1.1 	A bill for an act
1.2 	relating to education; providing for kindergarten
1.3 	through grade 12 education and early childhood and
1.4 	family education including general education, other
1.5 	general programs, education excellence, special
1.6 	programs, facilities and technology, nutrition,
1.7 	libraries, early childhood family support, community
1.8 	education and prevention, self-sufficiency and
1.9 	lifelong learning, and state agencies; authorizing
1.10 	rulemaking; appropriating money; amending Minnesota
1.11 	Statutes 2004, sections 13.321, by adding a
1.12 	subdivision; 120A.05, by adding a subdivision;
1.13 	120A.22, subdivision 12; 120B.02; 120B.13,
1.14 	subdivisions 1, 3, by adding subdivisions; 120B.30,
1.15 	subdivisions 1, 1a; 121A.17, subdivision 1; 121A.19;
1.16 	122A.12, subdivision 2; 122A.413; 122A.414; 122A.415,
1.17 	subdivisions 1, 3; 122A.61, subdivision 1; 123A.05,
1.18 	subdivision 2; 123A.24, subdivision 2; 123A.27;
1.19 	123A.485, subdivision 2; 123B.09, subdivision 8;
1.20 	123B.143, subdivision 1; 123B.42, subdivision 3;
1.21 	123B.53, subdivision 5; 123B.54; 123B.57, subdivision
1.22 	4; 123B.92, subdivisions 1, 5, 9; 124D.081,
1.23 	subdivision 6; 124D.09, subdivision 13; 124D.11,
1.24 	subdivisions 1, 2, 4, 5, 8; 124D.15, subdivisions 1,
1.25 	3, 5, 10, 12, by adding subdivisions; 124D.16,
1.26 	subdivisions 2, 3; 124D.22, subdivision 3; 124D.531,
1.27 	subdivisions 1, 4; 124D.65, subdivision 5; 124D.66,
1.28 	subdivision 3; 124D.83, subdivision 2; 124D.86,
1.29 	subdivision 3; 124D.88, subdivision 4; 125A.11,
1.30 	subdivision 1; 125A.51; 125A.76, subdivisions 1, 4, by
1.31 	adding subdivisions; 125A.79, subdivisions 1, 5, 7, by
1.32 	adding subdivisions; 126C.01, subdivision 7; 126C.05,
1.33 	subdivisions 1, 5, 6; 126C.10, subdivisions 1, 2, 2a,
1.34 	3, 5, 6, 7, 8, 13, 13a, 17, 18, 24, 25, 26, 27, 28,
1.35 	29, 31, 32, by adding subdivisions; 126C.13,
1.36 	subdivision 4; 126C.17, subdivisions 1, 2, 4, 5, 6, 7,
1.37 	9, 13; 126C.40, subdivision 1; 126C.457; 126C.48, by
1.38 	adding a subdivision; 126C.63, subdivisions 5, 8;
1.39 	127A.45, subdivision 11; 127A.47, subdivisions 7, 8;
1.40 	127A.49, subdivision 2; 171.04, subdivision 1; 171.05,
1.41 	subdivisions 2, 2b, 3; 171.30, subdivision 1; 260A.03;
1.42 	290.01, subdivision 19c; proposing coding for new law
1.43 	in Minnesota Statutes, chapters 120A; 120B; 122A;
1.44 	123A; 123B; 124D; 125B; 171; 290; repealing Minnesota
1.45 	Statutes 2004, sections 122A.415, subdivision 2;
1.46 	122A.60; 123A.39, subdivision 3; 123B.05; 124D.15,
2.1 	subdivisions 2, 4, 6, 7, 8, 9, 11, 13; 124D.16,
2.2 	subdivisions 1, 4; 126C.12; 126C.41, subdivision 5;
2.3 	126C.43, subdivisions 2, 3; 126C.44; 126C.445;
2.4 	126C.45; 126C.455; 127A.50; Laws 1996, chapter 412,
2.5 	article 5, section 28; Laws 1997, First Special
2.6 	Session chapter 4, article 4, section 31; Laws 2001,
2.7 	First Special Session chapter 5, article 3, section
2.8 	87; Laws 2001, First Special Session chapter 6,
2.9 	article 1, section 53, as amended.
2.10 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

2.11 	ARTICLE 1
2.12 	GENERAL EDUCATION

2.13 	Section 1. Minnesota Statutes 2004, section 120A.05, is
2.14 	amended by adding a subdivision to read:
2.15 		Subd. 18.Kindergarten. "Kindergarten" means a program
2.16 	designed for pupils five years of age on September 1 of the
2.17 	calendar year in which the school year commences that prepares
2.18 	pupils to enter first grade the following school year.  A
2.19 	program designed for pupils younger than five years of age on
2.20 	September 1 of the calendar year in which the school year
2.21 	commences that prepares pupils to enter kindergarten the
2.22 	following school year is a prekindergarten program.
2.23 	
EFFECTIVE DATE. This section is effective the day
2.24 	following final enactment.

2.25 	Sec. 2. Minnesota Statutes 2004, section 122A.413, is
2.26 	amended to read:
2.27 	122A.413 EDUCATIONAL IMPROVEMENT PLAN.
2.28 		Subdivision 1.Qualifying plan. A district or charter
2.29 	school may develop an educational improvement plan for the
2.30 	purpose of qualifying for alternative teacher compensation aid
2.31 	under sections 122A.414 and 122A.415.  The plan must include
2.32 	measures for improving school district, charter school,school
2.33 	site, teacher, and individual student performance.
2.34 		Subd. 2.Plan components. The educational improvement
2.35 	plan must be approved by the school board and have at least
2.36 	these elements:
2.37 	(1) assessment and evaluation tools to measure student
2.38 	performance and progress;
2.39 	(2) performance goals and benchmarks for improvement;
2.40 	(3) measures of student attendance and completion rates;
3.1 	(4) a rigorous professional development system that is
3.2 	aligned with educational improvement, designed to achieve
3.3 	teaching quality improvement, and consistent with clearly
3.4 	defined research-based standards;
3.5 	(5) measures of student, family, and community involvement
3.6 	and satisfaction;
3.7 	(6) a data system about students and their academic
3.8 	progress that provides parents and the public with
3.9 	understandable information; and
3.10 	(7) a teacher induction and mentoring program for
3.11 	probationary teachers that provides continuous learning and
3.12 	sustained teacher support.  The process for developing the plan
3.13 	must involve district or charter school teachers.
3.14 		Subd. 3.district school site accountability. A district
3.15 	that develops a plan under subdivisions 1 and 2 must ensure that
3.16 	each school site develops a board-approved educational
3.17 	improvement plan that is aligned with the district educational
3.18 	improvement plan under subdivision 2.  While a site plan must be
3.19 	consistent with the district educational improvement plan, it
3.20 	may establish performance goals and benchmarks that meet or
3.21 	exceed those of the district.  The process for developing the
3.22 	plan must involve site teachers.

3.23 	Sec. 3. Minnesota Statutes 2004, section 122A.414, is
3.24 	amended to read:
3.25 	122A.414 ALTERNATIVE TEACHER COMPENSATION.
3.26 		Subdivision 1.Restructured pay system. A restructured
3.27 	teacher compensation system is established under subdivision 2
3.28 	to provide incentives for teachers to improve their knowledge
3.29 	and skills and for school districts and charter schools to
3.30 	recruit and retain highly qualified teachers, and to support
3.31 	teachers' roles in improving students' educational achievement.
3.32 		Subd. 2.Alternative teacher professional pay system.
 3.33 	(a) To participate in this program, a school district or charter
3.34 	school must have an educational improvement plan as described in
3.35 	section 122A.413 and an alternative teacher professional pay
3.36 	system as described in paragraph (b).
4.1 	(b) The alternative teacher professional pay system must:
4.2 	(1) describe the conditions necessary for how teachers can
4.3 	achieve career advancement and additional compensation;
4.4 	(2) describe how the school district will provide career
4.5 	advancement options for teachers retaining which allow them to
4.6 	retain primary roles in student instruction.  These options
4.7 	shall include positions that provide multiple career paths such
4.8 	as master and mentor teaching positions to help peers increase
4.9 	their teaching skills;
4.10 	(3) use a professional pay system that replaces the step 
4.11 	lockstep steps and lane lanes salary schedule and is not based
4.12 	on years of service system and allows school districts and
4.13 	charter schools to compensate teachers for satisfactory service
4.14 	and completion of annual performance goals;
4.15 	(4) include performance compensation for teachers in
4.16 	districts or charter schools based on, at a minimum:
4.17 	(i) student achievement gains and school achievement gains
4.18 	under section 120B.35, locally selected standardized
4.19 	assessments, or both; and 
4.20 	(ii) results of individual teacher evaluations based on
4.21 	classroom observations by a locally selected evaluation team;
4.22 	(4) encourage teachers' continuous improvement in content
4.23 	knowledge, pedagogy, and use of best practices (5) provide staff
4.24 	development for teachers that:
4.25 	(i) utilize best practice research;
4.26 	(ii) are integrated and collaborative;
4.27 	(iii) provide for ongoing site-based and teacher-led
4.28 	professional growth activities aligned with student needs as
4.29 	outlined in sections 122A.413 and 122A.601; and 
4.30 	(iv) focus on the identified needs of students, which may
4.31 	include skill development in reading strategies, methods to
4.32 	align curriculum with learning standards, intervention with
4.33 	students not meeting proficiency level, and use of state and
4.34 	local assessment data; and
4.35 	(5) (6) implement an objective a teacher performance 
4.36 	evaluation system that is a comprehensive system based on
5.1 	scientifically based education research and on specific
5.2 	performance and accountability goals aligned with the
5.3 	district's, the charter school's, or the site's educational
5.4 	improvement plan as described in section 122A.413 and the staff
5.5 	development plan described in section 122A.601.  The evaluation
5.6 	shall include the locally selected evaluation team.  The
5.7 	evaluation of each teacher's performance in the school shall
5.8 	occur several times during the school year, including classroom
5.9 	observation, that is aligned with the district's or the site's
5.10 	educational improvement plan as described in section 122A.413.
5.11 		Subd. 3.Report. Participating districts, charter
5.12 	schools,and school sites must report on the implementation and
5.13 	effectiveness of the alternative teacher compensation plan,
5.14 	particularly addressing each requirement under subdivision 2 and
5.15 	make biennial recommendations by January 1 to their school
5.16 	boards.  The school boards shall transmit a copy of the report
5.17 	with a summary of the findings and recommendations of their
5.18 	district or charter school to the commissioner of education.

5.19 	Sec. 4. Minnesota Statutes 2004, section 122A.415,
5.20 	subdivision 1, is amended to read:
5.21 		Subdivision 1.aid revenue amount.  (a) A school district
5.22 	or charter school that meets the conditions of section 122A.414
5.23 	and submits an application approved by the commissioner is
5.24 	eligible for alternative compensation aid revenue.
5.25 	(b) The commissioner must consider only applications
5.26 	submitted jointly by a school district and the exclusive
5.27 	representative of the teachers for participation in the
5.28 	program.  The application must contain a formally adopted
5.29 	collective bargaining agreement, memorandum of understanding, or
5.30 	other binding agreement that implements an alternative teacher
5.31 	professional pay system consistent with section 122A.414, is in
5.32 	compliance with the Public Employment Labor Relations Act under
5.33 	chapter 179A,and includes all teachers in a district,or all
5.34 	teachers at a school site, or at least 25 percent of the
5.35 	teachers in a district. The commissioner, in approving
5.36 	applications, may give preference to applications involving
6.1 	entire districts or sites or to applications that align measures
6.2 	of teacher performance with student academic achievement and
6.3 	progress under section 120B.35, subdivision 1.
6.4 	(b) Alternative compensation aid revenue for a qualifying
6.5 	school district,or site, or portion of a district or school
6.6 	site is as follows:
6.7 	(1) for a school district in which the school board and the
6.8 	exclusive representative of the teachers agree to place all
6.9 	teachers in the district or at the site on the alternative
6.10 	compensation schedule, alternative compensation aid revenue 
6.11 	equals $150 $225 times the district's or the site's number of
6.12 	pupils enrolled on October 1 of the previous fiscal year; or 
6.13 	(2) for a district in which the school board and the
6.14 	exclusive representative of the teachers agree that at least 25
6.15 	percent of the district's licensed teachers will be paid on the
6.16 	alternative compensation schedule, alternative compensation aid
6.17 	equals $150 times the percentage of participating teachers times
6.18 	the district's number of pupils enrolled as of October 1 of the
6.19 	previous fiscal year.
6.20 	(c) Charter school applications must be submitted by the
6.21 	chair of the charter school board of directors and must
6.22 	contain:  (1) an agreement that implements an alternative
6.23 	teacher compensation program consistent with section 122A.414;
6.24 	(2) a resolution by the charter school board of directors
6.25 	adopting the agreement; and (3) documentation of a vote of the
6.26 	teachers showing that at least 70 percent of the teachers
6.27 	supporting the agreement that implements the alternative teacher
6.28 	compensation program.
6.29 	Alternative compensation revenue for a qualifying charter
6.30 	school must be calculated under section 126C.10, subdivision 34,
6.31 	paragraph (b).

