hardware and education software available in a school 
 59.12  as all other students in the enrolling district.  An on-line 
 59.13  learning provider must assist an on-line learning student whose 
 59.14  family qualifies for the education tax credit under section 
 59.15  290.0674 to acquire computer hardware and educational software 
 59.16  for on-line learning purposes. 
 59.17     (e) An enrolling district may offer on-line learning to its 
 59.18  enrolled students.  Such on-line learning does not generate 
 59.19  on-line learning funds under this section.  An enrolling 
 59.20  district that offers on-line learning only to its enrolled 
 59.21  students is not subject to the reporting requirements or review 
 59.22  criteria under subdivision 7.  A teacher with a Minnesota 
 59.23  license must assemble and deliver instruction to enrolled 
 59.24  students receiving on-line learning from an enrolling district.  
 59.25  The instruction may include curriculum developed by persons 
 59.26  other than a teacher with a Minnesota license. 
 59.27     (f) An on-line learning provider that is not the enrolling 
 59.28  district is subject to the reporting requirements and review 
 59.29  criteria under subdivision 7.  A teacher with a Minnesota 
 59.30  license must assemble and deliver instruction to on-line 
 59.31  learning students.  The instruction may include curriculum 
 59.32  developed by persons other than a teacher with a Minnesota 
 59.33  license.  Unless the commissioner grants a waiver, a teacher 
 59.34  providing on-line learning instruction must not instruct more 
 59.35  than 40 students in any one on-line learning course or program.  
 59.36     Subd. 5.  [PARTICIPATION IN EXTRACURRICULAR ACTIVITIES.] An 
 60.1   on-line learning student may participate in the extracurricular 
 60.2   activities of the enrolling district on the same basis as other 
 60.3   enrolled students. 
 60.4      Subd. 6.  [INFORMATION.] School districts and charter 
 60.5   schools must make available information about on-line learning 
 60.6   to all interested people. 
 60.7      Subd. 7.  [DEPARTMENT OF EDUCATION.] (a) The department 
 60.8   must review and certify on-line learning providers.  The on-line 
 60.9   learning courses and programs must be rigorous, aligned with 
 60.10  state academic standards, and contribute to grade progression in 
 60.11  a single subject.  On-line learning providers must affirm to the 
 60.12  commissioner that on-line learning courses have equivalent 
 60.13  standards or instruction, curriculum, and assessment 
 60.14  requirements as other courses offered to enrolled students.  The 
 60.15  on-line learning provider must also demonstrate expectations for 
 60.16  actual teacher contact time or other student-to-teacher 
 60.17  communication.  Once an on-line learning provider is approved 
 60.18  under this paragraph, all of its on-line learning course 
 60.19  offerings are eligible for payment under this section unless a 
 60.20  course is successfully challenged by an enrolling district or 
 60.21  the department under paragraph (b). 
 60.22     (b) An enrolling district may challenge the validity of a 
 60.23  course offered by an on-line learning provider.  The department 
 60.24  must review such challenges based on the certification 
 60.25  procedures under paragraph (a).  The department may initiate its 
 60.26  own review of the validity of an on-line learning course offered 
 60.27  by an on-line learning provider.  
 60.28     (c) The department may collect a fee not to exceed $250 for 
 60.29  certifying on-line learning providers or $50 per course for 
 60.30  reviewing a challenge by an enrolling district. 
 60.31     (d) The department must develop, publish, and maintain a 
 60.32  list of approved on-line learning providers and on-line learning 
 60.33  courses and programs that it has reviewed and certified. 
 60.34     Subd. 8.  [FINANCIAL ARRANGEMENTS.] (a) For a student 
 60.35  enrolled in an on-line learning course, the department must 
 60.36  calculate average daily membership and make payments according 
 61.1   to this subdivision. 
 61.2      (b) The initial on-line learning average daily membership 
 61.3   equals 1/12 for each semester course or a proportionate amount 
 61.4   for courses of different lengths.  The adjusted on-line learning 
 61.5   average daily membership equals the initial on-line learning 
 61.6   average daily membership times .88. 
 61.7      (c) No on-line learning average daily membership shall be 
 61.8   generated if:  (i) the student does not complete the on-line 
 61.9   learning course, or (ii) the student is enrolled in on-line 
 61.10  learning provided by the enrolling district and the student was 
 61.11  enrolled in a Minnesota public school for the school year before 
 61.12  the school year in which the student first enrolled in on-line 
 61.13  learning. 
 61.14     (d) On-line learning average daily membership under this 
 61.15  subdivision for a student currently enrolled in a Minnesota 
 61.16  public school and who was enrolled in a Minnesota public school 
 61.17  for the school year before the school year in which the student 
 61.18  first enrolled in on-line learning shall be used only for 
 61.19  computing average daily membership according to section 126C.05, 
 61.20  subdivision 19, paragraph (a), clause (ii), and for computing 
 61.21  on-line learning aid according to section 126C.24. 
 61.22     (e) On-line learning average daily membership under this 
 61.23  subdivision for students not included in paragraph (c) or (d) 
 61.24  shall be used only for computing average daily membership 
 61.25  according to section 126C.05, subdivision 19, paragraph (a), 
 61.26  clause (ii), and for computing payments under paragraphs (f) and 
 61.27  (g). 
 61.28     (f) Subject to the limitations in this subdivision, the 
 61.29  department must pay an on-line learning provider an amount equal 
 61.30  to the product of the adjusted on-line learning average daily 
 61.31  membership for students under paragraph (e) times the student 
 61.32  grade level weighting under section 126C.05, subdivision 1, 
 61.33  times the formula allowance. 
 61.34     (g) The department must pay each on-line learning provider 
 61.35  100 percent of the amount in paragraph (f) within 45 days of 
 61.36  receiving final enrollment and course completion information 
 62.1   each quarter or semester. 
 62.2      Subd. 9.  [PAYMENT PRIORITY.] (a) To the extent funds are 
 62.3   available, the commissioner must pay an on-line learning 
 62.4   provider according to subdivision 8, in the order in which a 
 62.5   on-line learning provider notifies the commissioner under 
 62.6   subdivision 3, paragraph (b), that it is delivering on-line 
 62.7   learning.  The on-line learning provider must submit to the 
 62.8   commissioner any student information necessary to process 
 62.9   payments under this section. 
 62.10     (b) Before paying other on-line learning providers under 
 62.11  paragraph (a), the commissioner must pay providers that 
 62.12  delivered on-line learning in fiscal year 2003.  (i) First, the 
 62.13  commissioner must pay for students who were enrolled in a 
 62.14  Minnesota on-line learning program during fiscal year 2003 and 
 62.15  continue to be enrolled in that on-line learning program during 
 62.16  the current fiscal year. (ii) Second, the commissioner must pay 
 62.17  for other students enrolled in that on-line learning program 
 62.18  during the current fiscal year.  A provider's qualifying number 
 62.19  of pupils under clauses (i) and (ii) shall not exceed 100 
 62.20  percent of the fiscal year 2003 pupils.  An on-line learning 
 62.21  provider that qualifies under this paragraph may also submit an 
 62.22  application for funding for additional pupils under paragraph 
 62.23  (a). 
 62.24     (c) Notwithstanding paragraph (a), the commissioner may 
 62.25  establish criteria to limit the increase in the number of 
 62.26  qualifying pupils for an on-line learning provider to enable 
 62.27  start-up or growth of other providers. 
 62.28     <b>[EFFECTIVE DATE.]</b> This section is effective for the 
 62.29  2003-2004 school year and later. 
 62.30     Sec. 21.  Minnesota Statutes 2002, section 124D.10, 
 62.31  subdivision 2a, is amended to read: 
 62.32     Subd. 2a.  [CHARTER SCHOOL ADVISORY COUNCIL.] (a) A charter 
 62.33  school advisory council is established under section 
 62.34  15.059 except that the term for each council member shall be 
 62.35  three years.  The advisory council is composed of seven members 
 62.36  from throughout the state who have demonstrated experience with 
 63.1   or interest in charter schools.  The members of the council 
 63.2   shall be appointed by the commissioner.  The advisory council 
 63.3   shall bring to the attention of the commissioner any matters 
 63.4   related to charter schools that the council deems necessary and 
 63.5   shall: 
 63.6      (1) encourage school boards to make full use of charter 
 63.7   school opportunities; 
 63.8      (2) encourage the creation of innovative schools; 
 63.9      (3) provide leadership and support for charter school 
 63.10  sponsors to increase the innovation in and the effectiveness, 
 63.11  accountability, and fiscal soundness of charter schools; 
 63.12     (4) serve an ombudsman function in facilitating the 
 63.13  operations of new and existing charter schools; 
 63.14     (5) promote timely financial management training for newly 
 63.15  elected members of a charter school board of directors and 
 63.16  ongoing training for other members of a charter school board of 
 63.17  directors; and 
 63.18     (6) review charter school applications and recommend 
 63.19  approving or disapproving the applications; and 
 63.20     (7) facilitate compliance with auditing and other reporting 
 63.21  requirements.  The advisory council shall refer all its 
 63.22  proposals to the commissioner who shall provide time for reports 
 63.23  from the council. 
 63.24     (b) The charter school advisory council under this 
 63.25  subdivision expires June 30, 2003 2007. 
 63.26     Sec. 22.  Minnesota Statutes 2002, section 124D.10, 
 63.27  subdivision 3, is amended to read: 
 63.28     Subd. 3.  [SPONSOR.] (a) A school board; intermediate 
 63.29  school district school board; education district organized under 
 63.30  sections 123A.15 to 123A.19; charitable organization under 
 63.31  section 501(c)(3) of the Internal Revenue Code of 1986 that is a 
 63.32  member of the Minnesota council of nonprofits or the Minnesota 
 63.33  council on foundations, registered with the attorney general's 
 63.34  office, and reports an end-of-year fund balance of at least 
 63.35  $2,000,000; Minnesota private college that grants two- or 
 63.36  four-year degrees and is registered with the higher education 
 64.1   services office under chapter 136A; community college, state 
 64.2   university, or technical college, governed by the board of 
 64.3   trustees of the Minnesota state colleges and universities; or 
 64.4   the University of Minnesota may sponsor one or more charter 
 64.5   schools.  
 64.6      (b) A nonprofit corporation subject to chapter 317A, 
 64.7   described in section 317A.905, and exempt from federal income 
 64.8   tax under section 501(c)(6) of the Internal Revenue Code of 
 64.9   1986, may sponsor one or more charter schools if the charter 
 64.10  school has operated for at least three years under a different 
 64.11  sponsor and if the nonprofit corporation has existed for at 
 64.12  least 25 years.  
 64.13     <b>[EFFECTIVE DATE.]</b> This section is effective for the 
 64.14  2003-2004 school year and later. 
 64.15     Sec. 23.  Minnesota Statutes 2002, section 124D.10, 
 64.16  subdivision 4, is amended to read: 
 64.17     Subd. 4.  [FORMATION OF SCHOOL.] (a) A sponsor may 
 64.18  authorize one or more licensed teachers under section 122A.18, 
 64.19  subdivision 1, to operate a charter school subject to approval 
 64.20  by the commissioner.  A board must vote on charter school 
 64.21  application for sponsorship no later than 90 days after 
 64.22  receiving the application.  After 90 days, the applicant may 
 64.23  apply to the commissioner.  If a board elects not to sponsor a 
 64.24  charter school, the applicant may appeal the board's decision to 
 64.25  the commissioner.  The commissioner may elect to sponsor the 
 64.26  charter school or assist the applicant in finding an eligible 
 64.27  sponsor.  The school must be organized and operated as a 
 64.28  cooperative under chapter 308A or nonprofit corporation under 
 64.29  chapter 317A and the provisions under the applicable chapter 
 64.30  shall apply to the school except as provided in this section.  
 64.31  Notwithstanding sections 465.717 and 465.719, a school district 
 64.32  may create a corporation for the purpose of creating a charter 
 64.33  school.  
 64.34     (b) Before the operators may form and operate a school, the 
 64.35  sponsor must file an affidavit with the commissioner stating its 
 64.36  intent to authorize a charter school.  The affidavit must state 
 65.1   the terms and conditions under which the sponsor would authorize 
 65.2   a charter school.  The commissioner must approve or disapprove 
 65.3   the sponsor's proposed authorization within 60 days of receipt 
 65.4   of the affidavit.  Failure to obtain commissioner approval 
 65.5   precludes a sponsor from authorizing the charter school that was 
 65.6   the subject of the affidavit.  
 65.7      (c) The operators authorized to organize and operate a 
 65.8   school, before entering into a contract or other agreement for 
 65.9   professional or other services, goods, or facilities, must 
 65.10  incorporate as a cooperative under chapter 308A or as a 
 65.11  nonprofit corporation under chapter 317A and must establish a 
 65.12  board of directors composed of at least five members until a 
 65.13  timely election for members of the charter school board of 
 65.14  directors is held according to the school's articles and 
 65.15  bylaws.  A charter school board of directors must be composed of 
 65.16  at least five members.  Any staff members who are employed at 
 65.17  the school, including teachers providing instruction under a 
 65.18  contract with a cooperative, and all parents of children 
 65.19  enrolled in the school may participate in the election for 
 65.20  members of the school's board of directors.  Licensed teachers 
 65.21  employed at the school, including teachers providing instruction 
 65.22  under a contract with a cooperative, must be a majority of the 
 65.23  members of the board of directors before the school completes 
 65.24  its third year of operation, unless the commissioner waives the 
 65.25  requirement for a majority of licensed teachers on the board.  
 65.26  Board of director meetings must comply with chapter 13D. 
 65.27     (d) The granting or renewal of a charter by a sponsoring 
 65.28  entity must not be conditioned upon the bargaining unit status 
 65.29  of the employees of the school.  
 65.30     (e) A sponsor may authorize the operators of a charter 
 65.31  school to expand the operation of the charter school to 
 65.32  additional sites or to add additional grades at the school 
 65.33  beyond those described in the sponsor's application as approved 
 65.34  by the commissioner only after submitting a supplemental 
 65.35  application to the commissioner in a form and manner prescribed 
 65.36  by the commissioner.  The supplemental application must provide 
 66.1   evidence that: 
 66.2      (1) the expansion of the charter school is supported by 
 66.3   need and projected enrollment; 
 66.4      (2) the charter school is fiscally sound; 
 66.5      (3) the sponsor supports the expansion; and 
 66.6      (4) the building of the additional site meets all health 
 66.7   and safety requirements to be eligible for lease aid. 
 66.8      (f) The commissioner annually must provide timely financial 
 66.9   management training to newly elected members of a charter school 
 66.10  board of directors and ongoing training to other members of a 
 66.11  charter school board of directors.  Training must address ways 
 66.12  to: 
 66.13     (1) proactively assess opportunities for a charter school 
 66.14  to maximize all available revenue sources; 
 66.15     (2) establish and maintain complete, auditable records for 
 66.16  the charter school; 
 66.17     (3) establish proper filing techniques; 
 66.18     (4) document formal actions of the charter school, 
 66.19  including meetings of the charter school board of directors; 
 66.20     (5) properly manage and retain charter school and student 
 66.21  records; 
 66.22     (6) comply with state and federal payroll record-keeping 
 66.23  requirements; and 
 66.24     (7) address other similar factors that facilitate 
 66.25  establishing and maintaining complete records on the charter 
 66.26  school's operations.  
 66.27     Sec. 24.  Minnesota Statutes 2002, section 124D.10, 
 66.28  subdivision 16, is amended to read: 
 66.29     Subd. 16.  [TRANSPORTATION.] (a) By July 1 of each year, a 
 66.30  charter school must notify the district in which the school is 
 66.31  located and the department of children, families, and 
 66.32  learning education if it will provide transportation for pupils 
 66.33  enrolled in the school for the fiscal year. 
 66.34     (b) If a charter school elects to provide transportation 
 66.35  for pupils, the transportation must be provided by the charter 
 66.36  school within the district in which the charter school is 
 67.1   located.  The state must pay transportation aid to the charter 
 67.2   school according to section 124D.11, subdivision 2. 
 67.3      For pupils who reside outside the district in which the 
 67.4   charter school is located, the charter school is not required to 
 67.5   provide or pay for transportation between the pupil's residence 
 67.6   and the border of the district in which the charter school is 
 67.7   located.  A parent may be reimbursed by the charter school for 
 67.8   costs of transportation from the pupil's residence to the border 
 67.9   of the district in which the charter school is located if the 
 67.10  pupil is from a family whose income is at or below the poverty 
 67.11  level, as determined by the federal government.  The 
 67.12  reimbursement may not exceed the pupil's actual cost of 
 67.13  transportation or 15 cents per mile traveled, whichever is 
 67.14  less.  Reimbursement may not be paid for more than 250 miles per 
 67.15  week.  
 67.16     At the time a pupil enrolls in a charter school, the 
 67.17  charter school must provide the parent or guardian with 
 67.18  information regarding the transportation.  
 67.19     (c) If a charter school does not elect to provide 
 67.20  transportation, transportation for pupils enrolled at the school 
 67.21  must be provided by the district in which the school is located, 
 67.22  according to sections 123B.88, subdivision 6, and 124D.03, 
 67.23  subdivision 8, for a pupil residing in the same district in 
 67.24  which the charter school is located.  Transportation may be 
 67.25  provided by the district in which the school is located, 
 67.26  according to sections 123B.88, subdivision 6, and 124D.03, 
 67.27  subdivision 8, for a pupil residing in a different district.  If 
 67.28  the district provides the transportation, the scheduling of 
 67.29  routes, manner and method of transportation, control and 
 67.30  discipline of the pupils, and any other matter relating to the 
 67.31  transportation of pupils under this paragraph shall be within 
 67.32  the sole discretion, control, and management of the district. 
 67.33     Sec. 25.  Minnesota Statutes 2002, section 124D.10, 
 67.34  subdivision 20, is amended to read: 
 67.35     Subd. 20.  [LEAVE TO TEACH IN A CHARTER SCHOOL.] If a 
 67.36  teacher employed by a district makes a written request for an 
 68.1   extended leave of absence to teach at a charter school, the 
 68.2   district must grant the leave.  The district must grant a leave 
 68.3   for any number of not to exceed a total of five years requested 
 68.4   by the teacher, and must.  Any request to extend the leave at 
 68.5   the teacher's request shall be granted only at the discretion of 
 68.6   the school board.  The district may require that the request for 
 68.7   a leave or extension of leave be made up to 90 days before the 
 68.8   teacher would otherwise have to report for duty.  Except as 
 68.9   otherwise provided in this subdivision and except for section 
 68.10  122A.46, subdivision 7, the leave is governed by section 
 68.11  122A.46, including, but not limited to, reinstatement, notice of 
 68.12  intention to return, seniority, salary, and insurance. 
 68.13     During a leave, the teacher may continue to aggregate 
 68.14  benefits and credits in the teachers' retirement association 
 68.15  account by paying both the employer and employee contributions 
 68.16  based upon the annual salary of the teacher for the last full 
 68.17  pay period before the leave began.  The retirement association 
 68.18  may impose reasonable requirements to efficiently administer 
 68.19  this subdivision.  
 68.20     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
 68.21  following final enactment and applies to approvals of leaves or 
 68.22  approvals of extensions of leaves made after that date.  
 68.23  Notwithstanding Minnesota Statutes 2002, section 122A.46, 
 68.24  subdivision 2, a school district, upon request, must grant a 
 68.25  one-year extension for the 2003-2004 school year to a teacher on 
 68.26  a leave of absence to teach at a charter school under this 
 68.27  subdivision who has taught five or more years as of the 
 68.28  2003-2004 school year. 
 68.29     Sec. 26.  Minnesota Statutes 2002, section 124D.11, 
 68.30  subdivision 1, is amended to read: 
 68.31     Subdivision 1.  [GENERAL EDUCATION REVENUE.] (a) General 
 68.32  education revenue must be paid to a charter school as though it 
 68.33  were a district.  The general education revenue for each 
 68.34  adjusted marginal cost pupil unit is the state average general 
 68.35  education revenue per pupil unit, plus the referendum 
 68.36  equalization aid allowance in the pupil's district of residence, 
 69.1   minus an amount equal to the product of the formula allowance 
 69.2   according to section 126C.10, subdivision 2, times .0485, 
 69.3   calculated without basic skills revenue, and transportation 
 69.4   sparsity revenue, and the transportation portion of the 
 69.5   transition revenue adjustment, plus basic skills revenue and 
 69.6   transition revenue as though the school were a school district. 
 69.7      (b) Notwithstanding paragraph (a), for charter schools in 
 69.8   the first year of operation, general education revenue shall be 
 69.9   computed using the number of adjusted pupil units in the current 
 69.10  fiscal year.  
 69.11     Sec. 27.  Minnesota Statutes 2002, section 124D.11, 
 69.12  subdivision 2, is amended to read: 
 69.13     Subd. 2.  [TRANSPORTATION REVENUE.] Transportation revenue 
 69.14  must be paid to a charter school that provides transportation 
 69.15  services according to section 124D.10, subdivision 16, according 
 69.16  to this subdivision.  Transportation aid shall equal 
 69.17  transportation revenue.  
 69.18     In addition to the revenue under subdivision 1, a charter 
 69.19  school providing transportation services must receive general 
 69.20  education aid for each pupil unit equal to the sum of an amount 
 69.21  equal to the product of the formula allowance according to 
 69.22  section 126C.10, subdivision 2, times .0485, plus the 
 69.23  transportation sparsity allowance for the school district in 
 69.24  which the charter school is located, plus the transportation 
 69.25  transition allowance for the district in which the charter 
 69.26  school is located.  
 69.27     Sec. 28.  Minnesota Statutes 2002, section 124D.11, 
 69.28  subdivision 4, is amended to read: 
 69.29     Subd. 4.  [BUILDING LEASE AID.] When a charter school finds 
 69.30  it economically advantageous to rent or lease a building or land 
 69.31  for any instructional purposes and it determines that the total 
 69.32  operating capital revenue under section 126C.10, subdivision 13, 
 69.33  is insufficient for this purpose, it may apply to the 
 69.34  commissioner for building lease aid for this purpose.  The 
 69.35  commissioner must review and either approve or deny a lease aid 
 69.36  application using the following criteria: 
 70.1      (1) the reasonableness of the price based on current market 
 70.2   values; 
 70.3      (2) the extent to which the lease conforms to applicable 
 70.4   state laws and rules; and 
 70.5      (3) the appropriateness of the proposed lease in the 
 70.6   context of the space needs and financial circumstances of the 
 70.7   charter school. 
 70.8   A charter school must not use the building lease aid it receives 
 70.9   for custodial, maintenance service, utility, or other operating 
 70.10  costs.  The amount of building lease aid per pupil unit served 
 70.11  for a charter school for any year shall not exceed the lesser of 
 70.12  (a) 90 percent of the approved cost or (b) the product of the 
 70.13  pupil units served for the current school year times $1,500 the 
 70.14  greater of the charter school's building lease aid per pupil 
 70.15  unit served for fiscal year 2003, excluding the adjustment under 
 70.16  Laws 2002, chapter 392, article 6, section 4, or $1,200. 
 70.17     <b>[EFFECTIVE DATE.]</b> This section is effective for revenue for 
 70.18  fiscal year 2004. 
 70.19     Sec. 29.  Minnesota Statutes 2002, section 124D.11, 
 70.20  subdivision 6, is amended to read: 
 70.21     Subd. 6.  [OTHER AID, GRANTS, REVENUE.] (a) A charter 
 70.22  school is eligible to receive other aids, grants, and revenue 
 70.23  according to chapters 120A to 129C, as though it were a district.
 70.24     (b) Notwithstanding paragraph (a), a charter school may not 
 70.25  receive aid, a grant, or revenue if a levy is required to obtain 
 70.26  the money, except as otherwise provided in this section.  
 70.27     (c) Federal aid received by the state must be paid to the 
 70.28  school, if it qualifies for the aid as though it were a school 
 70.29  district. 
 70.30     (d) A charter school may receive money from any source for 
 70.31  capital facilities needs.  In the year-end report to the 
 70.32  commissioner of children, families, and learning education, the 
 70.33  charter school shall report the total amount of funds received 
 70.34  from grants and other outside sources. 
 70.35     (e) Notwithstanding paragraph (a) or (b), a charter school 
 70.36  may apply for a grant to receive the aid portion of integration 
 71.1   revenue under section 124D.86, subdivision 3, for enrolled 
 71.2   students who are residents of a district that is eligible for 
 71.3   integration revenue.  The commissioner shall determine grant 
 71.4   recipients and may adopt application guidelines.  The grants 
 71.5   must be competitively determined and must demonstrate that 
 71.6   enrolling pupils in the charter school contributes to 
 71.7   desegregation or integration purposes as determined by the 
 71.8   commissioner.  If the charter school has elected not to provide 
 71.9   transportation under section 124D.10, subdivision 16, the aid 
 71.10  shall be reduced by the amount per pupil unit specified for the 
 71.11  district where the charter school is located under section 
 71.12  123B.92, subdivision 8. 
 71.13     <b>[EFFECTIVE DATE.]</b> This section is effective for revenue for 
 71.14  fiscal year 2004. 
 71.15     Sec. 30.  Minnesota Statutes 2002, section 124D.42, 
 71.16  subdivision 6, is amended to read: 
 71.17     Subd. 6.  [PROGRAM TRAINING.] (a) The commission must, 
 71.18  within available resources, ensure an opportunity for each 
 71.19  participant to have three weeks of training in a residential 
 71.20  setting.  If offered, each training session must: 
 71.21     (1) orient each participant in the nature, philosophy, and 
 71.22  purpose of the program; 
 71.23     (2) build an ethic of community service through general 
 71.24  community service training; and 
 71.25     (3) provide additional training as it determines necessary, 
 71.26  which may include training in evaluating early literacy skills 
 71.27  and teaching reading to preschool children through the St. Croix 
 71.28  River education district under Laws 2001, First Special Session 
 71.29  chapter 6, article 2, section 70, to assist local Head Start 
 71.30  organizations in establishing and evaluating Head Start programs 
 71.31  for developing children's early literacy skills.  
 71.32     (b) Each grantee organization shall also train participants 
 71.33  in skills relevant to the community service opportunity.  
 71.34     Sec. 31.  Minnesota Statutes 2002, section 124D.86, 
 71.35  subdivision 1a, is amended to read: 
 71.36     Subd. 1a.  [BUDGET APPROVAL PROCESS.] Each year before a 
 72.1   district receives any revenue under subdivision 3, clause (4), 
 72.2   (5), or (6), the district must submit to the department of 
 72.3   children, families, and learning education, for its review and 
 72.4   approval a budget detailing the costs of the 
 72.5   desegregation/integration plan filed under Minnesota Rules, 
 72.6   parts 3535.0100 to 3535.0180.  Notwithstanding chapter 14, the 
 72.7   department may develop criteria for budget approval.  The 
 72.8   department shall consult with the desegregation advisory board 
 72.9   in developing these criteria.  The criteria developed by the 
 72.10  department should address, at a minimum, the following: 
 72.11     (1) budget items cannot be approved unless they are part of 
 72.12  any overall desegregation plan approved by the district for 
 72.13  isolated sites or by the multidistrict collaboration council and 
 72.14  participation individual members; 
 72.15     (2) the budget must indicate how revenue expenditures will 
 72.16  be used specifically to support increased opportunities for 
 72.17  interracial contact; 
 72.18     (3) components of the budget to be considered by the 
 72.19  department, including staffing, curriculum, transportation, 
 72.20  facilities, materials, and equipment and reasonable planning 
 72.21  costs, as determined by the department; and 
 72.22     (4) if plans are proposed to enhance existing programs, the 
 72.23  total budget being appropriated to the program must be included, 
 72.24  indicating what part is to be funded using integration revenue 
 72.25  and what part is to be funded using other revenues.  
 72.26     <b>[EFFECTIVE DATE.]</b> This section is effective retroactively 
 72.27  for revenue for fiscal year 2003. 
 72.28     Sec. 32.  Minnesota Statutes 2002, section 124D.86, 
 72.29  subdivision 3, is amended to read: 
 72.30     Subd. 3.  [INTEGRATION REVENUE.] Integration revenue equals 
 72.31  the following amounts: 
 72.32     (1) for independent school district No. 709, 
 72.33  Duluth, $207 $206 times the adjusted pupil units for the school 
 72.34  year; 
 72.35     (2) for independent school district No. 625, St. 
 72.36  Paul, $446 $445 times the adjusted pupil units for the school 
 73.1   year; 
 73.2      (3) for special school district No. 1, Minneapolis, the sum 
 73.3   of $446 $445 times the adjusted pupil units for the school year 
 73.4   and an additional $35 times the adjusted pupil units for the 
 73.5   school year that is provided entirely through a local levy; 
 73.6      (4) for a district not listed in clause (1), (2), or (3), 
 73.7   that must implement a plan under Minnesota Rules, parts 
 73.8   3535.0100 to 3535.0180, where the district's enrollment of 
 73.9   protected students, as defined under Minnesota Rules, part 
 73.10  3535.0110, exceeds 15 percent, the lesser of (i) the actual cost 
 73.11  of implementing the plan during the fiscal year minus the aid 
 73.12  received under subdivision 6, or (ii) $130 $129 times the 
 73.13  adjusted pupil units for the school year; 
 73.14     (5) for a district not listed in clause (1), (2), (3), or 
 73.15  (4), that is required to implement a plan according to the 
 73.16  requirements of Minnesota Rules, parts 3535.0100 to 3535.0180, 
 73.17  the lesser of 
 73.18     (i) the actual cost of implementing the plan during the 
 73.19  fiscal year minus the aid received under subdivision 6, or 
 73.20     (ii) $93 $92 times the adjusted pupil units for the school 
 73.21  year. 
 73.22     Any money received by districts in clauses (1) to (4) (3) 
 73.23  which exceeds the amount received in fiscal year 2000 shall be 
 73.24  subject to the budget requirements in subdivision 1a; and 
 73.25     (6) for a member district of a multidistrict integration 
 73.26  collaborative that files a plan with the commissioner, but is 
 73.27  not contiguous to a racially isolated district, integration 
 73.28  revenue equals the amount defined in clause (5). 
 73.29     <b>[EFFECTIVE DATE.]</b> This section is effective for revenue for 
 73.30  fiscal year 2004. 
 73.31     Sec. 33.  Minnesota Statutes 2002, section 124D.86, 
 73.32  subdivision 4, is amended to read: 
 73.33     Subd. 4.  [INTEGRATION LEVY.] A district may levy an amount 
 73.34  equal to 37 percent for fiscal year 2003, 22 23 percent for 
 73.35  fiscal year 2004, 29 and 30 percent for fiscal year 2005, and 22 
 73.36  percent for fiscal year 2006 and thereafter of the district's 
 74.1   integration revenue as defined in subdivision 3. 
 74.2      <b>[EFFECTIVE DATE.]</b> This section is effective for revenue for 
 74.3   fiscal year 2004. 
 74.4      Sec. 34.  Minnesota Statutes 2002, section 124D.86, 
 74.5   subdivision 5, is amended to read: 
 74.6      Subd. 5.  [INTEGRATION AID.] A district's integration aid 
 74.7   equals 63 percent for fiscal year 2003, 78 percent for fiscal 
 74.8   year 2004, 71 percent for fiscal year 2005, and 78 percent for 
 74.9   fiscal year 2006 and thereafter of the difference between the 
 74.10  district's integration revenue as defined in subdivision 3 and 
 74.11  its integration levy. 
 74.12     <b>[EFFECTIVE DATE.]</b> This section is effective for revenue for 
 74.13  fiscal year 2004.  
 74.14     Sec. 35.  Minnesota Statutes 2002, section 124D.86, 
 74.15  subdivision 6, is amended to read: 
 74.16     Subd. 6.  [ALTERNATIVE ATTENDANCE PROGRAMS.] (a) The 
 74.17  integration aid under subdivision 5 must be adjusted for each 
 74.18  pupil residing in a district eligible for integration revenue 
 74.19  under subdivision 3, clause (1), (2), or (3), and attending a 
 74.20  nonresident district under sections 123A.05 to 123A.08, 124D.03, 
 74.21  124D.06, 124D.07, and 124D.08, that is not eligible for 
 74.22  integration revenue under subdivision 3, clause (1), (2), or 
 74.23  (3), and has implemented a plan under Minnesota Rules, parts 
 74.24  3535.0100 to 3535.0180, if the enrollment of the pupil in the 
 74.25  nonresident district contributes to desegregation or integration 
 74.26  purposes.  The adjustments must be made according to this 
 74.27  subdivision.  
 74.28     (b) Aid paid to a district serving nonresidents must be 
 74.29  increased by an amount equal to the revenue per pupil unit of 
 74.30  the resident district under subdivision 3, clause (1), (2), or 
 74.31  (3), minus the revenue attributable to the pupil in the 
 74.32  nonresident district under subdivision 3, clause (4), (5), or 
 74.33  (6), for the time the pupil is enrolled in the nonresident 
 74.34  district.  
 74.35     <b>[EFFECTIVE DATE.]</b> This section is effective retroactively 
 74.36  for fiscal year 2003. 
 75.1      Sec. 36.  Minnesota Statutes 2002, section 126C.05, is 
 75.2   amended by adding a subdivision to read: 
 75.3      Subd. 19.  [ON-LINE LEARNING STUDENTS.] (a) The average 
 75.4   daily membership for a public school pupil generating on-line 
 75.5   learning average daily membership according to section 124D.095, 
 75.6   subdivision 8, paragraph (b), equals the sum of:  (i) the ratio 
 75.7   of the sum of the number of instructional hours the pupil is 
 75.8   enrolled in a regular classroom setting at the enrolling school 
 75.9   to the actual number of instructional hours in the school year 
 75.10  at the enrolling school, plus (ii) .12 times the initial on-line 
 75.11  learning average daily membership according to section 124D.095, 
 75.12  subdivision 8, paragraph (b). 
 75.13     (b) When the sum of the average daily membership under 
 75.14  paragraph (a) and the adjusted on-line learning average daily 
 75.15  membership under section 124D.095, subdivision 8, paragraph (b), 
 75.16  exceeds the maximum allowed for the student under subdivision 8 
 75.17  or 15, as applicable, the average daily membership under 
 75.18  paragraph (a) shall be reduced by the excess over the maximum, 
 75.19  but shall not be reduced below .12.  The adjusted on-line 
 75.20  learning average daily membership according to section 124D.095, 
 75.21  subdivision 8, paragraph (b), shall be reduced by any remaining 
 75.22  excess over the maximum. 
 75.23     Sec. 37.  [126C.24] [ON-LINE LEARNING AID.] 
 75.24     (a) The on-line learning aid for an on-line learning 
 75.25  provider equals the product of the adjusted on-line learning 
 75.26  average daily membership for students under section 124D.095, 
 75.27  subdivision 8, paragraph (d), times the student grade level 
 75.28  weighting under section 126C.05, subdivision 1, times the 
 75.29  formula allowance. 
 75.30     (b) Notwithstanding section 127A.45, the department must 
 75.31  pay each on-line learning provider 77 percent of the amount in 
 75.32  paragraph (a) within 45 days of receiving final enrollment and 
 75.33  course completion information each quarter or semester.  A final 
 75.34  payment equal to 23 percent of the amount in paragraph (a) must 
 75.35  be made on September 30 of the next fiscal year. 
 75.36     Sec. 38.  Minnesota Statutes 2002, section 126C.44, is 
 76.1   amended to read: 
 76.2      126C.44 [SAFE SCHOOLS LEVY.] 
 76.3      Each district may make a levy on all taxable property 
 76.4   located within the district for the purposes specified in this 
 76.5   section.  The maximum amount which may be levied for all costs 
 76.6   under this section shall be equal to $30 $27 multiplied by the 
 76.7   district's adjusted marginal cost pupil units for the school 
 76.8   year.  The proceeds of the levy must be used for directly 
 76.9   funding the following purposes or for reimbursing the cities and 
 76.10  counties who contract with the district for the following 
 76.11  purposes:  (1) to pay the costs incurred for the salaries, 
 76.12  benefits, and transportation costs of peace officers and 
 76.13  sheriffs for liaison in services in the district's schools; (2) 
 76.14  to pay the costs for a drug abuse prevention program as defined 
 76.15  in section 609.101, subdivision 3, paragraph (e), in the 
 76.16  elementary schools; (3) to pay the costs for a gang resistance 
 76.17  education training curriculum in the district's schools; (4) to 
 76.18  pay the costs for security in the district's schools and on 
 76.19  school property; or (5) to pay the costs for other crime 
 76.20  prevention, drug abuse, student and staff safety, and violence 
 76.21  prevention measures taken by the school district.  The district 
 76.22  must initially attempt to contract for services to be provided 
 76.23  by peace officers or sheriffs with the police department of each 
 76.24  city or the sheriff's department of the county within the 
 76.25  district containing the school receiving the services.  If a 
 76.26  local police department or a county sheriff's department does 
 76.27  not wish to provide the necessary services, the district may 
 76.28  contract for these services with any other police or sheriff's 
 76.29  department located entirely or partially within the school 
 76.30  district's boundaries.  The levy authorized under this section 
 76.31  is not included in determining the school district's levy 
 76.32  limitations. 
 76.33     <b>[EFFECTIVE DATE.]</b> This section is effective for taxes 
 76.34  payable in 2004.  
 76.35     Sec. 39.  Minnesota Statutes 2002, section 128C.02, 
 76.36  subdivision 1, is amended to read: 
 77.1      Subdivision 1.  [DECISIONS, POLICIES, ADVISORY COMMITTEES.] 
 77.2   The board shall establish and adopt policies, including a policy 
 77.3   on corporate sponsorships and similar agreements, make decisions 
 77.4   on behalf of the league, and establish advisory committees 
 77.5   necessary to carry out board functions. 
 77.6      <b>[EFFECTIVE DATE.]</b> This section is effective the day 
 77.7   following final enactment.  