6.32 	Sec. 5. Minnesota Statutes 2004, section 122A.415,
6.33 	subdivision 3, is amended to read:
6.34 		Subd. 3.aid revenue timing.  (a) Districts or , school 
6.35 	sites, or charter schools with approved applications must
6.36 	receive alternative compensation aid revenue for each school
7.1 	year that the district or , school site, or charter school,
7.2 	participates in the program as described in this subdivision.
7.3 	Districts or , school sites, or charter schools with applications
7.4 	received approved by the commissioner before June 1 of the first
7.5 	year of a two-year contract shall receive alternative
7.6 	compensation aid revenue for both the school years of the
7.7 	contract.  Districts or sites with applications received by the
7.8 	commissioner after June 1 of the first year of a two-year
7.9 	contract shall receive alternative compensation aid only for the
7.10 	second year of the contract in which the alternative teacher
7.11 	compensation program is implemented for the full school
7.12 	year. For fiscal year 2007 and later,a qualifying district or ,
7.13 	school site, or charter school that received alternative
7.14 	compensation aid revenue for the previous fiscal year must
7.15 	receive at least an amount of alternative compensation revenue 
7.16 	equal to the lesser of the amount it received for the previous
7.17 	fiscal year or its proportionate share of the previous year's
7.18 	appropriation the amount it qualifies for under subdivision 1
7.19 	for the current fiscal year if the district, charter school,or
7.20 	site submits a timely application and the commissioner
7.21 	determines that the district, charter school,or site continues
7.22 	to implement an alternative teacher professional pay system,
7.23 	consistent with its application under this section. The
7.24 	commissioner must approve initial applications for school
7.25 	districts qualifying under subdivision 1, paragraph (b), clause
7.26 	(1), by January 15 of each year.  If any money remains, the
7.27 	commissioner must approve aid amounts for school districts
7.28 	qualifying under subdivision 1, paragraph (b), clause (2), by
7.29 	February 15 of each year.
7.30 	(b) The commissioner shall select applicants that qualify
7.31 	for this program, notify school districts, charter schools,and
7.32 	school sites about the program, develop and disseminate
7.33 	application materials, and carry out other activities needed to
7.34 	implement this section.

7.35 	Sec. 6. Minnesota Statutes 2004, section 124D.09,
7.36 	subdivision 13, is amended to read:
8.1 		Subd. 13.Financial arrangements.  For a pupil enrolled
8.2 	in a course under this section, the department must make
8.3 	payments according to this subdivision for courses that were
8.4 	taken for secondary credit.
8.5 	The department must not make payments to a school district
8.6 	or postsecondary institution for a course taken for
8.7 	postsecondary credit only.  The department must not make
8.8 	payments to a postsecondary institution for a course from which
8.9 	a student officially withdraws during the first 14 days of the
8.10 	quarter or semester or who has been absent from the
8.11 	postsecondary institution for the first 15 consecutive school
8.12 	days of the quarter or semester and is not receiving instruction
8.13 	in the home or hospital.
8.14 	A postsecondary institution shall receive the following:
8.15 	(1) for an institution granting quarter credit, the
8.16 	reimbursement per credit hour shall be an amount equal to 88
8.17 	percent of the product of the formula allowance minus $415,
8.18 	multiplied by 1.3, and divided by 45 $109 for fiscal year 2006
8.19 	and $111 for fiscal year 2007 and later; or
8.20 	(2) for an institution granting semester credit, the
8.21 	reimbursement per credit hour shall be an amount equal to 88
8.22 	percent of the product of the general revenue formula allowance
8.23 	minus $415, multiplied by 1.3, and divided by 30 $163 for fiscal
8.24 	year 2006 and $166 for fiscal year 2007 and later.
8.25 	The department must pay to each postsecondary institution
8.26 	100 percent of the amount in clause (1) or (2) within 30 days of
8.27 	receiving initial enrollment information each quarter or
8.28 	semester.  If changes in enrollment occur during a quarter or
8.29 	semester, the change shall be reported by the postsecondary
8.30 	institution at the time the enrollment information for the
8.31 	succeeding quarter or semester is submitted.  At any time the
8.32 	department notifies a postsecondary institution that an
8.33 	overpayment has been made, the institution shall promptly remit
8.34 	the amount due.

8.35 	Sec. 7. Minnesota Statutes 2004, section 124D.65,
8.36 	subdivision 5, is amended to read:
9.1 		Subd. 5.School district lep revenue.  (a) For fiscal
9.2 	year 2006,a district's limited English proficiency programs
9.3 	revenue equals the product of (1) $700 in fiscal year 2004 and
9.4 	later times (2) the greater of 20 or the adjusted marginal cost
9.5 	average daily membership of eligible pupils of limited English
9.6 	proficiency enrolled in the district during the current fiscal
9.7 	year. For fiscal year 2007 and later, a district's limited
9.8 	English proficiency programs revenue equals the product of (1)
9.9 	$704 times (2) the greater of 20 or the adjusted average daily
9.10 	membership of eligible pupils of limited English proficiency
9.11 	enrolled in the district during the current fiscal year.
9.12 	(b) A pupil ceases to generate state limited English
9.13 	proficiency aid in the school year following the school year in
9.14 	which the pupil attains the state cutoff score on a
9.15 	commissioner-provided assessment that measures the pupil's
9.16 	emerging academic English.
9.17 	
EFFECTIVE DATE. This section is effective for revenue for
9.18 	fiscal year 2007.

9.19 	Sec. 8. Minnesota Statutes 2004, section 126C.01,
9.20 	subdivision 7, is amended to read:
9.21 		Subd. 7.Shared time aid. For fiscal year 2006,aid for
9.22 	shared time pupils must equal the formula allowance times the
9.23 	full-time equivalent resident pupil units for shared time
9.24 	pupils. For fiscal year 2007 and later, aid for shared time
9.25 	pupils equals the sum of the formula allowance times the
9.26 	full-time equivalent resident pupil units for shared time pupils
9.27 	and the secondary education allowance times the full-time
9.28 	equivalent resident pupil units for shared time pupils in grades
9.29 	7 through 12.Aid for shared time pupils is in addition to any
9.30 	other aid to which the district is otherwise entitled.  Shared
9.31 	time average daily membership may not be used in the computation
9.32 	of pupil units under section 126C.05, subdivision 1, for any
9.33 	purpose other than the computation of shared time aid pursuant
9.34 	to subdivisions 6 to 8 and section 126C.19, subdivisions 1 to 3.

9.35 	Sec. 9. Minnesota Statutes 2004, section 126C.05,
9.36 	subdivision 1, is amended to read:
10.1 		Subdivision 1.Pupil unit.  Pupil units for each
10.2 	Minnesota resident pupil in average daily membership enrolled in
10.3 	the district of residence, in another district under sections
10.4 	123A.05 to 123A.08, 124D.03, 124D.06, 124D.07, 124D.08, or
10.5 	124D.68; in a charter school under section 124D.10; or for whom
10.6 	the resident district pays tuition under section 123A.18,
10.7 	123A.22, 123A.30, 123A.32, 123A.44, 123A.488, 123B.88,
10.8 	subdivision 4, 124D.04, 124D.05, 125A.03 to 125A.24, 125A.51, or
10.9 	125A.65, shall be counted according to this subdivision.
10.10 	(a) For fiscal year 2006,a prekindergarten pupil with a
10.11 	disability who is enrolled in a program approved by the
10.12 	commissioner and has an individual education plan is counted as
10.13 	the ratio of the number of hours of assessment and education
10.14 	service to 825 times 1.25 with a minimum average daily
10.15 	membership of 0.28, but not more than 1.25 pupil units. For
10.16 	fiscal year 2007 and later, a prekindergarten pupil with a
10.17 	disability who is enrolled in a program approved by the
10.18 	commissioner and has an individual education plan is counted as
10.19 	the ratio of the number of hours of assessment and education
10.20 	service to 825 with a minimum average daily membership of 0.28,
10.21 	but not more than one pupil unit.
10.22 	(b) For fiscal year 2006,a prekindergarten pupil who is
10.23 	assessed but determined not to be handicapped is counted as the
10.24 	ratio of the number of hours of assessment service to 825 times
10.25 	1.25. For fiscal year 2007 and later, a prekindergarten pupil
10.26 	who is assessed but determined not to be handicapped is counted
10.27 	as the ratio of the number of hours of assessment service to 825.
10.28 	(c) A kindergarten pupil with a disability who is enrolled
10.29 	in a program approved by the commissioner is counted as the
10.30 	ratio of the number of hours of assessment and education
10.31 	services required in the fiscal year by the pupil's individual
10.32 	education program plan to 875, but not more than one.
10.33 	(d) A kindergarten pupil who is not included in paragraph
10.34 	(c) is counted as .557 of a pupil unit for fiscal year 2000 2006
10.35 	and .5 of a pupil unit for fiscal year 2007 and thereafter.
10.36 	(e) A pupil who is in any of grades 1 to 3 is counted as
11.1 	1.115 pupil units for fiscal year 2000 2006 and one pupil unit
11.2 	for fiscal year 2007 and thereafter.
11.3 	(f) A pupil who is any of grades 4 to 6 is counted as 1.06
11.4 	pupil units for fiscal year 1995 2006 and one pupil unit for
11.5 	fiscal year 2007 and thereafter.
11.6 	(g) A pupil who is in any of grades 7 to 12 is counted as
11.7 	1.3 pupil units for fiscal year 2006 and one pupil unit for
11.8 	fiscal year 2007 and thereafter.
11.9 	(h) A pupil who is in the postsecondary enrollment options
11.10 	program is counted as 1.3 pupil units for fiscal year 2006 and
11.11 	one pupil unit for fiscal year 2007 and thereafter.
11.12 	
EFFECTIVE DATE. This section is effective for revenue for
11.13 	fiscal year 2007.

11.14 	Sec. 10. Minnesota Statutes 2004, section 126C.05,
11.15 	subdivision 5, is amended to read:
11.16 		Subd. 5.Adjusted pupil units.  (a) Adjusted pupil units
11.17 	for a district or charter school means the sum of:
11.18 	(1) the number of pupil units served, according to
11.19 	subdivision 7, plus
11.20 	(2) pupil units according to subdivision 1 for whom the
11.21 	district or charter school pays tuition under section 123A.18,
11.22 	123A.22, 123A.30, 123A.32, 123A.44, 123A.488, 123B.88,
11.23 	subdivision 4, 124D.04, 124D.05, 125A.03 to 125A.24, 125A.51, or
11.24 	125A.65, minus
11.25 	(3) pupil units according to subdivision 1 for whom the
11.26 	district or charter school receives tuition under section
11.27 	123A.18, 123A.22, 123A.30, 123A.32, 123A.44, 123A.488, 123B.88,
11.28 	subdivision 4, 124D.04, 124D.05, 125A.03 to 125A.24, 125A.51, or
11.29 	125A.65.
11.30 	(b) For fiscal year 2006,adjusted marginal cost pupil
11.31 	units means the greater of:
11.32 	(1) the sum of .77 times the pupil units defined in
11.33 	paragraph (a) for the current school year and .23 times the
11.34 	pupil units defined in paragraph (a) for the previous school
11.35 	year; or
11.36 	(2) the number of adjusted pupil units defined in paragraph
12.1 	(a) for the current school year.

12.2 	Sec. 11. Minnesota Statutes 2004, section 126C.05,
12.3 	subdivision 6, is amended to read:
12.4 		Subd. 6.Resident pupil units.  (a) Resident pupil units
12.5 	for a district means the number of pupil units according to
12.6 	subdivision 1 residing in the district.
12.7 	(b) For fiscal year 2006,resident marginal cost pupil
12.8 	units means the greater of:
12.9 	(1) the sum of .77 times the pupil units defined in
12.10 	paragraph (a) for the current year and .23 times the pupil units
12.11 	defined in paragraph (a) for the previous school year; or
12.12 	(2) the number of resident pupil units defined in paragraph
12.13 	(a) for the current school year.

12.14 	Sec. 12. Minnesota Statutes 2004, section 126C.10,
12.15 	subdivision 1, is amended to read:
12.16 		Subdivision 1.General education revenue.  (a) For fiscal
12.17 	year 2003, the general education revenue for each district
12.18 	equals the sum of the district's basic revenue, basic skills
12.19 	revenue, training and experience revenue, secondary sparsity
12.20 	revenue, elementary sparsity revenue, transportation sparsity
12.21 	revenue, total operating capital revenue, and equity revenue.
12.22 	(b) For fiscal year 2004 and later 2006, the general
12.23 	education revenue for each district equals the sum of the
12.24 	district's basic revenue, extended time revenue, basic skills
12.25 	revenue, training and experience revenue, secondary sparsity
12.26 	revenue, elementary sparsity revenue, transportation sparsity
12.27 	revenue, total operating capital revenue, equity
12.28 	revenue, alternative compensation revenue,and transition
12.29 	revenue.
12.30 	(b) For fiscal year 2007 and later, the general education
12.31 	revenue for each district equals the sum of the district's basic
12.32 	revenue, secondary education revenue, declining enrollment
12.33 	revenue, extended time revenue, basic skills revenue, secondary
12.34 	sparsity revenue, elementary sparsity revenue, transportation
12.35 	sparsity revenue, total operating capital revenue, equity
12.36 	revenue, alternative compensation revenue, discretionary
13.1 	revenue, and transition revenue.
13.2 	
EFFECTIVE DATE. This section is effective for revenue for
13.3 	fiscal year 2007.

13.4 	Sec. 13. Minnesota Statutes 2004, section 126C.10,
13.5 	subdivision 2, is amended to read:
13.6 		Subd. 2.Basic revenue. For fiscal year 2006,the basic
13.7 	revenue for each district equals the formula allowance times the
13.8 	adjusted marginal cost pupil units for the school year.  The
13.9 	formula allowance for fiscal year 2001 2006 is $3,964.  The
13.10 	formula allowance for fiscal year 2002 is $4,068.  The formula
13.11 	allowance for fiscal year 2003 and subsequent years is
13.12 	$4,601 $4,693. For fiscal year 2007 and later, the basic
13.13 	revenue for each district equals the formula allowance times the
13.14 	adjusted pupil units for the school year.  The formula allowance
13.15 	for fiscal year 2007 and later is $5,188.

13.16 	Sec. 14. Minnesota Statutes 2004, section 126C.10,
13.17 	subdivision 2a, is amended to read:
13.18 		Subd. 2a.Extended time revenue.  (a) For fiscal year
13.19 	2006,a school district's extended time revenue is equal to the
13.20 	product of $4,601 $4,693 and the sum of the adjusted marginal
13.21 	cost pupil units of the district for each pupil in average daily
13.22 	membership in excess of 1.0 and less than 1.2 according to
13.23 	section 126C.05, subdivision 8.
13.24 	(b) For fiscal year 2007 and later, a school district's
13.25 	extended time revenue equals $5,801 times the sum of the
13.26 	adjusted pupil units of the district for each pupil in average
13.27 	daily membership in excess of 1.0 and less than 1.2 according to
13.28 	section 126C.05, subdivision 8.
13.29 	(c) A school district's extended time revenue may be used
13.30 	for extended day programs, extended week programs, summer
13.31 	school, and other programming authorized under the learning year
13.32 	program.

13.33 	Sec. 15. Minnesota Statutes 2004, section 126C.10, is
13.34 	amended by adding a subdivision to read:
13.35 		Subd. 2b.Secondary education revenue. For fiscal year
13.36 	2007 and later, the secondary education revenue for each
14.1 	district equals the secondary education allowance times the
14.2 	adjusted pupil units for the school year in grades 7 through
14.3 	12.  The secondary education allowance for fiscal year 2007 and
14.4 	later is $936.
14.5 	
EFFECTIVE DATE. This section is effective for revenue for
14.6 	fiscal year 2007.

14.7 	Sec. 16. Minnesota Statutes 2004, section 126C.10, is
14.8 	amended by adding a subdivision to read:
14.9 		Subd. 2c.Declining enrollment revenue. For fiscal year
14.10 	2007 and later, the declining enrollment revenue for each
14.11 	district with a decline in the number of adjusted pupil units
14.12 	between the previous school year and the current school year
14.13 	equals $1,297 times the decline in adjusted pupil units between
14.14 	the previous school year and the current school year.
14.15 	
EFFECTIVE DATE. This section is effective for revenue for
14.16 	fiscal year 2007.

14.17 	Sec. 17. Minnesota Statutes 2004, section 126C.10,
14.18 	subdivision 3, is amended to read:
14.19 		Subd. 3.Compensatory education revenue.  (a) For fiscal
14.20 	year 2006,the compensatory education revenue for each building
14.21 	in the district equals the formula allowance minus $415 $4,278 
14.22 	times the compensation revenue pupil units computed according to
14.23 	section 126C.05, subdivision 3. For fiscal year 2007 and later,
14.24 	the compensatory education revenue for each building in the
14.25 	district equals $4,388 times the compensation revenue pupil
14.26 	units computed according to section 126C.05, subdivision 3.
14.27 	Revenue shall be paid to the district and must be allocated
14.28 	according to section 126C.15, subdivision 2.
14.29 	(b) When the district contracting with an alternative
14.30 	program under section 124D.69 changes prior to the start of a
14.31 	school year, the compensatory revenue generated by pupils
14.32 	attending the program shall be paid to the district contracting
14.33 	with the alternative program for the current school year, and
14.34 	shall not be paid to the district contracting with the
14.35 	alternative program for the prior school year.
14.36 	(c) When the fiscal agent district for an area learning
15.1 	center changes prior to the start of a school year, the
15.2 	compensatory revenue shall be paid to the fiscal agent district
15.3 	for the current school year, and shall not be paid to the fiscal
15.4 	agent district for the prior school year.

15.5 	Sec. 18. Minnesota Statutes 2004, section 126C.10,
15.6 	subdivision 5, is amended to read:
15.7 		Subd. 5.Training and experience revenue. (a) For fiscal
15.8 	year 2006,the training and experience revenue for each district
15.9 	equals the greater of zero or the result of the following
15.10 	computation:
15.11 	(1) subtract .8 from the training and experience index;
15.12 	(2) multiply the result in clause (1) by the product of
15.13 	$660 times the adjusted marginal cost pupil units for the school
15.14 	year.
15.15 	(b) For fiscal year 2007 and later, the training and
15.16 	experience allowance for each district equals the greater of
15.17 	zero or the result of the following computation:
15.18 	(1) subtract .8 from the training and experience index;
15.19 	(2) multiply the result in clause (1) by $800.
15.20 	
EFFECTIVE DATE. This section is effective for revenue for
15.21 	fiscal year 2007.

15.22 	Sec. 19. Minnesota Statutes 2004, section 126C.10,
15.23 	subdivision 6, is amended to read:
15.24 		Subd. 6.Definitions.  The definitions in this
15.25 	subdivision apply only to subdivisions 7 and 8.
15.26 	(a) "High school" means a secondary school that has pupils
15.27 	enrolled in at least the 10th, 11th, and 12th grades.  If there
15.28 	is no secondary school in the district that has pupils enrolled
15.29 	in at least the 10th, 11th, and 12th grades, and the school is
15.30 	at least 19 miles from the next nearest school, the commissioner
15.31 	must designate one school in the district as a high school for
15.32 	the purposes of this section.
15.33 	(b) "Secondary average daily membership" means, for a
15.34 	district that has only one high school, the average daily
15.35 	membership of pupils served in grades 7 through 12.  For a
15.36 	district that has more than one high school, "secondary average
16.1 	daily membership" for each high school means the product of the
16.2 	average daily membership of pupils served in grades 7 through 12
16.3 	in the high school, times the ratio of six to the number of
16.4 	grades in the high school.
16.5 	(c) "Attendance area" means the total surface area of the
16.6 	district, in square miles, divided by the number of high schools
16.7 	in the district.  For a district that does not operate a high
16.8 	school and is less than 19 miles from the nearest operating high
16.9 	school, the attendance area equals zero.
16.10 	(d) "Isolation index" for a high school means the square
16.11 	root of 55 percent of the attendance area plus the distance in
16.12 	miles, according to the usually traveled routes, between the
16.13 	high school and the nearest high school.  For a district in
16.14 	which there is located land defined in section 84A.01, 84A.20,
16.15 	or 84A.31, the distance in miles is the sum of:
16.16 	(1) the square root of one-half of the attendance area; and
16.17 	(2) the distance from the border of the district to the
16.18 	nearest high school.
16.19 	(e) "Qualifying high school" means a high school that has
16.20 	an isolation index greater than 23 and that has secondary
16.21 	average daily membership of less than 400.
16.22 	(f) "Qualifying elementary school" means an elementary
16.23 	school that is located 19 miles or more from the nearest
16.24 	elementary school or from the nearest elementary school within
16.25 	the district and, in either case, has an elementary average
16.26 	daily membership of an average of 20 or fewer per grade.
16.27 	(g) "Elementary average daily membership" means, for a
16.28 	district that has only one elementary school, the average daily
16.29 	membership of pupils served in kindergarten through grade 6.
16.30 	For a district that has more than one elementary school,
16.31 	"average daily membership" for each school means the average
16.32 	daily membership of pupils served in kindergarten through grade
16.33 	6 multiplied by the ratio of seven to the number of grades in
16.34 	the elementary school.
16.35 	(h) "Sparsity allowance" means $4,693 for fiscal year 2006
16.36 	and $4,787 for fiscal year 2007 and later.

17.1 	Sec. 20. Minnesota Statutes 2004, section 126C.10,
17.2 	subdivision 7, is amended to read:
17.3 		Subd. 7.Secondary sparsity revenue.  (a) A district's
17.4 	secondary sparsity revenue for a school year equals the sum of
17.5 	the results of the following calculation for each qualifying
17.6 	high school in the district:
17.7 	(1) the formula sparsity allowance for the school year,
17.8 	multiplied by
17.9 	(2) the secondary average daily membership of pupils served
17.10 	in the high school, multiplied by
17.11 	(3) the quotient obtained by dividing 400 minus the
17.12 	secondary average daily membership by 400 plus the secondary
17.13 	daily membership, multiplied by
17.14 	(4) the lesser of 1.5 or the quotient obtained by dividing
17.15 	the isolation index minus 23 by ten.
17.16 	(b) A newly formed district that is the result of districts
17.17 	combining under the cooperation and combination program or
17.18 	consolidating under section 123A.48 must receive secondary
17.19 	sparsity revenue equal to the greater of:  (1) the amount
17.20 	calculated under paragraph (a) for the combined district; or (2)
17.21 	the sum of the amounts of secondary sparsity revenue the former
17.22 	districts had in the year prior to consolidation, increased for
17.23 	any subsequent changes in the secondary sparsity formula.

17.24 	Sec. 21. Minnesota Statutes 2004, section 126C.10,
17.25 	subdivision 8, is amended to read:
17.26 		Subd. 8.Elementary sparsity revenue.  A district's
17.27 	elementary sparsity revenue equals the sum of the following
17.28 	amounts for each qualifying elementary school in the district:
17.29 	(1) the formula sparsity allowance for the year, multiplied
17.30 	by
17.31 	(2) the elementary average daily membership of pupils
17.32 	served in the school, multiplied by
17.33 	(3) the quotient obtained by dividing 140 minus the
17.34 	elementary average daily membership by 140 plus the average
17.35 	daily membership.

17.36 	Sec. 22. Minnesota Statutes 2004, section 126C.10,
18.1 	subdivision 13, is amended to read:
18.2 		Subd. 13.Total operating capital revenue.  (a) For
18.3 	fiscal year 2000 and thereafter 2006, total operating capital
18.4 	revenue for a district equals the amount determined under
18.5 	paragraph (b) or (c), plus $73 times the adjusted marginal cost
18.6 	pupil units for the school year. For fiscal year 2007 and
18.7 	later, total operating capital revenue for a district equals the
18.8 	amount determined under paragraph (b) or (c), plus $88 times the
18.9 	adjusted pupil units for the school year.The revenue must be
18.10 	placed in a reserved account in the general fund and may only be
18.11 	used according to paragraph (d) or subdivision 14.
18.12 	(b) For fiscal years 2000 and later year 2006, capital
18.13 	revenue for a district equals $100 times the district's
18.14 	maintenance cost index times its adjusted marginal cost pupil
18.15 	units for the school year. For fiscal year 2007 and later,
18.16 	capital revenue for a district equals $120 times the district's
18.17 	maintenance cost index times its adjusted pupil units for the
18.18 	school year.
18.19 	(c) For fiscal years 2000 and later year 2006, the revenue
18.20 	for a district that operates a program under section 124D.128,
18.21 	is increased by an amount equal to $30 times the number of
18.22 	marginal cost pupil units served at the site where the program
18.23 	is implemented. For fiscal year 2007 and later, the revenue for
18.24 	a district that operates a program under section 124D.128, is
18.25 	increased by an amount equal to $43 times the number of pupil
18.26 	units served at the site where the program is implemented.
18.27 	(d) For fiscal years 2001, 2002, and 2003, the district
18.28 	must reserve an amount equal to $5 per adjusted marginal cost
18.29 	pupil unit for telecommunication access costs.  Reserve revenue
18.30 	under this paragraph must first be used to pay for ongoing or
18.31 	recurring telecommunication access costs, including access to
18.32 	data and video connections, including Internet access.  Any
18.33 	revenue remaining after covering all ongoing or recurring access
18.34 	costs may be used for computer hardware or equipment.

18.35 	Sec. 23. Minnesota Statutes 2004, section 126C.10,
18.36 	subdivision 13a, is amended to read:
19.1 		Subd. 13a.Operating capital levy.  To obtain operating
19.2 	capital revenue for fiscal year 2005 2007 and later, a district
19.3 	may levy an amount not more than the product of its operating
19.4 	capital revenue for the fiscal year times the lesser of one or
19.5 	the ratio of its adjusted net tax capacity per adjusted marginal
19.6 	cost pupil unit to $22,222 $26,640.
19.7 	
EFFECTIVE DATE. This section is effective for revenue for
19.8 	fiscal year 2007.

19.9 	Sec. 24. Minnesota Statutes 2004, section 126C.10,
19.10 	subdivision 17, is amended to read:
19.11 		Subd. 17.Transportation sparsity definitions.  The
19.12 	definitions in this subdivision apply to subdivisions 18 and 19.
19.13 	(a) "Sparsity index" for a district means the greater of .2
19.14 	or the ratio of the square mile area of the district to the
19.15 	resident pupil units of the district.
19.16 	(b) "Density index" for a district means the ratio of the
19.17 	square mile area of the district to the resident pupil units of
19.18 	the district.  However, the density index for a district cannot
19.19 	be greater than .2 or less than .005.
19.20 	(c) "Transportation allowance" means $4,693 for fiscal year
19.21 	2006 and $5,188 for fiscal year 2007 and later.