 77.8      Sec. 40.  Minnesota Statutes 2002, section 128C.05, is 
 77.9   amended by adding a subdivision to read: 
 77.10     Subd. 1a.  [SUPERVISED COMPETITIVE HIGH SCHOOL 
 77.11  DIVING.] Notwithstanding Minnesota Rules, part 4717.3750, any 
 77.12  pool built before January 1, 1987, that was used for a high 
 77.13  school diving program during the 2000-2001 school year may be 
 77.14  used for supervised competitive high school diving unless a pool 
 77.15  that meets the requirements of Minnesota Rules, part 4717.3750, 
 77.16  is located within the school district.  A school or district 
 77.17  using a pool for supervised competitive high school diving that 
 77.18  does not meet the requirements of the rule must provide 
 77.19  appropriate notice to parents and participants. 
 77.20     <b>[EFFECTIVE DATE.]</b> This section is effective for the 
 77.21  2003-2004 school year and later. 
 77.22     Sec. 41.  Minnesota Statutes 2002, section 205A.03, 
 77.23  subdivision 1, is amended to read: 
 77.24     Subdivision 1.  [RESOLUTION REQUIRED PRIMARY IN CERTAIN 
 77.25  CIRCUMSTANCES.] The school board of a school district may, by 
 77.26  resolution adopted by June 1 of any year, decide to choose 
 77.27  nominees for school district elective offices by a primary as 
 77.28  provided in subdivisions 1 to 6.  The resolution, when adopted, 
 77.29  is effective for all ensuing elections of board members in that 
 77.30  school district until it is revoked. In a school district 
 77.31  election, if there are more than two candidates for a specified 
 77.32  school board position or more than twice as many school board 
 77.33  candidates as there are at-large school board positions 
 77.34  available, a school district must hold a primary.  
 77.35     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
 77.36  following final enactment for independent school district No. 
 78.1   742.  This section is effective January 1, 2004, for all other 
 78.2   school districts and applies to school board elections held in 
 78.3   2004 and thereafter. 
 78.4      Sec. 42.  Minnesota Statutes 2002, section 205A.03, 
 78.5   subdivision 3, is amended to read: 
 78.6      Subd. 3.  [CANDIDATES, FILING.] The clerk shall place upon 
 78.7   the primary ballot without partisan designation the names of 
 78.8   individuals whose candidacies have been filed and for whom the 
 78.9   proper filing fee has been paid.  When not more than twice the 
 78.10  number of individuals to be elected to a school district 
 78.11  elective office as many school board candidates as there are 
 78.12  at-large school board positions available file for nomination 
 78.13  for the office or when not more than two candidates for a 
 78.14  specified school board position file for nomination for that 
 78.15  office, their names must not be placed upon the primary ballot 
 78.16  and must be placed on the school district general election 
 78.17  ballot as the nominees for that office.  
 78.18     Sec. 43.  Minnesota Statutes 2002, section 205A.03, 
 78.19  subdivision 4, is amended to read: 
 78.20     Subd. 4.  [RESULTS.] The school district primary must be 
 78.21  conducted and the returns made in the manner provided for the 
 78.22  state primary as far as practicable.  Within two days after the 
 78.23  primary, the school board of the school district shall canvass 
 78.24  the returns, and the two candidates for each office specified 
 78.25  school board position who receive the highest number of votes, 
 78.26  or a number of candidates equal to twice the number of 
 78.27  individuals to be elected to the office at-large school board 
 78.28  positions who receive the highest number of votes, are the 
 78.29  nominees for the office named.  Their names must be certified to 
 78.30  the school district clerk who shall place them on the school 
 78.31  district general election ballot without partisan designation 
 78.32  and without payment of an additional fee. 
 78.33     Sec. 44.  Minnesota Statutes 2002, section 205A.06, 
 78.34  subdivision 1a, is amended to read: 
 78.35     Subd. 1a.  [FILING PERIOD.] In school districts nominating 
 78.36  candidates at a school district primary, Affidavits of candidacy 
 79.1   may must be filed with the school district clerk no earlier than 
 79.2   the 70th day and no later than the 56th day before the first 
 79.3   Tuesday after the second Monday in September in the year when 
 79.4   the school district general election is held.  In all other 
 79.5   school districts, affidavits of candidacy must be filed not more 
 79.6   than 70 days and not less than 56 days before the school 
 79.7   district general election. 
 79.8      <b>[EFFECTIVE DATE.]</b> This section is effective the day 
 79.9   following final enactment for independent school district No. 
 79.10  742.  This section is effective January 1, 2004, for all other 
 79.11  school districts and applies to school board elections held in 
 79.12  2004 and thereafter. 
 79.13     Sec. 45.  Minnesota Statutes 2002, section 611A.78, 
 79.14  subdivision 1, is amended to read: 
 79.15     Subdivision 1.  [MEMBERSHIP.] A crime victim services 
 79.16  roundtable is created and shall be convened by the commissioner 
 79.17  of administration or a designee.  The roundtable membership 
 79.18  shall include representatives from the following:  the 
 79.19  departments of health; human services; children, families, and 
 79.20  learning; corrections; and public safety; the supreme court; the 
 79.21  Minnesota planning agency; the office of the attorney general; 
 79.22  the office of crime victim ombudsman; the county attorneys 
 79.23  association; and the office of dispute resolution.  The 
 79.24  roundtable membership shall also include one person representing 
 79.25  the four councils designated in sections 3.922, 3.9223, 3.9225, 
 79.26  and 3.9226. 
 79.27     Sec. 46.  Laws 2001, First Special Session chapter 6, 
 79.28  article 2, section 72, is amended to read: 
 79.29     Sec. 72.  [DEADLINE AND PENALTY WAIVED.] 
 79.30     The deadline and penalty under Minnesota Statutes, section 
 79.31  123B.05, subdivision 2, do not apply for aid payment for 
 79.32  the 2002-2003 2004-2005 biennium. 
 79.33     Sec. 47.  [CHARTER SCHOOL ADVISORY BOARD MEMBER TERMS.] 
 79.34     In order to establish staggered terms for charter school 
 79.35  advisory board members under Minnesota Statutes, section 
 79.36  124D.10, subdivision 2a, the commissioner of education shall, by 
 80.1   lot, determine the length of term for each member serving on the 
 80.2   board on the effective date of this section.  One-third of the 
 80.3   members shall serve a one-year term, one-third shall serve a 
 80.4   two-year term, and one-third shall serve a three-year term.  
 80.5   Thereafter, the term for each member must be three years. 
 80.6      Sec. 48.  [PILOT PROJECT TO EVALUATE PARENT INVOLVEMENT 
 80.7   POLICIES AND STRATEGIES.] 
 80.8      Subdivision 1.  [DISTRICT AND SCHOOL SITE POLICY 
 80.9   EVALUATION.] A school board may elect to participate in a 
 80.10  two-year pilot project to evaluate parent involvement policies 
 80.11  and strategies in the district and in school sites, with the 
 80.12  goal of improving the academic achievement of all students 
 80.13  within the district, including at-risk students.  
 80.14     Subd. 2.  [PARENT INVOLVEMENT REVIEW COMMITTEES.] A school 
 80.15  board electing to participate and interested school sites within 
 80.16  that district must establish a parent involvement review 
 80.17  committee or expand the purview of an existing committee 
 80.18  composed of a majority of parents.  The committees must evaluate 
 80.19  the effectiveness of district and school site programs and 
 80.20  strategies intended to provide all parents with meaningful 
 80.21  opportunities to participate in the process of educating 
 80.22  students.  The committees, among other things, may evaluate the 
 80.23  operation of the instruction and curriculum advisory committee 
 80.24  or building team under Minnesota Statutes, section 120B.11, or 
 80.25  parent involvement programs developed under Minnesota Statutes, 
 80.26  section 124D.895.  A majority of committee members must be 
 80.27  parents of students enrolled in the district or school site, if 
 80.28  applicable.  The committee also must include teachers employed 
 80.29  by the district and who teach at a school site, if applicable.  
 80.30  A district must assist participating school sites at the request 
 80.31  of the school site. 
 80.32     Subd. 3.  [NOTICE OF PARTICIPATION; NOTICE TO PARENTS.] (a) 
 80.33  A school board electing to participate under this section must 
 80.34  notify the commissioner of education of its participation and 
 80.35  the participation of interested school sites on a form supplied 
 80.36  by the commissioner.  The commissioner may assist participating 
 81.1   districts and school sites at the request of the district or 
 81.2   school site. 
 81.3      (b) Participating school districts must transmit timely 
 81.4   effective notice of this project to parent organizations 
 81.5   throughout the district and to parents of children enrolled in 
 81.6   district schools.  
 81.7      Subd. 4.  [REPORT.] Participating districts and school 
 81.8   sites must report the findings of the evaluation and related 
 81.9   recommendations annually by March 1 to the school board, which 
 81.10  shall transmit a summary of the findings and recommendations to 
 81.11  the commissioner.  Information the commissioner receives under 
 81.12  this subdivision may be used to modify guidelines and model 
 81.13  plans for parent involvement programs under Minnesota Statutes, 
 81.14  section 124D.895.  
 81.15     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
 81.16  following final enactment and applies to the 2003-2004 and 
 81.17  2004-2005 school years. 
 81.18     Sec. 49.  [CHARTER SCHOOL START-UP AID.] 
 81.19     A charter school in its first year of operation during 
 81.20  fiscal year 2004 or 2005 is not eligible for charter school 
 81.21  start-up aid under Minnesota Statutes, section 124D.11, 
 81.22  subdivision 8. 
 81.23     Sec. 50.  [ALTERNATIVE ATTENDANCE ADJUSTMENTS FOR FISCAL 
 81.24  YEAR 2002.] 
 81.25     Notwithstanding Minnesota Statutes, section 124D.86, 
 81.26  subdivision 6, for fiscal year 2002 only, integration aid under 
 81.27  Minnesota Statutes, section 124D.86, subdivision 5, must be 
 81.28  adjusted for each pupil residing in special school district No. 
 81.29  1, Minneapolis; independent school district No. 625, St. Paul; 
 81.30  or independent school district No. 709, Duluth, and attending a 
 81.31  nonresident district under Minnesota Statutes, sections 123A.05 
 81.32  to 123A.08, 124D.03, 124D.06, and 124D.08, other than 
 81.33  Minneapolis, St. Paul or Duluth that has implemented a plan 
 81.34  under Minnesota Rules, parts 3535.0100 to 3535.0180, if the 
 81.35  enrollment of the pupil in the nonresident district contributes 
 81.36  to desegregation or integration purposes.  The adjustments must 
 82.1   be made according to this subdivision. 
 82.2      (b) Aid paid to a district serving nonresident pupils must 
 82.3   be increased by an amount equal to the revenue per pupil of the 
 82.4   resident district under Minnesota Statutes, section 124D.86, 
 82.5   subdivision 3, minus the revenue attributable to the pupil in 
 82.6   the nonresident district for the time the pupil is enrolled in 
 82.7   the nonresident district. 
 82.8      <b>[EFFECTIVE DATE.]</b> This section is effective the day 
 82.9   following final enactment and applies to fiscal year 2002. 
 82.10     Sec. 51.  [POLICY ON STUDENTS WITH A HISTORY OF VIOLENT 
 82.11  BEHAVIOR.] 
 82.12     (a) Representatives of the Minnesota school boards 
 82.13  association, Education Minnesota, and the information policy 
 82.14  analysis division in the Minnesota department of administration, 
 82.15  the parent of a child who has participated in the Title I 
 82.16  delinquent education program selected by the commissioner of 
 82.17  education, and the commissioner of education or the 
 82.18  commissioner's designee, shall develop a model policy by August 
 82.19  1, 2003, on notifying classroom teachers and other school 
 82.20  district employees having a legitimate educational interest when 
 82.21  a student with a history of violent behavior is placed in the 
 82.22  teacher's classroom.  The model policy at least must: 
 82.23     (1) define what constitutes a history of violent behavior, 
 82.24  consistent with Minnesota Statutes, section 121A.45, subdivision 
 82.25  2, clause (c); 
 82.26     (2) limit reports on violent behavior to a specified number 
 82.27  of school years; 
 82.28     (3) define "legitimate educational interest," consistent 
 82.29  with Minnesota Statutes, section 121A.64; 
 82.30     (4) indicate the persons at the school or district level 
 82.31  who determine which school district employees have a legitimate 
 82.32  educational interest; 
 82.33     (5) require school districts that transfer the student 
 82.34  records of a student with a history of violent behavior to 
 82.35  another school district, charter school, or alternative 
 82.36  education program to include all information about the student's 
 83.1   history of violent behavior in the student's educational records 
 83.2   it transmits to the enrolling school district, charter school, 
 83.3   or alternative education program, consistent with this policy; 
 83.4      (6) ensure that the parent of a student with a history of 
 83.5   violent behavior is able to review the student's educational 
 83.6   records and data and to effectively exercise rights under both 
 83.7   federal and state data practices laws to challenge records or 
 83.8   data on the basis that they are inaccurate, incomplete, 
 83.9   misleading, or otherwise violate the student's right to privacy 
 83.10  before the classroom teacher or other district employee is 
 83.11  notified; and 
 83.12     (7) require school districts to inform the parent or 
 83.13  guardian of a student with a history of violent behavior under 
 83.14  Minnesota Statutes, section 121A.64, that the district gives 
 83.15  notice about the student's history of violent behavior to the 
 83.16  classroom teacher and other district employees having a 
 83.17  legitimate educational interest before placing the student in 
 83.18  the teacher's classroom. 
 83.19     (b) The information policy analysis division in the 
 83.20  Minnesota department of administration by August 15, 2003, must 
 83.21  post on its division Web site the model policy developed under 
 83.22  paragraph (a). 
 83.23     (c) The task force in paragraph (a) expires on August 1, 
 83.24  2003. 
 83.25     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
 83.26  following final enactment. 
 83.27     Sec. 52.  [AT-LARGE SCHOOL BOARD MEMBERS; INDEPENDENT 
 83.28  SCHOOL DISTRICT NO. 709, DULUTH.] 
 83.29     (a) Notwithstanding Laws 1969, chapter 698, or other law to 
 83.30  the contrary, the school board for independent school district 
 83.31  No. 709, Duluth, may by resolution reduce from five to three the 
 83.32  number of at-large school board members. 
 83.33     (b) If the school board adopts the resolution under 
 83.34  paragraph (a), for the November 2003 election and each four 
 83.35  years thereafter, the three positions of those members elected 
 83.36  at large whose terms expire on December 31, 2003, shall be 
 84.1   reduced to one member elected at large. 
 84.2      (c) Nothing in this section prevents a member of the school 
 84.3   board on the effective date of this act who is otherwise 
 84.4   qualified from running for reelection upon the expiration of 
 84.5   that member's term. 
 84.6      <b>[EFFECTIVE DATE.]</b> This section is effective the day 
 84.7   following final enactment. 
 84.8      Sec. 53.  [APPROPRIATIONS.] 
 84.9      Subdivision 1.  [DEPARTMENT OF EDUCATION.] The sums 
 84.10  indicated in this section are appropriated from the general fund 
 84.11  to the department of education for the fiscal years designated. 
 84.12     Subd. 2.  [CHARTER SCHOOL BUILDING LEASE AID.] For building 
 84.13  lease aid under Minnesota Statutes, section 124D.11, subdivision 
 84.14  4: 
 84.15       $17,140,000    .....     2004 
 84.16       $21,018,000    .....     2005 
 84.17     The 2004 appropriation includes $2,524,000 for 2003 and 
 84.18  $14,616,000 for 2004. 
 84.19     The 2005 appropriation includes $3,654,000 for 2004 and 
 84.20  $17,364,000 for 2005.  
 84.21     Subd. 3.  [CHARTER SCHOOL STARTUP AID.] For charter school 
 84.22  startup cost aid under Minnesota Statutes, section 124D.11: 
 84.23       $824,000       .....     2004 
 84.24       $151,000       .....     2005 
 84.25     The 2004 appropriation includes $220,000 for 2003 and 
 84.26  $604,000 for 2004.  
 84.27     The 2005 appropriation includes $151,000 for 2004 and $0 
 84.28  for 2005. 
 84.29     Subd. 4.  [CHARTER SCHOOL INTEGRATION GRANTS.] For grants 
 84.30  to charter schools to promote integration and desegregation 
 84.31  under Minnesota Statutes, section 124D.11, subdivision 6, 
 84.32  paragraph (e): 
 84.33       $8,000         .....     2004 
 84.34     This appropriation includes $8,000 for 2003 and $0 for 2004.
 84.35     Subd. 5.  [INTEGRATION AID.] For integration aid under 
 84.36  Minnesota Statutes, section 124D.86, subdivision 5: 
 85.1        $56,869,000    .....     2004 
 85.2        $56,092,000    .....     2005 
 85.3      The 2004 appropriation includes $8,428,000 for 2003 and 
 85.4   $48,441,000 for 2004. 
 85.5      The 2005 appropriation includes $12,110,000 for 2004 and 
 85.6   $43,982,000 for 2005.  
 85.7      Subd. 6.  [MAGNET SCHOOL GRANTS.] For magnet school and 
 85.8   program grants: 
 85.9        $750,000       .....     2004 
 85.10       $750,000       .....     2005 
 85.11     $90,000 of the fiscal year 2004 appropriation is for 
 85.12  continuation of the magnet school program authorized under Laws 
 85.13  2000, chapter 489, article 7, section 15, subdivision 5, for 
 85.14  independent school district No. 696, Ely. 
 85.15     These amounts may be used for magnet school programs under 
 85.16  Minnesota Statutes, section 124D.88. 
 85.17     Subd. 7.  [MAGNET SCHOOL STARTUP AID.] For magnet school 
 85.18  startup aid under Minnesota Statutes, section 124D.88: 
 85.19       $ 37,000       .....     2004 
 85.20       $454,000       .....     2005 
 85.21     The 2004 appropriation includes $37,000 for 2003 and $0 for 
 85.22  2004.  
 85.23     The 2005 appropriation includes $0 for 2004 and $437,000 
 85.24  for 2005. 
 85.25     Subd. 8.  [INTERDISTRICT DESEGREGATION OR INTEGRATION 
 85.26  TRANSPORTATION GRANTS.] For interdistrict desegregation or 
 85.27  integration transportation grants under Minnesota Statutes, 
 85.28  section 124D.87: 
 85.29       $5,796,000     .....     2004 
 85.30       $8,401,000     .....     2005
 85.31     Subd. 9.  [SUCCESS FOR THE FUTURE.] For American Indian 
 85.32  success for the future grants under Minnesota Statutes, section 
 85.33  124D.81: 
 85.34       $2,073,000     .....     2004
 85.35       $2,137,000     .....     2005
 85.36     The 2004 appropriation includes $363,000 for 2003 and 
 86.1   $1,710,000 for 2004. 
 86.2      The 2005 appropriation includes $427,000 for 2004 and 
 86.3   $1,710,000 for 2005. 
 86.4      Subd. 10.  [AMERICAN INDIAN SCHOLARSHIPS.] For American 
 86.5   Indian scholarships under Minnesota Statutes, section 124D.84: 
 86.6        $1,875,000     .....     2004 
 86.7        $1,875,000     .....     2005 
 86.8      Subd. 11.  [AMERICAN INDIAN TEACHER PREPARATION 
 86.9   GRANTS.] For joint grants to assist American Indian people to 
 86.10  become teachers under Minnesota Statutes, section 122A.63: 
 86.11       $190,000       .....     2004 
 86.12       $190,000       .....     2005 
 86.13     Subd. 12.  [TRIBAL CONTRACT SCHOOLS.] For tribal contract 
 86.14  school aid under Minnesota Statutes, section 124D.83: 
 86.15       $2,135,000     .....     2004
 86.16       $2,336,000     .....     2005
 86.17     The 2004 appropriation includes $285,000 for 2003 and 
 86.18  $1,850,000 for 2004. 
 86.19     The 2005 appropriation includes $462,000 for 2004 and 
 86.20  $1,874,000 for 2005. 
 86.21     Subd. 13.  [EARLY CHILDHOOD PROGRAMS AT TRIBAL 
 86.22  SCHOOLS.] For early childhood family education programs at 
 86.23  tribal contract schools under Minnesota Statutes, section 
 86.24  124D.83, subdivision 4: 
 86.25       $68,000        .....     2004 
 86.26       $68,000        .....     2005 
 86.27     Subd. 14.  [STATEWIDE TESTING SUPPORT.] For statewide 
 86.28  testing support under Minnesota Statutes, section 120B.30. 
 86.29       $9,000,000     .....     2004 
 86.30       $9,000,000     .....     2005 
 86.31     Subd. 15.  [BEST PRACTICES SEMINARS.] For best practices 
 86.32  seminars and other professional development capacity building 
 86.33  activities that assure proficiency in teaching and 
 86.34  implementation of graduation rule standards: 
 86.35       $1,000,000     .....     2004
 86.36       $1,000,000     .....     2005
 87.1      $250,000 per year is for a grant to A Chance to Grow/New 
 87.2   Visions for the Minnesota learning resource center's 
 87.3   comprehensive training program for education professionals 
 87.4   charged with helping children acquire basic reading and math 
 87.5   skills.  
 87.6      Subd. 16.  [ALTERNATIVE TEACHER COMPENSATION.] For 
 87.7   alternative teacher compensation established under Minnesota 
 87.8   Statutes, sections 122A.413 to 122A.415: 
 87.9        $3,700,000     .....     2004
 87.10       $3,700,000     .....     2005
 87.11     If the appropriations under this subdivision are 
 87.12  insufficient to fund all program participants, a participant may 
 87.13  receive less than the maximum per pupil amount available under 
 87.14  Minnesota Statutes, section 122A.415, subdivision 1.  A 
 87.15  qualifying district or site receiving alternative teacher 
 87.16  compensation funding under this subdivision may use the funding 
 87.17  it receives to leverage additional funds from a national program 
 87.18  for enhancing teacher professionalism. 
 87.19     Subd. 17.  [EXAMINATION FEES; TEACHER TRAINING AND SUPPORT 
 87.20  PROGRAMS.] (a) For students' advanced placement and 
 87.21  international baccalaureate examination fees under Minnesota 
 87.22  Statutes, section 120B.13, subdivision 3, and the training and 
 87.23  related costs for teachers and other interested educators under 
 87.24  Minnesota Statutes, section 120B.13, subdivision 1: 
 87.25       $  778,000     .....     2004 
 87.26       $  778,000     .....     2005   
 87.27     (b) The advanced placement program shall receive 75 percent 
 87.28  of the appropriation each year and the international 
 87.29  baccalaureate program shall receive 25 percent of the 
 87.30  appropriation each year.  The department, in consultation with 
 87.31  representatives of the advanced placement and international 
 87.32  baccalaureate programs selected by the advanced placement 
 87.33  advisory council and IBMN, respectively, shall determine the 
 87.34  amounts of the expenditures each year for examination fees and 
 87.35  training and support programs for each program. 
 87.36     (c) Notwithstanding Minnesota Statutes, section 120B.13, 
 88.1   subdivision 1, $375,000 each year is for teachers to attend 
 88.2   subject matter summer training programs and follow-up support 
 88.3   workshops approved by the advanced placement or international 
 88.4   baccalaureate programs.  The amount of the subsidy for each 
 88.5   teacher attending an advanced placement or international 
 88.6   baccalaureate summer training program or workshop shall be the 
 88.7   same.  The commissioner shall determine the payment process and 
 88.8   the amount of the subsidy. 
 88.9      (d) The commissioner shall pay all examination fees for all 
 88.10  students of low-income families under Minnesota Statutes, 
 88.11  section 120B.13, subdivision 3, and to the extent of available 
 88.12  appropriations shall also pay examination fees for students 
 88.13  sitting for an advanced placement examination, international 
 88.14  baccalaureate examination, or both.  
 88.15     Any balance in the first year does not cancel but is 
 88.16  available in the second year. 
 88.17     Subd. 18.  [FIRST GRADE PREPAREDNESS.] For first grade 
 88.18  preparedness grants under Minnesota Statutes, section 124D.081: 
 88.19       $7,250,000     .....     2004 
 88.20       $7,250,000     .....     2005
 88.21     Subd. 19.  [YOUTH WORKS PROGRAM.] For funding youth works 
 88.22  programs under Minnesota Statutes, sections 124D.37 to 124D.45: 
 88.23       $900,000     .....     2004 
 88.24       $900,000     .....     2005 
 88.25     (a) $150,000 per year is for training in evaluating early 
 88.26  literacy skills and teaching reading to preschool children under 
 88.27  Minnesota Statutes, section 124D.42, subdivision 6, paragraph 
 88.28  (a), clause (3).  
 88.29     (b) A grantee organization may provide health and child 
 88.30  care coverage to the dependents of each participant enrolled in 
 88.31  a full-time youth works program to the extent such coverage is 
 88.32  not otherwise available. 
 88.33     Subd. 20.  [STUDENT ORGANIZATIONS.] For student 
 88.34  organizations: 
 88.35       $625,000       .....     2004
 88.36       $625,000       .....     2005
 89.1      The allocation for a student organization in fiscal year 
 89.2   2004 or fiscal year 2005 shall be no less than its fiscal year 
 89.3   2003 allocation. 
 89.4      Subd. 21.  [DISTANCE EDUCATION.] For distance education 
 89.5   under Minnesota Statutes, section 124D.095:  
 89.6      $1,000,000       .....     2004
 89.7      $1,250,000       .....     2005
 89.8      Subd. 22.  [COLLABORATIVE URBAN EDUCATOR RECRUITMENT AND 
 89.9   TRAINING PROGRAMS.] For grants to collaborative urban educator 
 89.10  recruitment and training programs: 
 89.11       $528,000       .....     2004
 89.12       $528,000       .....     2005
 89.13     $198,000 each year is for the Southeast Asian teacher 
 89.14  program at Concordia University, St. Paul; $165,000 each year is 
 89.15  for the collaborative urban educator program at the University 
 89.16  of St. Thomas; and $165,000 each year is for the center for 
 89.17  excellence in urban teaching at Hamline University.  Grant 
 89.18  recipients must collaborate with urban and nonurban school 
 89.19  districts. 
 89.20     Any balance in the first year does not cancel but is 
 89.21  available in the second year. 
 89.22     Sec. 54.  [REPEALER.] 
 89.23     (a) Minnesota Statutes 2002, sections 122A.64; 122A.65; 
 89.24  124D.84, subdivision 2; and 124D.89, are repealed. 
 89.25     (b) Minnesota Statutes 2002, sections 128C.01, subdivision 
 89.26  5; 128C.02, subdivision 8; and 128C.13, are repealed. 
 89.27     (c) Laws 1993, chapter 224, article 8, section 20, 
 89.28  subdivision 2, as amended by Laws 1994, chapter 647, article 8, 
 89.29  section 29, is repealed. 
 89.30                             ARTICLE 3
 89.31                          SPECIAL PROGRAMS
 89.32     Section 1.  Minnesota Statutes 2002, section 121A.41, 
 89.33  subdivision 10, is amended to read: 
 89.34     Subd. 10.  [SUSPENSION.] "Suspension" means an action by 
 89.35  the school administration, under rules promulgated by the school 
 89.36  board, prohibiting a pupil from attending school for a period of 
 90.1   no more than ten school days.  If a suspension is longer than 
 90.2   five days, the suspending administrator must provide the 
 90.3   superintendent with a reason for the longer suspension.  This 
 90.4   definition does not apply to dismissal from school for one 
 90.5   school day or less, except as provided in federal law for a 
 90.6   student with a disability.  Each suspension action may include a 
 90.7   readmission plan.  The readmission plan shall include, where 
 90.8   appropriate, a provision for implementing alternative 
 90.9   educational services upon readmission and may not be used to 
 90.10  extend the current suspension.  Consistent with section 125A.09, 
 90.11  subdivision 3, the readmission plan must not obligate a parent 
 90.12  to provide a sympathomimetic medication for the parent's child 
 90.13  as a condition of readmission.  The school administration may 
 90.14  not impose consecutive suspensions against the same pupil for 
 90.15  the same course of conduct, or incident of misconduct, except 
 90.16  where the pupil will create an immediate and substantial danger 
 90.17  to self or to surrounding persons or property, or where the 
 90.18  district is in the process of initiating an expulsion, in which 
 90.19  case the school administration may extend the suspension to a 
 90.20  total of 15 days.  In the case of a student with a disability, 
 90.21  the student's individual education plan team must meet 
 90.22  immediately but not more than ten school days after the date on 
 90.23  which the decision to remove the student from the student's 
 90.24  current education placement is made.  The individual education 
 90.25  plan team and other qualified personnel shall at that meeting:  
 90.26  conduct a review of the relationship between the child's 
 90.27  disability and the behavior subject to disciplinary action; and 
 90.28  determine the appropriateness of the child's education plan. 
 90.29     The requirements of the individual education plan team 
 90.30  meeting apply when: 
 90.31     (1) the parent requests a meeting; 
 90.32     (2) the student is removed from the student's current 
 90.33  placement for five or more consecutive days; or 
 90.34     (3) the student's total days of removal from the student's 
 90.35  placement during the school year exceed ten cumulative days in a 
 90.36  school year.  The school administration shall implement 
 91.1   alternative educational services when the suspension exceeds 
 91.2   five days.  A separate administrative conference is required for 
 91.3   each period of suspension. 
 91.4      Sec. 2.  [124D.452] [DISTRICT REPORT; CAREER AND TECHNICAL 
 91.5   EDUCATION.] 
 91.6      Each district and cooperative center must report data to 
 91.7   the department of education for all career and technical 
 91.8   education programs as required by the department. 
 91.9      Sec. 3.  Minnesota Statutes 2002, section 124D.454, 
 91.10  subdivision 1, is amended to read: 
 91.11     Subdivision 1.  [PURPOSE.] The purpose of this section is 
 91.12  to provide a method to fund transition career and technical 
 91.13  education programs for children with a disability that are 
 91.14  components of the student's transition plan.  As used in this 
 91.15  section, the term "children with a disability" shall have the 
 91.16  meaning ascribed to it in section 125A.02. 
 91.17     Sec. 4.  Minnesota Statutes 2002, section 124D.454, 
 91.18  subdivision 2, is amended to read: 
 91.19     Subd. 2.  [DEFINITIONS.] For the purposes of this section, 
 91.20  the definitions in this subdivision apply. 
 91.21     (a) "Base year" for fiscal year 1996 means fiscal year 1995.
 91.22  Base year for later fiscal years means the second fiscal year 
 91.23  preceding the fiscal year for which aid will be paid. 
 91.24     (b) "Basic revenue" has the meaning given it in section 
 91.25  126C.10, subdivision 2.  For the purposes of computing basic 
 91.26  revenue pursuant to this section, each child with a disability 
 91.27  shall be counted as prescribed in section 126C.05, subdivision 1.
 91.28     (c) "Average daily membership" has the meaning given it in 
 91.29  section 126C.05. 
 91.30     (d) "Program growth factor" means 1.00 for fiscal year 1998 
 91.31  and later. 
 91.32     (e) "Aid percentage factor" means 60 percent for fiscal 
 91.33  year 1996, 70 percent for fiscal year 1997, 80 percent for 
 91.34  fiscal year 1998, 90 percent for fiscal year 1999, and 100 
 91.35  percent for fiscal year 2000 and later. 
 91.36     (f) "Essential personnel" means a licensed teacher, 
 92.1   licensed support services staff person, paraprofessional 
 92.2   providing direct services to students, or licensed personnel 
 92.3   under subdivision 12, paragraph (c).  This definition is not 
 92.4   intended to change or modify the definition of essential 
 92.5   employee in chapter 179A. 
 92.6      Sec. 5.  Minnesota Statutes 2002, section 124D.454, 
 92.7   subdivision 3, is amended to read: 
 92.8      Subd. 3.  [BASE REVENUE.] (a) The transition 
 92.9   program-disabled transition-disabled program base revenue equals 
 92.10  the sum of the following amounts computed using base year data: 
 92.11     (1) 68 percent of the salary of each essential licensed 
 92.12  person or approved paraprofessional who provides direct 
 92.13  instructional services to students employed during that fiscal 
 92.14  year for services rendered in that district's transition program 
 92.15  for children with a disability; 
 92.16     (2) 47 percent of the costs of necessary equipment for 
 92.17  transition programs for children with a disability; 
 92.18     (3) 47 percent of the costs of necessary travel between 
 92.19  instructional sites by transition program teachers of children 
 92.20  with a disability but not including travel to and from local, 
 92.21  regional, district, state, or national vocational career and 
 92.22  technical student organization meetings; 
 92.23     (4) 47 percent of the costs of necessary supplies for 
 92.24  transition programs for children with a disability but not to 
 92.25  exceed an average of $47 in any one school year for each child 
 92.26  with a disability receiving these services; 
 92.27     (5) for transition programs for children with disabilities 
 92.28  provided by a contract approved by the commissioner with public, 
 92.29  private, or voluntary agencies other than a Minnesota school 
 92.30  district or cooperative center, in place of programs provided by 
 92.31  the district, 52 percent of the difference between the amount of 
 92.32  the contract and the basic revenue of the district for that 
 92.33  pupil for the fraction of the school day the pupil receives 
 92.34  services under the contract; 
 92.35     (6) for transition programs for children with disabilities 
 92.36  provided by a contract approved by the commissioner with public, 
 93.1   private, or voluntary agencies other than a Minnesota school 
 93.2   district or cooperative center, that are supplementary to a full 
 93.3   educational program provided by the school district, 52 percent 
 93.4   of the amount of the contract; and 
 93.5      (7) for a contract approved by the commissioner with 
 93.6   another Minnesota school district or cooperative center for 
 93.7   vocational evaluation services for children with a disability 
 93.8   for children that are not yet enrolled in grade 12, 52 percent 
 93.9   of the amount of the contract. 
 93.10     (b) If requested by a school district for transition 
 93.11  programs during the base year for less than the full school 
 93.12  year, the commissioner may adjust the base revenue to reflect 
 93.13  the expenditures that would have occurred during the base year 
 93.14  had the program been operated for the full year. 
 93.15     Sec. 6.  Minnesota Statutes 2002, section 124D.454, 
 93.16  subdivision 8, is amended to read: 
 93.17     Subd. 8.  [USE OF AID.] The aid provided under this section 
 93.18  shall be paid only for services rendered or for the costs which 
 93.19  are incurred according to this section for transition programs 
 93.20  for children with a disability which are approved by the 
 93.21  commissioner of children, families, and learning education and 
 93.22  operated in accordance with rules promulgated by the 
 93.23  commissioner.  These rules shall be subject to the restrictions 
 93.24  provided in section 124D.453, subdivision 6 12.  The procedure 
 93.25  for application for approval of these programs shall be as 
 93.26  provided in section 125A.75, subdivisions 4 and 6, and the 
 93.27  application review process shall be conducted by the office 
 93.28  division of lifework development federal programs in the 
 93.29  department. 
 93.30     Sec. 7.  Minnesota Statutes 2002, section 124D.454, 
 93.31  subdivision 10, is amended to read: 
 93.32     Subd. 10.  [EXCLUSION.] A district shall not receive aid 
 93.33  pursuant to section 124D.453 or 125A.76 for salaries, supplies, 
 93.34  travel or equipment for which the district receives aid pursuant 
 93.35  to this section. 
 93.36     Sec. 8.  Minnesota Statutes 2002, section 124D.454, is 
 94.1   amended by adding a subdivision to read: 
 94.2      Subd. 12.  [COMPLIANCE WITH RULES.] Aid must be paid under 
 94.3   this section only for services rendered or for costs incurred in 
 94.4   career and technical education programs approved by the 
 94.5   commissioner and operated in accordance with rules promulgated 
 94.6   by the commissioner.  This aid shall be paid only for services 
 94.7   rendered and for costs incurred by essential, licensed personnel 
 94.8   who meet the requirements for licensure pursuant to the rules of 
 94.9   the Minnesota board of teaching.  Licensed personnel means 
 94.10  persons holding a valid career and technical license issued by 
 94.11  the commissioner.  If an average of five or fewer secondary 
 94.12  full-time equivalent students are enrolled per teacher in an 
 94.13  approved postsecondary program at intermediate district No. 287, 
 94.14  916, or 917, licensed personnel means persons holding a valid 
 94.15  vocational license issued by the commissioner or the board of 
 94.16  trustees of the Minnesota state colleges and universities.  
 94.17  Notwithstanding section 127A.42, the commissioner may modify or 
 94.18  withdraw the program or aid approval and withhold aid under this 
 94.19  section without proceeding under section 127A.42 at any time.  
 94.20  To do so, the commissioner must determine that the program does 
 94.21  not comply with rules of the department of education or that any 
 94.22  facts concerning the program or its budget differ from the facts 
 94.23  in the district's approved application. 
 94.24     Sec. 9.  [125A.091] [ALTERNATIVE DISPUTE RESOLUTION AND DUE 
 94.25  PROCESS HEARINGS.] 
 94.26     Subdivision 1.  [DISTRICT OBLIGATION.] A school district 
 94.27  must use the procedures in federal law and state law and rule to 
 94.28  reach decisions about the identification, evaluation, 
 94.29  educational placement, manifestation determination, interim 
 94.30  alternative educational placement, or the provision of a free 
 94.31  appropriate public education to a child with a disability. 
 94.32     Subd. 2.  [PRIOR WRITTEN NOTICE.] A parent must receive 
 94.33  prior written notice a reasonable time before the district 
 94.34  proposes or refuses to initiate or change the identification, 
 94.35  evaluation, educational placement, or the provision of a free 
 94.36  appropriate public education to a child with a disability. 
 95.1      Subd. 3.  [CONTENT OF NOTICE.] The notice under subdivision 
 95.2   2 must: 
 95.3      (1) describe the action the district proposes or refuses; 
 95.4      (2) explain why the district proposes or refuses to take 
 95.5   the action; 
 95.6      (3) describe any other option the district considered and 
 95.7   the reason why it rejected the option; 
 95.8      (4) describe each evaluation procedure, test, record, or 
 95.9   report the district used as a basis for the proposed or refused 
 95.10  action; 
 95.11     (5) describe any other factor affecting the proposal or 
 95.12  refusal of the district to take the action; 
 95.13     (6) state that the parent of a child with a disability is 
 95.14  protected by procedural safeguards and, if this notice is not an 
 95.15  initial referral for evaluation, how a parent can get a 
 95.16  description of the procedural safeguards; and 
 95.17     (7) identify where a parent can get help in understanding 
 95.18  this law. 