19.22 	Sec. 25. Minnesota Statutes 2004, section 126C.10,
19.23 	subdivision 18, is amended to read:
19.24 		Subd. 18.Transportation sparsity revenue allowance.  (a)
19.25 	For fiscal year 2006,a district's transportation sparsity
19.26 	allowance equals the greater of zero or the result of the
19.27 	following computation:
19.28 	(i) (1) Multiply the formula transportation allowance
19.29 	according to subdivision 2,by .1469.
19.30 	(ii) (2) Multiply the result in clause (i) (1) by the
19.31 	district's sparsity index raised to the 26/100 power.
19.32 	(iii) (3) Multiply the result in clause (ii) (2) by the
19.33 	district's density index raised to the 13/100 power.
19.34 	(iv) (4) Multiply the formula transportation allowance
19.35 	according to subdivision 2,by .0485.
19.36 	(v) (5) Subtract the result in clause (iv) (4) from the
20.1 	result in clause (iii) (3).
20.2 	(b) For fiscal year 2007 and later, a district's
20.3 	transportation sparsity allowance equals the greater of zero or
20.4 	the result of the following computation:
20.5 	(1) Multiply the transportation allowance by .1432.
20.6 	(2) Multiply the result in clause (1) by the district's
20.7 	sparsity index raised to the 28/100 power.
20.8 	(3) Multiply the result in clause (2) by the district's
20.9 	density index raised to the 13/100 power.
20.10 	(4) Multiply the transportation allowance by .0458.
20.11 	(5) Subtract the result in clause (4) from the result in
20.12 	clause (3).
20.13 	(b) (c) For fiscal year 2006,transportation sparsity
20.14 	revenue is equal to the transportation sparsity allowance times
20.15 	the adjusted marginal cost pupil units. For fiscal year 2007
20.16 	and later, transportation sparsity revenue is equal to the
20.17 	transportation sparsity allowance times the adjusted pupil units.

20.18 	Sec. 26. Minnesota Statutes 2004, section 126C.10,
20.19 	subdivision 24, is amended to read:
20.20 		Subd. 24.Equity revenue.  (a) For fiscal years 2004
20.21 	through 2006,a school district qualifies for equity revenue if:
20.22 	(1) the school district's adjusted marginal cost pupil unit
20.23 	amount of basic revenue, supplemental revenue, transition
20.24 	revenue,and referendum revenue is less than the value of the
20.25 	school district at or immediately above the 95th percentile of
20.26 	school districts in its equity region for those revenue
20.27 	categories; and
20.28 	(2) the school district's administrative offices are not
20.29 	located in a city of the first class on July 1, 1999.
20.30 	For fiscal year 2007 and later, a school district qualifies for
20.31 	equity revenue if the school district's referendum revenue per
20.32 	adjusted pupil unit is less than 28 percent of the formula
20.33 	allowance.
20.34 	(b) For fiscal year 2006,equity revenue for a qualifying
20.35 	district that receives referendum revenue under section 126C.17,
20.36 	subdivision 4, equals the product of (1) the district's adjusted
21.1 	marginal cost pupil units for that year; times (2) the sum of
21.2 	(i) $13, plus (ii) $75, times the school district's equity index
21.3 	computed under subdivision 27.
21.4 	(c) For fiscal year 2006,equity revenue for a qualifying
21.5 	district that does not receive referendum revenue under section
21.6 	126C.17, subdivision 4, equals the product of the district's
21.7 	adjusted marginal cost pupil units for that year times $13.
21.8 	(d) For fiscal year 2007 and later, equity revenue for a
21.9 	qualifying district equals the product of (1) the district's
21.10 	adjusted pupil units for that year; times (2) $101 times the
21.11 	school district's equity index computed under subdivision 27.
21.12 	
EFFECTIVE DATE. This section is effective the day
21.13 	following final enactment and applies to revenue for fiscal year
21.14 	2004 and later.

21.15 	Sec. 27. Minnesota Statutes 2004, section 126C.10,
21.16 	subdivision 25, is amended to read:
21.17 		Subd. 25.Regional equity gap. For fiscal year 2006,the
21.18 	regional equity gap equals the difference between the value of
21.19 	the school district at or immediately above the fifth percentile
21.20 	of adjusted general referendum revenue per adjusted marginal
21.21 	cost pupil unit and the value of the school district at or
21.22 	immediately above the 95th percentile of adjusted general 
21.23 	referendum revenue per adjusted marginal cost pupil unit.

21.24 	Sec. 28. Minnesota Statutes 2004, section 126C.10,
21.25 	subdivision 26, is amended to read:
21.26 		Subd. 26.District equity gap. For fiscal year 2006,a
21.27 	district's equity gap equals the greater of zero or the
21.28 	difference between the district's adjusted general referendum 
21.29 	revenue and the value per adjusted marginal cost pupil unit of
21.30 	the school district at or immediately above the regional 95th
21.31 	percentile of adjusted general and the district's referendum 
21.32 	revenue per adjusted marginal cost pupil unit. For fiscal year
21.33 	2007 and later, a district's equity gap equals the greater of
21.34 	zero or the difference between 28 percent of the formula
21.35 	allowance and the district's referendum revenue per adjusted
21.36 	pupil unit.

22.1 	Sec. 29. Minnesota Statutes 2004, section 126C.10,
22.2 	subdivision 27, is amended to read:
22.3 		Subd. 27.District equity index. For fiscal year 2006,a
22.4 	district's equity index equals the ratio of the sum of the 
22.5 	district equity gap amount to the regional equity gap
22.6 	amount. For fiscal year 2007 and later, a district's equity
22.7 	index equals the ratio of the district equity gap amount to 28
22.8 	percent of the formula allowance.

22.9 	Sec. 30. Minnesota Statutes 2004, section 126C.10,
22.10 	subdivision 28, is amended to read:
22.11 		Subd. 28.Equity region.  For the purposes of computing
22.12 	equity revenue under subdivision 24 for fiscal year 2006, a
22.13 	district whose administrative offices on July 1, 1999, is
22.14 	located in Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, or
22.15 	Washington County is part of the metro equity region.  Districts
22.16 	whose administrative offices on July 1, 1999, are not located in
22.17 	Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, or Washington
22.18 	County are part of the rural equity region.

22.19 	Sec. 31. Minnesota Statutes 2004, section 126C.10,
22.20 	subdivision 29, is amended to read:
22.21 		Subd. 29.Equity levy.  To obtain equity revenue for
22.22 	fiscal year 2005 and later 2006, a district may levy an amount
22.23 	not more than the product of its equity revenue for the fiscal
22.24 	year times the lesser of one or the ratio of its referendum
22.25 	market value per resident marginal cost pupil unit to $476,000.
22.26 	To obtain equity revenue for fiscal year 2007 and later, a
22.27 	district may levy an amount not more than the product of its
22.28 	equity revenue for the fiscal year times the lesser of one or
22.29 	the ratio of its referendum market value per resident pupil unit
22.30 	to $572,000.

22.31 	Sec. 32. Minnesota Statutes 2004, section 126C.10,
22.32 	subdivision 31, is amended to read:
22.33 		Subd. 31.Transition revenue.  (a) A district's
22.34 	transition allowance for fiscal years 2004 through 2008 2006 
22.35 	equals the greater of zero or the product of the ratio of the
22.36 	number of adjusted marginal cost pupil units the district would
23.1 	have counted for fiscal year 2004 under Minnesota Statutes 2002
23.2 	to the district's adjusted marginal cost pupil units for fiscal
23.3 	year 2004, times the difference between:  (1) the lesser of the
23.4 	district's general education revenue per adjusted marginal cost
23.5 	pupil unit for fiscal year 2003 or the amount of general
23.6 	education revenue the district would have received per adjusted
23.7 	marginal cost pupil unit for fiscal year 2004 according to
23.8 	Minnesota Statutes 2002, and (2) the district's general
23.9 	education revenue for fiscal year 2004 excluding transition
23.10 	revenue divided by the number of adjusted marginal cost pupil
23.11 	units the district would have counted for fiscal year 2004 under
23.12 	Minnesota Statutes 2002.
23.13 	(b) A district's transition allowance for fiscal years 2007
23.14 	through 2010 equals the greater of zero or the difference
23.15 	between:
23.16 	(1) the sum of:
23.17 	(i) the amount of general education revenue the district
23.18 	would have received for fiscal year 2007 under the formulas in
23.19 	effect for fiscal year 2006, plus 
23.20 	(ii) $199 times the district's adjusted pupil units for
23.21 	fiscal year 2007, plus 
23.22 	(iii) the amount of the district's levy limitations for
23.23 	taxes payable in 2005 for:
23.24 	(A) building leases, according to Minnesota Statutes 2004,
23.25 	section 126C.40, subdivision 1, excluding the portion of the
23.26 	levy limitation attributable to leases eligible for levy for
23.27 	taxes payable in 2006 and later under section 126C.40,
23.28 	subdivision 1, paragraph (j);
23.29 	(B) unemployment insurance, according to Minnesota Statutes
23.30 	2004, section 126C.43, subdivision 2;
23.31 	(C) judgments, according to Minnesota Statutes 2004,
23.32 	section 126C.43, subdivision 3;
23.33 	(D) safe schools, according to Minnesota Statutes 2004,
23.34 	section 126C.44;
23.35 	(E) tree growth replacement, according to Minnesota
23.36 	Statutes 2004, section 126C.445;
24.1 	(F) ice arenas, according to Minnesota Statutes 2004,
24.2 	section 126C.45;
24.3 	(G) swimming pools, according to Minnesota Statutes 2004,
24.4 	section 126C.455;
24.5 	(H) lost interest earnings, according to Laws 2002, chapter
24.6 	377, article 5, section 53;
24.7 	(I) severance, according to Minnesota Statutes 2004,
24.8 	sections 123A.39, subdivision 3 and 126C.41, subdivision 5;
24.9 	(J) extended hours and school days according to Laws 1997,
24.10 	First Special Session chapter 4, article 4, section 31; and 
24.11 	(K) other miscellaneous levies according to Laws 1996,
24.12 	chapter 412, article 5, section 28 and Laws 2001, First Special
24.13 	Session chapter 5, article 3, section 87; and 
24.14 	(2) the district's general education revenue for fiscal
24.15 	year 2007 excluding transition revenue, divided by the
24.16 	district's adjusted pupil units for fiscal year 2007.
24.17 	(c) A district's transition allowance for fiscal year 2009 
24.18 	2011 and later is zero.
24.19 	(b) (d) A district's transition revenue for fiscal year
24.20 	2004 and later 2006 equals the sum of (1) the product of the
24.21 	district's transition allowance times the district's adjusted
24.22 	marginal cost pupil units.plus (2) the amount of referendum
24.23 	revenue under section 126C.17 and general education revenue,
24.24 	excluding transition revenue, for fiscal year 2004 attributable
24.25 	to pupils four or five years of age on September 1, 2003,
24.26 	enrolled in a prekindergarten program implemented by the
24.27 	district before July 1, 2003, and reported as kindergarten
24.28 	pupils under section 126C.05, subdivision 1, for fiscal year
24.29 	2004, plus (3) the amount of compensatory education revenue
24.30 	under subdivision 3 for fiscal year 2005 attributable to pupils
24.31 	four years of age on September 1, 2003, enrolled in a
24.32 	prekindergarten program implemented by the district before July
24.33 	1, 2003, and reported as kindergarten pupils under section
24.34 	126C.05, subdivision 1, for fiscal year 2004.
24.35 	(e) A district's transition revenue for fiscal year 2007
24.36 	through fiscal year 2010 equals the product of the district's
25.1 	transition allowance times the district's adjusted pupil units.

25.2 	Sec. 33. Minnesota Statutes 2004, section 126C.10,
25.3 	subdivision 32, is amended to read:
25.4 		Subd. 32.Transition levy.  To obtain transition revenue
25.5 	for fiscal year 2005 2007 and later, a district may levy an
25.6 	amount not more than the product of its transition revenue for
25.7 	the fiscal year times the lesser of one or the ratio of its
25.8 	referendum market value per resident marginal cost pupil unit to
25.9 	$476,000 $572,000.
25.10 	
EFFECTIVE DATE. This section is effective for revenue for
25.11 	fiscal year 2007.

25.12 	Sec. 34. Minnesota Statutes 2004, section 126C.10, is
25.13 	amended by adding a subdivision to read:
25.14 		Subd. 34.Basic alternative compensation aid. (a) For
25.15 	fiscal year 2006, the basic alternative compensation aid for a
25.16 	district or charter school with an alternative compensation plan
25.17 	approved under section 122A.415 equals the alternative
25.18 	compensation revenue according to section 122A.415, subdivision
25.19 	1.
25.20 	(b) For fiscal year 2007 and later, the basic alternative
25.21 	compensation aid for a district with an alternative compensation
25.22 	plan approved under section 122A.415 equals 68.9 percent of the
25.23 	alternative compensation revenue according to section 122A.415,
25.24 	subdivision 1.  The basic alternative compensation aid for a
25.25 	charter school with an alternative compensation plan approved
25.26 	under section 122A.415 equals the school's alternative
25.27 	compensation revenue according to section 122A.415, subdivision
25.28 	1, times the ratio of the sum of the alternative compensation
25.29 	aid and alternative compensation levy for all participating
25.30 	school districts to the maximum alternative compensation revenue
25.31 	for those districts according to section 122A.415, subdivision 1.
25.32 	(c) Notwithstanding paragraphs (a) and (b) and section
25.33 	122A.415, subdivision 1, the state total basic alternative
25.34 	compensation aid entitlement must not exceed $16,727,000 for
25.35 	fiscal year 2006 and $61,871,000 for fiscal year 2007 and
25.36 	later.  The commissioner must limit the amount of alternative
26.1 	compensation revenue approved under section 122A.415, so as not
26.2 	to exceed these limits.

26.3 	Sec. 35. Minnesota Statutes 2004, section 126C.10, is
26.4 	amended by adding a subdivision to read:
26.5 		Subd. 35.Alternative compensation levy. For fiscal year
26.6 	2007 and later, the alternative compensation levy for a district
26.7 	receiving basic alternative compensation aid equals the product
26.8 	of (1) the difference between the district's alternative
26.9 	compensation revenue and the district's basic alternative
26.10 	compensation aid times (2) the lesser of one or the ratio of the
26.11 	district's adjusted net tax capacity per adjusted pupil unit to
26.12 	$6,900.

26.13 	Sec. 36. Minnesota Statutes 2004, section 126C.10, is
26.14 	amended by adding a subdivision to read:
26.15 		Subd. 36.Alternative compensation aid. (a) For fiscal
26.16 	year 2007 and later, a district's alternative compensation
26.17 	equalization aid equals the district's alternative compensation
26.18 	revenue minus the district's basic alternative compensation aid
26.19 	minus the district's alternative compensation levy.  If a
26.20 	district does not levy the entire amount permitted, the
26.21 	alternative compensation equalization aid must be reduced in
26.22 	proportion to the actual amount levied.
26.23 	(b) A district's alternative compensation aid equals the
26.24 	sum of the district's basic alternative compensation aid and the
26.25 	district's alternative compensation equalization aid.

26.26 	Sec. 37. Minnesota Statutes 2004, section 126C.10, is
26.27 	amended by adding a subdivision to read:
26.28 		Subd. 37.Discretionary revenue. (a) For fiscal year
26.29 	2007 and later, a district's discretionary revenue equals the
26.30 	product of (1) the sum of $150 plus the district's training and
26.31 	experience allowance according to subdivision 5, times (2) the
26.32 	adjusted pupil units for the school year.
26.33 	(b) Discretionary revenue is subject to reverse referendum
26.34 	according to section 126C.48, subdivision 9.
26.35 	
EFFECTIVE DATE. This section is effective for revenue for
26.36 	fiscal year 2007.

27.1 	Sec. 38. Minnesota Statutes 2004, section 126C.10, is
27.2 	amended by adding a subdivision to read:
27.3 		Subd. 38.Discretionary levy. To obtain discretionary
27.4 	revenue for fiscal year 2007 and later, a district may levy an
27.5 	amount not more than the product of its discretionary revenue
27.6 	for the fiscal year times the lesser of one or the ratio of its
27.7 	adjusted net tax capacity per adjusted pupil unit to $6,900.
27.8 	
EFFECTIVE DATE. This section is effective for revenue for
27.9 	fiscal year 2007.

27.10 	Sec. 39. Minnesota Statutes 2004, section 126C.10, is
27.11 	amended by adding a subdivision to read:
27.12 		Subd. 39.Discretionary aid. For fiscal year 2007 and
27.13 	later, a district's discretionary aid equals its discretionary
27.14 	revenue minus its discretionary levy times the ratio of the
27.15 	actual amount levied to the permitted levy.
27.16 	
EFFECTIVE DATE. This section is effective for revenue for
27.17 	fiscal year 2007.

27.18 	Sec. 40. Minnesota Statutes 2004, section 126C.13,
27.19 	subdivision 4, is amended to read:
27.20 		Subd. 4.General education aid.  (a) For fiscal year
27.21 	2004, a district's general education aid is the sum of the
27.22 	following amounts:
27.23 	(1) general education revenue;
27.24 	(2) shared time aid according to section 126C.01,
27.25 	subdivision 7;
27.26 	(3) referendum aid according to section 126C.17; and 
27.27 	(4) online learning aid according to section 126C.24.
27.28 	(b) For fiscal year 2005 and later 2006, a district's
27.29 	general education aid is the sum of the following amounts:
27.30 	(1) general education revenue, excluding equity revenue,
27.31 	total operating capital, and transition revenue;
27.32 	(2) operating capital aid according to section 126C.10,
27.33 	subdivision 13b;
27.34 	(3) equity aid according to section 126C.10, subdivision
27.35 	30;
27.36 	(4) transition aid according to section 126C.10,
28.1 	subdivision 33;
28.2 	(5) shared time aid according to section 126C.01,
28.3 	subdivision 7;
28.4 	(6) referendum aid according to section 126C.17; and
28.5 	(7) online learning aid according to section 126C.24.
28.6 	(b) For fiscal year 2007 and later, a district's general
28.7 	education aid is the sum of the following amounts:
28.8 	(1) general education revenue, excluding equity revenue,
28.9 	total operating capital revenue, alternative compensation
28.10 	revenue, transition revenue, and discretionary revenue;
28.11 	(2) operating capital aid according to section 126C.10,
28.12 	subdivision 13b;
28.13 	(3) equity aid according to section 126C.10, subdivision
28.14 	30;
28.15 	(4) alternative compensation aid according to section
28.16 	126C.10, subdivision 36;
28.17 	(5) transition aid according to section 126C.10,
28.18 	subdivision 33;
28.19 	(6) discretionary aid according to section 126C.10,
28.20 	subdivision 39;
28.21 	(7) shared time aid according to section 126C.01,
28.22 	subdivision 7;
28.23 	(8) referendum aid according to section 126C.17; and 
28.24 	(9) online learning aid according to section 126C.24.

28.25 	Sec. 41. Minnesota Statutes 2004, section 126C.17,
28.26 	subdivision 1, is amended to read:
28.27 		Subdivision 1.Referendum allowance.  (a) For fiscal year
28.28 	2003 and later 2006, a district's initial referendum revenue
28.29 	allowance equals the sum of the allowance under section 126C.16,
28.30 	subdivision 2, plus any additional allowance per resident
28.31 	marginal cost pupil unit authorized under subdivision 9 before
28.32 	May 1, 2001, for fiscal year 2002 and later, plus the referendum
28.33 	conversion allowance approved under subdivision 13, minus $415.
28.34 	For districts with more than one referendum authority, the
28.35 	reduction must be computed separately for each authority.  The
28.36 	reduction must be applied first to the referendum conversion
29.1 	allowance and next to the authority with the earliest expiration
29.2 	date.  A district's initial referendum revenue allowance may not
29.3 	be less than zero.
29.4 	(b) For fiscal year 2003, a district's referendum revenue
29.5 	allowance equals the initial referendum allowance plus any
29.6 	additional allowance per resident marginal cost pupil unit
29.7 	authorized under subdivision 9 between April 30, 2001, and
29.8 	December 30, 2001, for fiscal year 2003 and later.
29.9 	(c) For fiscal year 2004 and later 2006, a district's
29.10 	referendum revenue allowance equals the sum of:
29.11 	(1) the product of (i) the ratio of the resident marginal
29.12 	cost pupil units the district would have counted for fiscal year
29.13 	2004 under Minnesota Statutes 2002, section 126C.05, to the
29.14 	district's resident marginal cost pupil units for fiscal year
29.15 	2004, times (ii) the initial referendum allowance plus any
29.16 	additional allowance per resident marginal cost pupil unit
29.17 	authorized under subdivision 9 between April 30, 2001, and May
29.18 	30, 2003, for fiscal year 2003 and later, plus
29.19 	(2) any additional allowance per resident marginal cost
29.20 	pupil unit authorized under subdivision 9 after May 30, 2003,
29.21 	for fiscal year 2005 and later.
29.22 	(c) For fiscal year 2007 and later, a district's referendum
29.23 	revenue allowance equals the sum of:
29.24 	(1) the product of (i) the ratio of the resident marginal
29.25 	cost pupil units the district would have counted for fiscal year
29.26 	2007 under Minnesota Statutes 2004, section 126C.05, to the
29.27 	district's resident pupil units for fiscal year 2007, times (ii)
29.28 	the referendum revenue allowance the district would have
29.29 	received for fiscal year 2007 and later under Minnesota Statutes
29.30 	2004, section 126C.17, subdivision 1, paragraph (c), based on
29.31 	elections held under subdivision 9, before May 30, 2005, plus 
29.32 	(2) any additional allowance per resident pupil unit
29.33 	authorized under subdivision 9 after May 30, 2005.

29.34 	Sec. 42. Minnesota Statutes 2004, section 126C.17,
29.35 	subdivision 2, is amended to read:
29.36 		Subd. 2.Referendum allowance limit.  (a) Notwithstanding
30.1 	subdivision 1, for fiscal year 2003, a district's referendum
30.2 	allowance must not exceed the greater of:
30.3 	(1) the sum of a district's referendum allowance for fiscal
30.4 	year 1994 times 1.162 plus its referendum conversion allowance
30.5 	for fiscal year 2003, minus $415;
30.6 	(2) 18.2 percent of the formula allowance;
30.7 	(3) for a newly reorganized district created on July 1,
30.8 	2002, the referendum revenue authority for each reorganizing
30.9 	district in the year preceding reorganization divided by its
30.10 	resident marginal cost pupil units for the year preceding
30.11 	reorganization, minus $415; or 
30.12 	(4) for a newly reorganized district created after July 1,
30.13 	2002, the referendum revenue authority for each reorganizing
30.14 	district in the year preceding reorganization divided by its
30.15 	resident marginal cost pupil units for the year preceding
30.16 	reorganization.
30.17 	(b) Notwithstanding subdivision 1, for fiscal year 2004 
30.18 	2007 and later, a district's referendum allowance must not
30.19 	exceed the greater of:
30.20 	(1) the sum of:  (i) a district's referendum allowance for
30.21 	fiscal year 1994 times 1.177 times the annual inflationary
30.22 	increase as calculated under paragraph (c) plus (ii) its
30.23 	referendum conversion allowance for fiscal year 2003, minus
30.24 	(iii) $415;
30.25 	(2) the greater of (i) 18.6 28 percent of the formula
30.26 	allowance or (ii) $855.79 $1,396 times the annual inflationary
30.27 	increase as calculated under paragraph (c); or
30.28 	(3) for a newly reorganized district created after July 1,
30.29 	2002 2006, the referendum revenue authority for each
30.30 	reorganizing district in the year preceding reorganization
30.31 	divided by its resident marginal cost pupil units for the year
30.32 	preceding reorganization.
30.33 	(c) (b) For purposes of this subdivision, for fiscal year
30.34 	2005 and later, "inflationary increase" means one plus the
30.35 	percentage change in the Consumer Price Index for urban
30.36 	consumers, as prepared by the United States Bureau of Labor
31.1 	Standards, for the current fiscal year to fiscal year 2004. For
31.2 	fiscal years 2009 and later, for purposes of paragraph (b),
31.3 	clause (1), the inflationary increase equals the inflationary
31.4 	increase for fiscal year 2008 plus one-fourth of the percentage
31.5 	increase in the formula allowance for that year compared with
31.6 	the formula allowance for fiscal year 2008.
31.7 	
EFFECTIVE DATE. This section is effective for revenue for
31.8 	fiscal year 2007.

31.9 	Sec. 43. Minnesota Statutes 2004, section 126C.17,
31.10 	subdivision 4, is amended to read:
31.11 		Subd. 4.Total referendum revenue. For fiscal year 2006,
31.12 	the total referendum revenue for each district equals the
31.13 	district's referendum allowance times the resident marginal cost
31.14 	pupil units for the school year. For fiscal year 2007 and
31.15 	later, the total referendum revenue for each district equals the
31.16 	district's referendum allowance times the resident pupil units
31.17 	for the school year.

31.18 	Sec. 44. Minnesota Statutes 2004, section 126C.17,
31.19 	subdivision 5, is amended to read:
31.20 		Subd. 5.Referendum equalization revenue.  (a) For fiscal
31.21 	year 2003 and later, a district's referendum equalization
31.22 	revenue equals the sum of the first tier referendum equalization
31.23 	revenue and the second tier referendum equalization revenue.
31.24 	(b) A district's first tier referendum equalization revenue
31.25 	equals the district's first tier referendum equalization
31.26 	allowance times the district's resident marginal cost pupil
31.27 	units for that year.
31.28 	(c) For fiscal years 2003 and 2004, a district's first tier
31.29 	referendum equalization allowance equals the lesser of the
31.30 	district's referendum allowance under subdivision 1 or $126.
31.31 	For fiscal year 2005, a district's first tier referendum
31.32 	equalization allowance equals the lesser of the district's
31.33 	referendum allowance under subdivision 1 or $405.For fiscal
31.34 	year 2006 and later, a district's first tier referendum
31.35 	equalization allowance equals the lesser of the district's
31.36 	referendum allowance under subdivision 1 or $500. For fiscal
32.1 	year 2007 and later, a district's first tier referendum
32.2 	equalization allowance equals the lesser of the district's
32.3 	referendum allowance under subdivision 1 or $601.
32.4 	(d) For fiscal year 2006,a district's second tier
32.5 	referendum equalization revenue equals the district's second
32.6 	tier referendum equalization allowance times the district's
32.7 	resident marginal cost pupil units for that year. For fiscal
32.8 	year 2007 and later, a district's second tier referendum
32.9 	equalization revenue equals the district's second tier
32.10 	referendum equalization allowance times the district's resident
32.11 	pupil units for that year.
32.12 	(e) For fiscal year 2006,a district's second tier
32.13 	referendum equalization allowance equals the lesser of the
32.14 	district's referendum allowance under subdivision 1 or 18.6
32.15 	percent of the formula allowance, minus the district's first
32.16 	tier referendum equalization allowance. For fiscal year 2007
32.17 	and later, a district's second tier referendum equalization
32.18 	allowance equals the lesser of the district's referendum
32.19 	allowance under subdivision 1 or 28 percent of the formula
32.20 	allowance, minus the district's first tier referendum
32.21 	equalization allowance.
32.22 	(f) Notwithstanding paragraph (e), the second tier
32.23 	referendum allowance for a district qualifying for secondary
32.24 	sparsity revenue under section 126C.10, subdivision 7, or
32.25 	elementary sparsity revenue under section 126C.10, subdivision
32.26 	8, equals the district's referendum allowance under subdivision
32.27 	1 minus the district's first tier referendum equalization
32.28 	allowance.