 95.19     Subd. 4.  [UNDERSTANDABLE NOTICE.] (a) The written notice 
 95.20  under subdivision 2 must be understandable to the general public 
 95.21  and available in the parent's native language or by another 
 95.22  communication form, unless it is clearly not feasible to do so. 
 95.23     (b) If the parent's native language or other communication 
 95.24  form is not written, the district must take steps to ensure that:
 95.25     (1) the notice is translated orally or by other means to 
 95.26  the parent in the parent's native language or other 
 95.27  communication form; 
 95.28     (2) the parent understands the notice; and 
 95.29     (3) written evidence indicates the requirements in 
 95.30  subdivision 2 are met. 
 95.31     Subd. 5.  [INITIAL ACTION; PARENT CONSENT.] The district 
 95.32  must not proceed with the initial evaluation of a child, the 
 95.33  initial placement of a child in a special education program, or 
 95.34  the initial provision of special education services for a child 
 95.35  without the prior written consent of the child's parent.  A 
 95.36  district may not override the written refusal of a parent to 
 96.1   consent to an initial evaluation or reevaluation. 
 96.2      Subd. 6.  [DISPUTE RESOLUTION PROCESSES; 
 96.3   GENERALLY.] Parties are encouraged to resolve disputes over the 
 96.4   identification, evaluation, educational placement, manifestation 
 96.5   determination, interim alternative educational placement, or the 
 96.6   provision of a free appropriate public education to a child with 
 96.7   a disability through conciliation, mediation, facilitated team 
 96.8   meetings, or other alternative process.  All dispute resolution 
 96.9   options are voluntary on the part of the parent and must not be 
 96.10  used to deny or delay the right to a due process hearing.  All 
 96.11  dispute resolution processes under this section are provided at 
 96.12  no cost to the parent. 
 96.13     Subd. 7.  [CONCILIATION CONFERENCE.] A parent must have an 
 96.14  opportunity to meet with appropriate district staff in at least 
 96.15  one conciliation conference if the parent objects to any 
 96.16  proposal of which the parent receives notice under subdivision 2.
 96.17  If the parent refuses district efforts to conciliate the 
 96.18  dispute, the conciliation requirement is satisfied.  Following a 
 96.19  conciliation conference, the district must prepare and provide 
 96.20  to the parent a conciliation conference memorandum that 
 96.21  describes the district's final proposed offer of service.  This 
 96.22  memorandum is admissible in evidence in any subsequent 
 96.23  proceeding. 
 96.24     Subd. 8.  [VOLUNTARY DISPUTE RESOLUTION OPTIONS.] In 
 96.25  addition to offering at least one conciliation conference, a 
 96.26  district must inform a parent of other dispute resolution 
 96.27  processes, including at least mediation and facilitated team 
 96.28  meetings.  The fact that an alternative dispute resolution 
 96.29  process was used is admissible in evidence at any subsequent 
 96.30  proceeding.  State-provided mediators and team meeting 
 96.31  facilitators shall not be subpoenaed to testify at a due process 
 96.32  hearing or civil action under federal special education law nor 
 96.33  are any records of mediators or state-provided team meeting 
 96.34  facilitators accessible to the parties. 
 96.35     Subd. 9.  [MEDIATION.] Mediation is a dispute resolution 
 96.36  process that involves a neutral party provided by the state to 
 97.1   assist a parent and a district in resolving disputes over the 
 97.2   identification, evaluation, educational placement, manifestation 
 97.3   determination, interim alternative educational placement, or the 
 97.4   provision of a free appropriate public education to a child with 
 97.5   a disability.  A mediation process is available as an informal 
 97.6   alternative to a due process hearing but must not be used to 
 97.7   deny or postpone the opportunity of a parent or district to 
 97.8   obtain a due process hearing.  Mediation is voluntary for all 
 97.9   parties.  All mediation discussions are confidential and 
 97.10  inadmissible in evidence in any subsequent proceeding, unless 
 97.11  the: 
 97.12     (1) parties expressly agree otherwise; 
 97.13     (2) evidence is otherwise available; or 
 97.14     (3) evidence is offered to prove bias or prejudice of a 
 97.15  witness. 
 97.16     Subd. 10.  [MEDIATED AGREEMENTS.] Mediated agreements are 
 97.17  not admissible unless the parties agree otherwise or a party to 
 97.18  the agreement believes the agreement is not being implemented, 
 97.19  in which case the aggrieved party may enter the agreement into 
 97.20  evidence at a due process hearing.  The parties may request 
 97.21  another mediation to resolve a dispute over implementing the 
 97.22  mediated agreement.  After a due process hearing is requested, a 
 97.23  party may request mediation and the commissioner must provide a 
 97.24  mediator who conducts a mediation session no later than the 
 97.25  third business day after the mediation request is made to the 
 97.26  commissioner. 
 97.27     Subd. 11.  [FACILITATED TEAM MEETING.] A facilitated team 
 97.28  meeting is an IEP, IFSP, or IIIP team meeting led by an 
 97.29  impartial state-provided facilitator to promote effective 
 97.30  communication and assist a team in developing an individualized 
 97.31  education plan. 
 97.32     Subd. 12.  [IMPARTIAL DUE PROCESS HEARING.] (a) A parent or 
 97.33  a district is entitled to an impartial due process hearing 
 97.34  conducted by the state when a dispute arises over the 
 97.35  identification, evaluation, educational placement, manifestation 
 97.36  determination, interim alternative educational placement, or the 
 98.1   provision of a free appropriate public education to a child with 
 98.2   a disability.  The hearing must be held in the district 
 98.3   responsible for ensuring that a free appropriate public 
 98.4   education is provided according to state and federal law.  The 
 98.5   proceedings must be recorded and preserved, at state expense, 
 98.6   pending ultimate disposition of the action. 
 98.7      (b) The due process hearing must be conducted according to 
 98.8   the rules of the commissioner and federal law. 
 98.9      Subd. 13.  [HEARING OFFICER QUALIFICATIONS.] The 
 98.10  commissioner must appoint an individual who is qualified under 
 98.11  this subdivision to serve as a hearing officer.  The hearing 
 98.12  officer must: 
 98.13     (1) be knowledgeable and impartial; 
 98.14     (2) have no personal interest in or specific involvement 
 98.15  with the student who is a party to the hearing; 
 98.16     (3) not have been employed as an administrator by the 
 98.17  district that is a party to the hearing; 
 98.18     (4) not have been involved in selecting the district 
 98.19  administrator who is a party to the hearing; 
 98.20     (5) have no personal, economic, or professional interest in 
 98.21  the outcome of the hearing other than properly administering 
 98.22  federal and state laws, rules, and policies; 
 98.23     (6) have no substantial involvement in developing state or 
 98.24  local policies or procedures challenged in the hearing; 
 98.25     (7) not be a current employee or board member of a 
 98.26  Minnesota public school district, education district, 
 98.27  intermediate unit or regional education agency, or the 
 98.28  department if the department is the service provider; and 
 98.29     (8) not be a current employee or board member of a 
 98.30  disability advocacy organization or group. 
 98.31     Subd. 14.  [REQUEST FOR HEARING.] A request for a due 
 98.32  process hearing must: 
 98.33     (1) be in writing; 
 98.34     (2) describe the nature of the dispute about providing 
 98.35  special education services to the student including facts 
 98.36  relating to the dispute; and 
 99.1      (3) state, to the extent known, the relief sought. 
 99.2      Any school district administrator receiving a request for a 
 99.3   due process hearing must immediately forward the request to the 
 99.4   commissioner.  Within two business days of receiving a request 
 99.5   for a due process hearing, the commissioner must appoint a 
 99.6   hearing officer.  The commissioner must not deny a request for 
 99.7   hearing because the request is incomplete.  A party may 
 99.8   disqualify a hearing officer only by affirmatively showing 
 99.9   prejudice or bias to the commissioner or to the chief 
 99.10  administrative law judge if the hearing officer is an 
 99.11  administrative law judge.  If a party affirmatively shows 
 99.12  prejudice against a hearing officer, the commissioner must 
 99.13  assign another hearing officer to hear the matter. 
 99.14     Subd. 15.  [PREHEARING CONFERENCE.] A prehearing conference 
 99.15  must be held within five business days of the date the 
 99.16  commissioner appoints the hearing officer.  The hearing officer 
 99.17  must initiate the prehearing conference which may be conducted 
 99.18  in person, at a location within the district, or by telephone. 
 99.19  The hearing officer must create a written verbatim record of the 
 99.20  prehearing conference which is available to either party upon 
 99.21  request.  At the prehearing conference, the hearing officer must:
 99.22     (1) identify the questions that must be answered to resolve 
 99.23  the dispute and eliminate claims and complaints that are without 
 99.24  merit; 
 99.25     (2) set a scheduling order for the hearing and additional 
 99.26  prehearing activities; 
 99.27     (3) determine if the hearing can be disposed of without an 
 99.28  evidentiary hearing and, if so, establish the schedule and 
 99.29  procedure for doing so; and 
 99.30     (4) establish the management, control, and location of the 
 99.31  hearing to ensure its fair, efficient, and effective disposition.
 99.32     Subd. 16.  [BURDEN OF PROOF.] The burden of proof at a due 
 99.33  process hearing is on the district to demonstrate, by a 
 99.34  preponderance of the evidence, that it is complying with the law 
 99.35  and offered or provided a free appropriate public education to 
 99.36  the child in the least restrictive environment.  If the district 
100.1   has not offered or provided a free appropriate public education 
100.2   in the least restrictive environment and the parent wants the 
100.3   district to pay for a private placement, the burden of proof is 
100.4   on the parent to demonstrate, by a preponderance of the 
100.5   evidence, that the private placement is appropriate. 
100.6      Subd. 17.  [ADMISSIBLE EVIDENCE.] The hearing officer may 
100.7   admit all evidence that possesses probative value, including 
100.8   hearsay, if it is the type of evidence on which reasonable, 
100.9   prudent persons are accustomed to rely in conducting their 
100.10  serious affairs.  The hearing officer must give effect to the 
100.11  rules of privilege recognized by law and exclude evidence that 
100.12  is incompetent, irrelevant, immaterial, or unduly repetitious. 
100.13     Subd. 18.  [HEARING OFFICER AUTHORITY.] (a) A hearing 
100.14  officer must limit an impartial due process hearing to the time 
100.15  sufficient for each party to present its case.  
100.16     (b) A hearing officer must establish and maintain control 
100.17  and manage the hearing.  This authority includes, but is not 
100.18  limited to: 
100.19     (1) requiring attorneys representing parties at the 
100.20  hearing, after notice and an opportunity to be heard, to pay 
100.21  court reporting and hearing officer costs, or fines payable to 
100.22  the state, for failing to:  (i) obey scheduling or prehearing 
100.23  orders, (ii) appear, (iii) be prepared, or (iv) participate in 
100.24  the hearing process in good faith; 
100.25     (2) administering oaths and affirmations; 
100.26     (3) issuing subpoenas; 
100.27     (4) determining the responsible and providing districts and 
100.28  joining those districts, if not already notified, in the 
100.29  proceedings; 
100.30     (5) making decisions involving identification, evaluation, 
100.31  educational placement, manifestation determination, interim 
100.32  alternative educational placement, or the provision of a free 
100.33  appropriate public education to a child with a disability; and 
100.34     (6) ordering an independent educational evaluation of a 
100.35  child at district expense. 
100.36     Subd. 19.  [EXPEDITED DUE PROCESS HEARINGS.] A parent has 
101.1   the right to an expedited due process hearing when there is a 
101.2   dispute over a manifestation determination or a proposed or 
101.3   actual placement in an interim alternative educational setting.  
101.4   A district has the right to an expedited due process hearing 
101.5   when proposing or seeking to maintain placement in an interim 
101.6   alternative educational setting.  A hearing officer must hold an 
101.7   expedited due process hearing and must issue a decision within 
101.8   ten calendar days of the request for a hearing.  A hearing 
101.9   officer may extend by up to five additional calendar days the 
101.10  time for issuing a decision in an expedited due process 
101.11  hearing.  All policies in this section apply to expedited due 
101.12  process hearings to the extent they do not conflict with federal 
101.13  law. 
101.14     Subd. 20.  [HEARING OFFICER'S DECISION; TIME PERIOD.] (a) 
101.15  The hearing officer must issue a decision within 45 calendar 
101.16  days of the date on which the commissioner receives the request 
101.17  for a due process hearing.  A hearing officer is encouraged to 
101.18  accelerate the time line to 30 days for a child under the age of 
101.19  three whose needs change rapidly and who requires quick 
101.20  resolution of a dispute.  A hearing officer may not extend the 
101.21  time beyond the 45-day period unless requested by either party 
101.22  for good cause shown on the record.  Extensions of time must not 
101.23  exceed a total of 30 calendar days unless both parties and the 
101.24  hearing officer agree or time is needed to complete an 
101.25  independent educational evaluation.  Good cause includes, but is 
101.26  not limited to, the time required for mediation or other 
101.27  settlement discussions, independent educational evaluation, 
101.28  complexity and volume of issues, or finding or changing counsel. 
101.29     (b) The hearing officer's decision must: 
101.30     (1) be in writing; 
101.31     (2) state the controlling and material facts upon which the 
101.32  decision is made in order to apprise the reader of the basis and 
101.33  reason for the decision; and 
101.34     (3) be based on local standards, state statute, the rules 
101.35  of the commissioner, and federal law. 
101.36     Subd. 21.  [COMPENSATORY EDUCATIONAL SERVICES.] The hearing 
102.1   officer may require the resident or responsible district to 
102.2   provide compensatory educational services to the child if the 
102.3   hearing officer finds that the district has not offered or made 
102.4   available to the child a free appropriate public education in 
102.5   the least restrictive environment and the child suffered a loss 
102.6   of educational benefit.  Such services take the form of direct 
102.7   and indirect special education and related services designed to 
102.8   address any loss of educational benefit that may have occurred.  
102.9   The hearing officer's finding must be based on a present 
102.10  determination of whether the child has suffered a loss of 
102.11  educational benefit. 
102.12     Subd. 22.  [CHILD'S EDUCATIONAL PLACEMENT DURING A DUE 
102.13  PROCESS HEARING.] (a) Until a due process hearing under this 
102.14  section is completed or the district and the parent agree 
102.15  otherwise, the child must remain in the child's current 
102.16  educational placement and must not be denied initial admission 
102.17  to school. 
102.18     (b) Until an expedited due process hearing challenging an 
102.19  interim alternative educational placement is completed, the 
102.20  child must remain in the interim alternative educational setting 
102.21  until the decision of the hearing officer or the expiration of 
102.22  the 45 days permitted for an interim alternative educational 
102.23  setting, whichever occurs first, unless the parent and district 
102.24  agree otherwise. 
102.25     Subd. 23.  [IMPLEMENTATION OF HEARING OFFICER ORDER.] (a) 
102.26  That portion of a hearing officer's decision granting relief 
102.27  requested by the parent must be implemented upon issuance. 
102.28     (b) Except as provided under paragraph (a) or the district 
102.29  and parent agree otherwise, following a hearing officer's 
102.30  decision granting relief requested by the district, the child 
102.31  must remain in the current educational placement until the time 
102.32  to request judicial review under subdivision 24 expires or, if 
102.33  judicial review is requested, at the time the Minnesota court of 
102.34  appeals or the federal district court issues its decision, 
102.35  whichever is later.  
102.36     Subd. 24.  [REVIEW OF HEARING OFFICER DECISIONS.] The 
103.1   parent or district may seek review of the hearing officer's 
103.2   decision in the Minnesota court of appeals or in the federal 
103.3   district court, consistent with federal law.  A party must 
103.4   appeal to the Minnesota court of appeals within 60 days of 
103.5   receiving the hearing officer's decision. 
103.6      Subd. 25.  [ENFORCEMENT OF ORDERS.] The commissioner must 
103.7   monitor final hearing officer decisions and ensure enforcement 
103.8   of hearing officer orders. 
103.9      Subd. 26.  [HEARING OFFICER AND PERSON CONDUCTING 
103.10  ALTERNATIVE DISPUTE RESOLUTION ARE STATE EMPLOYEES.] A hearing 
103.11  officer or person conducting alternative dispute resolution 
103.12  under this section is an employee of the state under section 
103.13  3.732 for purposes of section 3.736 only. 
103.14     Subd. 27.  [HEARING OFFICER TRAINING.] A hearing officer 
103.15  must participate in training and follow procedures established 
103.16  by the commissioner.  
103.17     Subd. 28.  [DISTRICT LIABILITY.] A district is not liable 
103.18  for harmless technical violations of this section or rules 
103.19  implementing this section if the school district can demonstrate 
103.20  on a case-by-case basis that the violations did not harm a 
103.21  student's educational progress or the parent's right to notice, 
103.22  participation, or due process. 
103.23     Sec. 10.  Minnesota Statutes 2002, section 125A.21, 
103.24  subdivision 2, is amended to read: 
103.25     Subd. 2.  [THIRD PARTY REIMBURSEMENT.] (a) Beginning July 
103.26  1, 2000, districts shall seek reimbursement from insurers and 
103.27  similar third parties for the cost of services provided by the 
103.28  district whenever the services provided by the district are 
103.29  otherwise covered by the child's health coverage.  Districts 
103.30  shall request, but may not require, the child's family to 
103.31  provide information about the child's health coverage when a 
103.32  child with a disability begins to receive services from the 
103.33  district of a type that may be reimbursable, and shall request, 
103.34  but may not require, updated information after that as needed.  
103.35     (b) For children enrolled in medical assistance under 
103.36  chapter 256B or MinnesotaCare under chapter 256L who have no 
104.1   other health coverage, a district shall provide an initial 
104.2   written notice to the enrolled child's parent or legal 
104.3   representative of its intent to seek reimbursement from medical 
104.4   assistance or MinnesotaCare for the individual education plan 
104.5   health-related services provided by the district. 
104.6      (c) The district shall give the parent or legal 
104.7   representative annual written notice of: 
104.8      (1) the district's intent to seek reimbursement from 
104.9   medical assistance or MinnesotaCare for individual education 
104.10  plan health-related services provided by the district; 
104.11     (2) the right of the parent or legal representative to 
104.12  request a copy of all records concerning individual education 
104.13  plan health-related services disclosed by the district to any 
104.14  third party; and 
104.15     (3) the right of the parent or legal representative to 
104.16  withdraw consent for disclosure of a child's records at any time 
104.17  without consequence. 
104.18  The written notice shall be provided as part of the written 
104.19  notice required by Code of Federal Regulations, title 34, 
104.20  section 300.503 300.504. 
104.21     (d) In order to access the private health care coverage of 
104.22  a child who is covered by private health care coverage in whole 
104.23  or in part, a district must: 
104.24     (1) obtain annual written informed consent from the parent 
104.25  or legal representative, in compliance with subdivision 5; and 
104.26     (2) inform the parent or legal representative that a 
104.27  refusal to permit the district or state Medicaid agency to 
104.28  access their private health care coverage does not relieve the 
104.29  district of its responsibility to provide all services necessary 
104.30  to provide free and appropriate public education at no cost to 
104.31  the parent or legal representative. 
104.32     (e) If the commissioner of human services obtains federal 
104.33  approval to exempt covered individual education plan 
104.34  health-related services from the requirement that private health 
104.35  care coverage refuse payment before medical assistance may be 
104.36  billed, paragraphs (b), (c), and (d) shall also apply to 
105.1   students with a combination of private health care coverage and 
105.2   health care coverage through medical assistance or MinnesotaCare.
105.3      (f) In the event that Congress or any federal agency or the 
105.4   Minnesota legislature or any state agency establishes lifetime 
105.5   limits, limits for any health care services, cost-sharing 
105.6   provisions, or otherwise provides that individual education plan 
105.7   health-related services impact benefits for persons enrolled in 
105.8   medical assistance or MinnesotaCare, the amendments to this 
105.9   subdivision adopted in 2002 are repealed on the effective date 
105.10  of any federal or state law or regulation that imposes the 
105.11  limits.  In that event, districts must obtain informed consent 
105.12  consistent with this subdivision as it existed prior to the 2002 
105.13  amendments and subdivision 5, before seeking reimbursement for 
105.14  children enrolled in medical assistance under chapter 256B or 
105.15  MinnesotaCare under chapter 256L who have no other health care 
105.16  coverage. 
105.17     Sec. 11.  Minnesota Statutes 2002, section 125A.28, is 
105.18  amended to read: 
105.19     125A.28 [STATE INTERAGENCY COORDINATING COUNCIL.] 
105.20     An interagency coordinating council of at least 17, but not 
105.21  more than 25 members is established, in compliance with Public 
105.22  Law Number 102-119, section 682.  The members must be appointed 
105.23  by the governor.  Council members must elect the council chair.  
105.24  The representative of the commissioner may not serve as the 
105.25  chair.  The council must be composed of at least five parents, 
105.26  including persons of color, of children with disabilities under 
105.27  age 12, including at least three parents of a child with a 
105.28  disability under age seven, five representatives of public or 
105.29  private providers of services for children with disabilities 
105.30  under age five, including a special education director, county 
105.31  social service director, local Head Start director, and a 
105.32  community health services or public health nursing 
105.33  administrator, one member of the senate, one member of the house 
105.34  of representatives, one representative of teacher preparation 
105.35  programs in early childhood-special education or other 
105.36  preparation programs in early childhood intervention, at least 
106.1   one representative of advocacy organizations for children with 
106.2   disabilities under age five, one physician who cares for young 
106.3   children with special health care needs, one representative each 
106.4   from the commissioners of commerce, children, families, and 
106.5   learning education, health, human services, a representative 
106.6   from the state agency responsible for child care, and a 
106.7   representative from Indian health services or a tribal council.  
106.8   Section 15.059, subdivisions 2 to 5, apply to the council.  The 
106.9   council must meet at least quarterly.  
106.10     The council must address methods of implementing the state 
106.11  policy of developing and implementing comprehensive, 
106.12  coordinated, multidisciplinary interagency programs of early 
106.13  intervention services for children with disabilities and their 
106.14  families. 
106.15     The duties of the council include recommending policies to 
106.16  ensure a comprehensive and coordinated system of all state and 
106.17  local agency services for children under age five with 
106.18  disabilities and their families.  The policies must address how 
106.19  to incorporate each agency's services into a unified state and 
106.20  local system of multidisciplinary assessment practices, 
106.21  individual intervention plans, comprehensive systems to find 
106.22  children in need of services, methods to improve public 
106.23  awareness, and assistance in determining the role of interagency 
106.24  early intervention committees.  
106.25     By September 1, the council must recommend to the governor 
106.26  and the commissioners of children, families, and learning 
106.27  education, health, human services, commerce, and economic 
106.28  security policies for a comprehensive and coordinated system. 
106.29     Notwithstanding any other law to the contrary, the state 
106.30  interagency coordinating council expires on June 30, 2003 2005.  
106.31     Sec. 12.  Minnesota Statutes 2002, section 125A.30, is 
106.32  amended to read: 
106.33     125A.30 [INTERAGENCY EARLY INTERVENTION COMMITTEES.] 
106.34     (a) A school district, group of districts, or special 
106.35  education cooperative, in cooperation with the health and human 
106.36  service agencies located in the county or counties in which the 
107.1   district or cooperative is located, must establish an 
107.2   interagency early intervention committee for children with 
107.3   disabilities under age five and their families under this 
107.4   section, and for children with disabilities ages three to 22 
107.5   consistent with the requirements under sections 125A.023 and 
107.6   125A.027.  Committees must include representatives of local and 
107.7   regional health, education, and county human service agencies, 
107.8   county boards, school boards, early childhood family education 
107.9   programs, Head Start, parents of young children with 
107.10  disabilities under age 12, child care resource and referral 
107.11  agencies, school readiness programs, current service providers, 
107.12  and may also include representatives from other private or 
107.13  public agencies and school nurses.  The committee must elect a 
107.14  chair from among its members and must meet at least quarterly. 
107.15     (b) The committee must develop and implement interagency 
107.16  policies and procedures concerning the following ongoing duties: 
107.17     (1) develop public awareness systems designed to inform 
107.18  potential recipient families of available programs and services; 
107.19     (2) implement interagency child find systems designed to 
107.20  actively seek out, identify, and refer infants and young 
107.21  children with, or at risk of, disabilities and their families; 
107.22     (3) establish and evaluate the identification, referral, 
107.23  child and family assessment systems, procedural safeguard 
107.24  process, and community learning systems to recommend, where 
107.25  necessary, alterations and improvements; 
107.26     (4) assure the development of individualized family service 
107.27  plans for all eligible infants and toddlers with disabilities 
107.28  from birth through age two, and their families, and individual 
107.29  education plans and individual service plans when necessary to 
107.30  appropriately serve children with disabilities, age three and 
107.31  older, and their families and recommend assignment of financial 
107.32  responsibilities to the appropriate agencies; 
107.33     (5) encourage agencies to develop individual family service 
107.34  plans for children with disabilities, age three and older; 
107.35     (6) implement a process for assuring that services involve 
107.36  cooperating agencies at all steps leading to individualized 
108.1   programs; 
108.2      (7) facilitate the development of a transitional plan if a 
108.3   service provider is not recommended to continue to provide 
108.4   services; 
108.5      (8) identify the current services and funding being 
108.6   provided within the community for children with disabilities 
108.7   under age five and their families; 
108.8      (9) develop a plan for the allocation and expenditure of 
108.9   additional state and federal early intervention funds under 
108.10  United States Code, title 20, section 1471 et seq.  (Part H, 
108.11  Public Law Number 102-119) and United States Code, title 20, 
108.12  section 631, et seq. (Chapter I, Public Law Number 89-313); and 
108.13     (10) develop a policy that is consistent with section 
108.14  13.05, subdivision 9, and federal law to enable a member of an 
108.15  interagency early intervention committee to allow another member 
108.16  access to data classified as not public. 
108.17     (c) The local committee shall also: 
108.18     (1) participate in needs assessments and program planning 
108.19  activities conducted by local social service, health and 
108.20  education agencies for young children with disabilities and 
108.21  their families; and 
108.22     (2) review and comment on the early intervention section of 
108.23  the total special education system for the district, the county 
108.24  social service plan, the section or sections of the community 
108.25  health services plan that address needs of and service 
108.26  activities targeted to children with special health care 
108.27  needs, the section on children with special needs in the county 
108.28  child care fund plan, sections in Head Start plans on 
108.29  coordinated planning and services for children with special 
108.30  needs, any relevant portions of early childhood education plans, 
108.31  such as early childhood family education or school readiness, or 
108.32  other applicable coordinated school and community plans for 
108.33  early childhood programs and services, and the section of the 
108.34  maternal and child health special project grants that address 
108.35  needs of and service activities targeted to children with 
108.36  chronic illness and disabilities. 
109.1      Sec. 13.  Minnesota Statutes 2002, section 125A.76, 
109.2   subdivision 1, is amended to read: 
109.3      Subdivision 1.  [DEFINITIONS.] For the purposes of this 
109.4   section, the definitions in this subdivision apply. 
109.5      (a) "Base year" for fiscal year 1998 and later fiscal years 
109.6   means the second fiscal year preceding the fiscal year for which 
109.7   aid will be paid. 
109.8      (b) "Basic revenue" has the meaning given it in section 
109.9   126C.10, subdivision 2.  For the purposes of computing basic 
109.10  revenue pursuant to this section, each child with a disability 
109.11  shall be counted as prescribed in section 126C.05, subdivision 1.
109.12     (c) "Essential personnel" means teachers, cultural 
109.13  liaisons, related services, and support services staff providing 
109.14  direct services to students.  Essential personnel may also 
109.15  include special education paraprofessionals or clericals 
109.16  providing support to teachers and students by preparing 
109.17  paperwork and making arrangements related to special education 
109.18  compliance requirements, including parent meetings and 
109.19  individual education plans. 
109.20     (d) "Average daily membership" has the meaning given it in 
109.21  section 126C.05. 
109.22     (e) "Program growth factor" means 1.08 for fiscal year 
109.23  2002, and 1.046 for fiscal year 2003, and 1.0 for fiscal year 
109.24  2004 and later. 
109.25     Sec. 14.  Minnesota Statutes 2002, section 125A.76, 
109.26  subdivision 4, is amended to read: 
109.27     Subd. 4.  [STATE TOTAL SPECIAL EDUCATION AID.] The state 
109.28  total special education aid for fiscal year 2000 2004 equals 
109.29  $463,000,000 $530,642,000.  The state total special education 
109.30  aid for fiscal year 2001 2005 equals $474,000,000 $529,164,000.  
109.31  The state total special education aid for later fiscal years 
109.32  equals:  
109.33     (1) the state total special education aid for the preceding 
109.34  fiscal year; times 
109.35     (2) the program growth factor; times 
109.36     (3) the ratio of the state total average daily membership 
110.1   for the current fiscal year to the state total average daily 
110.2   membership for the preceding fiscal year. 
110.3      Sec. 15.  Minnesota Statutes 2002, section 125A.79, 
110.4   subdivision 1, is amended to read: 
110.5      Subdivision 1.  [DEFINITIONS.] For the purposes of this 
110.6   section, the definitions in this subdivision apply. 
110.7      (a) "Unreimbursed special education cost" means the sum of 
110.8   the following: 
110.9      (1) expenditures for teachers' salaries, contracted 
110.10  services, supplies, equipment, and transportation services 
110.11  eligible for revenue under section 125A.76; plus 
110.12     (2) expenditures for tuition bills received under sections 
110.13  125A.03 to 125A.24 and 125A.65 for services eligible for revenue 
110.14  under section 125A.76, subdivision 2; minus 
110.15     (3) revenue for teachers' salaries, contracted services, 
110.16  supplies, and equipment under section 125A.76; minus 
110.17     (4) tuition receipts under sections 125A.03 to 125A.24 and 
110.18  125A.65 for services eligible for revenue under section 125A.76, 
110.19  subdivision 2. 
110.20     (b) "General revenue" means for fiscal year 1996, the sum 
110.21  of the general education revenue according to section 126C.10, 
110.22  subdivision 1, as adjusted according to section 127A.47, 
110.23  subdivision 7, plus the total referendum revenue according to 
110.24  section 126C.17, subdivision 4.  For fiscal years 1997 and 
110.25  later, "general revenue" means the sum of the general education 
110.26  revenue according to section 126C.10, subdivision 1, as adjusted 
110.27  according to section 127A.47, subdivisions 7 and 8, plus the 
110.28  total referendum revenue minus transportation sparsity revenue 
110.29  minus total operating capital revenue.  
110.30     (c) "Average daily membership" has the meaning given it in 
110.31  section 126C.05. 
110.32     (d) "Program growth factor" means 1.044 for fiscal year 
110.33  2002 and 1.02 for fiscal year 2003, and 1.0 for fiscal year 2004 
110.34  and later. 
110.35     Sec. 16.  Minnesota Statutes 2002, section 125A.79, 
110.36  subdivision 6, is amended to read: 
111.1      Subd. 6.  [STATE TOTAL SPECIAL EDUCATION EXCESS COST AID.] 
111.2   The state total special education excess cost aid for fiscal 
111.3   year 2004 equals $92,067,000.  The state total special education 
111.4   aid for fiscal year 2005 equals $91,811,000.  The state total 
111.5   special education excess cost aid for fiscal year 2002 2006 and 
111.6   later fiscal years equals: 
111.7      (1) the state total special education excess cost aid for 
111.8   the preceding fiscal year; times 
111.9      (2) the program growth factor; times 
111.10     (3) the ratio of the state total average daily membership 
111.11  for the current fiscal year to the state total average daily 
111.12  membership for the preceding fiscal year.  
111.13     Sec. 17.  [SPECIAL EDUCATION CROSS-SUBSIDY REDUCTION AID.] 
111.14     (a) For fiscal year 2004, a district shall receive special 
111.15  education cross-subsidy reduction aid equal to $5,000,000 times 
111.16  the ratio of the district's special education excess cost aid 
111.17  for the previous fiscal year according to Minnesota Statutes, 
111.18  section 125A.79, subdivision 7, to the state total special 
111.19  education excess cost aid for the previous fiscal year according 
111.20  to Minnesota Statutes, section 125A.79, subdivision 6. 
111.21     (b) For fiscal year 2005, a district shall receive special 
111.22  education cross-subsidy reduction aid equal to $11,000,000 times 
111.23  the ratio of the district's special education excess cost aid 
111.24  for the previous fiscal year according to Minnesota Statutes, 
111.25  section 125A.79, subdivision 7, to the state total special 
111.26  education excess cost aid for the previous fiscal year according 
111.27  to Minnesota Statutes, section 125A.79, subdivision 6. 
111.28     (c) Special education cross-subsidy reduction aid must be 
111.29  used to pay for a district's unfunded special education costs 
111.30  that would otherwise be cross-subsidized by a district's general 
111.31  education revenue. 
111.32     Sec. 18.  [IMPACT OF WAIVING SPECIFIC SPECIAL EDUCATION 
111.33  REQUIREMENTS THAT EXCEED FEDERAL LAW; THREE-YEAR PILOT PROJECT.] 
111.34     Subdivision 1.  [ESTABLISHMENT; GOAL.] A three-year pilot 
111.35  project is established to permit independent school district No. 
111.36  535, Rochester, and up to three other geographically diverse 
112.1   school districts or cooperative units under Minnesota Statutes, 
112.2   section 125A.11, subdivision 3, selected by the commissioner of 
112.3   education to determine the impact, if any, of waiving specific 
112.4   special education requirements listed in subdivision 3 on the 
112.5   quality and cost-effectiveness of the instructional services and 
112.6   educational outcomes provided to eligible students by the 
112.7   project participant. 
112.8      Subd. 2.  [ELIGIBILITY; APPLICATIONS.] The commissioner 
112.9   must transmit information about the pilot project and make 
112.10  application forms available to interested school districts or 
112.11  cooperative units.  Applications must be submitted to the 
112.12  commissioner by July 1, 2003.  An applicant must identify the 
112.13  specific special education requirements listed in subdivision 3 
112.14  for which the applicant seeks a waiver and indicate how the 
112.15  applicant proposes to modify the activities and procedures 
112.16  affected by the waiver.  The commissioner must approve the 
112.17  applications by August 1, 2003. 
112.18     Subd. 3.  [WAIVERS.] The following state special education 
112.19  requirements are waived for the 2003-2004, 2004-2005, and 
112.20  2005-2006 school years for independent school district No. 535, 
112.21  Rochester, and the other school districts or cooperative units 
112.22  participating in this pilot project: 
112.23     (1) Minnesota Statutes, section 125A.56, governing 
112.24  prereferral interventions; 
112.25     (2) Minnesota Statutes, section 125A.08, paragraph (a), 
112.26  clause (1), governing transitional services for students when 
112.27  reaching age 14 or grade 9, who transition from secondary 
112.28  services to postsecondary education and training, employment, 
112.29  community participation, recreation and leisure, and home 
112.30  living; 
112.31     (3) Minnesota Statutes, section 125A.22, governing 
112.32  community transition interagency committees; and 
112.33     (4) Minnesota Statutes, section 125A.023, governing 
112.34  coordinated interagency services but only affecting eligible 
112.35  children with disabilities age seven or older. 
112.36     Subd. 4.  [STUDENTS' RIGHTS.] Eligible students enrolled in 
113.1   a district or receiving special instruction and services through 
113.2   a cooperative unit that is participating in this pilot project 
113.3   remain entitled to the procedural protections provided under 
113.4   federal law in any matter that affects the students' 
113.5   identification, evaluation, and placement or change in 
113.6   placement, or protections provided under state law in dismissal 
113.7   proceedings that may result in students' suspension, exclusion, 
113.8   or expulsion.  Project participants must ensure that students' 
113.9   civil rights are protected, provide equal educational 
113.10  opportunities, and prohibit discrimination.  Failure to comply 
113.11  with this subdivision will at least cause a district or 
113.12  cooperative unit to become ineligible to participate in the 
113.13  pilot project. 
113.14     Subd. 5.  [TECHNICAL ASSISTANCE.] The commissioner must 
113.15  provide project participants, upon request, assistance in 
113.16  developing and implementing a valid and uniform procedure under 
113.17  subdivision 6 to evaluate the participants' experience. 
113.18     Subd. 6.  [EVALUATION; REPORT.] All participating school 
113.19  districts and cooperative units must evaluate the impact, if 
113.20  any, of waiving specific special education requirements listed 
113.21  in subdivision 3 on the quality and cost-effectiveness of the 
113.22  instructional services and educational outcomes provided to 
113.23  eligible students by the project participant.  Project 
113.24  participants must focus the evaluation on the overall efficacy 
113.25  of modifying the activities and procedures affected by the 
113.26  waiver.  The evaluation must include a mechanism for documenting 
113.27  parents' response to the pilot project.  Project participants 
113.28  must submit to the commissioner a progress report by September 
113.29  1, 2004, and a final report by November 1, 2005.  The 
113.30  commissioner must compile and present the results of the reports 
113.31  to the legislature by February 1, 2006, and recommend 
113.32  appropriate amendments to the statutory requirements listed in 
113.33  subdivision 3. 
113.34     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
113.35  following final enactment. 
113.36     Sec. 19.  [DEPARTMENT RESPONSIBILITY.] 
114.1      By January 1, 2004, the commissioner of education must 
114.2   adopt rules that: 
114.3      (1) establish criteria for selecting hearing officers, the 
114.4   standards of conduct to which a hearing officer must adhere, and 
114.5   a process to evaluate the hearing system; 
114.6      (2) ensure that appropriately trained and knowledgeable 
114.7   persons conduct due process hearings in compliance with federal 
114.8   law; and 
114.9      (3) create standards for expedited due process hearings 
114.10  under federal law. 