32.29 	Sec. 45. Minnesota Statutes 2004, section 126C.17,
32.30 	subdivision 6, is amended to read:
32.31 		Subd. 6.Referendum equalization levy.  (a) For fiscal
32.32 	year 2003 and later, a district's referendum equalization levy
32.33 	equals the sum of the first tier referendum equalization levy
32.34 	and the second tier referendum equalization levy.
32.35 	(b) For fiscal year 2006,a district's first tier
32.36 	referendum equalization levy equals the district's first tier
33.1 	referendum equalization revenue times the lesser of one or the
33.2 	ratio of the district's referendum market value per resident
33.3 	marginal cost pupil unit to $476,000. For fiscal year 2007 and
33.4 	later, a district's first tier referendum equalization levy
33.5 	equals the district's first tier referendum equalization revenue
33.6 	times the lesser of one or the ratio of the district's
33.7 	referendum market value per resident pupil unit to $572,000.
33.8 	(c) For fiscal year 2006,a district's second tier
33.9 	referendum equalization levy equals the district's second tier
33.10 	referendum equalization revenue times the lesser of one or the
33.11 	ratio of the district's referendum market value per resident
33.12 	marginal cost pupil unit to $270,000. For fiscal year 2007 and
33.13 	later, a district's second tier referendum equalization levy
33.14 	equals the district's second tier referendum equalization
33.15 	revenue times the lesser of one or the ratio of the district's
33.16 	referendum market value per resident pupil unit to $331,500.

33.17 	Sec. 46. Minnesota Statutes 2004, section 126C.17,
33.18 	subdivision 7, is amended to read:
33.19 		Subd. 7.Referendum equalization aid.  (a) A district's
33.20 	referendum equalization aid equals the difference between its
33.21 	referendum equalization revenue and levy.
33.22 	(b) If a district's actual levy for first or second tier
33.23 	referendum equalization revenue is less than its maximum levy
33.24 	limit for that tier, aid shall be proportionately reduced.
33.25 	(c) Notwithstanding paragraph (a), the referendum
33.26 	equalization aid for a district, where the referendum
33.27 	equalization aid under paragraph (a) exceeds 90 percent of the
33.28 	referendum revenue, must not exceed 18.6 28 percent of the
33.29 	formula allowance times the district's resident marginal cost 
33.30 	pupil units.  A district's referendum levy is increased by the
33.31 	amount of any reduction in referendum aid under this paragraph.
33.32 	
EFFECTIVE DATE. This section is effective for revenue for
33.33 	fiscal year 2007.

33.34 	Sec. 47. Minnesota Statutes 2004, section 126C.17,
33.35 	subdivision 9, is amended to read:
33.36 		Subd. 9.Referendum revenue.  (a) The revenue authorized
34.1 	by section 126C.10, subdivision 1, may be increased in the
34.2 	amount approved by the voters of the district at a referendum
34.3 	called for the purpose.  The referendum may be called by the
34.4 	board or shall be called by the board upon written petition of
34.5 	qualified voters of the district.  The referendum must be
34.6 	conducted one or two calendar years before the increased levy
34.7 	authority, if approved, first becomes payable.  Only one
34.8 	election to approve an increase may be held in a calendar year.
34.9 	Unless the referendum is conducted by mail under paragraph (g),
34.10 	the referendum must be held on the first Tuesday after the first
34.11 	Monday in November.  The ballot must state the maximum amount of
34.12 	the increased revenue per resident marginal cost pupil unit, the
34.13 	estimated referendum tax rate as a percentage of referendum
34.14 	market value in the first year it is to be levied, and that the
34.15 	revenue must be used to finance school operations.  The ballot
34.16 	may state a schedule, determined by the board, of increased
34.17 	revenue per resident marginal cost pupil unit that differs from
34.18 	year to year over the number of years for which the increased
34.19 	revenue is authorized. If the ballot contains a schedule
34.20 	showing different amounts, it must also indicate the estimated
34.21 	referendum tax rate as a percent of referendum market value for
34.22 	the amount specified for the first year and for the maximum
34.23 	amount specified in the schedule.The ballot may state that
34.24 	existing referendum levy authority is expiring.  In this case,
34.25 	the ballot may also compare the proposed levy authority to the
34.26 	existing expiring levy authority, and express the proposed
34.27 	increase as the amount, if any, over the expiring referendum
34.28 	levy authority.  The ballot must designate the specific number
34.29 	of years, not to exceed ten, for which the referendum
34.30 	authorization applies. The ballot, including a ballot on the
34.31 	question to revoke or reduce the increased revenue amount under
34.32 	paragraph (c), must abbreviate the term "per resident pupil
34.33 	unit" as "per pupil." The notice required under section 275.60
34.34 	may be modified to read, in cases of renewing existing levies:
34.35 	"BY VOTING "YES" ON THIS BALLOT QUESTION, YOU MAY BE VOTING
34.36 	FOR A PROPERTY TAX INCREASE."
35.1 	The ballot may contain a textual portion with the
35.2 	information required in this subdivision and a question stating
35.3 	substantially the following:
35.4 	"Shall the increase in the revenue proposed by (petition
35.5 	to) the board of ........., School District No. .., be approved?"
35.6 	If approved, an amount equal to the approved revenue per
35.7 	resident marginal cost pupil unit times the resident marginal
35.8 	cost pupil units for the school year beginning in the year after
35.9 	the levy is certified shall be authorized for certification for
35.10 	the number of years approved, if applicable, or until revoked or
35.11 	reduced by the voters of the district at a subsequent referendum.
35.12 	(b) The board must prepare and deliver by first class mail
35.13 	at least 15 days but no more than 30 days before the day of the
35.14 	referendum to each taxpayer a notice of the referendum and the
35.15 	proposed revenue increase.  The board need not mail more than
35.16 	one notice to any taxpayer.  For the purpose of giving mailed
35.17 	notice under this subdivision, owners must be those shown to be
35.18 	owners on the records of the county auditor or, in any county
35.19 	where tax statements are mailed by the county treasurer, on the
35.20 	records of the county treasurer.  Every property owner whose
35.21 	name does not appear on the records of the county auditor or the
35.22 	county treasurer is deemed to have waived this mailed notice
35.23 	unless the owner has requested in writing that the county
35.24 	auditor or county treasurer, as the case may be, include the
35.25 	name on the records for this purpose.  The notice must project
35.26 	the anticipated amount of tax increase in annual dollars and
35.27 	annual percentage for typical residential homesteads,
35.28 	agricultural homesteads, apartments, and commercial-industrial
35.29 	property within the school district.
35.30 	The notice for a referendum may state that an existing
35.31 	referendum levy is expiring and project the anticipated amount
35.32 	of increase over the existing referendum levy in the first year,
35.33 	if any, in annual dollars and annual percentage for typical
35.34 	residential homesteads, agricultural homesteads, apartments, and
35.35 	commercial-industrial property within the district.
35.36 	The notice must include the following statement:  "Passage
36.1 	of this referendum will result in an increase in your property
36.2 	taxes."  However, in cases of renewing existing levies, the
36.3 	notice may include the following statement:  "Passage of this
36.4 	referendum may result in an increase in your property taxes."
36.5 	(c) A referendum on the question of revoking or reducing
36.6 	the increased revenue amount authorized pursuant to paragraph
36.7 	(a) may be called by the board and shall be called by the board
36.8 	upon the written petition of qualified voters of the district.
36.9 	A referendum to revoke or reduce the revenue amount must state
36.10 	the amount per resident marginal cost pupil unit by which the
36.11 	authority is to be reduced.  Revenue authority approved by the
36.12 	voters of the district pursuant to paragraph (a) must be
36.13 	available to the school district at least once before it is
36.14 	subject to a referendum on its revocation or reduction for
36.15 	subsequent years.  Only one revocation or reduction referendum
36.16 	may be held to revoke or reduce referendum revenue for any
36.17 	specific year and for years thereafter.
36.18 	(d) A petition authorized by paragraph (a) or (c) is
36.19 	effective if signed by a number of qualified voters in excess of
36.20 	15 percent of the registered voters of the district on the day
36.21 	the petition is filed with the board.  A referendum invoked by
36.22 	petition must be held on the date specified in paragraph (a).
36.23 	(e) The approval of 50 percent plus one of those voting on
36.24 	the question is required to pass a referendum authorized by this
36.25 	subdivision.
36.26 	(f) At least 15 days before the day of the referendum, the
36.27 	district must submit a copy of the notice required under
36.28 	paragraph (b) to the commissioner and to the county auditor of
36.29 	each county in which the district is located.  Within 15 days
36.30 	after the results of the referendum have been certified by the
36.31 	board, or in the case of a recount, the certification of the
36.32 	results of the recount by the canvassing board, the district
36.33 	must notify the commissioner of the results of the referendum.

36.34 	Sec. 48. Minnesota Statutes 2004, section 126C.17,
36.35 	subdivision 13, is amended to read:
36.36 		Subd. 13.Referendum conversion allowance.  (a) A school
37.1 	district that received supplemental or transition revenue in
37.2 	fiscal year 2002 may convert its supplemental revenue conversion
37.3 	allowance and transition revenue conversion allowance to
37.4 	additional referendum allowance under subdivision 1 for fiscal
37.5 	year 2003 and thereafter.  A majority of the school board must
37.6 	approve the conversion at a public meeting before November 1,
37.7 	2001.  For a district with other referendum authority, the
37.8 	referendum conversion allowance approved by the board continues
37.9 	until the portion of the district's other referendum authority
37.10 	with the earliest expiration date after June 30, 2006, expires.
37.11 	For a district with no other referendum authority, the
37.12 	referendum conversion allowance approved by the board continues
37.13 	until June 30, 2012.
37.14 	(b) A school district that received transition revenue in
37.15 	fiscal year 2004 2007 may convert all or part of its transition
37.16 	revenue to referendum revenue with voter approval in a
37.17 	referendum called for the purpose.  The referendum must be held
37.18 	in accordance with subdivision 9, except that the ballot may
37.19 	state that existing transition revenue authority is being
37.20 	canceled or is expiring.  In this case, the ballot shall compare
37.21 	the proposed referendum allowance to the canceled or expiring
37.22 	transition revenue allowance.  For purposes of this comparison,
37.23 	the canceled or expiring transition revenue allowance per
37.24 	adjusted marginal cost pupil unit shall be converted to an
37.25 	allowance per resident marginal cost pupil unit based on the
37.26 	district's ratio of adjusted marginal cost pupil units to
37.27 	resident marginal cost pupil units for the preceding fiscal
37.28 	year.  The referendum must be held on the first Tuesday after
37.29 	the first Monday in November of 2006, 2007, 2008, or 2009.  The
37.30 	notice required under section 275.60 may be modified to read:
37.31 	"BY VOTING 'YES' ON THIS BALLOT QUESTION, YOU MAY BE VOTING FOR
37.32 	A PROPERTY TAX INCREASE." Elections under this paragraph must
37.33 	be held in 2007 or earlier.

37.34 	Sec. 49. Minnesota Statutes 2004, section 127A.45,
37.35 	subdivision 11, is amended to read:
37.36 		Subd. 11.Payment percentage for reimbursement aids.  One
38.1 	hundred percent of the aid for the previous fiscal year must be
38.2 	paid in the current year for the following aids:
38.3 	telecommunications/Internet access equity and according to
38.4 	section 125B.26,special education special pupil aid according
38.5 	to section 125A.75, subdivision 3, aid for litigation costs
38.6 	according to section 125A.75, subdivision 8, aid for
38.7 	court-placed special education expenses according to section
38.8 	125A.79, subdivision 4, and aid for special education
38.9 	out-of-state tuition according to section 125A.79, subdivision 8
38.10 	and shared time aid according to section 126C.01, subdivision 7.

38.11 	Sec. 50. KINDERGARTEN REPORTING.
 38.12 	Notwithstanding Minnesota Statutes, sections 120A.05,
38.13 	subdivision 18; 120A.20, subdivision 1; and 124D.02, subdivision
38.14 	1, pupils four or five years of age on September 1 of the
38.15 	calendar year in which the school year commences and enrolled in
38.16 	a prekindergarten program implemented by the district before
38.17 	July 1, 2003, may be reported as kindergarten pupils under
38.18 	Minnesota Statutes, section 126C.05, subdivision 1, for fiscal
38.19 	years 2004 and earlier.

38.20 	EFFECTIVE DATE. This section is effective the day
38.21 	following final enactment and applies to fiscal years 2004 and
38.22 	earlier.

38.23 	Sec. 51. TRANSITION REVENUE ADJUSTMENTS.
 38.24 	For taxes payable in 2006, a district may levy an amount
38.25 	equal to the increase in the district's transition levy for
38.26 	fiscal year 2006 under Minnesota Statutes, section 126C.10,
38.27 	subdivision 31, paragraphs (c) and (d).

38.28 	Sec. 52. FISCAL YEAR 2006 COMPENSATORY REVENUE FOR
38.29 	REFUGEES.
 38.30 	Notwithstanding Minnesota Statutes, section 126C.05,
38.31 	subdivisions 3 and 16, refugees from the Wat Krabok Refugee Camp
38.32 	in Thailand who were not enrolled in a Minnesota public school
38.33 	on October 1, 2004, but who were enrolled in a Minnesota public
38.34 	school on March 15, 2005, must be included in the calculation of
38.35 	compensatory revenue pupil units for fiscal year 2006.

38.36 	Sec. 53. ALTERNATIVE COMPENSATION REVENUE GUARANTEE.
 39.1 	Notwithstanding Minnesota Statutes, sections 122A.415,
39.2 	subdivision 1, and 126C.10, subdivision 34, a school district
39.3 	that received alternative compensation aid for fiscal year 2005,
39.4 	but does not qualify for alternative compensation revenue for
39.5 	fiscal year 2006 or 2007, shall receive basic alternative
39.6 	compensation aid for that fiscal year equal to the lesser of the
39.7 	amount of alternative compensation aid it received for fiscal
39.8 	year 2005 or the amount it would have received for that fiscal
39.9 	year under Minnesota Statutes 2004, section 122A.415,
39.10 	subdivision 1, if the district submits a timely application and
39.11 	the commissioner determines that the district continues to
39.12 	implement an alternative professional pay system, consistent
39.13 	with its application under Minnesota Statutes 2004, section
39.14 	122A.415, for fiscal year 2005.  A district qualifying for basic
39.15 	alternative compensation aid under this section does not qualify
39.16 	for the alternative compensation levy under Minnesota Statutes,
39.17 	section 126C.10, subdivision 35.  This section applies only to
39.18 	fiscal years 2006 and 2007 and does not apply to later fiscal
39.19 	years.

39.20 	Sec. 54. APPROPRIATIONS.
 39.21 		Subdivision 1.Department of education. The sums
39.22 	indicated in this section are appropriated from the general fund
39.23 	to the Department of Education for the fiscal years designated.
39.24 		Subd. 2.General education aid. For general education
39.25 	aid under Minnesota Statutes, section 126C.13, subdivision 4:
39.26 	$ 5,022,250,000 .....2006 
39.27 	$ 5,194,663,400 .....2007 
39.28 	The 2006 appropriation includes $906,039,000 for 2005 and
39.29 	$4,116,211,000 for 2006.
39.30 	The 2007 appropriation includes $920,521,000 for 2006 and
39.31 	$4,274,142,600 for 2007.
39.32 		Subd. 3.Referendum tax base replacement aid. For
39.33 	referendum tax base replacement aid under Minnesota Statutes,
39.34 	section 126C.17, subdivision 7a:
39.35 	$ 8,704,000 .....2006 
39.36 	$ 8,704,000 .....2007 
40.1 	The 2006 appropriation includes $1,575,000 for 2005 and
40.2 	$7,129,000 for 2006.
40.3 	The 2007 appropriation includes $1,575,000 for 2006 and
40.4 	$7,129,000 for 2007.

40.5 	Sec. 55. REPEALER.
 40.6 	(a) Minnesota Statutes 2004, sections 122A.415, subdivision
40.7 	2; and 123B.05, are repealed.
40.8 	(b) Minnesota Statutes 2004, sections 126C.12 and 127A.50,
40.9 	are repealed for revenue for fiscal year 2007.

40.10 	ARTICLE 2
40.11 	OTHER GENERAL PROGRAMS

40.12 	Section 1. Minnesota Statutes 2004, section 123A.05,
40.13 	subdivision 2, is amended to read:
40.14 		Subd. 2.Reserve revenue.  Each district that is a member
40.15 	of an area learning center must reserve revenue in an amount
40.16 	equal to at least 90 percent of the district average general
40.17 	education revenue per pupil unit minus an amount equal to the
40.18 	product of the formula allowance according to section 126C.10,
40.19 	subdivision 2, times .0485 for fiscal year 2006 and .0458 for
40.20 	fiscal year 2007 and later, calculated without basic skills
40.21 	revenue, transportation sparsity revenue, and the transportation
40.22 	portion of the transition revenue adjustment, times the number
40.23 	of pupil units attending an area learning center program under
40.24 	this section.  The amount of reserved revenue under this
40.25 	subdivision may only be spent on program costs associated with
40.26 	the area learning center.  Compensatory revenue must be
40.27 	allocated according to section 126C.15, subdivision 2.
40.28 	
EFFECTIVE DATE. This section is effective for revenue for
40.29 	fiscal year 2007.

40.30 	Sec. 2. [123A.10] EDUCATION ADMINISTRATIVE DISTRICTS.
40.31 		Subdivision 1.Purpose. The purpose of an education
40.32 	administrative district is to increase the efficiency of
40.33 	administrative services for elementary and secondary education
40.34 	by combining administrative functions for multiple school
40.35 	districts, while maintaining independent school district control
40.36 	of individual student attendance sites.
41.1 		Subd. 2.Agreement to establish an education
41.2 	administrative district. Boards meeting the requirements of
41.3 	subdivision 3 may enter into a written agreement to establish an
41.4 	education administrative district.  The agreement must address
41.5 	methods to improve the efficiency of delivering administrative
41.6 	services.  The agreement and subsequent amendments must be
41.7 	adopted by majority vote of the full membership of each board.
41.8 		Subd. 3.Requirements for formation. (a) An education
41.9 	administrative district must have one of the following at the
41.10 	time of formation:
41.11 	(1) at least five districts;
41.12 	(2) at least three districts with a total of at least 5,000
41.13 	pupils in average daily membership; or 
41.14 	(3) at least three districts with a total of at least 2,000
41.15 	square miles.
41.16 	(b) Members of an education administrative district must be
41.17 	contiguous.  Districts with a cooperation agreement according to
41.18 	section 123A.32 may belong to an education administrative
41.19 	district only as a unit.
41.20 	(c) Notwithstanding paragraph (b), a noncontiguous district
41.21 	may be a member of an education administrative district if the
41.22 	commissioner of education determines that:
41.23 	(1) a district between the education administrative
41.24 	district and the noncontiguous district has considered and is
41.25 	unwilling to become a member; or 
41.26 	(2) a noncontiguous configuration of member districts has
41.27 	sufficient technological or other resources to offer effective
41.28 	levels of administrative services.
41.29 		Subd. 4.Commissioner review and comment. Before
41.30 	entering into an agreement, the school boards of the proposed
41.31 	member districts must jointly submit the proposed agreement to
41.32 	the commissioner for review and comment.  The commissioner shall
41.33 	submit a review and comment on the educational and economic
41.34 	advisability of the proposed agreement to the school boards
41.35 	within 60 days of receiving the proposal.  If the commissioner
41.36 	submits a negative review and comment, the districts do not
42.1 	qualify for levy authority according to section 123A.12,
42.2 	subdivision 5.
42.3 		Subd. 5.Notice and public hearing on proposed
42.4 	agreement. Before entering into an agreement, the board of each
42.5 	member district must publish the commissioner's review and
42.6 	comment and a summary of the proposed agreement and its effect
42.7 	upon the district at least once in a newspaper of general
42.8 	circulation in the district.  The board must conduct a public
42.9 	hearing on the proposed agreement not more than ten days after
42.10 	the notice and at least 30 days before entering into an
42.11 	agreement.

42.12 	Sec. 3. [123A.11] EDUCATION ADMINISTRATIVE DISTRICT
42.13 	BOARD.
42.14 		Subdivision 1.School district representation. The
42.15 	education administrative district board shall be composed of at
42.16 	least one representative appointed by the school board of each
42.17 	member district.  Each representative must be a member of the
42.18 	appointing school board.  Each representative shall serve at the
42.19 	pleasure of the appointing board and may be recalled by a
42.20 	majority vote of the appointing board.  Each representative
42.21 	shall serve for the term that is specified in the agreement.
42.22 	The board shall select its officers from among its members and
42.23 	shall determine the terms of the officers.  The board shall
42.24 	adopt bylaws for the conduct of its business.  The board may
42.25 	conduct public meetings via interactive television if the board
42.26 	complies with chapter 13D in each location where board members
42.27 	are present.
42.28 		Subd. 2.Provision of administrative services. An
42.29 	education administrative district board shall implement the
42.30 	agreement for delivering administrative services, defined in
42.31 	section 123A.12, needed in the education administrative district.
42.32 		Subd. 3.Personnel. The board may employ personnel as
42.33 	necessary to provide administrative services for the education
42.34 	administrative district.  Education administrative district
42.35 	staff shall participate in retirement programs.  Notwithstanding
42.36 	section 123B.143, subdivision 1, a member district of an
43.1 	education administrative district must contract with the
43.2 	education administrative district to obtain the services of a
43.3 	superintendent.  The person to provide the services need not be
43.4 	employed by the education administrative district or a member
43.5 	district at the time the contract is entered into.
43.6 		Subd. 4.Contracts. The board may enter into contracts
43.7 	with districts and other public and private agencies to provide
43.8 	administrative services needed in the education administrative
43.9 	district.
43.10 		Subd. 5.General law. The board shall be governed,
43.11 	unless specifically provided otherwise, by section 471.59.
43.12 		Subd. 6.Annual report. After each of its first five
43.13 	years of operation, the board shall submit an annual report to
43.14 	the member districts and the commissioner regarding the
43.15 	activities of the education administrative district, including
43.16 	analysis of the impact of the arrangement on administrative
43.17 	costs and efficiency.

43.18 	Sec. 4. [123A.12] EDUCATION ADMINISTRATIVE DISTRICT
43.19 	AGREEMENT.
43.20 		Subdivision 1.Implementation; review. An education
43.21 	administrative district board shall implement the agreement for
43.22 	provision of administrative services to the member school
43.23 	districts adopted by the member districts according to section
43.24 	123A.10, subdivision 2.  The education administrative district
43.25 	board shall review the agreement annually and propose necessary
43.26 	amendments to the member districts.
43.27 		Subd. 2.Administrative services. (a) The agreement must
43.28 	provide for the selection of one superintendent for the
43.29 	administrative district at a specified time, according to
43.30 	section 123B.143, subdivision 1, by the administrative district
43.31 	board.
43.32 	(b) The agreement must specify which other noninstructional
43.33 	services are to be provided by the education administrative
43.34 	district.  These services may include, but are not limited to,
43.35 	business management, human resources, payroll, food service,
43.36 	buildings and grounds maintenance, pupil transportation,
44.1 	technology coordination, curriculum coordination, community
44.2 	education, nursing services, student records, district policy,
44.3 	student administrative services, and school building
44.4 	administration.
44.5 		Subd. 3.Timing and duration. (a) The initial agreement
44.6 	must specify a time schedule for implementation.
44.7 	(b) The initial agreement must be for a period of at least
44.8 	three years.  After completing the first two years, the
44.9 	agreement may be extended by majority vote of the full
44.10 	membership of each board.
44.11 		Subd. 4.Finances. The initial agreement must:
44.12 	(1) include a three-year budget projection comparing
44.13 	existing administrative services and their costs with the
44.14 	proposed services and their costs for each year;
44.15 	(2) specify what retirement and severance incentives may be
44.16 	offered to licensed and nonlicensed staff, and how these costs
44.17 	will be apportioned among the member districts.  The incentives
44.18 	must conform with section 123A.48, subdivision 23;
44.19 	(3) specify any other start-up costs for the education
44.20 	administrative district and how these costs will be apportioned
44.21 	among the member districts;
44.22 	(4) specify the estimated amounts that each member district
44.23 	will levy under subdivision 5 for the costs specified in clauses
44.24 	(2) and (3); and 
44.25 	(5) specify an equitable distribution formula for the
44.26 	education administrative district board to assess and certify to
44.27 	each member school district its proportionate share of
44.28 	expenses.  Each member district must remit its assessment to the
44.29 	education administrative district board within 30 days after
44.30 	receipt.
44.31 		Subd. 5.Levy. A school district that is a member of an
44.32 	education administrative district may levy an amount equal to
44.33 	the district's share of costs approved by the commissioner for
44.34 	retirement and severance incentives and other start-up costs
44.35 	included in the initial agreement under subdivision 4, clauses
44.36 	(2) and (3), over a period of time not to exceed three years.
45.1 		Subd. 6.Reports to department of education. Member
45.2 	districts may submit joint reports and jointly provide
45.3 	information required by the department.  The joint reports must
45.4 	allow information, including expenditures for the education
45.5 	administrative district, to be attributed to each member
45.6 	district.
45.7 		Subd. 7.Addition and withdrawal of districts. (a) Upon
45.8 	approval by majority vote of a district school board and of the
45.9 	education administrative district board, an adjoining district
45.10 	may become a member of the education administrative district and
45.11 	be governed by the provisions of this section and the agreement
45.12 	in effect.  A noncontiguous district may become a member with
45.13 	the approval of the commissioner according to the criteria
45.14 	specified in section 123A.10, subdivision 3, paragraph (c).  A
45.15 	new member added to an existing education administrative
45.16 	district may levy for approved costs of retirement and severance
45.17 	incentives according to subdivision 5.
45.18 	(b) After its first three years of membership, a district
45.19 	may withdraw from the education administrative district and from
45.20 	the agreement in effect by a majority vote of the full board
45.21 	membership of the member district desiring withdrawal and upon
45.22 	compliance with provisions in the agreement establishing the
45.23 	education administrative district.  The withdrawal shall become
45.24 	effective at the end of the next following fiscal year.
45.25 		Subd. 8.Dissolution. After the first three years of the
45.26 	education administrative district, the boards of each member
45.27 	district may agree to dissolve the education administrative
45.28 	district effective at the end of any fiscal year or at an
45.29 	earlier time as they may mutually agree.  A dissolution must be
45.30 	accomplished in accordance with any applicable provisions of the
45.31 	agreement establishing the education administrative district.
45.32 	The dissolution must not affect the continuing liability of the
45.33 	previous member districts for continuing obligations, including
45.34 	unemployment benefits.