114.11     By March 1, 2004, the commissioner of education must 
114.12  develop and make available a notice for participants in 
114.13  state-provided dispute resolution processes that informs 
114.14  participants of their rights concerning dispute resolution. 
114.15     Sec. 20.  [APPROPRIATIONS.] 
114.16     Subdivision 1.  [DEPARTMENT OF EDUCATION.] The sums 
114.17  indicated in this section are appropriated from the general fund 
114.18  to the department of education for the fiscal years designated. 
114.19     Subd. 2.  [SPECIAL EDUCATION; REGULAR.] For special 
114.20  education aid under Minnesota Statutes, section 125A.75: 
114.21       $515,091,000   .....     2004 
114.22       $529,460,000   .....     2005 
114.23     The 2004 appropriation includes $90,577,000 for 2003 and 
114.24  $424,514,000 for 2004. 
114.25     The 2005 appropriation includes $106,128,000 for 2004 and 
114.26  $423,332,000 for 2005. 
114.27     Subd. 3.  [SPECIAL EDUCATION CROSS-SUBSIDY REDUCTION 
114.28  AID.] For special education cross-subsidy reduction aid under 
114.29  section 17: 
114.30       $ 5,000,000    .....     2004 
114.31       $11,000,000    .....     2005 
114.32     This is a onetime appropriation. 
114.33     Subd. 4.  [AID FOR CHILDREN WITH DISABILITIES.] For aid 
114.34  under Minnesota Statutes, section 125A.75, subdivision 3, for 
114.35  children with disabilities placed in residential facilities 
114.36  within the district boundaries for whom no district of residence 
115.1   can be determined: 
115.2        $2,177,000     .....     2004 
115.3        $2,244,000     .....     2005 
115.4      If the appropriation for either year is insufficient, the 
115.5   appropriation for the other year is available.  
115.6      Subd. 5.  [TRAVEL FOR HOME-BASED SERVICES.] For aid for 
115.7   teacher travel for home-based services under Minnesota Statutes, 
115.8   section 125A.75, subdivision 1: 
115.9        $220,000       .....     2004 
115.10       $261,000       .....     2005 
115.11     The 2004 appropriation includes $34,000 for 2003 and 
115.12  $186,000 for 2004. 
115.13     The 2005 appropriation includes $46,000 for 2004 and 
115.14  $215,000 for 2005. 
115.15     Subd. 6.  [SPECIAL EDUCATION; EXCESS COSTS.] For excess 
115.16  cost aid under Minnesota Statutes, section 125A.79, subdivision 
115.17  7: 
115.18       $92,606,000    .....     2004 
115.19       $92,984,000    .....     2005 
115.20     The 2004 appropriation includes $41,754,000 for 2003 and 
115.21  $50,852,000 for 2004. 
115.22     The 2005 appropriation includes $41,215,000 for 2004 and 
115.23  $51,769,000 for 2005.  
115.24     Subd. 7.  [LITIGATION COSTS FOR SPECIAL EDUCATION.] For 
115.25  paying the costs a district incurs under Minnesota Statutes, 
115.26  section 125A.75, subdivision 8: 
115.27       $346,000       .....     2004 
115.28       $ 17,000       .....     2005 
115.29     Subd. 8.  [TRANSITION FOR DISABLED STUDENTS.] For aid for 
115.30  transition programs for children with disabilities under 
115.31  Minnesota Statutes, section 124D.454: 
115.32       $8,625,000     .....     2004 
115.33       $8,867,000     .....     2005 
115.34     The 2004 appropriation includes $1,516,000 for 2003 and 
115.35  $7,109,000 for 2004.  
115.36     The 2005 appropriation includes $1,777,000 for 2004 and 
116.1   $7,090,000 for 2005.  
116.2      Subd. 9.  [COURT-PLACED SPECIAL EDUCATION REVENUE.] For 
116.3   reimbursing serving school districts for unreimbursed eligible 
116.4   expenditures attributable to children placed in the serving 
116.5   school district by court action under Minnesota Statutes, 
116.6   section 125A.79, subdivision 4: 
116.7        $152,000       .....     2004 
116.8        $160,000       .....     2005 
116.9      Subd. 10.  [OUT-OF-STATE TUITION SPECIAL EDUCATION.] For 
116.10  special education out-of-state tuition according to Minnesota 
116.11  Statutes, section 125A.79, subdivision 8: 
116.12       $250,000       .....     2004 
116.13       $250,000       .....     2005 
116.14     Sec. 21.  [REPEALER.] 
116.15     Minnesota Statutes 2002, sections 125A.023, subdivision 5; 
116.16  125A.09; 125A.47; and 125A.79, subdivision 2, are repealed. 
116.17                             ARTICLE 4
116.18                     FACILITIES AND TECHNOLOGY
116.19     Section 1.  Minnesota Statutes 2002, section 123B.51, 
116.20  subdivision 3, is amended to read: 
116.21     Subd. 3.  [LEASE ROOMS OR BUILDINGS REAL PROPERTY.] When 
116.22  necessary, the board may lease rooms or buildings real property 
116.23  for school purposes. 
116.24     Sec. 2.  Minnesota Statutes 2002, section 123B.51, 
116.25  subdivision 4, is amended to read: 
116.26     Subd. 4.  [LEASE FOR NONSCHOOL PURPOSE.] (a) The board may 
116.27  lease to any person, business, or organization a schoolhouse 
116.28  real property that is not needed for school purposes, or part of 
116.29  a schoolhouse the property that is not needed for school 
116.30  purposes if the board determines that leasing part of a 
116.31  schoolhouse the property does not interfere with the educational 
116.32  programs taking place in the rest of the building on the 
116.33  property.  The board may charge and collect reasonable 
116.34  consideration for the lease and may determine the terms and 
116.35  conditions of the lease. 
116.36     (b) In districts with outstanding bonds, the net proceeds 
117.1   of the lease must be first deposited in the debt retirement fund 
117.2   of the district in an amount sufficient to meet when due that 
117.3   percentage of the principal and interest payments for 
117.4   outstanding bonds that is ascribable to the payment of expenses 
117.5   necessary and incidental to the construction or purchase of the 
117.6   particular building or property that is leased.  Any remaining 
117.7   net proceeds in these districts may be deposited in either the 
117.8   debt redemption fund or operating capital expenditure 
117.9   fund account.  All net proceeds of the lease in districts 
117.10  without outstanding bonds shall be deposited in the operating 
117.11  capital expenditure fund account of the district. 
117.12     (c) The board may make capital improvements, including 
117.13  fixtures, to a schoolhouse or a portion thereof to the real 
117.14  property, not exceeding in cost the replacement value of 
117.15  the schoolhouse property, to facilitate its rental, and the 
117.16  lease of an the improved schoolhouse property, or part of it, 
117.17  shall provide for rentals which will recover the cost of the 
117.18  improvements over the initial term of the lease.  
117.19  Notwithstanding paragraph (b), the portion of the rentals 
117.20  representing the cost of the improvements shall be deposited in 
117.21  the operating capital expenditure fund account of the district 
117.22  and the balance of the rentals shall be used as provided in 
117.23  paragraph (b).  
117.24     Sec. 3.  Minnesota Statutes 2002, section 123B.52, is 
117.25  amended by adding a subdivision to read: 
117.26     Subd. 1a.  [CONSTRUCTION CONTRACTS.] A project labor 
117.27  agreement is a hiring agreement that establishes wages, uniform 
117.28  work schedules, and rules for dispute resolution to manage 
117.29  construction projects that generally require, among other 
117.30  things, payment of union dues or fees to a labor organization or 
117.31  membership in or affiliation with a labor organization.  A 
117.32  school board must adopt at a public meeting a written resolution 
117.33  authorizing a project labor agreement to construct or repair a 
117.34  facility through a contract or bid.  The board must publish in 
117.35  the official newspaper of the district notice of the meeting at 
117.36  least 30 days in advance. 
118.1      Sec. 4.  Minnesota Statutes 2002, section 123B.53, 
118.2   subdivision 4, is amended to read: 
118.3      Subd. 4.  [DEBT SERVICE EQUALIZATION REVENUE.] (a) The debt 
118.4   service equalization revenue of a district equals the sum of the 
118.5   first tier debt service equalization revenue and the second tier 
118.6   debt service equalization revenue. 
118.7      (b) The first tier debt service equalization revenue of a 
118.8   district equals the greater of zero or the eligible debt service 
118.9   revenue minus the amount raised by a levy of 15 percent times 
118.10  the adjusted net tax capacity of the district minus the second 
118.11  tier debt service equalization revenue of the district. 
118.12     (c) The second tier debt service equalization revenue of a 
118.13  district equals the greater of zero or the eligible debt service 
118.14  revenue, excluding alternative facilities levies under section 
118.15  123B.59, subdivision 5, minus the amount raised by a levy of 25 
118.16  percent times the adjusted net tax capacity of the district. 
118.17     <b>[EFFECTIVE DATE.]</b> This section is effective for revenue for 
118.18  fiscal year 2005. 
118.19     Sec. 5.  Minnesota Statutes 2002, section 123B.57, 
118.20  subdivision 1, is amended to read: 
118.21     Subdivision 1.  [HEALTH AND SAFETY PROGRAM.] (a) To receive 
118.22  health and safety revenue for any fiscal year a district must 
118.23  submit to the commissioner an application for aid and levy by 
118.24  the date determined by the commissioner.  The application may be 
118.25  for hazardous substance removal, fire and life safety code 
118.26  repairs, labor and industry regulated facility and equipment 
118.27  violations, and health, safety, and environmental management, 
118.28  including indoor air quality management.  The application must 
118.29  include a health and safety program adopted by the school 
118.30  district board.  The program must include the estimated cost, 
118.31  per building, of the program by fiscal year.  Upon approval 
118.32  through the adoption of a resolution by each of an intermediate 
118.33  district's member school district boards and the approval of the 
118.34  department of children, families, and learning education, a 
118.35  school district may include its proportionate share of the costs 
118.36  of health and safety projects for an intermediate district in 
119.1   its application. 
119.2      (b) Health and safety projects with an estimated cost of 
119.3   $500,000 or more per site, approved after February 1, 2003, are 
119.4   not eligible for health and safety revenue.  Health and safety 
119.5   projects with an estimated cost of $500,000 or more per site, 
119.6   approved after February 1, 2003, that meet all other 
119.7   requirements for health and safety funding, are eligible for 
119.8   alternative facilities bonding and levy revenue according to 
119.9   section 123B.59.  A school board shall not separate portions of 
119.10  a single project into components to qualify for health and 
119.11  safety revenue, and shall not combine unrelated projects into a 
119.12  single project to qualify for alternative facilities bonding and 
119.13  levy revenue. 
119.14     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
119.15  following final enactment and applies to projects approved after 
119.16  February 1, 2003, for taxes payable in 2004 and later. 
119.17     Sec. 6.  Minnesota Statutes 2002, section 123B.57, 
119.18  subdivision 4, is amended to read: 
119.19     Subd. 4.  [HEALTH AND SAFETY LEVY.] To receive health and 
119.20  safety revenue, a district may levy an amount equal to the 
119.21  district's health and safety revenue as defined in subdivision 3 
119.22  multiplied by the lesser of one, or the ratio of the quotient 
119.23  derived by dividing the adjusted net tax capacity of the 
119.24  district for the year preceding the year the levy is certified 
119.25  by the adjusted marginal cost pupil units in the district for 
119.26  the school year to which the levy is attributable, 
119.27  to $3,956 $2,935. 
119.28     Sec. 7.  Minnesota Statutes 2002, section 123B.57, 
119.29  subdivision 6, is amended to read: 
119.30     Subd. 6.  [USES OF HEALTH AND SAFETY REVENUE.] (a) Health 
119.31  and safety revenue may be used only for approved expenditures 
119.32  necessary to correct fire and life safety hazards, life safety 
119.33  hazards, or for the removal or encapsulation of asbestos from 
119.34  school buildings or property owned or being acquired by the 
119.35  district, asbestos-related repairs, cleanup and disposal of 
119.36  polychlorinated biphenyls found in school buildings or property 
120.1   owned or being acquired by the district, or the cleanup, 
120.2   removal, disposal, and repairs related to storing heating fuel 
120.3   or transportation fuels such as alcohol, gasoline, fuel oil, and 
120.4   special fuel, as defined in section 296A.01, labor and 
120.5   industry Minnesota occupational safety and health administration 
120.6   regulated facility and equipment hazards, indoor air quality 
120.7   mold abatement, upgrades or replacement of mechanical 
120.8   ventilation systems to meet American Society of Heating, 
120.9   Refrigerating and Air Conditioning Engineers standards and state 
120.10  mechanical code, department of health food code and swimming 
120.11  pool hazards excluding depth correction, and health, safety, and 
120.12  environmental management.  Health and safety revenue must not be 
120.13  used to finance a lease purchase agreement, installment purchase 
120.14  agreement, or other deferred payments agreement.  Health and 
120.15  safety revenue must not be used for the construction of new 
120.16  facilities or the purchase of portable classrooms, for interest 
120.17  or other financing expenses, or for energy efficiency projects 
120.18  under section 123B.65.  The revenue may not be used for a 
120.19  building or property or part of a building or property used for 
120.20  post-secondary instruction or administration or for a purpose 
120.21  unrelated to elementary and secondary education. 
120.22     (b) Notwithstanding paragraph (a), health and safety 
120.23  revenue must not be used for replacement of building materials 
120.24  or facilities including roof, walls, windows, internal fixtures 
120.25  and flooring, nonhealth and safety costs associated with 
120.26  demolition of facilities, structural repair or replacement of 
120.27  facilities due to unsafe conditions, violence prevention and 
120.28  facility security, ergonomics, building and heating, ventilating 
120.29  and air conditioning supplies, maintenance, cleaning, testing, 
120.30  and calibration activities.  All assessments, investigations, 
120.31  inventories, and support equipment not leading to the 
120.32  engineering or construction of a project shall be included in 
120.33  the health, safety, and environmental management costs in 
120.34  subdivision 8, paragraph (a). 
120.35     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
120.36  following final enactment and applies to projects approved after 
121.1   February 1, 2003, for taxes payable in 2004 and later. 
121.2      Sec. 8.  Minnesota Statutes 2002, section 123B.59, 
121.3   subdivision 1, is amended to read: 
121.4      Subdivision 1.  [TO QUALIFY.] (a) An independent or special 
121.5   school district qualifies to participate in the alternative 
121.6   facilities bonding and levy program if the district has: 
121.7      (1) more than 66 students per grade; 
121.8      (2) over 1,850,000 square feet of space and the average age 
121.9   of building space is 15 years or older or over 1,500,000 square 
121.10  feet and the average age of building space is 35 years or older; 
121.11     (3) insufficient funds from projected health and safety 
121.12  revenue and capital facilities revenue to meet the requirements 
121.13  for deferred maintenance, to make accessibility improvements, or 
121.14  to make fire, safety, or health repairs; and 
121.15     (4) a ten-year facility plan approved by the commissioner 
121.16  according to subdivision 2. 
121.17     (b) An independent or special school district not eligible 
121.18  to participate in the alternative facilities bonding and levy 
121.19  program under paragraph (a) qualifies for limited participation 
121.20  in the program if the district has: 
121.21     (1) one or more health and safety projects with an 
121.22  estimated cost of $500,000 or more per site that would qualify 
121.23  for health and safety revenue except for the project size 
121.24  limitation in section 123B.57, subdivision 1, paragraph (b); and 
121.25     (2) insufficient funds from capital facilities revenue to 
121.26  fund those projects. 
121.27     <b>[EFFECTIVE DATE.]</b> This section is effective for revenue for 
121.28  fiscal year 2005. 
121.29     Sec. 9.  Minnesota Statutes 2002, section 123B.59, 
121.30  subdivision 2, is amended to read: 
121.31     Subd. 2.  [TEN-YEAR FACILITY PLAN.] (a) A district 
121.32  qualifying district under subdivision 1, paragraph (a), must 
121.33  have a ten-year facility plan approved by the commissioner that 
121.34  includes an inventory of projects and costs that would be 
121.35  eligible for: 
121.36     (1) health and safety revenue, without restriction as to 
122.1   project size; 
122.2      (2) disabled access levy; and 
122.3      (3) deferred capital expenditures and maintenance projects 
122.4   necessary to prevent further erosion of facilities. 
122.5      (b) A district qualifying under subdivision 1, paragraph 
122.6   (b), must have a five-year plan approved by the commissioner 
122.7   that includes an inventory of projects and costs for health and 
122.8   safety projects with an estimated cost of $500,000 or more per 
122.9   site that would qualify for health and safety revenue except for 
122.10  the project size limitation in section 123B.57, subdivision 1, 
122.11  paragraph (b). 
122.12     (c) The school district must: 
122.13     (1) annually update the plan plans; 
122.14     (2) biennially submit a facility maintenance plan; and 
122.15     (3) indicate whether the district will issue bonds to 
122.16  finance the plan or levy for the costs. 
122.17     <b>[EFFECTIVE DATE.]</b> This section is effective for revenue for 
122.18  fiscal year 2005. 
122.19     Sec. 10.  Minnesota Statutes 2002, section 123B.59, 
122.20  subdivision 3, is amended to read: 
122.21     Subd. 3.  [BOND AUTHORIZATION.] (a) A school district, upon 
122.22  approval of its board and the commissioner, may issue general 
122.23  obligation bonds under this section to finance approved 
122.24  facilities plans approved by its board and the commissioner.  
122.25  Chapter 475, except sections 475.58 and 475.59, must be complied 
122.26  with.  The district may levy under subdivision 5 for the debt 
122.27  service revenue.  The authority to issue bonds under this 
122.28  section is in addition to any bonding authority authorized by 
122.29  this chapter, or other law.  The amount of bonding authority 
122.30  authorized under this section must be disregarded in calculating 
122.31  the bonding or net debt limits of this chapter, or any other law 
122.32  other than section 475.53, subdivision 4. 
122.33     (b) Before a district issues bonds under this subdivision, 
122.34  it must publish notice of the intended projects, the amount of 
122.35  the bond issue, and the total amount of district indebtedness. 
122.36     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
123.1   following final enactment and applies to bonds issued after 
123.2   April 15, 2003, for taxes payable in 2004 and later. 
123.3      Sec. 11.  Minnesota Statutes 2002, section 123B.59, is 
123.4   amended by adding a subdivision to read: 
123.5      Subd. 3a.  [LEVY AUTHORIZATION.] (a) A school district may 
123.6   levy under this section to finance the portion of facilities 
123.7   plans approved by its board and the commissioner that are not 
123.8   financed through bond issues according to subdivision 3. 
123.9      (b) Before a district levies under this subdivision, it 
123.10  must publish notice of the intended projects, including the 
123.11  total estimated project cost. 
123.12     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
123.13  following final enactment and applies to levies for taxes 
123.14  payable in 2004 and later. 
123.15     Sec. 12.  Minnesota Statutes 2002, section 123B.59, 
123.16  subdivision 5, is amended to read: 
123.17     Subd. 5.  [LEVY AUTHORIZED.] A district, after local board 
123.18  approval, may levy for costs related to an approved facility 
123.19  plan as follows:  
123.20     (a) if the district has indicated to the commissioner that 
123.21  bonds will be issued, the district may levy for the principal 
123.22  and interest payments on outstanding bonds issued according to 
123.23  subdivision 3 after reduction for any alternative facilities aid 
123.24  receivable under subdivision 6; or 
123.25     (b) if the district has indicated to the commissioner that 
123.26  the plan will be funded through levy, the district may levy 
123.27  according to the schedule approved in the plan after reduction 
123.28  for any alternative facilities aid receivable under subdivision 
123.29  6 3a. 
123.30     <b>[EFFECTIVE DATE.]</b> This section is effective for taxes 
123.31  payable in 2004. 
123.32     Sec. 13.  Minnesota Statutes 2002, section 123B.63, 
123.33  subdivision 1, is amended to read: 
123.34     Subdivision 1.  [CREATION OF A DOWN PAYMENT CAPITAL PROJECT 
123.35  REFERENDUM ACCOUNT.] A district may create a down payment 
123.36  capital project referendum account as a separate account in 
124.1   its general fund or its building construction fund.  All 
124.2   proceeds from the down payment capital project levy must be 
124.3   deposited in the capital expenditure fund and transferred to 
124.4   this account project referendum account in its general fund.  
124.5   The portion of the proceeds to be used for building construction 
124.6   must be transferred to the capital project referendum account in 
124.7   its building construction fund.  Interest income attributable to 
124.8   the down payment capital project referendum account must be 
124.9   credited to the account. 
124.10     Sec. 14.  Minnesota Statutes 2002, section 123B.63, 
124.11  subdivision 2, is amended to read: 
124.12     Subd. 2.  [USES OF THE ACCOUNT.] Money in the down payment 
124.13  capital project referendum account must be used as a down 
124.14  payment for the future costs of acquisition and betterment for a 
124.15  project that has been reviewed under section 123B.71 and has 
124.16  been approved according to subdivision 3. 
124.17     Sec. 15.  Minnesota Statutes 2002, section 123B.63, 
124.18  subdivision 3, is amended to read: 
124.19     Subd. 3.  [FACILITIES DOWN PAYMENT CAPITAL PROJECT LEVY 
124.20  REFERENDUM.] A district may levy the local tax rate approved by 
124.21  a majority of the electors voting on the question to provide 
124.22  funds for a down payment for an approved project.  The election 
124.23  must take place no more than five years before the estimated 
124.24  date of commencement of the project.  The referendum must be 
124.25  held on a date set by the board.  A referendum for a project not 
124.26  receiving a positive review and comment by the commissioner 
124.27  under section 123B.71 must be approved by at least 60 percent of 
124.28  the voters at the election.  The referendum may be called by the 
124.29  school board and may be held: 
124.30     (1) separately, before an election for the issuance of 
124.31  obligations for the project under chapter 475; or 
124.32     (2) in conjunction with an election for the issuance of 
124.33  obligations for the project under chapter 475; or 
124.34     (3) notwithstanding section 475.59, as a conjunctive 
124.35  question authorizing both the down payment capital project levy 
124.36  and the issuance of obligations for the project under chapter 
125.1   475.  Any obligations authorized for a project may be issued 
125.2   within five years of the date of the election. 
125.3      The ballot must provide a general description of the 
125.4   proposed project, state the estimated total cost of the project, 
125.5   state whether the project has received a positive or negative 
125.6   review and comment from the commissioner, state the maximum 
125.7   amount of the down payment capital project levy as a percentage 
125.8   of net tax capacity, state the amount that will be raised by 
125.9   that local tax rate in the first year it is to be levied, and 
125.10  state the maximum number of years that the levy authorization 
125.11  will apply. 
125.12     The ballot must contain a textual portion with the 
125.13  information required in this section and a question stating 
125.14  substantially the following: 
125.15     "Shall the down payment capital project levy proposed by 
125.16  the board of .......... School District No. .......... be 
125.17  approved?" 
125.18     If approved, the amount provided by the approved local tax 
125.19  rate applied to the net tax capacity for the year preceding the 
125.20  year the levy is certified may be certified for the number of 
125.21  years approved. 
125.22     In the event a conjunctive question proposes to authorize 
125.23  both the down payment capital project levy and the issuance of 
125.24  obligations for the project, appropriate language authorizing 
125.25  the issuance of obligations must also be included in the 
125.26  question.  
125.27     The district must notify the commissioner of the results of 
125.28  the referendum. 
125.29     Sec. 16.  Minnesota Statutes 2002, section 123B.63, 
125.30  subdivision 4, is amended to read: 
125.31     Subd. 4.  [EXCESS BUILDING CONSTRUCTION FUND LEVY 
125.32  PROCEEDS.] Any funds remaining in the down payment capital 
125.33  project referendum account that are not applied to the payment 
125.34  of the costs of the approved project before its final completion 
125.35  must be transferred to the district's debt redemption fund.  
125.36     Sec. 17.  Minnesota Statutes 2002, section 126C.40, 
126.1   subdivision 1, is amended to read: 
126.2      Subdivision 1.  [TO LEASE BUILDING OR LAND.] (a) When an 
126.3   independent or a special school district or a group of 
126.4   independent or special school districts finds it economically 
126.5   advantageous to rent or lease a building or land for any 
126.6   instructional purposes or for school storage or furniture 
126.7   repair, and it determines that the operating capital revenue 
126.8   authorized under section 126C.10, subdivision 13, is 
126.9   insufficient for this purpose, it may apply to the commissioner 
126.10  for permission to make an additional capital expenditure levy 
126.11  for this purpose.  An application for permission to levy under 
126.12  this subdivision must contain financial justification for the 
126.13  proposed levy, the terms and conditions of the proposed lease, 
126.14  and a description of the space to be leased and its proposed use.
126.15     (b) The criteria for approval of applications to levy under 
126.16  this subdivision must include:  the reasonableness of the price, 
126.17  the appropriateness of the space to the proposed activity, the 
126.18  feasibility of transporting pupils to the leased building or 
126.19  land, conformity of the lease to the laws and rules of the state 
126.20  of Minnesota, and the appropriateness of the proposed lease to 
126.21  the space needs and the financial condition of the district.  
126.22  The commissioner must not authorize a levy under this 
126.23  subdivision in an amount greater than 90 percent of the cost to 
126.24  the district of renting or leasing a building or land for 
126.25  approved purposes.  The proceeds of this levy must not be used 
126.26  for custodial or other maintenance services.  A district may not 
126.27  levy under this subdivision for the purpose of leasing or 
126.28  renting a district-owned building or site to itself. 
126.29     (c) For agreements finalized after July 1, 1997, a district 
126.30  may not levy under this subdivision for the purpose of leasing:  
126.31  (1) a newly constructed building used primarily for regular 
126.32  kindergarten, elementary, or secondary instruction; or (2) a 
126.33  newly constructed building addition or additions used primarily 
126.34  for regular kindergarten, elementary, or secondary instruction 
126.35  that contains more than 20 percent of the square footage of the 
126.36  previously existing building. 
127.1      (d) Notwithstanding paragraph (b), a district may levy 
127.2   under this subdivision for the purpose of leasing or renting a 
127.3   district-owned building or site to itself only if the amount is 
127.4   needed by the district to make payments required by a lease 
127.5   purchase agreement, installment purchase agreement, or other 
127.6   deferred payments agreement authorized by law, and the levy 
127.7   meets the requirements of paragraph (c).  A levy authorized for 
127.8   a district by the commissioner under this paragraph may be in 
127.9   the amount needed by the district to make payments required by a 
127.10  lease purchase agreement, installment purchase agreement, or 
127.11  other deferred payments agreement authorized by law, provided 
127.12  that any agreement include a provision giving the school 
127.13  districts the right to terminate the agreement annually without 
127.14  penalty. 
127.15     (e) The total levy under this subdivision for a district 
127.16  for any year must not exceed $100 $90 times the resident pupil 
127.17  units for the fiscal year to which the levy is attributable. 
127.18     (f) For agreements for which a review and comment have been 
127.19  submitted to the department of children, families, and 
127.20  learning education after April 1, 1998, the term "instructional 
127.21  purpose" as used in this subdivision excludes expenditures on 
127.22  stadiums. 
127.23     (g) The commissioner of children, families, and 
127.24  learning education may authorize a school district to exceed the 
127.25  limit in paragraph (e) if the school district petitions the 
127.26  commissioner for approval.  The commissioner shall grant 
127.27  approval to a school district to exceed the limit in paragraph 
127.28  (e) for not more than five years if the district meets the 
127.29  following criteria: 
127.30     (1) the school district has been experiencing pupil 
127.31  enrollment growth in the preceding five years; 
127.32     (2) the purpose of the increased levy is in the long-term 
127.33  public interest; 
127.34     (3) the purpose of the increased levy promotes colocation 
127.35  of government services; and 
127.36     (4) the purpose of the increased levy is in the long-term 
128.1   interest of the district by avoiding over construction of school 
128.2   facilities. 
128.3      (h) A school district that is a member of an intermediate 
128.4   school district may include in its authority under this 
128.5   section 90 percent of the costs associated with leases of 
128.6   administrative and classroom space for intermediate school 
128.7   district programs.  This authority must not exceed $25 $22.50 
128.8   times the adjusted marginal cost pupil units of the member 
128.9   districts.  This authority is in addition to any other authority 
128.10  authorized under this section. 
128.11     (i) In addition to the allowable capital levies in 
128.12  paragraph (a), a district that is a member of the "Technology 
128.13  and Information Education Systems" data processing joint board, 
128.14  that finds it economically advantageous to enter into a lease 
128.15  purchase agreement for a building for a group of school 
128.16  districts or special school districts for staff development 
128.17  purposes, may levy for its portion of lease costs attributed to 
128.18  the district within the total levy limit in paragraph (e). 
128.19     <b>[EFFECTIVE DATE.]</b> This section is effective for taxes 
128.20  payable in 2004. 
128.21     Sec. 18.  Minnesota Statutes 2002, section 126C.63, 
128.22  subdivision 5, is amended to read: 
128.23     Subd. 5.  [LEVY.] "Levy" means a district's net debt 
128.24  service levy after the reduction of debt service equalization 
128.25  aid under section 123B.53, subdivision 6.  For taxes payable in 
128.26  1994 2003 and later, each district's maximum effort debt service 
128.27  levy for purposes of subdivision 8, must be reduced by an equal 
128.28  number of percentage points if the commissioner of finance 
128.29  determines that the levy reduction will not result in 
128.30  a statewide property tax payment from the general fund in the 
128.31  state treasury according to section 16A.641, as would be 
128.32  required under Minnesota Statutes 1992, section 124.46 126C.72, 
128.33  subdivision 3.  A district's levy that is adjusted under this 
128.34  section must not be reduced below 22.3 30.1 percent of the 
128.35  district's adjusted net tax capacity. 
128.36     Sec. 19.  Minnesota Statutes 2002, section 126C.63, 
129.1   subdivision 8, is amended to read: 
129.2      Subd. 8.  [MAXIMUM EFFORT DEBT SERVICE LEVY.] (a) "Maximum 
129.3   effort debt service levy" means the lesser of: 
129.4      (1) a levy in whichever of the following amounts is 
129.5   applicable: 
129.6      (a) (i) in any district receiving a debt service loan for a 
129.7   debt service levy payable in 2002 and thereafter, or granted a 
129.8   capital loan after January 1, 2001 2002, a levy in total dollar 
129.9   amount computed at a rate of 30 40 percent of adjusted net tax 
129.10  capacity for taxes payable in 2002 and thereafter; 
129.11     (b) (ii) in any district receiving a debt service loan for 
129.12  a debt service levy payable in 1991 and thereafter 2001 or 
129.13  earlier, or granted a capital loan after before January 1 
129.14  2, 1990 2001, a levy in a total dollar amount computed at a rate 
129.15  of 24 32 percent of adjusted net tax capacity for taxes payable 
129.16  in 1991 2002 and thereafter; 
129.17     (c) in any district granted a debt service loan after July 
129.18  31, 1981, or granted a capital loan which is approved after July 
129.19  31, 1981, a levy in a total dollar amount computed as a tax rate 
129.20  of 21.92 percent on the adjusted net tax capacity for taxes 
129.21  payable in 1991 and thereafter; or 
129.22     (2) a levy in any district for which a capital loan was 
129.23  approved prior to August 1, 1981, a levy in a total dollar 
129.24  amount equal to the sum of the amount of the required debt 
129.25  service levy and an amount which when levied annually will in 
129.26  the opinion of the commissioner be sufficient to retire the 
129.27  remaining interest and principal on any outstanding loans from 
129.28  the state within 30 years of the original date when the capital 
129.29  loan was granted.  
129.30     (b) The board in any district affected by the provisions of 
129.31  paragraph (a), clause (2), may elect instead to determine the 
129.32  amount of its levy according to the provisions of paragraph (a), 
129.33  clause (1).  If a district's capital loan is not paid within 30 
129.34  years because it elects to determine the amount of its levy 
129.35  according to the provisions of paragraph (a), clause (2), the 
129.36  liability of the district for the amount of the difference 
130.1   between the amount it levied under paragraph (a), clause (2), 
130.2   and the amount it would have levied under paragraph (a), clause 
130.3   (1), and for interest on the amount of that difference, must not 
130.4   be satisfied and discharged pursuant to Minnesota Statutes 1988, 
130.5   or an earlier edition of Minnesota Statutes if applicable, 
130.6   section 124.43, subdivision 4. 
130.7      Sec. 20.  Minnesota Statutes 2002, section 126C.69, 
130.8   subdivision 2, is amended to read: 
130.9      Subd. 2.  [CAPITAL LOANS ELIGIBILITY.] Beginning July 1, 
130.10  1999, a district is not eligible for a capital loan unless the 
130.11  district's estimated net debt tax rate as computed by the 
130.12  commissioner after debt service equalization aid would be more 
130.13  than 30 40 percent of adjusted net tax capacity.  The estimate 
130.14  must assume a 20-year maturity schedule for new debt. 
130.15     Sec. 21.  Minnesota Statutes 2002, section 126C.69, 
130.16  subdivision 9, is amended to read: 
130.17     Subd. 9.  [LOAN AMOUNT LIMITS.] (a) A loan must not be 
130.18  recommended for approval for a district exceeding an amount 
130.19  computed as follows: 
130.20     (1) the amount requested by the district under subdivision 
130.21  6; 
130.22     (2) plus the aggregate principal amount of general 
130.23  obligation bonds of the district outstanding on June 30 of the 
130.24  year following the year the application was received, not 
130.25  exceeding the limitation on net debt of the district in section 
130.26  475.53, subdivision 4, or 450 607 percent of its adjusted net 
130.27  tax capacity as most recently determined, whichever is less; 
130.28     (3) less the maximum net debt permissible for the district 
130.29  on December 1 of the year the application is received, under the 
130.30  limitation in section 475.53, subdivision 4, or 450 607 percent 
130.31  of its adjusted net tax capacity as most recently determined, 
130.32  whichever is less; 
130.33     (4) less any amount by which the amount voted exceeds the 
130.34  total cost of the facilities for which the loan is granted.  
130.35     (b) The loan may be approved in an amount computed as 
130.36  provided in paragraph (a), clauses (1) to (3), subject to later 
131.1   reduction according to paragraph (a), clause (4). 
131.2      Sec. 22.  Minnesota Statutes 2002, section 475.61, 
131.3   subdivision 1, is amended to read: 
131.4      Subdivision 1.  [DEBT SERVICE RESOLUTION.] The governing 
131.5   body of any municipality issuing general obligations shall, 
131.6   prior to delivery of the obligations, levy by resolution a 
131.7   direct general ad valorem tax upon all taxable property in the 
131.8   municipality to be spread upon the tax rolls for each year of 
131.9   the term of the obligations.  The tax levies for all years for 
131.10  municipalities other than school districts shall be specified 
131.11  and such that if collected in full they, together with estimated 
131.12  collections of special assessments and other revenues pledged 
131.13  for the payment of said obligations, will produce at least five 
131.14  percent in excess of the amount needed to meet when due the 
131.15  principal and interest payments on the obligations.  The tax 
131.16  levies for school districts shall be specified and such that if 
131.17  collected in full they, together with estimated collection of 
131.18  other revenues pledged for the payment of the obligations, will 
131.19  produce between five and six percent in excess of the amount 
131.20  needed to meet when due the principal and interest payments on 
131.21  the obligations, rounded up to the nearest dollar; except that, 
131.22  with the permission of the commissioner of children, families, 
131.23  and learning education, a school board may specify a tax levy in 
131.24  a higher amount if necessary either to meet an anticipated tax 
131.25  delinquency or for cash flow needs to meet the required payments 
131.26  from the debt redemption fund.  Such resolution shall 
131.27  irrevocably appropriate the taxes so levied and any special 
131.28  assessments or other revenues so pledged to the municipality's 
131.29  debt service fund or a special debt service fund or account 
131.30  created for the payment of one or more issues of obligations.  
131.31  The governing body may, in its discretion, at any time after the 
131.32  obligations have been authorized, adopt a resolution levying 
131.33  only a portion of such taxes, to be filed, assessed, extended, 
131.34  collected, and remitted as hereinafter provided, and the amount 
131.35  or amounts therein levied shall be credited against the tax 
131.36  required to be levied prior to delivery of the obligations. 
132.1      Sec. 23.  Minnesota Statutes 2002, section 475.61, 
132.2   subdivision 3, is amended to read: 
132.3      Subd. 3.  [IRREVOCABILITY.] (a) Tax levies so made and 
132.4   filed shall be irrevocable, except as provided in this 
132.5   subdivision. 
132.6      (b) For purposes of this subdivision, "excess debt 
132.7   redemption fund balance" means the greater of zero or the 
132.8   balance in the district's debt redemption fund as of June 30 of 
132.9   the fiscal year ending in the year before the year the levy is 
132.10  certified, minus any debt redemption fund balance attributable 
132.11  to refunding of existing bonds, minus the amount of the levy 
132.12  reduction for the current year and the prior year under 
132.13  paragraphs (e) and (f), minus five percent of the district's 
132.14  required debt service levy for the next year. 
132.15     (c) By July 15 each year, a district shall report to the 
132.16  commissioner of children, families, and learning education the 
132.17  amount of the districts' debt redemption fund balance as of June 
132.18  30 of the prior year attributable to refunding of existing bonds.
132.19     (d) By August 15 each year, the commissioner shall 
132.20  determine the excess debt redemption fund balance for each 
132.21  school district, and shall certify the amount of the excess 
132.22  balance to the school district superintendent.  
132.23     (e) In each year when a district has an excess debt 
132.24  redemption fund balance, the commissioner shall report the 
132.25  amount of the excess to the county auditor and the auditor shall 
132.26  reduce the tax levy otherwise to be included in the rolls next 
132.27  prepared by the amount certified.  
132.28     (f) The school board may, with the approval of the 
132.29  commissioner, retain all or part of the excess balance if it is 
132.30  necessary to ensure the prompt and full payment of its 
132.31  obligations and any call premium on its obligations, will be 
132.32  used for redemption of its obligations in accordance with their 
132.33  terms, or to level out the debt service tax rate, excluding the 
132.34  debt excess adjustment, for its obligations over the next two 
132.35  years.  A school district requesting authority to retain all or 
132.36  part of the excess balance shall provide written documentation 
133.1   to the commissioner describing the rationale for its request by 
133.2   September 15 including the issuance of new obligations within 
133.3   the next year or the refunding of existing obligations.  A 
133.4   school district that retains an excess may request to transfer 
133.5   the excess to its operating capital account in the general fund 
133.6   under section 123B.80.  The school board may, with the approval 
133.7   of the commissioner, specify a tax levy in a higher amount if 
133.8   necessary because of anticipated tax delinquency or for cash 
133.9   flow needs to meet the required payments from the debt 
133.10  redemption fund.  
133.11     (g) If the governing body, including the governing body of 
133.12  a school district, in any year makes an irrevocable 
133.13  appropriation to the debt service fund of money actually on hand 
133.14  or if there is on hand any excess amount in the debt service 
133.15  fund, the recording officer may certify to the county auditor 
133.16  the fact and amount thereof and the auditor shall reduce by the 
133.17  amount so certified the amount otherwise to be included in the 
133.18  rolls next thereafter prepared. 
133.19     Sec. 24.  [BONDS; MOUNDS VIEW.] 
133.20     Notwithstanding Minnesota Statutes, section 123B.59, 
133.21  subdivision 3, independent school district No. 621, Mounds View, 
133.22  may issue bonds according to Minnesota Statutes 2002, section 
133.23  123B.59, subdivision 3, for projects approved by the 
133.24  commissioner before February 1, 2003. 
133.25     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
133.26  following final enactment. 
133.27     Sec. 25.  [LEASE LEVY EXCEPTION.] 
133.28     Notwithstanding Minnesota Statutes, section 126C.40, 
133.29  subdivision 1, a school district that has entered into a 
133.30  completed agreement under Laws 2000, chapter 492, article 1, 
133.31  section 3, subdivision 4, may continue to levy for 100 percent 
133.32  of the costs of any lease required by the agreement. 
133.33     Sec. 26.  [PROPERTY SALE; ST. FRANCIS SCHOOL DISTRICT.] 
133.34     Notwithstanding Minnesota Statutes, section 123B.51, 
133.35  subdivision 6, or any other law to the contrary, independent 
133.36  school district No. 15, St. Francis, may deposit the proceeds 
134.1   from the sale of land that was purchased with funds obtained 
134.2   according to Laws 1992, chapter 558, section 7, subdivision 7, 
134.3   in the district's general fund reserved for operating capital 
134.4   account.  The district may only use the proceeds of the sale for 
134.5   projects designed to create or improve safe walking routes for 
134.6   the students of independent school district No. 15, St. Francis. 
134.7      <b>[EFFECTIVE DATE.]</b> This section is effective the day 
134.8   following final enactment. 
134.9      Sec. 27.  [DISABLED ACCESS LEVY AUTHORITY; SOUTHLAND.] 
134.10     Notwithstanding the time limits in Minnesota Statutes, 
134.11  section 123B.58, subdivision 3, independent school district No. 
134.12  500, Southland, may levy up to $66,000 of its remaining disabled 
134.13  access levy authority over five or fewer years.  
134.14     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
134.15  following final enactment. 
134.16     Sec. 28.  [LEVY; ELGIN-MILLVILLE.] 
134.17     Subdivision 1.  [LEVY.] For taxes payable in 2004 only, 
134.18  independent school district No. 806, Elgin-Millville, may levy 
134.19  an amount up to $8,000 for handicapped access and fire safety 
134.20  improvements to school buildings.  
134.21     Subd. 2.  [LEVY LIMITATION.] The sum of the levy in 
134.22  subdivision 1 and other levies under Minnesota Statutes, section 
134.23  123B.58, must not exceed $300,000.  
134.24     <b>[EFFECTIVE DATE.]</b> This section is effective for revenue for 
134.25  fiscal year 2005 and thereafter. 
134.26     Sec. 29.  [GARAGE LEASE LEVY; SARTELL.] 
134.27     For taxes payable in 2004, 2005, and 2006, independent 
134.28  school district No. 740, Sartell, may levy up to $107,000 each 
134.29  year for the purpose of leasing a school bus storage facility.  
134.30  The department of education shall include this levy in the 
134.31  calculation of eligible building lease levy under Minnesota 
134.32  Statutes, section 126C.40, subdivision 1.  This levy shall not 
134.33  allow the district to exceed the $100 per resident marginal cost 
134.34  pupil unit cap in that section.  The district is eligible to 
134.35  make this levy only if it sells its current school bus storage 
134.36  site to the city of Sartell and the district may not use this 
135.1   levy as part of a lease purchase agreement to replace its 
135.2   current school bus storage facility.  
135.3      Sec. 30.  [HEALTH AND SAFETY EXCEPTION, ULEN-HITTERDAL.] 
135.4      Notwithstanding Minnesota Statutes, section 123B.57, 
135.5   independent school district No. 914, Ulen-Hitterdal, may submit 
135.6   to the commissioner of education an application that the 
135.7   demolition of a portion of the Ulen high school building be 
135.8   included in its health and safety revenue for fiscal year 2005.  
135.9   The department of education shall consider the district's 
135.10  application for health and safety revenue based on the 
135.11  eligibility criteria under Minnesota Statutes 2002, section 
135.12  123B.57. 
135.13     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
135.14  following final enactment. 
135.15     Sec. 31.  [APPROPRIATIONS.] 
135.16     Subdivision 1.  [DEPARTMENT OF EDUCATION.] The sums 
135.17  indicated in this section are appropriated from the general fund 
135.18  to the department of education for the fiscal years designated.  
135.19     Subd. 2.  [HEALTH AND SAFETY REVENUE.] For health and 
135.20  safety aid according to Minnesota Statutes, section 123B.57, 
135.21  subdivision 5: 
135.22       $7,839,000     .....     2004 
135.23       $6,068,000     .....     2005 
135.24     The 2004 appropriation includes $1,516,000 for 2003 and 
135.25  $6,323,000 for 2004. 
135.26     The 2005 appropriation includes $1,580,000 for 2004 and 
135.27  $4,488,000 for 2005. 
135.28     Subd. 3.  [DEBT SERVICE EQUALIZATION.] For debt service aid 
135.29  according to Minnesota Statutes, section 123B.53, subdivision 6: 
135.30       $34,500,000    .....     2004 
135.31       $37,575,000    .....     2005 
135.32     The 2004 appropriation includes $5,586,000 for 2003 and 
135.33  $28,914,000 for 2004. 
135.34     The 2005 appropriation includes $7,228,000 for 2004 and 
135.35  $30,347,000 for 2005. 
135.36     Subd. 4.  [ALTERNATIVE FACILITIES BONDING AID.] For 
136.1   alternative facilities bonding aid, according to Minnesota 
136.2   Statutes, section 123B.59, subdivision 1: 
136.3        $18,708,000    .....     2004 
136.4        $19,287,000    .....     2005 
136.5      The 2004 appropriation includes $3,278,000 for 2003 and 
136.6   $15,430,000 for 2004. 
136.7      The 2005 appropriation includes $3,857,000 for 2004 and 
136.8   $15,430,000 for 2005. 
136.9      Sec. 32.  [REPEALER.] 
136.10     Minnesota Statutes 2002, section 125B.11, is repealed. 
136.11                             ARTICLE 5 
136.12            NUTRITION, SCHOOL ACCOUNTING, OTHER PROGRAMS 
136.13     Section 1.  Minnesota Statutes 2002, section 12.21, 
136.14  subdivision 3, is amended to read: 
136.15     Subd. 3.  [SPECIFIC AUTHORITY.] In performing duties under 
136.16  this chapter and to effect its policy and purpose, the governor 
136.17  may: 
136.18     (1) make, amend, and rescind the necessary orders and rules 
136.19  to carry out the provisions of this chapter and section 216C.15 
136.20  within the limits of the authority conferred by this section, 
136.21  with due consideration of the plans of the federal government 
136.22  and without complying with sections 14.001 to 14.69, but no 
136.23  order or rule has the effect of law except as provided by 
136.24  section 12.32; 
136.25     (2) ensure that a comprehensive emergency operations plan 
136.26  and emergency management program for this state are developed 
136.27  and maintained, and are integrated into and coordinated with the 
136.28  emergency plans of the federal government and of other states to 
136.29  the fullest possible extent; 
136.30     (3) in accordance with the emergency operations plan and 
136.31  the emergency management program of this state, procure 
136.32  supplies, equipment, and facilities; institute training programs 
136.33  and public information programs; and take all other preparatory 
136.34  steps, including the partial or full activation of emergency 
136.35  management organizations in advance of actual disaster to ensure 
136.36  the furnishing of adequately trained and equipped forces of 
137.1   emergency management personnel in time of need; 
137.2      (4) make studies and surveys of the industries, resources, 
137.3   and facilities in this state as may be necessary to ascertain 
137.4   the capabilities of the state for emergency management and to 
137.5   plan for the most efficient emergency use of those industries, 
137.6   resources, and facilities; 
137.7      (5) on behalf of this state, enter into mutual aid 
137.8   arrangements or cooperative agreements with other states, tribal 
137.9   authorities, and Canadian provinces, and coordinate mutual aid 
137.10  plans between political subdivisions of this state; 
137.11     (6) delegate administrative authority vested in the 
137.12  governor under this chapter, except the power to make rules, and 
137.13  provide for the subdelegation of that authority; 
137.14     (7) cooperate with the president and the heads of the armed 
137.15  forces, the emergency management agency of the United States and 
137.16  other appropriate federal officers and agencies, and with the 
137.17  officers and agencies of other states in matters pertaining to 
137.18  the emergency management of the state and nation, including the 
137.19  direction or control of: 
137.20     (i) emergency preparedness drills and exercises; 
137.21     (ii) warnings and signals for drills or actual emergencies 
137.22  and the mechanical devices to be used in connection with them; 
137.23     (iii) shutting off water mains, gas mains, electric power 
137.24  connections and the suspension of all other utility services; 
137.25     (iv) the conduct of persons in the state, including 
137.26  entrance or exit from any stricken or threatened public place, 
137.27  occupancy of facilities, and the movement and cessation of 
137.28  movement of pedestrians, vehicular traffic, and all forms of 
137.29  private and public transportation during, prior, and subsequent 
137.30  to drills or actual emergencies; 
137.31     (v) public meetings or gatherings; and 
137.32     (vi) the evacuation, reception, and sheltering of persons; 
137.33     (8) contribute to a political subdivision, within the 
137.34  limits of the appropriation for that purpose, not more than 25 
137.35  percent of the cost of acquiring organizational equipment that 
137.36  meets standards established by the governor; 
138.1      (9) formulate and execute, with the approval of the 
138.2   executive council, plans and rules for the control of traffic in 
138.3   order to provide for the rapid and safe movement over public 
138.4   highways and streets of troops, vehicles of a military nature, 
138.5   and materials for national defense and war or for use in any war 
138.6   industry, for the conservation of critical materials, or for 
138.7   emergency management purposes; coordinate the activities of the 
138.8   departments or agencies of the state and its political 
138.9   subdivisions concerned directly or indirectly with public 
138.10  highways and streets, in a manner that will best effectuate 
138.11  those plans; 
138.12     (10) alter or adjust by executive order, without complying 
138.13  with sections 14.01 to 14.69, the working hours, work days and 
138.14  work week of, and annual and sick leave provisions and payroll 
138.15  laws regarding all state employees in the executive branch as 
138.16  the governor deems necessary to minimize the impact of the 
138.17  disaster or emergency, conforming the alterations or adjustments 
138.18  to existing state laws, rules, and collective bargaining 
138.19  agreements to the extent practicable; 
138.20     (11) authorize the commissioner of children, families, and 
138.21  learning education to alter school schedules, curtail school 
138.22  activities, or order schools closed without affecting state aid 
138.23  to schools, as defined in section 120A.05, subdivisions 9, 11, 
138.24  13, and 17, and including charter schools under section 124D.10, 
138.25  and elementary schools enrolling prekindergarten pupils in 
138.26  district programs; and 
138.27     (12) transfer the direction, personnel, or functions of 
138.28  state agencies to perform or facilitate response and recovery 
138.29  programs. 
138.30     Sec. 2.  Minnesota Statutes 2002, section 84A.51, 
138.31  subdivision 4, is amended to read: 
138.32     Subd. 4.  [COUNTY'S USE OF FUNDS.] The funds received by 
138.33  each county must be apportioned by the county auditor as follows:
138.34     (1) 30 percent to a county development fund, which is 
138.35  created, to be spent under the direction of the county board for 
138.36  the rehabilitation and development of the portion of the county 
139.1   within the conservation area; 
139.2      (2) 40 percent to the capital outlay general fund of the 
139.3   school district from which derived; 
139.4      (3) 20 percent to the county revenue fund; and 
139.5      (4) ten percent to the township road and bridge fund of the 
139.6   township from which derived. 
139.7      If the proceeds are derived from an unorganized township 
139.8   with no levy for road and bridge purposes, the township portion 
139.9   must be credited to the county revenue fund. 
139.10     Sec. 3.  Minnesota Statutes 2002, section 120A.05, 
139.11  subdivision 9, is amended to read: 
139.12     Subd. 9.  [ELEMENTARY SCHOOL.] "Elementary school" means 
139.13  any school with building, equipment, courses of study, class 
139.14  schedules, enrollment of pupils ordinarily in prekindergarten 
139.15  through grade 6 or any portion thereof, and staff meeting the 
139.16  standards established by the commissioner. 
139.17     The commissioner of children, families, and learning shall 
139.18  not close a school or deny any state aids to a district for its 
139.19  elementary schools because of enrollment limitations classified 
139.20  in accordance with the provisions of this subdivision. 
139.21     Sec. 4.  Minnesota Statutes 2002, section 123B.75, 
139.22  subdivision 5, is amended to read: 
139.23     Subd. 5.  [LEVY RECOGNITION.] (a) "School district tax 
139.24  settlement revenue" means the current, delinquent, and 
139.25  manufactured home property tax receipts collected by the county 
139.26  and distributed to the school district. 
139.27     (b) In June of 2001, the school district must recognize as 
139.28  revenue, in the fund for which the levy was made, the lesser of: 
139.29     (1) the sum of May, June, and July school district tax 
139.30  settlement revenue received in that calendar year plus general 
139.31  education aid according to section 126C.13, subdivision 4, 
139.32  received in July and August of that calendar year; or 
139.33     (2) the sum of: 
139.34     (i) 31 percent of the referendum levy certified in the 
139.35  prior calendar year according to section 126C.17, subdivision 9; 
139.36  plus 
140.1      (ii) the entire amount of the levy certified in the prior 
140.2   calendar year according to sections 124D.86, subdivision 4, for 
140.3   school districts receiving revenue under 124D.86, subdivision 3, 
140.4   clauses (1), (2), and (3); 126C.41, subdivisions 1, 2, and 3, 
140.5   paragraphs (4), (5), and (6); 126C.43, subdivision 2; and 
140.6   126C.48, subdivision 6.  
140.7      (c) For fiscal year 2002 and later years, In June of each 
140.8   year 2003, the school district must recognize as revenue, in the 
140.9   fund for which the levy was made, the lesser of: 
140.10     (1) the sum of May, June, and July school district tax 
140.11  settlement revenue received in that calendar year, plus general 
140.12  education aid according to section 126C.13, subdivision 4, 
140.13  received in July and August of that calendar year; or 
140.14     (2) the sum of: 
140.15     (i) 31 percent of the referendum levy certified according 
140.16  to section 126C.17, in calendar year 2000; plus 
140.17     (ii) the entire amount of the levy certified in the prior 
140.18  calendar year according to section 124D.86, subdivision 4, for 
140.19  school districts receiving revenue under sections 124D.86, 
140.20  subdivision 3, clauses (1), (2), and (3); 126C.41, subdivisions 
140.21  1, 2, and 3, paragraphs (4) (b), (5) (c), and (6) (d); 
140.22  126C.43, subdivision 2; 126C.457; and 126C.48, subdivision 6. 
140.23     (c) For fiscal year 2004 and later years, in June of each 
140.24  year, the school district must recognize as revenue, in the fund 
140.25  for which the levy was made, the lesser of: 
140.26     (1) the sum of May, June, and July school district tax 
140.27  settlement revenue received in that calendar year, plus general 
140.28  education aid according to section 126C.13, subdivision 4, 
140.29  received in July and August of that calendar year; or 
140.30     (2) the sum of: 
140.31     (i) the greater of the percent of the referendum levy 
140.32  certified according to section 126C.17, in the prior calendar 
140.33  year or 45 percent of the referendum levy certified according to 
140.34  section 126C.17, in calendar year 2000; plus 
140.35     (ii) the entire amount of the levy certified in the prior 
140.36  calendar year according to section 124D.86, subdivision 4, for 
141.1   school districts receiving revenue under sections 124D.86, 
141.2   subdivision 3, clauses (1), (2), and (3); 126C.41, subdivisions 
141.3   1, 2, and 3, paragraphs (b), (c), and (d); 126C.43, subdivision 
141.4   2; 126C.457; and 126C.48, subdivision 6; plus 
141.5      (iii) 45 percent of the amount of the levy certified in the 
141.6   prior calendar year for the school district's general and 
141.7   community service funds, plus or minus auditor's adjustments, 
141.8   not including levy portions that are assumed by the state, that 
141.9   remains after subtracting the referendum levy certified 
141.10  according to section 126C.17 and the amount recognized according 
141.11  to clause (ii). 
141.12     (3) For fiscal year 2005 and later, the percent of the 
141.13  referendum levy that is shifted is the greater of 31 percent or 
141.14  the percent computed under paragraph (c), clause (2), item (i), 
141.15  for fiscal year 2004. 
141.16     Sec. 5.  Minnesota Statutes 2002, section 124D.11, 
141.17  subdivision 9, is amended to read: 
141.18     Subd. 9.  [PAYMENT OF AIDS TO CHARTER SCHOOLS.] (a) 
141.19  Notwithstanding section 127A.45, subdivision 3, aid payments for 
141.20  the current fiscal year to a charter school not in its first 
141.21  year of operation shall be of an equal amount on each of the 23 
141.22  payment dates.  A charter school in its first year of operation 
141.23  shall receive, on its first payment date, ten percent of its 
141.24  cumulative amount guaranteed for the year and 22 payments of an 
141.25  equal amount thereafter the sum of which shall be 90 percent of 
141.26  the cumulative amount guaranteed. 
141.27     (b) Notwithstanding paragraph (a), for a charter school 
141.28  ceasing operation prior to the end of a school year, 83 80 
141.29  percent of the amount due for the school year may be paid to the 
141.30  school after audit of prior fiscal year and current fiscal year 
141.31  pupil counts. 
141.32     (c) Notwithstanding section 127A.45, subdivision 3, and 
141.33  paragraph (a), 83 80 percent of the start-up cost aid under 
141.34  subdivision 8 shall be paid within 45 days after the first day 
141.35  of student attendance for that school year. 
141.36     (d) In order to receive state aid payments under this 
142.1   subdivision, a charter school in its first three years of 
142.2   operation must submit a quarterly report to the department of 
142.3   children, families, and learning education.  The report must 
142.4   list each student by grade, show the student's start and end 
142.5   dates, if any, with the charter school, and for any student 
142.6   participating in a learning year program, the report must list 
142.7   the hours and times of learning year activities.  The report 
142.8   must be submitted not more than two weeks after the end of the 
142.9   calendar quarter to the department.  The department must develop 
142.10  a Web-based reporting form for charter schools to use when 
142.11  submitting enrollment reports.  A charter school in its fourth 
142.12  and subsequent year of operation must submit enrollment 
142.13  information to the department in the form and manner requested 
142.14  by the department. 
142.15     <b>[EFFECTIVE DATE.]</b> This section is effective for revenue for 
142.16  fiscal year 2004. 
142.17     Sec. 6.  [124D.1158] [SCHOOL BREAKFAST PROGRAM.] 
142.18     Subdivision 1.  [PURPOSE.] The purpose of the school 
142.19  breakfast program is to provide affordable morning nutrition to 
142.20  children so that they can effectively learn.  Public and 
142.21  nonpublic schools that participate in the federal school 
142.22  breakfast program may receive state breakfast aid.  Schools 
142.23  shall encourage all children to eat a nutritious breakfast, 
142.24  either at home or at school, and shall work to eliminate 
142.25  barriers to breakfast participation at school such as inadequate 
142.26  facilities and transportation. 
142.27     Subd. 2.  [PROGRAM; ELIGIBILITY.] Each school year, public 
142.28  and nonpublic schools that participate in the federal school 
142.29  breakfast program are eligible for the state breakfast program.  
142.30     Subd. 3.  [PROGRAM REIMBURSEMENT.] Each school year, the 
142.31  state must reimburse each participating school 30 cents for each 
142.32  reduced price breakfast and 55 cents for each fully paid 
142.33  breakfast. 
142.34     Subd. 4.  [NO FEES.] A school that receives school 
142.35  breakfast aid under this section must make breakfast available 
142.36  without charge to all participating students who qualify for 
143.1   free or reduced price meals. 
143.2      Sec. 7.  Minnesota Statutes 2002, section 124D.118, 
143.3   subdivision 4, is amended to read: 
143.4      Subd. 4.  [REIMBURSEMENT.] In accordance with program 
143.5   guidelines, the commissioner shall prepay or reimburse each 
143.6   participating districts for the state share of the district's 
143.7   cost for providing public or nonpublic school nine cents for 
143.8   each half-pint of milk that is served to kindergarten students 
143.9   and is not part of a school lunch or breakfast reimbursed under 
143.10  section 124D.111 or 124D.1158. 
143.11     Sec. 8.  Minnesota Statutes 2002, section 126C.42, 
143.12  subdivision 1, is amended to read: 
143.13     Subdivision 1.  [1977 STATUTORY OPERATING DEBT.] (a) In 
143.14  each year in which so required by this subdivision, a district 
143.15  must make an additional levy to eliminate its statutory 
143.16  operating debt, determined as of June 30, 1977, and certified 
143.17  and adjusted by the commissioner.  This levy shall not be made 
143.18  in more than 30 successive years and each year before it is 
143.19  made, it must be approved by the commissioner and the approval 
143.20  shall specify its amount.  This levy shall be an amount which is 
143.21  equal to the amount raised by a levy of a net tax rate of 1.98 
143.22  2.67 percent times the adjusted net tax capacity of the district 
143.23  for the preceding year for taxes payable in 2000 2002 and 
143.24  thereafter; provided that in the last year in which the district 
143.25  is required to make this levy, it must levy an amount not to 
143.26  exceed the amount raised by a levy of a net tax rate of 1.98 
143.27  2.67 percent times the adjusted net tax capacity of the district 
143.28  for the preceding year for taxes payable in 2000 2002 and 
143.29  thereafter.  When the sum of the cumulative levies made pursuant 
143.30  to this subdivision and transfers made according to section 
143.31  123B.79, subdivision 6, equals an amount equal to the statutory 
143.32  operating debt of the district, the levy shall be discontinued. 
143.33     (b) The district must establish a special account in the 
143.34  general fund which shall be designated "appropriated fund 
143.35  balance reserve account for purposes of reducing statutory 
143.36  operating debt" on its books and records.  This account shall 
144.1   reflect the levy authorized pursuant to this subdivision.  The 
144.2   proceeds of this levy must be used only for cash flow 
144.3   requirements and must not be used to supplement district 
144.4   revenues or income for the purposes of increasing the district's 
144.5   expenditures or budgets. 
144.6      (c) Any district which is required to levy pursuant to this 
144.7   subdivision must certify the maximum levy allowable under 
144.8   section 126C.13, subdivision 2, in that same year. 
144.9      (d) Each district shall make permanent fund balance 
144.10  transfers so that the total statutory operating debt of the 
144.11  district is reflected in the general fund as of June 30, 1977. 
144.12     Sec. 9.  Minnesota Statutes 2002, section 126C.43, 
144.13  subdivision 2, is amended to read: 
144.14     Subd. 2.  [PAYMENT TO UNEMPLOYMENT INSURANCE PROGRAM TRUST 
144.15  FUND BY STATE AND POLITICAL SUBDIVISIONS.] A district may 
144.16  levy 90 percent of the amounts amount exceeding $10 times the 
144.17  district's adjusted marginal cost pupil units for the fiscal 
144.18  year ending in the year before the year the levy is certified 
144.19  necessary (i) to pay the district's obligations under section 
144.20  268.052, subdivision 1, and the amounts necessary (ii) to pay 
144.21  for job placement services offered to employees who may become 
144.22  eligible for benefits pursuant to section 268.085 for the fiscal 
144.23  year the levy is certified. 
144.24     <b>[EFFECTIVE DATE.]</b> This section is effective for taxes 
144.25  payable in 2004. 
144.26     Sec. 10.  Minnesota Statutes 2002, section 126C.43, 
144.27  subdivision 3, is amended to read: 
144.28     Subd. 3.  [TAX LEVY FOR JUDGMENT.] A district may levy 90 
144.29  percent of the amounts amount exceeding $10 times the district's 
144.30  adjusted marginal cost pupil units for the fiscal year ending in 
144.31  the year before the year the levy is certified necessary to pay 
144.32  judgments against the district under section 123B.25 that became 
144.33  final after the date the district certified its proposed levy in 
144.34  the previous year.  With the approval of the commissioner, a 
144.35  district may spread this levy over a period not to exceed three 
144.36  years.  Upon approval through the adoption of a resolution by 
145.1   each of an intermediate district's member school district 
145.2   boards, a member school district may include its proportionate 
145.3   share of the costs of a judgment against an intermediate school 
145.4   district that became final under section 123B.25 after the date 
145.5   that the earliest member school district certified its proposed 
145.6   levy in the previous year.  With the approval of the 
145.7   commissioner, an intermediate school district member school 
145.8   district may spread this levy over a period not to exceed three 
145.9   years. 
145.10     <b>[EFFECTIVE DATE.]</b> This section is effective for taxes 
145.11  payable in 2004. 
145.12     Sec. 11.  [127A.441] [AID REDUCTION; LEVY REVENUE 
145.13  RECOGNITION CHANGE.] 
145.14     Each year, the state aids payable to any school district 
145.15  for that fiscal year that are recognized as revenue in the 
145.16  school district's general and community service funds shall be 
145.17  adjusted by an amount equal to (1) the amount the district 
145.18  recognized as revenue for the prior fiscal year pursuant to 
145.19  section 123B.75, subdivision 5, paragraph (b) or (c), minus (2) 
145.20  the amount the district recognized as revenue for the current 
145.21  fiscal year pursuant to section 123B.75, subdivision 5, 
145.22  paragraph (c).  For purposes of making the aid adjustments under 
145.23  this section, the amount the district recognizes as revenue for 
145.24  either the prior fiscal year or the current fiscal year pursuant 
145.25  to section 123B.75, subdivision 5, paragraph (b) or (c), shall 
145.26  not include any amount levied pursuant to section 124D.86, 
145.27  subdivision 4, for school districts receiving revenue under 
145.28  sections 124D.86, subdivision 3, clauses (1), (2), and (3); 
145.29  126C.41, subdivisions 1, 2, and 3, paragraphs (b), (c), and (d); 
145.30  126C.43, subdivision 2; 126C.457; and 126C.48, subdivision 6.  
145.31  Payment from the permanent school fund shall not be adjusted 
145.32  pursuant to this section.  The school district shall be notified 
145.33  of the amount of the adjustment made to each payment pursuant to 
145.34  this section. 
145.35     Sec. 12.  Minnesota Statutes 2002, section 126C.45, is 
145.36  amended to read: 
146.1      126C.45 [ICE ARENA LEVY.] 
146.2      (a) Each year, an independent school district operating and 
146.3   maintaining an ice arena, may levy for the net operational costs 
146.4   of the ice arena.  The levy may not exceed 90 percent of the net 
146.5   actual costs of operation of the arena for the previous year.  
146.6   Net actual costs are defined as operating costs less any 
146.7   operating revenues. 
146.8      (b) Any district operating and maintaining an ice arena 
146.9   must demonstrate to the satisfaction of the office of monitoring 
146.10  in the department that the district will offer equal sports 
146.11  opportunities for male and female students to use its ice arena, 
146.12  particularly in areas of access to prime practice time, team 
146.13  support, and providing junior varsity and younger level teams 
146.14  for girls' ice sports and ice sports offerings. 
146.15     <b>[EFFECTIVE DATE.]</b> This section is effective for taxes 
146.16  payable in 2004. 
146.17     Sec. 13.  Minnesota Statutes 2002, section 126C.48, 
146.18  subdivision 3, is amended to read: 
146.19     Subd. 3.  [ADJUSTMENTS.] If any district levy is found to 
146.20  be excessive as a result of a decision of the tax court or a 
146.21  redetermination by the commissioner of revenue under section 
146.22  127A.48, subdivisions 7 to 16, or for any other reason, the 
146.23  amount of the excess shall be deducted from the levy certified 
146.24  in the next year for the same purpose.  If no levy is certified 
146.25  in the next year for the same purpose or if the amount certified 
146.26  is less than the amount of the excess, the excess must be 
146.27  deducted from that levy and the general fund levy certified 
146.28  pursuant to section 126C.13, subdivision 2 chapters 122A, 123A, 
146.29  123B, 124D, and 126C.  If the amount of any aid would have been 
146.30  increased in a prior year as a result of a decision of the tax 
146.31  court or a redetermination by the commissioner of revenue, the 
146.32  amount of the increase shall be added to the amount of current 
146.33  aid for the same purposes. 
146.34     Sec. 14.  Minnesota Statutes 2002, section 127A.45, 
146.35  subdivision 2, is amended to read: 
146.36     Subd. 2.  [DEFINITIONS.] (a) The term "other district 
147.1   receipts" means payments by county treasurers pursuant to 
147.2   section 276.10, apportionments from the school endowment fund 
147.3   pursuant to section 127A.33, apportionments by the county 
147.4   auditor pursuant to section 127A.34, subdivision 2, and payments 
147.5   to school districts by the commissioner of revenue pursuant to 
147.6   chapter 298.  
147.7      (b) The term "cumulative amount guaranteed" means the 
147.8   product of 
147.9      (1) the cumulative disbursement percentage shown in 
147.10  subdivision 3; times 
147.11     (2) the sum of 
147.12     (i) 83 80 percent of the estimated aid and credit 
147.13  entitlements paid according to subdivision 13; plus 
147.14     (ii) 100 percent of the entitlements paid according to 
147.15  subdivisions 11 and 12; plus 
147.16     (iii) the other district receipts.  
147.17     (c) The term "payment date" means the date on which state 
147.18  payments to districts are made by the electronic funds transfer 
147.19  method.  If a payment date falls on a Saturday, a Sunday, or a 
147.20  weekday which is a legal holiday, the payment shall be made on 
147.21  the immediately preceding business day.  The commissioner may 
147.22  make payments on dates other than those listed in subdivision 3, 
147.23  but only for portions of payments from any preceding payment 
147.24  dates which could not be processed by the electronic funds 
147.25  transfer method due to documented extenuating circumstances.  
147.26     Sec. 15.  Minnesota Statutes 2002, section 127A.45, 
147.27  subdivision 3, is amended to read: 
147.28     Subd. 3.  [PAYMENT DATES AND PERCENTAGES.] (a) For fiscal 
147.29  year 2003, the commissioner shall pay to a district on the dates 
147.30  indicated an amount computed as follows:  the cumulative amount 
147.31  guaranteed minus the sum of (a) the district's other district 
147.32  receipts through the current payment, and (b) the aid and credit 
147.33  payments through the immediately preceding payment.  For 
147.34  purposes of this computation, the payment dates and the 
147.35  cumulative disbursement percentages are as follows:  
147.36                           Payment date               Percentage 
148.1   Payment 1    July 15:                                         5.1
148.2   Payment 2    July 30:                                         7.7
148.3   Payment 3    August 15:                                      16.9
148.4   Payment 4    August 30:                                      19.3
148.5   Payment 5    September 15:                                   21.8
148.6   Payment 6    September 30:                                   24.3
148.7   Payment 7    October 15:                                     26.3
148.8   Payment 8    October 30:                                     28.3
148.9   Payment 9    November 15:                                    32.8
148.10  Payment 10   November 30:                                    39.1
148.11  Payment 11   December 15:                                    42.4
148.12  Payment 12   December 30:                                    45.6
148.13  Payment 13   January 15:                                     50.5
148.14  Payment 14   January 30:                                     55.0
148.15  Payment 15   February 15:                                    60.2
148.16  Payment 16   February 28:                                    65.0
148.17  Payment 17   March 15:                                       69.7
148.18  Payment 18   March 30:                                       74.3
148.19  Payment 19   April 15:                                       78.3
148.20  Payment 20   April 30:                                       84.2
148.21  Payment 21   May 15:                                         88.7
148.22  Payment 22   May 30:                                         93.3
148.23  Payment 23   June 20:                                       100.0
148.24     (b) In addition to the amounts paid under paragraph (a), 
148.25  for fiscal year 2003, the commissioner shall pay to a district 
148.26  on the dates indicated an amount computed as follows: 
148.27  Payment 3    August 15:  the final adjustment for the
148.28               prior fiscal year for the state paid
148.29               property tax credits established in
148.30               section 273.1392
148.31  Payment 7    October 15:  one-half of the final adjustment
148.32               for the prior fiscal year for all aid
148.33               entitlements except state paid property
148.34               tax credits 
148.35  Payment 8    October 30:  one-half of the final adjustment
148.36               for the prior fiscal year for all aid
149.1                entitlements except state paid property
149.2                tax credits 
149.3      (c) For fiscal year 2004 and later, the commissioner shall 
149.4   pay to a district on the dates indicated an amount computed as 
149.5   follows:  the cumulative amount guaranteed minus the sum of (a) 
149.6   the district's other district receipts through the current 
149.7   payment, and (b) the aid and credit payments through the 
149.8   immediately preceding payment.  For purposes of this 
149.9   computation, the payment dates and the cumulative disbursement 
149.10  percentages are as follows: 
149.11             Payment date                      Percentage 
149.12  Payment 1    July 15:                                     5.1 5.5
149.13  Payment 2    July 30:                                     7.7 8.0
149.14  Payment 3    August 15:                                 16.9 17.5
149.15  Payment 4    August 30:                                 19.3 20.0
149.16  Payment 5    September 15:                              21.8 22.5
149.17  Payment 6    September 30:                              24.3 25.0
149.18  Payment 7    October 15:                                26.3 27.0
149.19  Payment 8    October 30:                                28.3 30.0
149.20  Payment 9    November 15:                               30.3 32.5
149.21  Payment 10   November 30:                               35.0 36.5
149.22  Payment 11   December 15:                               40.0 42.0
149.23  Payment 12   December 30:                               43.0 45.0
149.24  Payment 13   January 15:                                48.0 50.0
149.25  Payment 14   January 30:                                52.0 54.0
149.26  Payment 15   February 15:                               56.0 58.0
149.27  Payment 16   February 28:                               61.0 63.0
149.28  Payment 17   March 15:                                  66.0 68.0
149.29  Payment 18   March 30:                                  72.0 74.0
149.30  Payment 19   April 15:                                  76.0 78.0
149.31  Payment 20   April 30:                                  83.0 85.0
149.32  Payment 21   May 15:                                    88.0 90.0
149.33  Payment 22   May 30:                                    95.0
149.34  Payment 23   June 20:                                  100.0
149.35     (d) (b) In addition to the amounts paid under paragraph 
149.36  (c) (a), for fiscal year 2004 and later, the commissioner shall 
150.1   pay to a district on the dates indicated an amount computed as 
150.2   follows: 
150.3   Payment 3    August 15:  the final adjustment for the
150.4                prior fiscal year for the state paid
150.5                property tax credits established in 
150.6                section 273.1392 
150.7   Payment 4    August 30:  one-third of the final adjustment
150.8                for the prior fiscal year for all aid
150.9                entitlements except state paid property
150.10               tax credits 
150.11  Payment 6    September 30:  one-third of the final adjustment
150.12               for the prior fiscal year for all aid
150.13               entitlements except state paid property
150.14               tax credits
150.15  Payment 8    October 30:  one-third of the final adjustment
150.16               for the prior fiscal year for all aid
150.17               entitlements except state paid property
150.18               tax credits
150.19     (c) In addition to the amounts paid under paragraph (a), 
150.20  for fiscal year 2005 and later, the commissioner shall pay to a 
150.21  district on the dates indicated an amount computed as follows: 
150.22  Payment 3    August 15:  the final adjustment for the
150.23               prior fiscal year for the state paid
150.24               property tax credits established in
150.25               section 273.1392
150.26  Payment 4    August 30:  30 percent of the final adjustment
150.27               for the prior fiscal year for all aid
150.28               entitlements except state paid property
150.29               tax credits
150.30  Payment 6    September 30:  40 percent of the final adjustment
150.31               for the prior fiscal year for all aid
150.32               entitlements except state paid property
150.33               tax credits
150.34  Payment 8    October 30:  30 percent of the final adjustment
150.35               for the prior fiscal year for all aid
150.36               entitlements except state paid property
151.1                tax credits
151.2      Sec. 16.  Minnesota Statutes 2002, section 127A.45, 
151.3   subdivision 7a, is amended to read: 
151.4      Subd. 7a.  [ADVANCE FINAL PAYMENT.] (a) Notwithstanding 
151.5   subdivisions 3 and 7, a school district or a charter school 
151.6   exceeding its expenditure limitations under section 123B.83 as 
151.7   of June 30 of the prior fiscal year may receive a portion of its 
151.8   final payment for the current fiscal year on June 20, if 
151.9   requested by the district.  The amount paid under this 
151.10  subdivision must not exceed the lesser of: 
151.11     (1) seven percent of the district or charter school's 
151.12  general education aid for the current fiscal year; or 
151.13     (2) the amount by which the district or charter school's 
151.14  net negative unreserved general fund balance as of June 30 of 
151.15  the prior fiscal year exceeds 2.5 percent of the district or 
151.16  charter school's expenditures for that fiscal year. 
151.17     (b) The state total advance final payment under this 
151.18  subdivision for any year must not exceed $17,500,000 $12,000,000.
151.19  If the amount requested exceeds $17,500,000 $12,000,000, the 
151.20  advance final payment for each eligible district must be reduced 
151.21  proportionately. 
151.22     Sec. 17.  Minnesota Statutes 2002, section 127A.45, 
151.23  subdivision 10, is amended to read: 
151.24     Subd. 10.  [PAYMENTS TO SCHOOL NONOPERATING FUNDS.] Each 
151.25  fiscal year state general fund payments for a district 
151.26  nonoperating fund must be made at 83 80 percent of the estimated 
151.27  entitlement during the fiscal year of the entitlement.  This 
151.28  amount shall be paid in 12 equal monthly installments.  The 
151.29  amount of the actual entitlement, after adjustment for actual 
151.30  data, minus the payments made during the fiscal year of the 
151.31  entitlement must be paid prior to October 31 of the following 
151.32  school year.  The commissioner may make advance payments of debt 
151.33  service equalization aid or homestead and agricultural credit 
151.34  aid for a district's debt service fund earlier than would occur 
151.35  under the preceding schedule if the district submits evidence 
151.36  showing a serious cash flow problem in the fund.  The 
152.1   commissioner may make earlier payments during the year and, if 
152.2   necessary, increase the percent of the entitlement paid to 
152.3   reduce the cash flow problem. 
152.4      Sec. 18.  Minnesota Statutes 2002, section 127A.45, 
152.5   subdivision 13, is amended to read: 
152.6      Subd. 13.  [AID PAYMENT PERCENTAGE.] Except as provided in 
152.7   subdivisions 11, 12, 12a, and 14, each fiscal year, all 
152.8   education aids and credits in this chapter and chapters 120A, 
152.9   120B, 121A, 122A, 123A, 123B, 124D, 125A, 125B, 126C, 134, and 
152.10  section 273.1392, shall be paid at 83 80 percent of the 
152.11  estimated entitlement during the fiscal year of the 
152.12  entitlement.  For the purposes of this subdivision, a district's 
152.13  estimated entitlement for special education excess cost aid 
152.14  under section 125A.79 equals 70 percent of the district's 
152.15  entitlement for the second prior fiscal year.  The final 
152.16  adjustment payment, according to subdivision 9, must be the 
152.17  amount of the actual entitlement, after adjustment for actual 
152.18  data, minus the payments made during the fiscal year of the 
152.19  entitlement. 
152.20     Sec. 19.  Minnesota Statutes 2002, section 127A.45, 
152.21  subdivision 14, is amended to read: 
152.22     Subd. 14.  [NONPUBLIC AIDS.] The state shall pay aid 
152.23  according to sections 123B.40 to 123B.48 for pupils attending 
152.24  nonpublic schools as follows: 
152.25     (1) an advance payment by November 30 equal to 83 80 
152.26  percent of the estimated entitlement for the current fiscal 
152.27  year; and 
152.28     (2) a final payment by October 31 of the following fiscal 
152.29  year, adjusted for actual data.  
152.30     If a payment advance to meet cash flow needs is requested 
152.31  by a district and approved by the commissioner, the state shall 
152.32  pay nonpublic pupil transportation aid according to section 
152.33  123B.92 by October 31. 
152.34     Sec. 20.  Minnesota Statutes 2002, section 127A.45, 
152.35  subdivision 14a, is amended to read: 
152.36     Subd. 14a.  [STATE NUTRITION PROGRAMS.] Notwithstanding 
153.1   subdivision 3, the state shall pay 100 percent of the aid for 
153.2   the current year according to sections 124D.111, 
153.3   124D.115, 124D.1158, and 124D.118 and 83 percent of the aid for 
153.4   the current year according to section 124D.1156 based on 
153.5   submitted monthly vouchers showing meals and milk served.  The 
153.6   remaining 17 percent according to section 124D.1156 shall be 
153.7   paid by October 30 of the following fiscal year. 
153.8      Sec. 21.  Minnesota Statutes 2002, section 127A.45, 
153.9   subdivision 16, is amended to read: 
153.10     Subd. 16.  [PAYMENTS TO THIRD PARTIES.] Notwithstanding 
153.11  subdivision 3, 83 80 percent of the amounts under section 
153.12  123A.26, subdivision 3, shall be paid in equal installments on 
153.13  August 30, December 30, and March 30, with a 17 20 percent final 
153.14  adjustment payment on October 30 of the next fiscal year. 
153.15     Sec. 22.  Minnesota Statutes 2002, section 127A.47, 
153.16  subdivision 7, is amended to read: 
153.17     Subd. 7.  [ALTERNATIVE ATTENDANCE PROGRAMS.] The general 
153.18  education aid for districts must be adjusted for each pupil 
153.19  attending a nonresident district under sections 123A.05 to 
153.20  123A.08, 124D.03, 124D.06, 124D.07, 124D.08, and 124D.68.  The 
153.21  adjustments must be made according to this subdivision. 
153.22     (a) General education aid paid to a resident district must 
153.23  be reduced by an amount equal to the referendum equalization aid 
153.24  attributable to the pupil in the resident district. 
153.25     (b) General education aid paid to a district serving a 
153.26  pupil in programs listed in this subdivision must be increased 
153.27  by an amount equal to the referendum equalization aid 
153.28  attributable to the pupil in the nonresident district.  
153.29     (c) If the amount of the reduction to be made from the 
153.30  general education aid of the resident district is greater than 
153.31  the amount of general education aid otherwise due the district, 
153.32  the excess reduction must be made from other state aids due the 
153.33  district. 
153.34     (d) The district of residence must pay tuition to a 
153.35  district or an area learning center, operated according to 
153.36  paragraph (e), providing special instruction and services to a 
154.1   pupil with a disability, as defined in section 125A.02, or a 
154.2   pupil, as defined in section 125A.51, who is enrolled in a 
154.3   program listed in this subdivision.  The tuition must be equal 
154.4   to (1) the actual cost of providing special instruction and 
154.5   services to the pupil, including a proportionate amount for debt 
154.6   service and for capital expenditure facilities and equipment, 
154.7   and debt service but not including any amount for 
154.8   transportation, minus (2) the amount of general education 
154.9   revenue and special education aid but not including any amount 
154.10  for transportation, attributable to that pupil, that is received 
154.11  by the district providing special instruction and services. 
154.12     (e) An area learning center operated by a service 
154.13  cooperative, intermediate district, education district, or a 
154.14  joint powers cooperative may elect through the action of the 
154.15  constituent boards to charge the resident district tuition for 
154.16  pupils rather than to calculate general education aid 
154.17  adjustments under paragraph (a), (b), or (c).  The tuition must 
154.18  be equal to the greater of the average general education revenue 
154.19  per pupil unit attributable to the pupil, or the actual cost of 
154.20  providing the instruction, excluding transportation costs, if 
154.21  the pupil meets the requirements of section 125A.02 or 
154.22  125A.51 have the general education revenue paid to a fiscal 
154.23  agent school district.  Except as provided in paragraph (d), the 
154.24  district of residence must pay tuition equal to at least 90 
154.25  percent of the district average general education revenue per 
154.26  pupil unit minus an amount equal to the product of the formula 
154.27  allowance according to section 126C.10, subdivision 2, times 
154.28  .0485, calculated without basic skills revenue and 
154.29  transportation sparsity revenue, times the number of pupil units 
154.30  for pupils attending the area learning center, plus the amount 
154.31  of compensatory revenue generated by pupils attending the area 
154.32  learning center. 
154.33     Sec. 23.  Minnesota Statutes 2002, section 127A.47, 
154.34  subdivision 8, is amended to read: 
154.35     Subd. 8.  [CHARTER SCHOOLS.] (a) The general education aid 
154.36  for districts must be adjusted for each pupil attending a 
155.1   charter school under section 124D.10.  The adjustments must be 
155.2   made according to this subdivision. 
155.3      (b) General education aid paid to a district in which a 
155.4   charter school not providing transportation according to section 
155.5   124D.10, subdivision 16, is located must be increased by an 
155.6   amount equal to the product of:  (1) the sum of an amount equal 
155.7   to the product of the formula allowance according to section 
155.8   126C.10, subdivision 2, times .0485, plus the transportation 
155.9   sparsity allowance for the district, plus the transportation 
155.10  transition allowance for the district; times (2) the pupil units 
155.11  attributable to the pupil.  
155.12     Sec. 24.  Minnesota Statutes 2002, section 127A.49, 
155.13  subdivision 2, is amended to read: 
155.14     Subd. 2.  [ABATEMENTS.] Whenever by virtue of chapter 278, 
155.15  sections 270.07, 375.192, or otherwise, the net tax capacity of 
155.16  any district for any taxable year is changed after the taxes for 
155.17  that year have been spread by the county auditor and the local 
155.18  tax rate as determined by the county auditor based upon the 
155.19  original net tax capacity is applied upon the changed net tax 
155.20  capacities, the county auditor shall, prior to February 1 of 
155.21  each year, certify to the commissioner of children, families, 
155.22  and learning education the amount of any resulting net revenue 
155.23  loss that accrued to the district during the preceding year.  
155.24  Each year, the commissioner shall pay an abatement adjustment to 
155.25  the district in an amount calculated according to the provisions 
155.26  of this subdivision.  This amount shall be deducted from the 
155.27  amount of the levy authorized by section 126C.46.  The amount of 
155.28  the abatement adjustment must be the product of:  
155.29     (1) the net revenue loss as certified by the county 
155.30  auditor, times 
155.31     (2) the ratio of:  
155.32     (i) the sum of the amounts of the district's certified levy 
155.33  in the preceding year according to the following:  
155.34     (A) section 126C.13 if the district received general 
155.35  education aid according to that section for the second preceding 
155.36  year; 
156.1      (B) section 123B.57, if the district received health and 
156.2   safety aid according to that section for the second preceding 
156.3   year; 
156.4      (C) sections (B) section 124D.20, 124D.21, and 124D.56, if 
156.5   the district received aid for community education programs 
156.6   according to any of those sections that section for the second 
156.7   preceding year; 
156.8      (D) (C) section 124D.135, subdivision 3, if the district 
156.9   received early childhood family education aid according to 
156.10  section 124D.135 for the second preceding year; and 
156.11     (E) (D) section 126C.17, subdivision 6, if the district 
156.12  received referendum equalization aid according to that section 
156.13  for the second preceding year; to 
156.14     (ii) the total amount of the district's certified levy in 
156.15  the preceding December, plus or minus auditor's adjustments. 
156.16     Sec. 25.  Minnesota Statutes 2002, section 127A.49, 
156.17  subdivision 3, is amended to read: 
156.18     Subd. 3.  [EXCESS TAX INCREMENT.] (a) If a return of excess 
156.19  tax increment is made to a district pursuant to section 469.176, 
156.20  subdivision 2, or upon decertification of a tax increment 
156.21  district, the school district's aid and levy limitations must be 
156.22  adjusted for the fiscal year in which the excess tax increment 
156.23  is paid under the provisions of this subdivision. 
156.24     (b) An amount must be subtracted from the district's aid 
156.25  for the current fiscal year equal to the product of: 
156.26     (1) the amount of the payment of excess tax increment to 
156.27  the district, times 
156.28     (2) the ratio of: 
156.29     (i) the sum of the amounts of the district's certified levy 
156.30  for the fiscal year in which the excess tax increment is paid 
156.31  according to the following: 
156.32     (A) section 126C.13, if the district received general 
156.33  education aid according to that section for the second preceding 
156.34  year; 
156.35     (B) section 123B.57, if the district received health and 
156.36  safety aid according to that section for the second preceding 
157.1   year; 
157.2      (C) sections (B) section 124D.20, 124D.21, and 124D.56, if 
157.3   the district received aid for community education programs 
157.4   according to any of those sections that section for the second 
157.5   preceding year; 
157.6      (D) (C) section 124D.135, subdivision 3, if the district 
157.7   received early childhood family education aid according to 
157.8   section 124D.135 for the second preceding year; and 
157.9      (E) (D) section 126C.17, subdivision 6, if the district 
157.10  received referendum equalization aid according to that section 
157.11  for the second preceding year; to 
157.12     (ii) the total amount of the district's certified levy for 
157.13  the fiscal year, plus or minus auditor's adjustments. 
157.14     (c) An amount must be subtracted from the school district's 
157.15  levy limitation for the next levy certified equal to the 
157.16  difference between: 
157.17     (1) the amount of the distribution of excess increment; and 
157.18     (2) the amount subtracted from aid pursuant to clause (a). 
157.19     If the aid and levy reductions required by this subdivision 
157.20  cannot be made to the aid for the fiscal year specified or to 
157.21  the levy specified, the reductions must be made from aid for 
157.22  subsequent fiscal years, and from subsequent levies.  The school 
157.23  district must use the payment of excess tax increment to replace 
157.24  the aid and levy revenue reduced under this subdivision. 
157.25     (d) This subdivision applies only to the total amount of 
157.26  excess increments received by a district for a calendar year 
157.27  that exceeds $25,000. 
157.28     Sec. 26.  Minnesota Statutes 2002, section 128D.11, 
157.29  subdivision 8, is amended to read: 
157.30     Subd. 8.  [NET DEBT LIMIT.] The school district shall not 
157.31  be subject to a net debt in excess of 102 144 percent of the net 
157.32  tax capacity of all taxable property therein. 
157.33     Sec. 27.  Minnesota Statutes 2002, section 268.052, 
157.34  subdivision 2, is amended to read: 
157.35     Subd. 2.  [ELECTION BY STATE OR POLITICAL SUBDIVISION TO BE 
157.36  A TAXPAYING EMPLOYER.] (a) The state or political 
158.1   subdivision excluding a school district may elect to be a 
158.2   taxpaying employer for any calendar year if a notice of election 
158.3   is filed within 30 calendar days following January 1 of that 
158.4   calendar year.  Upon election, the state or political 
158.5   subdivision shall be assigned the new employer tax rate under 
158.6   section 268.051, subdivision 5, for the calendar year of the 
158.7   election and until it qualifies for an experience rating under 
158.8   section 268.051, subdivision 3. 
158.9      (b) An election shall be for a minimum period of two 
158.10  calendar years following the effective date of the election and 
158.11  continue unless a notice terminating the election is filed not 
158.12  later than 30 calendar days before the beginning of the calendar 
158.13  year.  The termination shall be effective at the beginning of 
158.14  the next calendar year.  Upon election, the commissioner shall 
158.15  establish a reimbursable account for the state or political 
158.16  subdivision.  A termination of election shall be allowed only if 
158.17  the state or political subdivision has, since the beginning of 
158.18  the experience rating period under section 268.051, subdivision 
158.19  3, paid taxes and made voluntary payments under section 268.051, 
158.20  subdivision 7, equal to or more than 125 percent of the 
158.21  unemployment benefits used in computing the experience rating.  
158.22  In addition, any unemployment benefits paid after the experience 
158.23  rating period shall be transferred to the new reimbursable 
158.24  account of the state or political subdivision.  If the amount of 
158.25  taxes and voluntary payments paid since the beginning of the 
158.26  experience rating period exceeds 125 percent of the amount of 
158.27  unemployment benefits paid during the experience rating period, 
158.28  that amount in excess shall be applied against any unemployment 
158.29  benefits paid after the experience rating period. 
158.30     (c) The method of payments to the fund under subdivisions 3 
158.31  and 4 shall apply to all taxes paid by or due from the state or 
158.32  political subdivision that elects to be taxpaying employers 
158.33  under this subdivision. 
158.34     (d) The commissioner may allow a notice of election or a 
158.35  notice terminating election to be filed by mail or electronic 
158.36  transmission.  
159.1      <b>[EFFECTIVE DATE.]</b> This section is effective the day 
159.2   following final enactment. 
159.3      Sec. 28.  Minnesota Statutes 2002, section 268.052, 
159.4   subdivision 4, is amended to read: 
159.5      Subd. 4.  [METHOD OF PAYMENT BY POLITICAL SUBDIVISION.] A 
159.6   political subdivision or instrumentality thereof is authorized 
159.7   and directed to pay its liabilities by money collected from 
159.8   taxes or other revenues.  Every political subdivision authorized 
159.9   to levy taxes except school districts may include in its tax 
159.10  levy the amount necessary to pay its liabilities.  School 
159.11  districts may levy according to section 126C.43, subdivision 2.  
159.12  If the taxes authorized to be levied cause the total amount of 
159.13  taxes levied to exceed any limitation upon the power of a 
159.14  political subdivision to levy taxes, the political subdivision 
159.15  may levy taxes in excess of the limitations in the amounts 
159.16  necessary to meet its liability.  The expenditures authorized 
159.17  shall not be included in computing the cost of government as 
159.18  defined in any home rule charter.  The governing body of a 
159.19  municipality, for the purpose of meeting its liabilities, in the 
159.20  event of a deficit, may issue its obligations payable in not 
159.21  more than two years, in an amount that may cause its 
159.22  indebtedness to exceed any statutory or charter limitations, 
159.23  without an election, and may levy taxes in the manner provided 
159.24  in section 475.61. 
159.25     <b>[EFFECTIVE DATE.]</b> This section is effective for taxes 
159.26  payable in 2004. 
159.27     Sec. 29.  Minnesota Statutes 2002, section 273.138, 
159.28  subdivision 6, is amended to read: 
159.29     Subd. 6.  The amount of aid calculated for a school 
159.30  district pursuant to subdivision 3, clauses (2), (3), (4), and 
159.31  (5) shall be deducted from the school district's general fund 
159.32  levy limitation established pursuant to section 126C.13 chapters 
159.33  122A, 123A, 123B, 124D, and 126C in determining the amount of 
159.34  taxes the school district may levy for general and special 
159.35  purposes. 
159.36     Sec. 30.  Minnesota Statutes 2002, section 298.28, 
160.1   subdivision 4, is amended to read: 
160.2      Subd. 4.  [SCHOOL DISTRICTS.] (a) 17.15 cents per taxable 
160.3   ton plus the increase provided in paragraph (d) must be 
160.4   allocated to qualifying school districts to be distributed, 
160.5   based upon the certification of the commissioner of revenue, 
160.6   under paragraphs (b) and (c), except as otherwise provided in 
160.7   paragraph (f). 
160.8      (b) 3.43 cents per taxable ton must be distributed to the 
160.9   school districts in which the lands from which taconite was 
160.10  mined or quarried were located or within which the concentrate 
160.11  was produced.  The distribution must be based on the 
160.12  apportionment formula prescribed in subdivision 2. 
160.13     (c)(i) 13.72 cents per taxable ton, less any amount 
160.14  distributed under paragraph (e), shall be distributed to a group 
160.15  of school districts comprised of those school districts in which 
160.16  the taconite was mined or quarried or the concentrate produced 
160.17  or in which there is a qualifying municipality as defined by 
160.18  section 273.134, paragraph (b), in direct proportion to school 
160.19  district indexes as follows:  for each school district, its 
160.20  pupil units determined under section 126C.05 for the prior 
160.21  school year shall be multiplied by the ratio of the average 
160.22  adjusted net tax capacity per pupil unit for school districts 
160.23  receiving aid under this clause as calculated pursuant to 
160.24  chapters 122A, 126C, and 127A for the school year ending prior 
160.25  to distribution to the adjusted net tax capacity per pupil unit 
160.26  of the district.  Each district shall receive that portion of 
160.27  the distribution which its index bears to the sum of the indices 
160.28  for all school districts that receive the distributions.  
160.29     (ii) Notwithstanding clause (i), each school district that 
160.30  receives a distribution under sections 298.018; 298.23 to 
160.31  298.28, exclusive of any amount received under this clause; 
160.32  298.34 to 298.39; 298.391 to 298.396; 298.405; or any law 
160.33  imposing a tax on severed mineral values after reduction for any 
160.34  portion distributed to cities and towns under section 126C.48, 
160.35  subdivision 8, paragraph (5), that is less than the amount of 
160.36  its levy reduction under section 126C.48, subdivision 8, for the 
161.1   second year prior to the year of the distribution shall receive 
161.2   a distribution equal to the difference; the amount necessary to 
161.3   make this payment shall be derived from proportionate reductions 
161.4   in the initial distribution to other school districts under 
161.5   clause (i).  
161.6      (d) Any school district described in paragraph (c) where a 
161.7   levy increase pursuant to section 126C.17, subdivision 9, was 
161.8   authorized by referendum for taxes payable in 2001, shall 
161.9   receive a distribution from a fund that receives a distribution 
161.10  in 1998 of 21.3 cents per ton.  On July 15 of 1999, and each 
161.11  year thereafter, the increase over the amount established for 
161.12  the prior year shall be determined according to the increase in 
161.13  the implicit price deflator as provided in section 298.24, 
161.14  subdivision 1.  Each district shall receive $175 times the pupil 
161.15  units identified in section 126C.05, subdivision 1, enrolled in 
161.16  the second previous year or the 1983-1984 school year, whichever 
161.17  is greater, less the product of 1.8 percent times the district's 
161.18  taxable net tax capacity in the second previous year. 
161.19     If the total amount provided by paragraph (d) is 
161.20  insufficient to make the payments herein required then the 
161.21  entitlement of $175 per pupil unit shall be reduced uniformly so 
161.22  as not to exceed the funds available.  Any amounts received by a 
161.23  qualifying school district in any fiscal year pursuant to 
161.24  paragraph (d) shall not be applied to reduce general education 
161.25  aid which the district receives pursuant to section 126C.13 or 
161.26  the permissible levies of the district.  Any amount remaining 
161.27  after the payments provided in this paragraph shall be paid to 
161.28  the commissioner of iron range resources and rehabilitation who 
161.29  shall deposit the same in the taconite environmental protection 
161.30  fund and the northeast Minnesota economic protection trust fund 
161.31  as provided in subdivision 11. 
161.32     Each district receiving money according to this paragraph 
161.33  shall reserve the lesser of the amount received under this 
161.34  paragraph or $25 times the number of pupil units served in the 
161.35  district.  It may use the money for early childhood programs or 
161.36  for outcome-based learning programs that enhance the academic 
162.1   quality of the district's curriculum.  The outcome-based 
162.2   learning programs must be approved by the commissioner of 
162.3   children, families, and learning education. 
162.4      (e) There shall be distributed to any school district the 
162.5   amount which the school district was entitled to receive under 
162.6   section 298.32 in 1975. 
162.7      (f) Effective for the distribution in 2003 only, five 
162.8   percent of the distributions to school districts under 
162.9   paragraphs (b), (c), and (e); subdivision 6, paragraph (c); 
162.10  subdivision 11; and section 298.225, shall be distributed to the 
162.11  general fund.  The remainder less any portion distributed to 
162.12  cities and towns under section 126C.48, subdivision 8, paragraph 
162.13  (5), shall be distributed to the northeast Minnesota economic 
162.14  protection trust fund created in section 298.292.  Fifty percent 
162.15  of the amount distributed to the northeast Minnesota economic 
162.16  protection trust fund shall be made available for expenditure 
162.17  under section 298.293 as governed by section 298.296.  Effective 
162.18  in 2003 only, 100 percent of the distributions to school 
162.19  districts under section 477A.15 less any portion distributed to 
162.20  cities and towns under section 126C.48, subdivision 8, paragraph 
162.21  (5), shall be distributed to the general fund. 
162.22     Sec. 31.  Minnesota Statutes 2002, section 475.61, 
162.23  subdivision 4, is amended to read: 
162.24     Subd. 4.  [SURPLUS FUNDS.] (a) All such taxes shall be 
162.25  collected and remitted to the municipality by the county 
162.26  treasurer as other taxes are collected and remitted, and shall 
162.27  be used only for payment of the obligations on account of which 
162.28  levied or to repay advances from other funds used for such 
162.29  payments, except that any surplus remaining in the debt service 
162.30  fund when the obligations and interest thereon are paid may be 
162.31  appropriated to any other general purpose by the municipality.  
162.32  However, the amount of any surplus remaining in the debt service 
162.33  fund of a school district when the obligations and interest 
162.34  thereon are paid shall be used to reduce the general education 
162.35  fund levy authorized pursuant to section 126C.13 chapters 122A, 
162.36  123A, 123B, 124D, and 126C and the state aids authorized 
163.1   pursuant to chapters 122A, 123A, 123B, 124D, 125A, 126C, and 
163.2   127A. 
163.3      (b) The reduction to state aids equals the lesser of (1) 
163.4   the amount of the surplus times the ratio of the district's debt 
163.5   service equalization aid to the district's debt service 
163.6   equalization revenue for the last year that the district 
163.7   qualified for debt service equalization aid; or (2) the 
163.8   district's cumulative amount of debt service equalization aid.  
163.9      (c) The reduction to the general education fund levy equals 
163.10  the total amount of the surplus minus the reduction to state 
163.11  aids. 
163.12     Sec. 32.  Laws 1965, chapter 705, as amended by Laws 1975, 
163.13  chapter 261, section 4; Laws 1980, chapter 609, article 6, 
163.14  section 37; and Laws 1989, chapter 329, article 13, section 18, 
163.15  is amended to read: 
163.16     Sec. 6.  [ST. PAUL SEVERANCE LEVY.] The school board of 
163.17  independent school district No. 625, St. Paul, for the purpose 
163.18  of providing moneys for the payment of its severance pay 
163.19  obligations under a plan approved by resolution of the district, 
163.20  in addition to all other powers possessed by the school district 
163.21  and in addition to and in excess of any existing limitation upon 
163.22  the amount it is otherwise authorized by law to levy as taxes, 
163.23  is authorized to levy taxes annually not exceeding in any one 
163.24  year an amount equal to a gross tax capacity rate of .17 percent 
163.25  for taxes payable in 1990 or a net tax capacity rate of .21 .34 
163.26  percent for taxes payable in 1991 2002 and thereafter upon all 
163.27  taxable property within the school district which taxes as 
163.28  levied shall be spread upon the tax rolls, and all corrections 
163.29  thereof shall be held by the school district, and allocated 
163.30  therefor to be disbursed and expended by the school district in 
163.31  payment of any public school severance pay obligations and for 
163.32  no other purpose.  Disbursements and expenditures previously 
163.33  authorized on behalf of the school district for payment of 
163.34  severance pay obligations shall not be deemed to constitute any 
163.35  part of the cost of the operation and maintenance of the school 
163.36  district within the meaning of any statutory limitation of any 
164.1   school district expenditures.  
164.2      The amount of such severance pay allowable or to become 
164.3   payable in respect of any such employment or to any such 
164.4   employee shall not exceed the amount permitted by Minnesota 
164.5   Statutes, Section 465.72.  
164.6      <b>[EFFECTIVE DATE.]</b> This section is effective retroactively 
164.7   for taxes payable in 2002 and thereafter. 
164.8      Sec. 33.  [FUND TRANSFERS.] 
164.9      Subdivision 1.  [CHISHOLM.] Notwithstanding Minnesota 
164.10  Statutes, section 123B.79 or 123B.80, on June 30, 2003, 
164.11  independent school district No. 695, Chisholm, may permanently 
164.12  transfer up to $500,000 from its reserved operating capital 
164.13  account in its general fund to the undesignated general fund 
164.14  balance. 
164.15     Subd. 2.  [SWANVILLE.] Notwithstanding Minnesota Statutes, 
164.16  sections 123B.79, 123B.80, and 475.61, subdivision 4, 
164.17  independent school district No. 486, Swanville, on June 30, 
164.18  2003, may permanently transfer up to $61,000 from its debt 
164.19  redemption fund to its capital account in its general fund 
164.20  without making an aid or levy reduction. 
164.21     Subd. 3.  [WESTONKA.] Notwithstanding Minnesota Statutes, 
164.22  sections 123B.79, 123B.80, and 475.61, subdivision 4, 
164.23  independent school district No. 277, Westonka, on June 30, 2003, 
164.24  may permanently transfer the lesser of $170,000 or the actual 
164.25  fund balance from its debt redemption fund to its general fund 
164.26  without making a levy reduction. 
164.27     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
164.28  following final enactment. 
164.29     Sec. 34.  [DIRECTION TO COMMISSIONER.] 
164.30     Notwithstanding Minnesota Statutes, section 123B.75, 
164.31  subdivision 5, the commissioner shall calculate the property tax 
164.32  recognition shift percentage that raises $230,378,000 in fiscal 
164.33  year 2004.  The commissioner shall apply this percentage to the 
164.34  property tax recognition shift in fiscal year 2004 and later. 
164.35     Sec. 35.  [APPROPRIATIONS.] 
164.36     Subdivision 1.  [DEPARTMENT OF EDUCATION.] The sums 
165.1   indicated in this section are appropriated from the general fund 
165.2   to the department of education for the fiscal years designated. 
165.3      Subd. 2.  [SCHOOL LUNCH.] (a) For school lunch aid 
165.4   according to Minnesota Statutes, section 124D.111, and Code of 
165.5   Federal Regulations, title 7, section 210.17:  
165.6        $7,800,000     .....     2004 
165.7        $7,950,000     .....     2005 
165.8      Subd. 3.  [TRADITIONAL SCHOOL BREAKFAST; KINDERGARTEN 
165.9   MILK.] For traditional school breakfast aid and kindergarten 
165.10  milk under Minnesota Statutes, sections 124D.1158 and 124D.118: 
165.11       $3,088,000     .....     2004 
165.12       $3,217,000     .....     2005 
165.13     Subd. 4.  [FAST BREAK TO LEARNING BREAKFAST.] For fast 
165.14  break to learning breakfast under Minnesota Statutes, section 
165.15  124D.1156: 
165.16       $747,000     .....     2004 
165.17     The 2004 appropriation includes $747,000 for 2003 and $0 
165.18  for 2004. 
165.19     Subd. 5.  [SUMMER SCHOOL SERVICE REPLACEMENT AID.] For 
165.20  summer food service replacement aid under Minnesota Statutes, 
165.21  section 124D.119: 
165.22       $150,000       .....     2004 
165.23       $150,000       .....     2005 
165.24     Sec. 36.  [REVISOR INSTRUCTION.] 
165.25     In the next and subsequent editions of Minnesota Statutes, 
165.26  the revisor shall codify section 32 as Minnesota Statutes, 
165.27  section 126C.41, subdivision 5.  
165.28     Sec. 37.  [REPEALER.] 
165.29     Minnesota Statutes 2002, sections 93.22, subdivision 2; 
165.30  93.223, subdivision 1; 124D.115; 124D.1156; and 127A.41, 
165.31  subdivision 6, are repealed. 
165.32                             ARTICLE 6 
165.33                             LIBRARIES 
165.34     Section 1.  Minnesota Statutes 2002, section 134.34, 
165.35  subdivision 4, is amended to read: 
165.36     Subd. 4.  [LIMITATION.] A regional library basic system 
166.1   support grant shall not be made to a regional public library 
166.2   system for a participating city or county which decreases the 
166.3   dollar amount provided for support for operating purposes of 
166.4   public library service below 90 percent of the amount provided 
166.5   by it for the second preceding year.  This subdivision shall not 
166.6   apply to participating cities or counties where the adjusted net 
166.7   tax capacity of that city or county has decreased, if the dollar 
166.8   amount of the reduction in support is not greater than the 
166.9   dollar amount by which support would be decreased if the 
166.10  reduction in support were made in direct proportion to the 
166.11  decrease in adjusted net tax capacity. 
166.12     <b>[EFFECTIVE DATE.]</b> This section is effective for grants 
166.13  distributed in 2004 and 2005 only. 
166.14     Sec. 2.  [134.355] [BASIC REGIONAL LIBRARY SYSTEM; 
166.15  SUPPORT.] 
166.16     Subdivision 1.  [APPROPRIATIONS.] Basic system support 
166.17  grants and regional library telecommunications aid provide the 
166.18  appropriations for the basic regional library system. 
166.19     Sec. 3.  Minnesota Statutes 2002, section 134.47, 
166.20  subdivision 1, is amended to read: 
166.21     Subdivision 1.  [ELIGIBILITY.] (a) A regional public 
166.22  library system may apply for regional library telecommunications 
166.23  aid.  The aid must be used for data and video access costs and 
166.24  other related costs to improve or maintain electronic access and 
166.25  connect the library system with the state information 
166.26  infrastructure administered by the department of administration 
166.27  under section 16B.465.  Priority shall be given to public 
166.28  libraries that have not received access., maintenance, 
166.29  equipment, or installation of telecommunication lines.  To be 
166.30  eligible, a regional public library system must be officially 
166.31  designated by the commissioner of children, families, and 
166.32  learning education as a regional public library system as 
166.33  defined in section 134.34, subdivision 3, and each of its 
166.34  participating cities and counties must meet local support levels 
166.35  defined in section 134.34, subdivision 1.  A public library 
166.36  building that receives aid under this section must be open a 
167.1   minimum of 20 hours per week. 
167.2      (b) Aid received under this section may not be used to 
167.3   substitute for any existing local funds allocated to provide 
167.4   electronic access, equipment for library staff or the public, or 
167.5   local funds dedicated to other library operations. 
167.6      (c) (b) An application for regional library 
167.7   telecommunications aid must, at a minimum, contain information 
167.8   to document the following: 
167.9      (1) the connections are adequate and employ an open network 
167.10  architecture that will ensure interconnectivity and 
167.11  interoperability with school districts, post-secondary 
167.12  education, or other governmental agencies; 
167.13     (2) that the connection is established through the most 
167.14  cost-effective means and that the regional library has explored 
167.15  and coordinated connections through school districts, 
167.16  post-secondary education, or other governmental agencies; 
167.17     (3) that the regional library system has filed an e-rate 
167.18  application; and 
167.19     (4) other information, as determined by the commissioner of 
167.20  children, families, and learning, to ensure that connections are 
167.21  coordinated, efficient, and cost-effective, take advantage of 
167.22  discounts, and meet applicable state standards. 
167.23     The library system may include costs associated with 
167.24  cooperative arrangements with post-secondary institutions, 
167.25  school districts, and other governmental agencies. 
167.26     Sec. 4.  [APPROPRIATIONS.] 
167.27     Subdivision 1.  [DEPARTMENT OF EDUCATION.] The sums 
167.28  indicated in this section are appropriated from the general fund 
167.29  to the department of education for the fiscal years designated.  
167.30     Subd. 2.  [BASIC SYSTEM SUPPORT.] For basic system support 
167.31  grants under Minnesota Statutes, section 134.355: 
167.32       $8,072,000     .....     2004 
167.33       $8,570,000     .....     2005 
167.34     The 2004 appropriation includes $1,456,000 for 2003 and 
167.35  $6,616,000 for 2004. 
167.36     The 2005 appropriation includes $1,654,000 for 2004 and 
168.1   $6,916,000 for 2005. 
168.2      Subd. 3.  [REGIONAL LIBRARY TELECOMMUNICATIONS AID.] For 
168.3   regional library telecommunications aid under Minnesota 
168.4   Statutes, section 134.355: 
168.5        $1,200,000     .....     2004
168.6        $1,200,000     .....     2005
168.7      Subd. 4.  [MULTICOUNTY, MULTITYPE LIBRARY SYSTEMS.] For 
168.8   grants according to Minnesota Statutes, sections 134.353 and 
168.9   134.354, to multicounty, multitype library systems: 
168.10       $876,000       .....     2004 
168.11       $903,000       .....     2005 
168.12     The 2004 appropriation includes $153,000 for 2003 and 
168.13  $723,000 for 2004. 
168.14     The 2005 appropriation includes $180,000 for 2004 and 
168.15  $723,000 for 2005.  
168.16     Subd. 5.  [ELECTRONIC LIBRARY FOR MINNESOTA.] For statewide 
168.17  licenses to on-line databases selected in cooperation with the 
168.18  higher education services office for school media centers, 
168.19  public libraries, state government agency libraries, and public 
168.20  or private college or university libraries: 
168.21        $400,000     .....     2004 
168.22        $400,000     .....     2005 
168.23     Any balance in the first year does not cancel but is 
168.24  available in the second year. 
168.25     Sec. 5.  [REVISOR INSTRUCTION.] 
168.26     The revisor of statutes shall renumber each section of 
168.27  Minnesota Statutes listed in column A with the number listed in 
168.28  column B.  The revisor shall also make necessary cross-reference 
168.29  changes consistent with the renumbering. 
168.30              Column A                Column B
168.31           134.35, subd. 1        134.355, subd. 2
168.32           134.35, subd. 2        134.355, subd. 3
168.33           134.35, subd. 3        134.355, subd. 4
168.34           134.35, subd. 4        134.355, subd. 5
168.35           134.35, subd. 5        134.355, subd. 6
168.36           134.35, subd. 6        134.355, subd. 7
169.1            134.47, subd. 1        
169.2              paragraph (a)        134.355, subd. 8
169.3            134.47, subd. 1       
169.4              paragraph (b)        134.355, subd. 9
169.5            134.47, subd. 2        134.355, subd. 10
169.6      Sec. 6.  [REPEALER.] 
169.7      The changes made to Minnesota Statutes, section 134.34, 
169.8   subdivision 4, in section 1 are repealed effective July 1, 2005. 
169.9                              ARTICLE 7
169.10                   EARLY CHILDHOOD FAMILY SUPPORT
169.11     Section 1.  Minnesota Statutes 2002, section 119A.52, is 
169.12  amended to read: 
169.13     119A.52 [DISTRIBUTION OF APPROPRIATION AND PROGRAM 
169.14  COORDINATION.] 
169.15     (a) The commissioner of children, families, and learning 
169.16  education must distribute money appropriated for that purpose to 
169.17  Head Start program grantees to expand services and to serve 
169.18  additional low-income children.  Money must be allocated to each 
169.19  project Head Start grantee in existence on the effective date of 
169.20  Laws 1989, chapter 282.  Migrant and Indian reservation grantees 
169.21  must be initially allocated money based on the grantees' share 
169.22  of federal funds.  The remaining money must be initially 
169.23  allocated to the remaining local agencies based equally on the 
169.24  agencies' share of federal funds and on the proportion of 
169.25  eligible children in the agencies' service area who are not 
169.26  currently being served.  A Head Start grantee must be funded at 
169.27  a per child rate equal to its contracted, federally funded base 
169.28  level for program accounts 20, 22, and 25 at the start of the 
169.29  fiscal year.  In allocating funds under this paragraph, the 
169.30  commissioner of children, families, and learning education must 
169.31  assure that each Head Start grantee is allocated no less funding 
169.32  in any fiscal year than was allocated to that grantee in fiscal 
169.33  year 1993.  The commissioner may provide additional funding to 
169.34  grantees for start-up costs incurred by grantees due to the 
169.35  increased number of children to be served.  Before paying money 
169.36  to the grantees, the commissioner must notify each grantee of 
170.1   its initial allocation, how the money must be used, and the 
170.2   number of low-income children that must be served with the 
170.3   allocation.  Each grantee must notify present a work plan to the 
170.4   commissioner of for approval.  The work plan must include the 
170.5   estimated number of low-income children and families it will be 
170.6   able to serve, a description of the program design and service 
170.7   delivery area which meets the needs of and encourages access by 
170.8   low-income working families, a program design that ensures fair 
170.9   and equitable access to Head Start services for all populations 
170.10  and parts of the service area, and a plan for coordinating 
170.11  services to maximize assistance for child care costs available 
170.12  to families under chapter 119B.  For any grantee that cannot 
170.13  utilize its full allocation, the commissioner must reduce the 
170.14  allocation proportionately.  Money available after the initial 
170.15  allocations are reduced must be redistributed to eligible 
170.16  grantees. 
170.17     (b) Up to 11 percent of the funds appropriated annually may 
170.18  be used to provide grants to local Head Start agencies to 
170.19  provide funds for innovative programs designed either to target 
170.20  Head Start resources to particular at-risk groups of children or 
170.21  to provide services in addition to those currently allowable 
170.22  under federal Head Start regulations.  The commissioner must 
170.23  award funds for innovative programs under this paragraph on a 
170.24  competitive basis. 
170.25     Sec. 2.  Minnesota Statutes 2002, section 119A.53, is 
170.26  amended to read: 
170.27     119A.53 [FEDERAL REQUIREMENTS.] 
170.28     Grantees and the commissioner of children, families, and 
170.29  learning shall comply with federal regulations governing the 
170.30  federal Head Start program, except for innovative programs 
170.31  funded under section 119A.52, paragraph (b) funding for 
170.32  innovative initiatives under section 119A.52, which may be used 
170.33  to operate differently than federal Head Start regulations, and 
170.34  except that when.  If a state statute or regulation rule 
170.35  conflicts with a federal statute or regulation, the state 
170.36  statute or regulation rule prevails. 
171.1      Sec. 3.  Minnesota Statutes 2002, section 124D.13, 
171.2   subdivision 2, is amended to read: 
171.3      Subd. 2.  [PROGRAM CHARACTERISTICS.] Early childhood family 
171.4   education programs are programs for children in the period of 
171.5   life from birth to kindergarten, for the parents of such 
171.6   children, and for expectant parents.  The To the extent that 
171.7   funds are insufficient to provide programs for all children, 
171.8   early childhood family education programs should emphasize 
171.9   programming for a child from birth to age three and encourage 
171.10  parents to involve four- and five-year-old children in school 
171.11  readiness programs, and other public and nonpublic early 
171.12  learning programs.  Early childhood family education programs 
171.13  may include the following:  
171.14     (1) programs to educate parents about the physical, mental, 
171.15  and emotional development of children; 
171.16     (2) programs to enhance the skills of parents in providing 
171.17  for their children's learning and development; 
171.18     (3) learning experiences for children and parents that 
171.19  promote children's development; 
171.20     (4) activities designed to detect children's physical, 
171.21  mental, emotional, or behavioral problems that may cause 
171.22  learning problems; 
171.23     (5) activities and materials designed to encourage 
171.24  self-esteem, skills, and behavior that prevent sexual and other 
171.25  interpersonal violence; 
171.26     (6) educational materials which may be borrowed for home 
171.27  use; 
171.28     (7) information on related community resources; 
171.29     (8) programs to prevent child abuse and neglect; 
171.30     (9) other programs or activities to improve the health, 
171.31  development, and school readiness of children; or 
171.32     (10) activities designed to maximize development during 
171.33  infancy.  
171.34     The programs must not include activities for children that 
171.35  do not require substantial involvement of the children's 
171.36  parents.  The programs must be reviewed periodically to assure 
172.1   the instruction and materials are not racially, culturally, or 
172.2   sexually biased.  The programs must encourage parents to be 
172.3   aware of practices that may affect equitable development of 
172.4   children. 
172.5      Sec. 4.  Minnesota Statutes 2002, section 124D.13, 
172.6   subdivision 4, is amended to read: 
172.7      Subd. 4.  [HOME VISITING PROGRAM.] (a) The commissioner A 
172.8   district that levies for home visiting under section 124D.135, 
172.9   subdivision 6, shall use this revenue to include as part of the 
172.10  early childhood family education programs a parent education 
172.11  component to prevent child abuse and neglect.  This parent 
172.12  education component must include: 
172.13     (1) expanding statewide the home visiting component of the 
172.14  early childhood family education programs; 
172.15     (2) training parent educators, child educators, community 
172.16  outreach workers, and home visitors in the dynamics of child 
172.17  abuse and neglect and positive parenting and discipline 
172.18  practices; and 
172.19     (3) developing and disseminating education and public 
172.20  information materials that promote positive parenting skills and 
172.21  prevent child abuse and neglect. 
172.22     (b) The parent education component must: 
172.23     (1) offer to isolated or at-risk families home visiting 
172.24  parent education services that at least address parenting 
172.25  skills, a child's development and stages of growth, 
172.26  communication skills, managing stress, problem-solving skills, 
172.27  positive child discipline practices, methods of improving 
172.28  parent-child interactions and enhancing self-esteem, using 
172.29  community support services and other resources, and encouraging 
172.30  parents to have fun with and enjoy their children; 
172.31     (2) develop a that is designed to reach isolated or at-risk 
172.32  families. 
172.33     The home visiting program must use: 
172.34     (1) an established risk assessment tool to determine the 
172.35  family's level of risk; 
172.36     (3) (2) establish clear objectives and protocols for home 
173.1   visits; 
173.2      (4) determine the frequency and duration of home visits 
173.3   based on a risk-need assessment of the client, with home visits 
173.4   beginning in the second trimester of pregnancy and continuing, 
173.5   based on client need, until a child is six years old; 
173.6      (5) (3) encourage families to make a transition from home 
173.7   visits to site-based parenting programs to build a family 
173.8   support network and reduce the effects of isolation; 
173.9      (6) develop and distribute education materials on 
173.10  preventing child abuse and neglect that may be used in home 
173.11  visiting programs and parent education classes and distributed 
173.12  to the public; 
173.13     (7) initially provide at least 40 hours of training and 
173.14  thereafter ongoing training for parent educators, child 
173.15  educators, community outreach workers, and home visitors that 
173.16  covers the dynamics of child abuse and neglect, domestic 
173.17  violence and victimization within family systems, signs of abuse 
173.18  or other indications that a child may be at risk of being abused 
173.19  or neglected, what child abuse and neglect are, how to properly 
173.20  report cases of child abuse and neglect, respect for cultural 
173.21  preferences in child rearing, what community resources, social 
173.22  service agencies, and family support activities and programs are 
173.23  available, child development and growth, parenting skills, 
173.24  positive child discipline practices, identifying stress factors 
173.25  and techniques for reducing stress, home visiting techniques, 
173.26  and risk assessment measures; 
173.27     (8) (4) provide program services that are community-based, 
173.28  accessible, and culturally relevant; and 
173.29     (9) (5) foster collaboration among existing agencies and 
173.30  community-based organizations that serve young children and 
173.31  their families. 
173.32     (c) Home visitors should reflect the demographic 
173.33  composition of the community the home visitor is serving to the 
173.34  extent possible.  
173.35     Sec. 5.  Minnesota Statutes 2002, section 124D.13, 
173.36  subdivision 8, is amended to read: 
174.1      Subd. 8.  [COORDINATION.] (a) A district is encouraged to 
174.2   coordinate the program with its special education and vocational 
174.3   education programs and with related services provided by other 
174.4   governmental agencies and nonprofit agencies. must describe 
174.5   strategies to coordinate and maximize public and private 
174.6   community resources and reduce duplication of services. 
174.7      (b) A district is encouraged to coordinate adult basic 
174.8   education programs provided to parents and early childhood 
174.9   family education programs provided to children to accomplish the 
174.10  goals of section 124D.895. 
174.11     Sec. 6.  Minnesota Statutes 2002, section 124D.135, 
174.12  subdivision 1, is amended to read: 
174.13     Subdivision 1.  [REVENUE.] The revenue for early childhood 
174.14  family education programs for a school district equals $113.50 
174.15  for fiscal years 2000 and 2001 and $120 for 2002 and later 
174.16  fiscal years for fiscal years 2003 and 2004 and $96 for fiscal 
174.17  year 2005 and later, times the greater of: 
174.18     (1) 150; or 
174.19     (2) the number of people under five years of age residing 
174.20  in the district on October 1 of the previous school year. 
174.21     Sec. 7.  Minnesota Statutes 2002, section 124D.135, 
174.22  subdivision 8, is amended to read: 
174.23     Subd. 8.  [RESERVE ACCOUNT LIMIT.] (a) Under this section, 
174.24  the average balance, during the most recent three-year period in 
174.25  a district's early childhood family education reserve account on 
174.26  June 30 of each year, adjusted for any prior reductions under 
174.27  this subdivision, must not be greater than 25 percent of the sum 
174.28  of the district's maximum early childhood family education 
174.29  annual revenue under subdivision 1, excluding adjustments under 
174.30  this subdivision, plus any fees, grants, or other revenue 
174.31  received by the district for early childhood family education 
174.32  programs for the prior year. 
174.33     (b) If a district's adjusted average early childhood family 
174.34  education reserve over the three-year period is in excess of 25 
174.35  percent of the prior year annual revenue the limit under 
174.36  paragraph (a), the district's early childhood family education 
175.1   state aid and levy authority for the current school year must be 
175.2   reduced by the lesser of the current year revenue under 
175.3   subdivision 1 or the excess reserve amount.  The aid reduction 
175.4   equals the product of the lesser of the excess reserve amount or 
175.5   the current year revenue under subdivision 1 times the ratio of 
175.6   the district's aid for the prior current year under subdivision 
175.7   4 to the district's revenue for the prior current year under 
175.8   subdivision 1.  The levy reduction equals the excess reserve 
175.9   amount minus the aid reduction.  The commissioner must 
175.10  reallocate aid and levy reduced under this subdivision to other 
175.11  eligible early childhood family education programs in proportion 
175.12  to each district's revenue for the prior year under subdivision 
175.13  1.  For purposes of this paragraph, if a district does not levy 
175.14  the entire amount permitted under subdivision 3, the revenue 
175.15  under subdivision 1 must be reduced in proportion to the actual 
175.16  amount levied.  
175.17     (b) (c) Notwithstanding paragraph (a), for fiscal year 
175.18  2003, the excess reserve amount shall be computed using the 
175.19  balance in a district's early childhood family education reserve 
175.20  account on June 30, 2002.  For fiscal year 2004, the excess 
175.21  reserve amount shall be computed using the adjusted average 
175.22  balance in a district's early childhood family education reserve 
175.23  account on June 30, 2002, and June 30, 2003. 
175.24     <b>[EFFECTIVE DATE.]</b> This section is effective for revenue for 
175.25  fiscal year 2003. 
175.26     Sec. 8.  Minnesota Statutes 2002, section 124D.15, 
175.27  subdivision 7, is amended to read: 
175.28     Subd. 7.  [ADVISORY COUNCIL.] Each school readiness program 
175.29  must have an advisory council composed of members of existing 
175.30  early education-related boards, parents of participating 
175.31  children, child care providers, culturally specific service 
175.32  organizations, local resource and referral agencies, local early 
175.33  intervention committees, and representatives of early childhood 
175.34  service providers.  The council must advise the board in 
175.35  creating and administering the program and must monitor the 
175.36  progress of the program.  The council must ensure that children 
176.1   at greatest risk receive appropriate services.  If the board is 
176.2   unable to appoint to the advisory council members of existing 
176.3   early education-related boards, it must appoint parents of 
176.4   children enrolled in the program who represent the racial, 
176.5   cultural, and economic diversity of the district and 
176.6   representatives of early childhood service providers as 
176.7   representatives to an existing advisory council. 
176.8      Sec. 9.  Minnesota Statutes 2002, section 124D.16, 
176.9   subdivision 1, is amended to read: 
176.10     Subdivision 1.  [PROGRAM REVIEW AND APPROVAL.] A school 
176.11  district shall biennially by May 1 submit to the commissioners 
176.12  of children, families, and learning education and health the 
176.13  program plan required under this subdivision.  As determined by 
176.14  the commissioners, one-half of the districts shall first submit 
176.15  the plan by May 1 of the 2000-2001 school year and one-half of 
176.16  the districts shall first submit the plan by May 1 of the 
176.17  2001-2002 school year.  The program plan must include: 
176.18     (1) a description of the services to be provided; 
176.19     (2) a plan to ensure children at greatest risk receive 
176.20  appropriate services; 
176.21     (3) a description of procedures and methods to be used 
176.22  strategies to coordinate and maximize public and private 
176.23  community resources to maximize use of existing community 
176.24  resources, including school districts, health care facilities, 
176.25  government agencies, neighborhood organizations, and other 
176.26  resources knowledgeable in early childhood development and 
176.27  reduce duplication of services; 
176.28     (4) comments about the district's proposed program by the 
176.29  advisory council required by section 124D.15, subdivision 7; and 
176.30     (5) agreements with all participating service providers.  
176.31     Each commissioner may review and comment on the program, 
176.32  and make recommendations to the commissioner of children, 
176.33  families, and learning education, within 30 90 days of receiving 
176.34  the plan. 
176.35     Sec. 10.  Minnesota Statutes 2002, section 124D.16, 
176.36  subdivision 6, is amended to read: 
177.1      Subd. 6.  [RESERVE ACCOUNT LIMIT.] (a) Under this section, 
177.2   the average balance, during the most recent three-year period, 
177.3   in a district's school readiness reserve account on June 30 of 
177.4   each year, adjusted for any prior reductions under this 
177.5   subdivision, must not be greater than 25 percent of the 
177.6   district's school readiness annual revenue for the prior year, 
177.7   excluding adjustments under this subdivision.  
177.8      (b) If a district's adjusted average school readiness 
177.9   reserve over the three-year period is in excess of 25 percent of 
177.10  the prior year annual revenue the limit under paragraph (a), the 
177.11  district's current year school readiness state aid must be 
177.12  reduced by the lesser of the excess reserve amount or the 
177.13  current year aid.  The commissioner must reallocate aid reduced 
177.14  under this subdivision to other eligible school readiness 
177.15  programs in proportion to each district's aid for the prior year 
177.16  under subdivision 2.  
177.17     (b) (c) Notwithstanding paragraph (a), for fiscal year 
177.18  2003, the excess reserve amount shall be computed using the 
177.19  balance in a district's school readiness reserve account on June 
177.20  30, 2002.  For fiscal year 2004, the excess reserve amount shall 
177.21  be computed using the adjusted average balance in a district's 
177.22  school readiness reserve account on June 30, 2002, and June 30, 
177.23  2003. 
177.24     <b>[EFFECTIVE DATE.]</b> This section is effective for revenue for 
177.25  fiscal year 2003. 
177.26     Sec. 11.  [APPROPRIATIONS.] 
177.27     Subdivision 1.  [DEPARTMENT OF EDUCATION.] The sums 
177.28  indicated in this section are appropriated from the general fund 
177.29  to the department of education for the fiscal years designated.  
177.30     Subd. 2.  [SCHOOL READINESS.] For revenue for school 
177.31  readiness programs under Minnesota Statutes, sections 124D.15 
177.32  and 124D.16: 
177.33       $ 9,536,000    .....     2004
177.34       $ 9,258,000    .....     2005
177.35     The 2004 appropriation includes $1,605,000 for 2003 and 
177.36  $7,931,000 for 2004. 
178.1      The 2005 appropriation includes $1,982,000 for 2004 and 
178.2   $7,276,000 for 2005.  
178.3      Subd. 3.  [EARLY CHILDHOOD FAMILY EDUCATION AID.] For early 
178.4   childhood family education aid under Minnesota Statutes, section 
178.5   124D.135: 
178.6        $19,675,000    .....     2004 
178.7        $15,129,000    .....     2005 
178.8      The 2004 appropriation includes $3,239,000 for 2003 and 
178.9   $16,436,000 for 2004.  
178.10     The 2005 appropriation includes $4,109,000 for 2004 and 
178.11  $11,020,000 for 2005.  
178.12     Subd. 4.  [HEALTH AND DEVELOPMENTAL SCREENING AID.] For 
178.13  health and developmental screening aid under Minnesota Statutes, 
178.14  sections 121A.17 and 121A.19: 
178.15       $2,581,000     .....     2004 
178.16       $2,661,000     .....     2005 
178.17     The 2004 appropriation includes $452,000 for 2003 and 
178.18  $2,129,000 for 2004.  
178.19     The 2005 appropriation includes $532,000 for 2004 and 
178.20  $2,129,000 for 2005.  
178.21     Subd. 5.  [HEAD START PROGRAM.] For Head Start programs 
178.22  under Minnesota Statutes, section 119A.52: 
178.23       $16,475,000    .....     2004
178.24       $17,100,000    .....     2005
178.25     Sec. 12.  [REPEALER.] 
178.26     Minnesota Statutes 2002, section 124D.17, is repealed. 
178.27                             ARTICLE 8 
178.28                             PREVENTION
178.29     Section 1.  Minnesota Statutes 2002, section 124D.19, 
178.30  subdivision 3, is amended to read: 
178.31     Subd. 3.  [COMMUNITY EDUCATION DIRECTOR.] (a) Except as 
178.32  provided under paragraphs (b) and (c), each board shall employ a 
178.33  licensed community education director.  The board shall submit 
178.34  the name of the person who is serving as director of community 
178.35  education under this section on the district's annual community 
178.36  education report to the commissioner. 
179.1      (b) A board may apply to the commissioner Minnesota board 
179.2   of school administrators under Minnesota Rules, part 3512.3500, 
179.3   subpart 9, for authority to use an individual who is not 
179.4   licensed as a community education director. 
179.5      (c) A board of a district with a total population of 2,000 
179.6   or less may identify an employee who holds a valid Minnesota 
179.7   principal or superintendent license under Minnesota Rules, 
179.8   chapter 3512, to serve as director of community education.  To 
179.9   be eligible for an exception under this paragraph, the board 
179.10  shall certify in writing to the commissioner that the district 
179.11  has not placed a licensed director of community education on 
179.12  unrequested leave. 
179.13     Sec. 2.  Minnesota Statutes 2002, section 124D.20, 
179.14  subdivision 3, is amended to read: 
179.15     Subd. 3.  [GENERAL COMMUNITY EDUCATION REVENUE.] The 
179.16  general community education revenue for a district equals 
179.17  $5.95 for fiscal year 2003 and 2004 and $5.23 for fiscal year 
179.18  2005 and later, times the greater of 1,335 or the population of 
179.19  the district.  The population of the district is determined 
179.20  according to section 275.14.  
179.21     <b>[EFFECTIVE DATE.]</b> This section is effective for revenue for 
179.22  fiscal year 2005. 
179.23     Sec. 3.  Minnesota Statutes 2002, section 124D.20, 
179.24  subdivision 5, is amended to read: 
179.25     Subd. 5.  [TOTAL COMMUNITY EDUCATION LEVY.] To obtain total 
179.26  community education revenue, a district operating a youth 
179.27  after-school enrichment program under section 124D.19, 
179.28  subdivision 12, may levy the amount raised by a maximum tax rate 
179.29  of .7431 .985 percent times the adjusted net tax capacity of the 
179.30  district.  To obtain total community education revenue, a 
179.31  district not operating a youth after-school enrichment program 
179.32  may levy the amount raised by a maximum tax rate of .4795 
179.33  percent times the adjusted net tax capacity of the district.  If 
179.34  the amount of the total community education levy would exceed 
179.35  the total community education revenue, the total community 
179.36  education levy shall be determined according to subdivision 6. 
180.1      <b>[EFFECTIVE DATE.]</b> This section is effective for revenue for 
180.2   fiscal year 2005. 
180.3      Sec. 4.  Minnesota Statutes 2002, section 124D.20, is 
180.4   amended by adding a subdivision to read: 
180.5      Subd. 11.  [RESERVE ACCOUNT LIMIT.] (a) Under this section, 
180.6   the sum of the average balances during the most recent 
180.7   three-year period in a district's community education reserve 
180.8   account and unreserved/undesignated community service fund 
180.9   account on June 30 of each year, adjusted for any prior 
180.10  reductions under this subdivision, must not be greater than 25 
180.11  percent of the sum of the district's maximum total community 
180.12  education revenue under subdivision 1, excluding adjustments 
180.13  under this subdivision, plus the district's additional community 
180.14  education levy under section 124D.21, plus any fees, grants, or 
180.15  other revenue received by the district for community education 
180.16  programs for the prior year.  For purposes of this paragraph, 
180.17  "community education programs" means programs according to 
180.18  subdivisions 8, paragraph (a), and 9, and section 124D.19, 
180.19  subdivision 12, excluding early childhood family education 
180.20  programs under section 124D.13, school readiness programs under 
180.21  sections 124D.15 and 124D.17, and adult basic education programs 
180.22  under section 124D.52. 
180.23     (b) If the sum of the average balances during the most 
180.24  recent three-year period in a district's community education 
180.25  reserve account and unreserved/undesignated community service 
180.26  fund account on June 30 of each year, adjusted for any prior 
180.27  reductions under this subdivision, is in excess of the limit 
180.28  under paragraph (a), the district's community education state 
180.29  aid and levy authority for the current school year must be 
180.30  reduced by the lesser of the current year revenue under 
180.31  subdivision 1 or the excess reserve amount.  The aid reduction 
180.32  equals the product of the lesser of the excess reserve amount or 
180.33  the current year revenue under subdivision 1 times the ratio of 
180.34  the district's aid for the current year under subdivision 7 to 
180.35  the district's revenue for the current year under subdivision 
180.36  1.  The levy reduction equals the excess reserve amount minus 
181.1   the aid reduction.  For purposes of this paragraph, if a 
181.2   district does not levy the entire amount permitted under 
181.3   subdivision 5 or 6, the revenue under subdivision 1 must be 
181.4   reduced in proportion to the actual amount levied. 
181.5      (c) Notwithstanding paragraph (a), for fiscal year 2003, 
181.6   the excess reserve amount shall be computed using the balances 
181.7   in a district's community education reserve account and 
181.8   unreserved/undesignated community service fund account on June 
181.9   30, 2002.  For fiscal year 2004, the excess reserve amount shall 
181.10  be computed using the adjusted average balances in a district's 
181.11  community education reserve account and unreserved/undesignated 
181.12  community service fund account on June 30, 2002, and June 30, 
181.13  2003. 
181.14     <b>[EFFECTIVE DATE.]</b> This section is effective for revenue for 
181.15  fiscal year 2003. 
181.16     Sec. 5.  Minnesota Statutes 2002, section 124D.20, is 
181.17  amended by adding a subdivision to read: 
181.18     Subd. 12.  [WAIVER.] (a) If a district anticipates that the 
181.19  reserve account may exceed the 25 percent limit established 
181.20  under subdivision 11 because of extenuating circumstances, prior 
181.21  approval to exceed the limit must be obtained in writing from 
181.22  the commissioner. 
181.23     (b) Notwithstanding paragraph (a), for fiscal year 2003, a 
181.24  district may submit a waiver request within 30 days of the date 
181.25  of final enactment. 
181.26     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
181.27  following final enactment for revenue for fiscal year 2003. 
181.28     Sec. 6.  Minnesota Statutes 2002, section 124D.22, 
181.29  subdivision 3, is amended to read: 
181.30     Subd. 3.  [SCHOOL-AGE CARE LEVY.] To obtain school-age care 
181.31  revenue, a school district may levy an amount equal to the 
181.32  district's school-age care revenue as defined in subdivision 2 
181.33  multiplied by the lesser of one, or the ratio of the quotient 
181.34  derived by dividing the adjusted net tax capacity of the 
181.35  district for the year before the year the levy is certified by 
181.36  the resident pupil units in the district for the school year to 
182.1   which the levy is attributable, to $3,280 $2,433. 
182.2      Sec. 7.  [APPROPRIATIONS.] 
182.3      Subdivision 1.  [DEPARTMENT OF EDUCATION.] The sums 
182.4   indicated in this section are appropriated from the general fund 
182.5   to the department of education for the fiscal years designated. 
182.6      Subd. 2.  [COMMUNITY EDUCATION AID.] For community 
182.7   education aid under Minnesota Statutes, section 124D.20: 
182.8        $5,495,000     .....     2004 
182.9        $3,406,000     .....     2005 
182.10     The 2004 appropriation includes $956,000 for 2003 and 
182.11  $4,539,000 for 2004.  
182.12     The 2005 appropriation includes $1,134,000 for 2004 and 
182.13  $2,272,000 for 2005.  
182.14     Subd. 3.  [ADULTS WITH DISABILITIES PROGRAM AID.] For 
182.15  adults with disabilities programs under Minnesota Statutes, 
182.16  section 124D.56: 
182.17       $688,000       .....     2004 
182.18       $710,000       .....     2005 
182.19     The 2004 appropriation includes $120,000 for 2003 and 
182.20  $568,000 for 2004.  
182.21     The 2005 appropriation includes $142,000 for 2004 and 
182.22  $568,000 for 2005. 
182.23     Subd. 4.  [HEARING-IMPAIRED ADULTS.] For programs for 
182.24  hearing-impaired adults under Minnesota Statutes, section 
182.25  124D.57: 
182.26       $70,000        .....     2004
182.27       $70,000        .....     2005
182.28     Subd. 5.  [SCHOOL-AGE CARE REVENUE.] For extended day care 
182.29  aid under Minnesota Statutes, section 124D.22: 
182.30       $41,000        .....     2004 
182.31       $22,000        .....     2005
182.32     The 2004 appropriation includes $14,000 for 2003 and 
182.33  $27,000 for 2004. 
182.34     The 2005 appropriation includes $6,000 for 2004 and $16,000 
182.35  for 2005. 
182.36     Sec. 8.  [REPEALER.] 
183.1      Minnesota Statutes 2002, sections 124D.21; 124D.221; 
183.2   124D.93; and 144.401, subdivision 5, are repealed. 
183.3                              ARTICLE 9
183.4               SELF-SUFFICIENCY AND LIFE LONG LEARNING
183.5      Section 1.  Minnesota Statutes 2002, section 124D.52, 
183.6   subdivision 1, is amended to read: 
183.7      Subdivision 1.  [PROGRAM REQUIREMENTS.] (a) An adult basic 
183.8   education program is a day or evening program offered by a 
183.9   district that is for people over 16 years of age who do not 
183.10  attend an elementary or secondary school.  The program offers 
183.11  academic instruction necessary to earn a high school diploma or 
183.12  equivalency certificate.  Tuition and fees may not be charged to 
183.13  a learner for instruction paid under this section, except for 
183.14     (b) Notwithstanding any law to the contrary, a school board 
183.15  or the governing body of a consortium offering an adult basic 
183.16  education program may adopt a sliding fee schedule based on a 
183.17  family's income, but must waive the fee for participants who are 
183.18  under the age of 21 or unable to pay.  The fees charged must be 
183.19  designed to enable individuals of all socioeconomic levels to 
183.20  participate in the program.  A program may charge a security 
183.21  deposit to assure return of materials, supplies, and equipment. 
183.22     (c) Each approved adult basic education program must 
183.23  develop a memorandum of understanding with the local workforce 
183.24  development centers located in the approved program's service 
183.25  delivery area.  The memorandum of understanding must describe 
183.26  how the adult basic education program and the workforce 
183.27  development centers will cooperate and coordinate services to 
183.28  provide unduplicated, efficient, and effective services to 
183.29  clients.  
183.30     (d) Adult basic education aid must be spent for adult basic 
183.31  education purposes as specified in sections 124D.518 to 124D.531.
183.32     Sec. 2.  Minnesota Statutes 2002, section 124D.52, 
183.33  subdivision 3, is amended to read: 
183.34     Subd. 3.  [ACCOUNTS; REVENUE; AID.] (a) Each district, 
183.35  group of districts, or private nonprofit organization providing 
183.36  adult basic education programs must establish and 
184.1   maintain accounts separate from all other district accounts a 
184.2   reserve account within the community service fund for the 
184.3   receipt and disbursement of all funds related to these 
184.4   programs.  All revenue received pursuant to this section must be 
184.5   utilized solely for the purposes of adult basic education 
184.6   programs.  State aid must not equal more than 100 percent of the 
184.7   unreimbursed expenses of providing these programs, excluding 
184.8   in-kind costs.  
184.9      (b) Notwithstanding section 123A.26 or any other law to the 
184.10  contrary, an adult basic education consortium providing an 
184.11  approved adult basic education program may be its own fiscal 
184.12  agent and is eligible to receive state-aid payments directly 
184.13  from the commissioner. 
184.14     Sec. 3.  Minnesota Statutes 2002, section 124D.531, 
184.15  subdivision 1, is amended to read: 
184.16     Subdivision 1.  [STATE TOTAL ADULT BASIC EDUCATION AID.] 
184.17  (a) The state total adult basic education aid for fiscal year 
184.18  2001 2004 equals $30,157,000 $34,388,000.  The state total adult 
184.19  basic education aid for fiscal year 2005 and later is 
184.20  $36,509,000.  The state total adult basic education aid for 
184.21  later years equals: 
184.22     (1) the state total adult basic education aid for the 
184.23  preceding fiscal year; times 
184.24     (2) the lesser of: 
184.25     (i) 1.08, or 
184.26     (ii) the greater of 1.00 or the ratio of the state total 
184.27  contact hours in the first prior program year to the state total 
184.28  contact hours in the second prior program year.  Beginning in 
184.29  fiscal year 2002, two percent of the state total adult basic 
184.30  education aid must be set aside for adult basic education 
184.31  supplemental service grants under section 124D.522.  
184.32     (b) The state total adult basic education aid, excluding 
184.33  basic population aid, equals the difference between the amount 
184.34  computed in paragraph (a), and the state total basic population 
184.35  aid under subdivision 2. 
184.36     Sec. 4.  Minnesota Statutes 2002, section 124D.531, 
185.1   subdivision 2, is amended to read: 
185.2      Subd. 2.  [BASIC POPULATION AID.] A district is eligible 
185.3   for basic population aid if the district has a basic service 
185.4   level approved by the commissioner under section 124D.52, 
185.5   subdivision 5, or is a member of a consortium with an approved 
185.6   basic service level.  Basic population aid is equal to the 
185.7   greater of $4,000 $3,844 or $1.80 $1.73 times the population of 
185.8   the district.  District population is determined according to 
185.9   section 275.14. 
185.10     Sec. 5.  Minnesota Statutes 2002, section 124D.531, 
185.11  subdivision 4, is amended to read: 
185.12     Subd. 4.  [ADULT BASIC EDUCATION PROGRAM AID LIMIT.] (a) 
185.13  Notwithstanding subdivisions 2 and 3, the total adult basic 
185.14  education aid for a program per prior year contact hour must not 
185.15  exceed four times the rate $21 per prior year contact hour 
185.16  computed under subdivision 3, clause (2). 
185.17     (b) For fiscal year 2004, the aid for a program under 
185.18  subdivision 3, clause (2), adjusted for changes in program 
185.19  membership, must not exceed the aid for that program under 
185.20  subdivision 3, clause (2), for fiscal year 2003 by more than the 
185.21  greater of eight percent or $10,000. 
185.22     (c) For fiscal year 2005, the aid for a program under 
185.23  subdivision 3, clause (2), adjusted for changes in program 
185.24  membership, must not exceed the sum of the aid for that program 
185.25  under subdivision 3, clause (2), and section 8, paragraph (a), 
185.26  for the preceding fiscal year by more than the greater of eight 
185.27  percent or $10,000.  
185.28     (d) For fiscal year 2002 2006 and later, the aid for a 
185.29  program under subdivision 3, clause (2), adjusted for changes in 
185.30  program membership, must not exceed the aid for that program 
185.31  under subdivision 3, clause (2), for the first preceding fiscal 
185.32  year by more than the greater of 17 eight percent or 
185.33  $20,000 $10,000. 
185.34     (c) (d) Adult basic education aid is payable to a program 
185.35  for unreimbursed costs. 
185.36     Sec. 6.  Minnesota Statutes 2002, section 124D.531, 
186.1   subdivision 7, is amended to read: 
186.2      Subd. 7.  [PROGRAM AUDITS.] Programs that receive aid under 
186.3   this section must maintain records that support the aid 
186.4   payments.  The commissioner may audit these records upon 
186.5   request.  The commissioner must establish procedures for 
186.6   conducting fiscal audits of adult basic education programs 
186.7   according to the schedule in this subdivision.  In calendar year 
186.8   2003, the commissioner must audit one-half of approved adult 
186.9   basic education programs that received aid for fiscal year 2002, 
186.10  and in calendar year 2004, the commissioner must audit the 
186.11  remaining unaudited programs for aid received in fiscal year 
186.12  2003.  Beginning with fiscal year 2005, the commissioner must, 
186.13  at a minimum, audit each adult basic education program once 
186.14  every five years.  The commissioner must establish procedures to 
186.15  reconcile any discrepancies between aid payments based on 
186.16  information reported to the commissioner and aid estimates based 
186.17  on a program audit. 
186.18     Sec. 7.  [ADULT BASIC EDUCATION PROGRAM APPROVAL AND AID, 
186.19  FISCAL YEAR 2004.] 
186.20     (a) Notwithstanding Minnesota Statutes 2002, section 
186.21  124D.54, subdivision 2, a district or consortium of districts 
186.22  that provided a program funded under Minnesota Statutes 2002, 
186.23  section 124D.54, in fiscal year 2003 may request an extension of 
186.24  the application deadline for approval of an adult basic 
186.25  education program for fiscal year 2004. 
186.26     (b) For purposes of computing the fiscal year 2005 adult 
186.27  basic education aid for a program under Minnesota Statutes, 
186.28  section 124D.531, subdivision 3, clause (2), the contact hours 
186.29  for students participating in the program during the first prior 
186.30  program year must be increased by 17 percent of the adult 
186.31  graduation aid average daily attendance for fiscal year 2002.  
186.32     Sec. 8.  [ADULT BASIC EDUCATION TRANSITION AID.] 
186.33     (a) For fiscal year 2004, adult basic education transition 
186.34  aid for each qualifying district equals the district's adult 
186.35  high school graduation aid for fiscal year 2002.  This aid 
186.36  amount must be used to provide an adult basic education program 
187.1   under Minnesota Statutes, section 124D.52.  To qualify for aid 
187.2   under this section a district must establish or join an approved 
187.3   adult basic education program according to Minnesota Statutes, 
187.4   section 124D.52, subdivision 2.  
187.5      (b) For fiscal year 2005, the adult high school graduation 
187.6   aid program is eliminated.  
187.7      Sec. 9.  [APPROPRIATIONS.] 
187.8      Subdivision 1.  [DEPARTMENT OF EDUCATION.] The sums 
187.9   indicated in this section are appropriated from the general fund 
187.10  to the department of education for the fiscal years designated. 
187.11     Subd. 2.  [ADULT BASIC EDUCATION AID.] For adult basic 
187.12  education aid under Minnesota Statutes, section 124D.52, in 
187.13  fiscal year 2004 and Minnesota Statutes, section 124D.531, in 
187.14  fiscal year 2005:  
187.15       $33,153,000    .....     2004 
187.16       $35,823,000    .....     2005 
187.17     The 2004 appropriation includes $5,905,000 for 2003 and 
187.18  $27,248,000 for 2004.  
187.19     The 2005 appropriation includes $6,811,000 for 2004 and 
187.20  $29,012,000 for 2005.  
187.21     Subd. 3.  [ADULT GRADUATION AID.] For adult graduation aid 
187.22  under Minnesota Statutes, section 124D.54:  
187.23       $2,094,000     .....     2004
187.24       $  424,000     .....     2005
187.25     The 2004 appropriation includes $396,000 for 2003 and 
187.26  $1,698,000 for 2004.  
187.27     The 2005 appropriation includes $424,000 for 2004 and $0 
187.28  for 2005. 
187.29     Subd. 4.  [GED TESTS.] For payment of 60 percent of the 
187.30  costs of GED tests under Laws 1993, chapter 224, article 4, 
187.31  section 44, subdivision 10: 
187.32       $125,000       .....     2004
187.33       $125,000       .....     2005
187.34     Subd. 5.  [LEAD ABATEMENT.] For lead abatement according to 
187.35  Minnesota Statutes, section 119A.46:  
187.36       $  100,000     .....     2004 
188.1        $  100,000     .....     2005 
188.2      Any balance in the first year does not cancel but is 
188.3   available in the second year. 
188.4      Sec. 10.  [REPEALER.] 
188.5      Minnesota Statutes 2002, sections 124D.09, subdivision 15; 
188.6   124D.54; and 126C.05, subdivision 12, are repealed. 
188.7                              ARTICLE 10
188.8                            STATE AGENCIES
188.9      Section 1.  Minnesota Statutes 2002, section 122A.09, 
188.10  subdivision 10, is amended to read: 
188.11     Subd. 10.  [VARIANCES.] (a) Notwithstanding subdivision 9 
188.12  and section 14.05, subdivision 4, the board of teaching may 
188.13  grant a variance to its rules upon application by a school 
188.14  district for purposes of implementing experimental programs in 
188.15  learning or management. 
188.16     (b) To enable a school district to meet the needs of 
188.17  students enrolled in an alternative education program and to 
188.18  enable licensed teachers instructing those students to satisfy 
188.19  content area licensure requirements, the board of teaching 
188.20  annually may permit a licensed teacher teaching in an 
188.21  alternative education program to instruct students in a content 
188.22  area for which the teacher is not licensed, consistent with 
188.23  paragraph (a). 
188.24     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
188.25  following final enactment.  
188.26     Sec. 2.  Minnesota Statutes 2002, section 122A.12, 
188.27  subdivision 1, is amended to read: 
188.28     Subdivision 1.  [MEMBERSHIP.] A board of school 
188.29  administrators is established and must consist of nine ten 
188.30  members appointed by the governor with the advice and consent of 
188.31  the senate, including at least: 
188.32     (1) one elementary school principal; 
188.33     (2) one secondary school principal; 
188.34     (3) one higher education faculty member in an educational 
188.35  administration program approved by the board; 
188.36     (4) one higher education administrator for an educational 
189.1   administration program approved by the board; 
189.2      (5) one school superintendent; 
189.3      (6) one classroom teacher; 
189.4      (7) one community education director or a; 
189.5      (8) one special education director; and 
189.6      (8) (9) two members of the public, one of whom must be a 
189.7   present or former school board member. 
189.8      In making appointments, the governor shall solicit 
189.9   recommendations from groups representing persons in clauses (1) 
189.10  to (8) (9). 
189.11     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
189.12  following final enactment.  
189.13     Sec. 3.  Minnesota Statutes 2002, section 122A.12, 
189.14  subdivision 2, is amended to read: 
189.15     Subd. 2.  [TERMS; COMPENSATION; REMOVAL; ADMINISTRATION.] 
189.16  Membership terms, removal of members, and the filling of 
189.17  membership vacancies are as provided in section 214.09.  The 
189.18  terms of the initial board members must be determined by lot as 
189.19  follows: 
189.20     (1) three members must be appointed for terms that expire 
189.21  August 1, 2002; 
189.22     (2) three members must be appointed for terms that expire 
189.23  August 1, 2003; and 
189.24     (3) three four members must be appointed for terms that 
189.25  expire August 1, 2004. 
189.26     Members shall not receive the daily payment under section 
189.27  214.09, subdivision 3.  The public employer of a member shall 
189.28  not reduce the member's compensation or benefits for the 
189.29  member's absence from employment when engaging in the business 
189.30  of the board.  The provision of staff, administrative services, 
189.31  and office space; the review and processing of complaints; the 
189.32  setting of fees; the selection and duties of an executive 
189.33  secretary to serve the board; and other provisions relating to 
189.34  board operations are as provided in chapter 214.  Fiscal year 
189.35  and reporting requirements are as provided in sections 214.07 
189.36  and 214.08. 
190.1      <b>[EFFECTIVE DATE.]</b> This section is effective the day 
190.2   following final enactment.  
190.3      Sec. 4.  Minnesota Statutes 2002, section 122A.18, 
190.4   subdivision 7a, is amended to read: 
190.5      Subd. 7a.  [PERMISSION TO SUBSTITUTE TEACH.] (a) The board 
190.6   of teaching may allow a person who is enrolled in and making 
190.7   satisfactory progress in a board-approved teacher program and 
190.8   who has successfully completed student teaching to be employed 
190.9   as a short-call substitute teacher.  
190.10     (b) The board of teaching may issue a lifetime qualified 
190.11  short-call substitute teaching license to a person who: 
190.12     (1) was a qualified teacher under section 122A.16 while 
190.13  holding a continuing five-year teaching license issued by the 
190.14  board, and receives a retirement annuity from the teachers 
190.15  retirement association, Minneapolis teachers retirement fund 
190.16  association, St. Paul teachers retirement fund association, or 
190.17  Duluth teachers retirement fund association; 
190.18     (2) holds an out-of-state teaching license and receives a 
190.19  retirement annuity as a result of the person's teaching 
190.20  experience; or 
190.21     (3) held a continuing five-year license issued by the 
190.22  board, taught at least three school years in an accredited 
190.23  nonpublic school in Minnesota, and receives a retirement annuity 
190.24  as a result of the person's teaching experience. 
190.25  A person holding a lifetime qualified short-call substitute 
190.26  teaching license is not required to complete continuing 
190.27  education clock hours.  A person holding this license may 
190.28  reapply to the board for a continuing five-year license and must 
190.29  again complete continuing education clock hours one school year 
190.30  after receiving the continuing five-year license. 
190.31     <b>[EFFECTIVE DATE.]</b> This section is effective for the 
190.32  2003-2004 school year. 
190.33     Sec. 5.  Minnesota Statutes 2002, section 122A.21, is 
190.34  amended to read: 
190.35     122A.21 [TEACHERS' AND ADMINISTRATORS' LICENSES; FEES.] 
190.36     Each application for the issuance, renewal, or extension of 
191.1   a license to teach must be accompanied by a processing fee in an 
191.2   amount set by the board of teaching by rule of $57.  Each 
191.3   application for issuing, renewing, or extending the license of a 
191.4   school administrator or supervisor must be accompanied by a 
191.5   processing fee in the amount set by the board of teaching.  The 
191.6   processing fee for a teacher's license and for the licenses of 
191.7   supervisory personnel must be paid to the executive secretary of 
191.8   the appropriate board.  The executive secretary of the board 
191.9   shall deposit the fees with the state treasurer, as provided by 
191.10  law, and report each month to the commissioner of finance the 
191.11  amount of fees collected.  The fees as set by the board are 
191.12  nonrefundable for applicants not qualifying for a license.  
191.13  However, a fee must be refunded by the state treasurer in any 
191.14  case in which the applicant already holds a valid unexpired 
191.15  license.  The board may waive or reduce fees for applicants who 
191.16  apply at the same time for more than one license. 
191.17     Sec. 6.  Minnesota Statutes 2002, section 122A.22, is 
191.18  amended to read: 
191.19     122A.22 [DISTRICT RECORDING VERIFICATION OF TEACHER 
191.20  LICENSES.] 
191.21     No person shall be accounted a qualified teacher until the 
191.22  person has filed for record with the district superintendent 
191.23  where the person intends to teach a license, or certified copy 
191.24  of a license, authorizing the person to teach school in the 
191.25  district school system school district or charter school 
191.26  contracting with the person for teaching services verifies 
191.27  through the Minnesota education licensing system available on 
191.28  the department Web site that the person is a qualified teacher, 
191.29  consistent with sections 122A.16 and 122A.44, subdivision 1. 
191.30     <b>[EFFECTIVE DATE.]</b> This section is effective for the 
191.31  2003-2004 school year and later.  
191.32     Sec. 7.  Minnesota Statutes 2002, section 169.26, 
191.33  subdivision 3, is amended to read: 
191.34     Subd. 3.  [DRIVER TRAINING.] All driver education courses 
191.35  approved by the commissioner of children, families, and learning 
191.36  and the commissioner of public safety must include instruction 
192.1   on railroad-highway grade crossing safety.  The commissioner of 
192.2   children, families, and learning and the commissioner of public 
192.3   safety shall by rule establish minimum standards of course 
192.4   content relating to operation of vehicles at railroad-highway 
192.5   grade crossings.  
192.6      Sec. 8.  Minnesota Statutes 2002, section 169.973, 
192.7   subdivision 1, is amended to read: 
192.8      Subdivision 1.  [COMMISSIONER'S AUTHORITY; RULES; 
192.9   CURRICULUM.] The commissioner of public safety shall supervise 
192.10  the administration and conduct of driver improvement clinics and 
192.11  youth-oriented driver improvement clinics.  The commissioner of 
192.12  public safety shall promulgate rules setting forth standards for 
192.13  the curriculum and mode of instruction of driver improvement 
192.14  clinics and youth-oriented driver improvement clinics and such 
192.15  other matters as the commissioner of public safety considers 
192.16  necessary for the proper administration of such clinics.  In the 
192.17  preparation of such standards the commissioner of public safety 
192.18  shall consult with the commissioner of children, families, and 
192.19  learning and state associations of judges.  A driver improvement 
192.20  clinic established under sections 169.971 to 169.973 and 171.20, 
192.21  subdivision 3, shall conform to the standards promulgated by the 
192.22  commissioner of public safety.  The course of study at a driver 
192.23  improvement clinic and youth-oriented driver improvement clinic 
192.24  may not exceed a cumulative total of nine hours with no single 
192.25  class session lasting more than three hours.  The course of 
192.26  study at a driver improvement clinic and youth-oriented driver 
192.27  improvement clinic shall include instruction in railroad 
192.28  crossing safety. 
192.29     Sec. 9.  Minnesota Statutes 2002, section 178.02, 
192.30  subdivision 1, is amended to read: 
192.31     Subdivision 1.  [MEMBERS.] The commissioner of labor and 
192.32  industry, hereinafter called the commissioner, shall appoint an 
192.33  apprenticeship advisory council, hereinafter referred to as the 
192.34  council, composed of three representatives each from employer 
192.35  and employee organizations, and two representatives of the 
192.36  general public.  The assistant commissioner director of 
193.1   children, families, and learning education responsible for 
193.2   vocational career and technical education or designee shall be 
193.3   an ex officio member of the council and shall serve in an 
193.4   advisory capacity only.  
193.5      Sec. 10.  [APPROPRIATIONS; DEPARTMENT OF EDUCATION.] 
193.6      Subdivision 1.  [DEPARTMENT OF EDUCATION.] Unless otherwise 
193.7   indicated, the sums indicated in this section are appropriated 
193.8   from the general fund to the department of education for the 
193.9   fiscal years designated. 
193.10     Subd. 2.  [DEPARTMENT.] (a) For the department of education:
193.11       $23,653,000    .....     2004 
193.12       $23,653,000    .....     2005 
193.13     Any balance in the first year does not cancel but is 
193.14  available in the second year. 
193.15     (b) $260,000 each year is for the Minnesota children's 
193.16  museum. 
193.17     (c) $41,000 each year is for the Minnesota academy of 
193.18  science. 
193.19     (d) $237,000 of the balance in the state education 
193.20  courseware development account in the state government special 
193.21  revenue fund as of July 1, 2004, is canceled to the general fund.
193.22     (e) $160,000 of the balance in the state item bank 
193.23  revolving account in the state government special revenue fund 
193.24  as of July 1, 2004, is canceled to the general fund. 
193.25     (f) $621,000 each year is for the board of teaching. 
193.26     (g) $165,000 each year is for the board of school 
193.27  administrators.  
193.28     (h) The commissioner is encouraged to give priority 
193.29  consideration to the Minnesota humanities commission when 
193.30  issuing grants for professional development of teachers or 
193.31  content development from best practices, Federal Title II, Part 
193.32  A, Federal Title V, Part A, or other appropriate grant resources 
193.33  that have a stated objective of improvement of teacher 
193.34  performance. 
193.35     (i) An additional $96,000 in fiscal year 2004 and $96,000 
193.36  in fiscal year 2005 are appropriated from the special revenue 
194.1   fund under Minnesota Statutes, section 517.08, subdivision 1c, 
194.2   for family visitation centers.  Any balance in the first year 
194.3   does not cancel but is available for the second year. 
194.4      Subd. 3.  [FEDERAL GRANTS AND AIDS.] The expenditures of 
194.5   federal grants and aids as shown in the biennial budget document 
194.6   and its supplements are approved and appropriated and shall be 
194.7   spent as indicated. 
194.8      Sec. 11.  [APPROPRIATIONS; MINNESOTA STATE ACADEMIES.] 
194.9      The sums indicated in this section are appropriated from 
194.10  the general fund to the Minnesota state academies for the deaf 
194.11  and the blind for the fiscal years designated:  
194.12       $10,466,000    .....     2004 
194.13       $10,466,000    .....     2005 
194.14     Any balance in the first year does not cancel but is 
194.15  available in the second year. 
194.16     Sec. 12.  [APPROPRIATIONS; PERPICH CENTER FOR ARTS 
194.17  EDUCATION.] 
194.18     The sums indicated in this section are appropriated from 
194.19  the general fund to the Perpich center for arts education for 
194.20  the fiscal years designated: 
194.21       $6,864,000     .....     2004 
194.22       $6,423,000     .....     2005 
194.23     Any balance in the first year does not cancel but is 
194.24  available in the second year. 
194.25     Sec. 13.  [REVISOR'S INSTRUCTION.] 
194.26     In the next and subsequent editions of Minnesota Statutes, 
194.27  the revisor shall change all references to the "commissioner of 
194.28  children, families, and learning" to the "commissioner of public 
194.29  safety" in Minnesota Statutes, sections 123B.88, subdivision 9; 
194.30  168.102; 169.441, subdivision 5; and 171.321, subdivision 4c; 
194.31  and "Part H" to "Part C" in Minnesota Statutes, sections 
194.32  125A.27, subdivisions 7 and 8; 125A.32; 125A.35; 125A.37; 
194.33  125A.39; 125A.44; and 125A.45. 
194.34     Sec. 14.  [REPEALER.] 
194.35     (a) Minnesota Statutes 2002, sections 15.014, subdivision 
194.36  3; 123B.90, subdivision 1; 169.441, subdivision 4; and 239.004, 
195.1   are repealed. 
195.2      (b) Minnesota Rules, parts 3500.0600; 3520.0400; 3520.1400; 
195.3   3520.3300; 3530.1500; 3530.2700; 3530.4400; 3530.4500; 
195.4   3530.4700; and 3550.0100, are repealed. 
195.5                              ARTICLE 11
195.6                             DEFICIENCIES
195.7   Section 1.  [DEPARTMENT OF EDUCATION.] 
195.8      The dollar amounts shown are added to or, if shown in 
195.9   parentheses, are subtracted from the appropriations in Laws 
195.10  2001, First Special Session chapter 6, as amended by Laws 2002, 
195.11  chapter 220, and Laws 2002, chapter 374, or other law, and are 
195.12  appropriated from the general fund to the department of 
195.13  education for the purposes specified in this article, to be 
195.14  available for the fiscal year indicated for each purpose.  The 
195.15  figure "2003" used in this article means that the appropriation 
195.16  or appropriations listed are available for the fiscal year 
195.17  ending June 30, 2003. 
195.18                                                         2003 
195.19  APPROPRIATION ADJUSTMENTS                         $  10,869,000 
195.20                                             APPROPRIATION CHANGE
195.21  Sec. 2.  APPROPRIATIONS; DEPARTMENT OF 
195.22  EDUCATION 
195.23  Subdivision 1.  Community Education Aid                 219,000 
195.24  Subd. 2.  General and Supplemental 
195.25  Education Aid                                         8,791,000 
195.26  This change includes ($7,420,000) for 
195.27  2002 and $16,211,000 for 2003. 
195.28  Subd. 3.  Nonpublic Pupil Aid                           437,000 
195.29  Subd. 4.  Consolidation Transition Aid                    5,000 
195.30  Subd. 5.  Interdistrict Desegregation 
195.31  or Integration Transportation Grants                    169,000 
195.32  Subd. 6.  Travel for Home-Based 
195.33  Services                                                 48,000  
195.34  Subd. 7.  Debt Service Aid                               19,000 
195.35  Subd. 8.  School Breakfast                              100,000 
195.36  Subd. 9.  Fast Break to Learning                      1,081,000 
195.37     Sec. 3.  [EFFECTIVE DATE.] 
195.38     Sections 1 and 2 are effective the day following final 
196.1   enactment. 
196.2                              ARTICLE 12
196.3                         TECHNICAL AMENDMENTS
196.4      Section 1.  Minnesota Statutes 2002, section 119B.011, 
196.5   subdivision 20, is amended to read: 
196.6      Subd. 20.  [TRANSITION YEAR FAMILIES.] "Transition year 
196.7   families" means families who have received MFIP assistance, or 
196.8   who were eligible to receive MFIP assistance after choosing to 
196.9   discontinue receipt of the cash portion of MFIP assistance under 
196.10  section 256J.31, subdivision 12, for at least three of the last 
196.11  six months before losing eligibility for MFIP or families 
196.12  participating in work first under chapter 256K who meet the 
196.13  requirements of section 256K.07.  Transition year child care may 
196.14  be used to support employment or job search.  Transition year 
196.15  child care is not available to families who have been 
196.16  disqualified from MFIP due to fraud.  
196.17     Sec. 2.  Minnesota Statutes 2002, section 121A.21, is 
196.18  amended to read: 
196.19     121A.21 [SCHOOL HEALTH SERVICES.] 
196.20     (a) Every school board must provide services to promote the 
196.21  health of its pupils. 
196.22     (b) The board of a district with 1,000 pupils or more in 
196.23  average daily membership in early childhood family education, 
196.24  preschool handicapped, elementary, and secondary programs must 
196.25  comply with the requirements of this paragraph.  It may use one 
196.26  or a combination of the following methods: 
196.27     (1) employ personnel, including at least one full-time 
196.28  equivalent licensed school nurse or continue to employ a 
196.29  registered nurse not yet certified as a public health nurse as 
196.30  defined in section 145A.02, subdivision 18, who is enrolled in a 
196.31  program that would lead to certification within four years of 
196.32  August 1, 1988; 
196.33     (2) contract with a public or private health organization 
196.34  or another public agency for personnel during the regular school 
196.35  year, determined appropriate by the board, who are currently 
196.36  licensed under chapter 148 and who are certified public health 
197.1   nurses; or 
197.2      (3) enter into another arrangement approved by the 
197.3   commissioner.  
197.4      Sec. 3.  Minnesota Statutes 2002, section 122A.41, 
197.5   subdivision 2, is amended to read: 
197.6      Subd. 2.  [PROBATIONARY PERIOD; DISCHARGE OR DEMOTION.] All 
197.7   teachers in the public schools in cities of the first class 
197.8   during the first three years of consecutive employment shall be 
197.9   deemed to be in a probationary period of employment during which 
197.10  period any annual contract with any teacher may, or may not, be 
197.11  renewed as the school board, after consulting with the peer 
197.12  review committee charged with evaluating the probationary 
197.13  teachers under subdivision 2a or 3, shall see fit.  The school 
197.14  site management team or the school board if there is no school 
197.15  site management team, shall adopt a plan for a written 
197.16  evaluation of teachers during the probationary period according 
197.17  to subdivision 2a 3.  Evaluation by the peer review committee 
197.18  charged with evaluating probationary teachers under subdivision 
197.19  2a 3 shall occur at least three times each year for a teacher 
197.20  performing services on 120 or more school days, at least two 
197.21  times each year for a teacher performing services on 60 to 119 
197.22  school days, and at least one time each year for a teacher 
197.23  performing services on fewer than 60 school days.  Days devoted 
197.24  to parent-teacher conferences, teachers' workshops, and other 
197.25  staff development opportunities and days on which a teacher is 
197.26  absent from school shall not be included in determining the 
197.27  number of school days on which a teacher performs services.  The 
197.28  school board may, during such probationary period, discharge or 
197.29  demote a teacher for any of the causes as specified in this 
197.30  code.  A written statement of the cause of such discharge or 
197.31  demotion shall be given to the teacher by the school board at 
197.32  least 30 days before such removal or demotion shall become 
197.33  effective, and the teacher so notified shall have no right of 
197.34  appeal therefrom. 
197.35     Sec. 4.  Minnesota Statutes 2002, section 122A.58, is 
197.36  amended to read: 
198.1      122A.58 [COACHES, TERMINATION OF DUTIES.] 
198.2      Subdivision 1.  [TERMINATION; HEARING.] Before a district 
198.3   terminates the coaching duties of an employee who is required to 
198.4   hold a license as an athletic coach from the commissioner 
198.5   of children, families, and learning education, the district must 
198.6   notify the employee in writing and state its reason for the 
198.7   proposed termination.  Within 14 days of receiving this 
198.8   notification, the employee may request in writing a hearing on 
198.9   the termination before the commissioner board.  If a hearing is 
198.10  requested, the commissioner board must hold a hearing within 25 
198.11  days according to the hearing procedures specified in section 
198.12  122A.40, subdivision 14, and the termination is final upon the 
198.13  order of the commissioner board after the hearing. 
198.14     Subd. 2.  [FINAL DECISION.] Within ten days after the 
198.15  hearing, the commissioner board must issue a written decision 
198.16  regarding the termination.  If the commissioner board decides to 
198.17  terminate the employee's coaching duties, the decision must 
198.18  state the reason on which it is based and include findings of 
198.19  fact based upon competent evidence in the record.  The 
198.20  commissioner board may terminate the employee's duties or not, 
198.21  as it sees fit, for any reason which is found to be true based 
198.22  on substantial and competent evidence in the record. 
198.23     Subd. 3.  [NONAPPLICATION OF SECTION.] This section shall 
198.24  not apply to the termination of coaching duties pursuant to a 
198.25  district transfer policy or as a result of the nonrenewal or 
198.26  termination of the employee's contract or the employee's 
198.27  discharge, demotion or suspension pursuant to section 122A.40 or 
198.28  122A.41.  This section shall not apply to the termination of an 
198.29  employee's coaching duties prior to completion of before 
198.30  completing the probationary period of employment. 
198.31     Sec. 5.  Minnesota Statutes 2002, section 123B.02, 
198.32  subdivision 1, is amended to read: 
198.33     Subdivision 1.  [BOARD AUTHORITY.] The board must have the 
198.34  general charge of the business of the district, the school 
198.35  houses, and of the interests of the schools thereof.  The 
198.36  board's authority to govern, manage, and control the district; 
199.1   to carry out its duties and responsibilities; and to conduct the 
199.2   business of the district includes implied powers in addition to 
199.3   any specific powers granted by the legislature.  
199.4      Sec. 6.  Minnesota Statutes 2002, section 123B.72, 
199.5   subdivision 3, is amended to read: 
199.6      Subd. 3.  [CERTIFICATION.] Prior to occupying or 
199.7   reoccupying a school facility affected by this section, a school 
199.8   board or its designee shall submit a document prepared by a 
199.9   system inspector to the building official or to the 
199.10  commissioner, verifying that the facility's heating, 
199.11  ventilation, and air conditioning system has been installed and 
199.12  operates according to design specifications and code, according 
199.13  to section 123B.71, subdivision 10 9, clause (3) (11).  A 
199.14  systems inspector shall also verify that the facility's design 
199.15  will provide the ability for monitoring of outdoor airflow and 
199.16  total airflow of ventilation systems in new school facilities 
199.17  and that any heating, ventilation, or air conditioning system 
199.18  that is installed or modified for a project subject to this 
199.19  section must provide a filtration system with a current ASHRAE 
199.20  standard. 
199.21     Sec. 7.  Minnesota Statutes 2002, section 123B.93, is 
199.22  amended to read: 
199.23     123B.93 [ADVERTISING ON SCHOOL BUSES.] 
199.24     (a) The commissioner, through a competitive process, and 
199.25  with the approval of the school bus safety advisory committee 
199.26  may contract with advertisers regarding advertising on school 
199.27  buses.  At a minimum, the contract must prohibit advertising and 
199.28  advertising images that: 
199.29     (1) solicit the sale of, or promote the use of, alcoholic 
199.30  beverages and tobacco products; 
199.31     (2) are discriminatory in nature or content; 
199.32     (3) imply or declare an endorsement of the product or 
199.33  service by the school district; 
199.34     (4) contain obscene material; 
199.35     (5) are false, misleading, or deceptive; or 
199.36     (6) relate to an illegal activity or antisocial behavior. 
200.1      (b) Advertisement must meet the following conditions: 
200.2      (1) the advertising attached to the school bus does not 
200.3   interfere with bus identification under section 169.441; and 
200.4      (2) the bus with attached advertising meets the school bus 
200.5   equipment standards under sections 169.4501 to 169.4504. 
200.6      (c) All buses operated by school districts may be attached 
200.7   with advertisements under the state contract.  All school 
200.8   district contracts shall include a provision for advertisement.  
200.9   Each school district shall be reimbursed by the advertiser for 
200.10  all costs incurred by the district and its contractors for 
200.11  supporting the advertising program, including, but not limited 
200.12  to, retrofitting buses, storing advertising, attaching 
200.13  advertising to the bus, and related maintenance. 
200.14     (d) The commissioner shall hold harmless and indemnify each 
200.15  district for all liabilities arising from the advertising 
200.16  program.  Each district must tender defense of all such claims 
200.17  to the commissioner within five days of receipt. 
200.18     (e) All revenue from the contract shall be deposited in the 
200.19  general fund. 
200.20     Sec. 8.  Minnesota Statutes 2002, section 124D.03, 
200.21  subdivision 12, is amended to read: 
200.22     Subd. 12.  [TERMINATION OF ENROLLMENT.] A district may 
200.23  terminate the enrollment of a nonresident student enrolled under 
200.24  this section or section 124D.07 or 124D.08 at the end of a 
200.25  school year if the student meets the definition of a habitual 
200.26  truant under section 260C.007, subdivision 19, the student has 
200.27  been provided appropriate services under chapter 260A, and the 
200.28  student's case has been referred to juvenile court.  A district 
200.29  may also terminate the enrollment of a nonresident student over 
200.30  the age of 16 enrolled under this section if the student is 
200.31  absent without lawful excuse for one or more periods on 15 
200.32  school days and has not lawfully withdrawn from school under 
200.33  section 120A.22, subdivision 8. 
200.34     Sec. 9.  Minnesota Statutes 2002, section 124D.09, 
200.35  subdivision 3, is amended to read: 
200.36     Subd. 3.  [DEFINITIONS.] For purposes of this section, the 
201.1   following terms have the meanings given to them. 
201.2      (a) "Eligible institution" means a Minnesota public 
201.3   post-secondary institution, a private, nonprofit two-year trade 
201.4   and technical school granting associate degrees, an 
201.5   opportunities industrialization center accredited by the North 
201.6   Central Association of Colleges and Schools, or a private, 
201.7   residential, two-year or four-year, liberal arts, 
201.8   degree-granting college or university located in Minnesota.  
201.9   "Course" means a course or program.  
201.10     (b) "Course" means a course or program.  
201.11     Sec. 10.  Minnesota Statutes 2002, section 124D.10, 
201.12  subdivision 13, is amended to read: 
201.13     Subd. 13.  [LENGTH OF SCHOOL YEAR.] A charter school must 
201.14  provide instruction each year for at least the number of days 
201.15  required by section 120A.22, subdivision 5 120A.41.  It may 
201.16  provide instruction throughout the year according to sections 
201.17  124D.12 to 124D.127 or 124D.128.  
201.18     Sec. 11.  Minnesota Statutes 2002, section 124D.10, 
201.19  subdivision 23a, is amended to read: 
201.20     Subd. 23a.  [RELATED PARTY LEASE COSTS.] (a) A charter 
201.21  school is prohibited from entering a lease of real property with 
201.22  a related party as defined in this subdivision, unless the 
201.23  lessor is a nonprofit corporation under chapter 317A or a 
201.24  cooperative under chapter 308A, and the lease cost is reasonable 
201.25  under section 124D.11, subdivision 4, clause (1). 
201.26     (b) For purposes of this subdivision: 
201.27     (1) A "related party" is an affiliate or close relative of 
201.28  the other party in question, an affiliate of a close relative, 
201.29  or a close relative of an affiliate.  
201.30     (2) "Affiliate" means a person that directly, or indirectly 
201.31  through one or more intermediaries, controls, or is controlled 
201.32  by, or is under common control with, another person. 
201.33     (3) "Close relative" means an individual whose relationship 
201.34  by blood, marriage, or adoption to another individual is no more 
201.35  remote than first cousin. 
201.36     (4) "Person" means an individual or entity of any kind. 
202.1      (5) "Control" includes the terms "controlling," "controlled 
202.2   by," and "under common control with" and means the possession, 
202.3   direct or indirect, of the power to direct or cause the 
202.4   direction of the management, operations, or policies of a 
202.5   person, whether through the ownership of voting securities, by 
202.6   contract, or otherwise. 
202.7      (c) A lease of real property to be used for a charter 
202.8   school, not excluded in paragraph (b), must contain the 
202.9   following statement:  "This lease is subject to Minnesota 
202.10  Statutes, section 124D.10, subdivision 23a." 
202.11     (d) If a charter school enters into as lessee a lease with 
202.12  a related party and the charter school subsequently closes, the 
202.13  commissioner has the right to recover from the lessor any lease 
202.14  payments in excess of those that are reasonable under section 
202.15  124.11 124D.11, subdivision 4, clause (1). 
202.16     Sec. 12.  Minnesota Statutes 2002, section 125A.05, is 
202.17  amended to read: 
202.18     125A.05 [METHOD OF SPECIAL INSTRUCTION.] 
202.19     (a) As defined in this subdivision section, to the extent 
202.20  required by federal law as of July 1, 1999, special instruction 
202.21  and services for children with a disability must be based on the 
202.22  assessment and individual education plan.  The instruction and 
202.23  services may be provided by one or more of the following methods:
202.24     (1) in connection with attending regular elementary and 
202.25  secondary school classes; 
202.26     (2) establishment of special classes; 
202.27     (3) at the home or bedside of the child; 
202.28     (4) in other districts; 
202.29     (5) instruction and services by special education 
202.30  cooperative centers established under this section, or in 
202.31  another member district of the cooperative center to which the 
202.32  resident district of the child with a disability belongs; 
202.33     (6) in a state residential school or a school department of 
202.34  a state institution approved by the commissioner; 
202.35     (7) in other states; 
202.36     (8) by contracting with public, private or voluntary 
203.1   agencies; 
203.2      (9) for children under age five and their families, 
203.3   programs and services established through collaborative efforts 
203.4   with other agencies; 
203.5      (10) for children under age five and their families, 
203.6   programs in which children with a disability are served with 
203.7   children without a disability; and 
203.8      (11) any other method approved by the commissioner. 
203.9      (b) Preference shall be given to providing special 
203.10  instruction and services to children under age three and their 
203.11  families in the residence of the child with the parent or 
203.12  primary caregiver, or both, present. 
203.13     (c) The primary responsibility for the education of a child 
203.14  with a disability must remain with the district of the child's 
203.15  residence regardless of which method of providing special 
203.16  instruction and services is used.  If a district other than a 
203.17  child's district of residence provides special instruction and 
203.18  services to the child, then the district providing the special 
203.19  instruction and services must notify the child's district of 
203.20  residence before the child's individual education plan is 
203.21  developed and must provide the district of residence an 
203.22  opportunity to participate in the plan's development.  The 
203.23  district of residence must inform the parents of the child about 
203.24  the methods of instruction that are available. 
203.25     Sec. 13.  Minnesota Statutes 2002, section 125A.12, is 
203.26  amended to read: 
203.27     125A.12 [ATTENDANCE IN ANOTHER DISTRICT.] 
203.28     No resident of a district who is eligible for special 
203.29  instruction and services pursuant to this section may be denied 
203.30  provision of this instruction and service because of attending a 
203.31  public school in another district pursuant to section 123B.88, 
203.32  subdivision 5, if the attendance is not subject to section 
203.33  124D.06, 124D.07, or 124D.08.  If the pupil attends a public 
203.34  school located in a contiguous district and the district of 
203.35  attendance does not provide special instruction and services, 
203.36  the district of residence must provide necessary transportation 
204.1   for the pupil between the boundary of the district of residence 
204.2   and the educational facility where special instruction and 
204.3   services are provided within the district of residence.  The 
204.4   district of residence may provide necessary transportation for 
204.5   the pupil between its boundary and the school attended in the 
204.6   contiguous district, but must not pay the cost of transportation 
204.7   provided outside the boundary of the district of residence.  
204.8      Sec. 14.  Minnesota Statutes 2002, section 126C.10, 
204.9   subdivision 28, is amended to read: 
204.10     Subd. 28.  [EQUITY REGION.] For the purposes of computing 
204.11  equity revenue under subdivision 23 24, a district whose 
204.12  administrative offices on July 1, 1999, is located in Anoka, 
204.13  Carver, Dakota, Hennepin, Ramsey, Scott, or Washington county is 
204.14  part of the metro equity region.  Districts whose administrative 
204.15  offices on July 1, 1999, are not located in Anoka, Carver, 
204.16  Dakota, Hennepin, Ramsey, Scott, or Washington county are part 
204.17  of the rural equity region. 
204.18     Sec. 15.  Minnesota Statutes 2002, section 127A.05, 
204.19  subdivision 4, is amended to read: 
204.20     Subd. 4.  [ADMINISTRATIVE RULES.] The commissioner may 
204.21  adopt new rules or amend any existing rules only under specific 
204.22  authority and consistent with the requirements of chapter 14.  
204.23  The commissioner may repeal any existing rules adopted by the 
204.24  commissioner.  Notwithstanding the provisions of section 14.05, 
204.25  subdivision 4, The commissioner may grant a variance to rules 
204.26  adopted by the commissioner upon application by a school 
204.27  district for purposes of implementing experimental programs in 
204.28  learning or school management.  This subdivision shall not 
204.29  prohibit the commissioner from making technical changes or 
204.30  corrections to rules adopted by the commissioner. 
204.31     Sec. 16.  Minnesota Statutes 2002, section 127A.45, 
204.32  subdivision 12, is amended to read: 
204.33     Subd. 12.  [PAYMENT PERCENTAGE FOR CERTAIN AIDS.] (a) One 
204.34  hundred percent of the aid for the current fiscal year must be 
204.35  paid for the following aids:  reimbursement for enrollment 
204.36  options transportation, according to sections 124D.03, 
205.1   subdivision 8, 124D.09, subdivision 22, and 124D.10; school 
205.2   lunch aid, according to section 124D.111; hearing impaired 
205.3   support services aid, according to section 124D.57; and Indian 
205.4   post-secondary preparation grants according to section 124D.85 
205.5   124D.80. 
205.6      (b) One hundred percent of the aid for the current fiscal 
205.7   year, based on enrollment in the previous year, must be paid for 
205.8   the first grade preparedness program according to section 
205.9   124D.081. 
205.10     Sec. 17.  Minnesota Statutes 2002, section 169.435, is 
205.11  amended to read: 
205.12     169.435 [STATE SCHOOL BUS SAFETY ADMINISTRATION.] 
205.13     Subdivision 1.  [RESPONSIBILITY; DEPARTMENT OF PUBLIC 
205.14  SAFETY.] The department of public safety has the primary 
205.15  responsibility for school transportation safety.  To oversee 
205.16  school transportation safety, the commissioner of public safety 
205.17  shall establish a school bus safety advisory committee according 
205.18  to subdivision 2.  The commissioner or the commissioner's 
205.19  designee shall serve as state director of pupil transportation 
205.20  according to subdivision 3. 
205.21     Subd. 3.  [PUPIL TRANSPORTATION SAFETY DIRECTOR.] (a) The 
205.22  commissioner of public safety or the commissioner's designee 
205.23  shall serve as pupil transportation safety director. 
205.24     (b) The duties of the pupil transportation safety director 
205.25  shall include: 
205.26     (1) overseeing all department activities related to school 
205.27  bus safety; 
205.28     (2) assisting in the development, interpretation, and 
205.29  implementation of laws and policies relating to school bus 
205.30  safety; 
205.31     (3) supervising preparation of the school bus inspection 
205.32  manual; and 
205.33     (4) in conjunction with the department of children, 
205.34  families, and learning education, assisting school districts in 
205.35  developing and implementing comprehensive transportation 
205.36  policies; and 
206.1      (5) providing information requested by the school bus 
206.2   safety advisory committee. 
206.3      Sec. 18.  Minnesota Statutes 2002, section 169.449, 
206.4   subdivision 1, is amended to read: 
206.5      Subdivision 1.  [RULES.] The commissioner of public safety, 
206.6   in consultation with the school bus safety advisory committee, 
206.7   shall adopt rules governing the operation of school buses used 
206.8   for transportation of school children, when owned or operated by 
206.9   a school or privately owned and operated under a contract with a 
206.10  school, and these rules must be made a part of that contract by 
206.11  reference.  Each school, its officers and employees, and each 
206.12  person employed under the contract is subject to these rules. 
206.13     Sec. 19.  Minnesota Statutes 2002, section 169.4501, 
206.14  subdivision 3, is amended to read: 
206.15     Subd. 3.  [INSPECTION MANUAL.] The department of public 
206.16  safety shall develop a school bus inspection manual based on the 
206.17  national standards adopted in subdivision 1 and Minnesota 
206.18  standards adopted in sections 169.4502 to 169.4504.  The 
206.19  Minnesota state patrol shall use the manual as the basis for 
206.20  inspecting buses as provided in section 169.451.  When 
206.21  appropriate, the school bus safety advisory committee shall 
206.22  recommend to the education committees of the legislature 
206.23  modifications to the standards upon which the school bus 
206.24  inspection manual is based.  The department of public safety has 
206.25  no rulemaking authority to alter the standards upon which school 
206.26  buses are inspected. 
206.27     Sec. 20.  Minnesota Statutes 2002, section 169.4501, 
206.28  subdivision 4, is amended to read: 
206.29     Subd. 4.  [VARIANCE.] The commissioner of public safety may 
206.30  grant a variance to any of the school bus standards to 
206.31  accommodate testing of new equipment related to school buses.  A 
206.32  variance from the standards must be for the sole purpose of 
206.33  testing and evaluating new equipment for increased safety, 
206.34  efficiency, and economy of pupil transportation.  The variance 
206.35  expires 18 months from the date on which it is granted unless 
206.36  the commissioner specifies an earlier expiration date.  The 
207.1   school bus safety advisory committee shall annually review all 
207.2   variances that are granted under this subdivision and consider 
207.3   whether to recommend modifications to the Minnesota school bus 
207.4   equipment standards based on the variances. 
207.5      Sec. 21.  [REPEALER.] 
207.6      (a) Minnesota Statutes 2002, section 126C.55, subdivision 
207.7   5, is repealed. 
207.8      (b) Laws 2001, First Special Session chapter 3, article 4, 
207.9   sections 1 and 2; and Laws 2001, First Special Session chapter 
207.10  6, article 2, section 52, are repealed.