45.35 	Sec. 5. Minnesota Statutes 2004, section 123A.24,
45.36 	subdivision 2, is amended to read:
46.1 		Subd. 2.Cooperative unit defined.  For the purposes of
46.2 	this section, a cooperative unit is:
46.3 	(1) an education district organized under sections 123A.15
46.4 	to 123A.19;
46.5 	(2) a cooperative vocational center organized under section
46.6 	123A.22;
46.7 	(3) an intermediate district organized under chapter 136D;
46.8 	(4) an education administrative district organized under
46.9 	sections 123A.10 to 123A.12;
46.10 	(5) a service cooperative organized under section 123A.21;
46.11 	or
46.12 	(5) (6) a regional management information center organized
46.13 	under section 123A.23 or as a joint powers district according to
46.14 	section 471.59.

46.15 	Sec. 6. Minnesota Statutes 2004, section 123A.27, is
46.16 	amended to read:
46.17 	123A.27 RESERVED REVENUE FOR DISTRICT COOPERATION.
46.18 	(a) A district that was a member of an intermediate school
46.19 	district organized pursuant to chapter 136D on July 1, 1996,
46.20 	must place a portion of its general education revenue in a
46.21 	reserved account for instructional services from entities formed
46.22 	for cooperative services for special education programs and
46.23 	secondary vocational programs.  The amount reserved is equal to
46.24 	the levy made according to Minnesota Statutes 1993 Supplement,
46.25 	section 124.2727, subdivision 6, for taxes payable in 1994
46.26 	divided by the actual pupil units in the intermediate school
46.27 	district for fiscal year 1995 times the number of actual pupil
46.28 	units in the school district in 1995.  The district must use
46.29 	5/11 of the revenue for special education and 6/11 of the
46.30 	revenue for secondary vocational education.  The district must
46.31 	demonstrate that the revenue is being used to provide the full
46.32 	range of special education and secondary vocational programs and
46.33 	services available to each child served by the intermediate.
46.34 	The secondary vocational programs and services must meet the
46.35 	requirements established in an articulation agreement developed
46.36 	between the commissioner of education and the Board of Trustees
47.1 	of the Minnesota State Colleges and Universities.
47.2 	(b) A school district that is a member of an intermediate
47.3 	school district must place a portion of its discretionary
47.4 	revenue under section 126C.10, subdivision 37, in a reserve
47.5 	account for leases of administrative and classroom space for
47.6 	intermediate school district programs.  The amount reserved is
47.7 	equal to the district's share of intermediate school district
47.8 	lease costs for administrative and classroom space for the
47.9 	fiscal year in which the levy is certified not to exceed $27 per
47.10 	adjusted pupil unit.
47.11 	(c) A district that was a member of an education district
47.12 	organized pursuant to section 123A.15 on July 1, 1999, must
47.13 	place a portion of its general education revenue in a reserve
47.14 	account for instructional services from entities formed for
47.15 	cooperative services.  Services may include secondary vocational
47.16 	programs, special education programs, staff development, and
47.17 	gifted and talented instruction.  The amount reserved is equal
47.18 	to $50 per pupil unit times the actual number of pupil units in
47.19 	the district.

47.20 	Sec. 7. Minnesota Statutes 2004, section 123A.485,
47.21 	subdivision 2, is amended to read:
47.22 		Subd. 2.Aid.  (a) Consolidation transition aid is equal
47.23 	to $200 $240 times the number of resident pupil units in the
47.24 	newly created district in the year of consolidation and $100 
47.25 	$120 times the number of resident pupil units in the first year
47.26 	following the year of consolidation.  The number of pupil units
47.27 	used to calculate aid in either year shall not exceed 1,000 for
47.28 	districts consolidating July 1, 1994, and 1,500 1,250 for
47.29 	districts consolidating July 1, 1995 2005, and thereafter.
47.30 	(b) If the total appropriation for consolidation transition
47.31 	aid for any fiscal year, plus any amount transferred under
47.32 	section 127A.41, subdivision 8, is insufficient to pay all
47.33 	districts the full amount of aid earned, the department must
47.34 	first pay the districts in the first year following the year of
47.35 	consolidation the full amount of aid earned and distribute any
47.36 	remaining funds to the newly created districts in the first year
48.1 	of consolidation.
48.2 	
EFFECTIVE DATE. This section is effective for revenue for
48.3 	fiscal year 2007.

48.4 	Sec. 8. Minnesota Statutes 2004, section 123B.42,
48.5 	subdivision 3, is amended to read:
48.6 		Subd. 3.Cost; limitation.  (a) The cost per pupil of the
48.7 	textbooks, individualized instructional or cooperative learning
48.8 	materials, and standardized tests provided for in this section
48.9 	for each school year must not exceed the statewide average
48.10 	expenditure per pupil, adjusted pursuant according to clause 
48.11 	paragraph (b), by the Minnesota public elementary and secondary
48.12 	schools for textbooks, individualized instructional materials
48.13 	and standardized tests as computed and established by the
48.14 	department by February 1 of the preceding school year from the
48.15 	most recent public school year data then available.
48.16 	(b) The cost computed in clause paragraph (a) shall be
48.17 	increased by an inflation adjustment equal to the percent of
48.18 	increase in the formula allowance, pursuant to section 126C.10,
48.19 	subdivision 2, from the second preceding school year to the
48.20 	current school year two percent for fiscal year 2006, 4.04
48.21 	percent for fiscal year 2007, and two percent for fiscal year
48.22 	2008.
48.23 	(c) The commissioner shall allot to the districts or
48.24 	intermediary service areas the total cost for each school year
48.25 	of providing or loaning the textbooks, individualized
48.26 	instructional or cooperative learning materials, and
48.27 	standardized tests for the pupils in each nonpublic school.  The
48.28 	allotment shall not exceed the product of the statewide average
48.29 	expenditure per pupil, according to clause (a), adjusted
48.30 	pursuant to clause (b), multiplied by the number of nonpublic
48.31 	school pupils who make requests pursuant to this section and who
48.32 	are enrolled as of September 15 of the current school year.

48.33 	Sec. 9. Minnesota Statutes 2004, section 123B.92,
48.34 	subdivision 1, is amended to read:
48.35 		Subdivision 1.Definitions.  For purposes of this section
48.36 	and section 125A.76, the terms defined in this subdivision have
49.1 	the meanings given to them.
49.2 	(a) "Actual expenditure per pupil transported in the
49.3 	regular and excess transportation categories" means the quotient
49.4 	obtained by dividing:
49.5 	(1) the sum of:
49.6 	(i) all expenditures for transportation in the regular
49.7 	category, as defined in paragraph (b), clause (1), and the
49.8 	excess category, as defined in paragraph (b), clause (2), plus
49.9 	(ii) an amount equal to one year's depreciation on the
49.10 	district's school bus fleet and mobile units computed on a
49.11 	straight line basis at the rate of 15 percent per year for
49.12 	districts operating a program under section 124D.128 for grades
49.13 	1 to 12 for all students in the district and 12-1/2 percent per
49.14 	year for other districts of the cost of the fleet, plus
49.15 	(iii) an amount equal to one year's depreciation on the
49.16 	district's type three school buses, as defined in section
49.17 	169.01, subdivision 6, clause (5), which must be used a majority
49.18 	of the time for pupil transportation purposes, computed on a
49.19 	straight line basis at the rate of 20 percent per year of the
49.20 	cost of the type three school buses by:
49.21 	(2) the number of pupils eligible for transportation in the
49.22 	regular category, as defined in paragraph (b), clause (1), and
49.23 	the excess category, as defined in paragraph (b), clause (2).
49.24 	(b) "Transportation category" means a category of
49.25 	transportation service provided to pupils as follows:
49.26 	(1) Regular transportation is:
49.27 	(i) transportation to and from school during the regular
49.28 	school year for resident elementary pupils residing one mile or
49.29 	more from the public or nonpublic school they attend, and
49.30 	resident secondary pupils residing two miles or more from the
49.31 	public or nonpublic school they attend, excluding desegregation
49.32 	transportation and noon kindergarten transportation; but with
49.33 	respect to transportation of pupils to and from nonpublic
49.34 	schools, only to the extent permitted by sections 123B.84 to
49.35 	123B.87;
49.36 	(ii) transportation of resident pupils to and from language
50.1 	immersion programs;
50.2 	(iii) transportation of a pupil who is a custodial parent
50.3 	and that pupil's child between the pupil's home and the child
50.4 	care provider and between the provider and the school, if the
50.5 	home and provider are within the attendance area of the school;
50.6 	(iv) transportation to and from or board and lodging in
50.7 	another district, of resident pupils of a district without a
50.8 	secondary school; and
50.9 	(v) transportation to and from school during the regular
50.10 	school year required under subdivision 3 for nonresident
50.11 	elementary pupils when the distance from the attendance area
50.12 	border to the public school is one mile or more, and for
50.13 	nonresident secondary pupils when the distance from the
50.14 	attendance area border to the public school is two miles or
50.15 	more, excluding desegregation transportation and noon
50.16 	kindergarten transportation.
50.17 	For the purposes of this paragraph, a district may
50.18 	designate a licensed day care facility, respite care facility,
50.19 	the residence of a relative, or the residence of a person chosen
50.20 	by the pupil's parent or guardian as the home of a pupil for
50.21 	part or all of the day, if requested by the pupil's parent or
50.22 	guardian, and if that facility or residence is within the
50.23 	attendance area of the school the pupil attends.
50.24 	(2) Excess transportation is:
50.25 	(i) transportation to and from school during the regular
50.26 	school year for resident secondary pupils residing at least one
50.27 	mile but less than two miles from the public or nonpublic school
50.28 	they attend, and transportation to and from school for resident
50.29 	pupils residing less than one mile from school who are
50.30 	transported because of extraordinary traffic, drug, or crime
50.31 	hazards; and
50.32 	(ii) transportation to and from school during the regular
50.33 	school year required under subdivision 3 for nonresident
50.34 	secondary pupils when the distance from the attendance area
50.35 	border to the school is at least one mile but less than two
50.36 	miles from the public school they attend, and for nonresident
51.1 	pupils when the distance from the attendance area border to the
51.2 	school is less than one mile from the school and who are
51.3 	transported because of extraordinary traffic, drug, or crime
51.4 	hazards.
51.5 	(3) Desegregation transportation is transportation within
51.6 	and outside of the district during the regular school year of
51.7 	pupils to and from schools located outside their normal
51.8 	attendance areas under a plan for desegregation mandated by the
51.9 	commissioner or under court order.
51.10 	(4) "Transportation services for pupils with disabilities"
51.11 	is:
51.12 	(i) transportation of pupils with disabilities who cannot
51.13 	be transported on a regular school bus between home or a respite
51.14 	care facility and school;
51.15 	(ii) necessary transportation of pupils with disabilities
51.16 	from home or from school to other buildings, including centers
51.17 	such as developmental achievement centers, hospitals, and
51.18 	treatment centers where special instruction or services required
51.19 	by sections 125A.03 to 125A.24, 125A.26 to 125A.48, and 125A.65
51.20 	are provided, within or outside the district where services are
51.21 	provided;
51.22 	(iii) necessary transportation for resident pupils with
51.23 	disabilities required by sections 125A.12, and 125A.26 to
51.24 	125A.48;
51.25 	(iv) board and lodging for pupils with disabilities in a
51.26 	district maintaining special classes;
51.27 	(v) transportation from one educational facility to another
51.28 	within the district for resident pupils enrolled on a
51.29 	shared-time basis in educational programs, and necessary
51.30 	transportation required by sections 125A.18, and 125A.26 to
51.31 	125A.48, for resident pupils with disabilities who are provided
51.32 	special instruction and services on a shared-time basis or if
51.33 	resident pupils are not transported, the costs of necessary
51.34 	travel between public and private schools or neutral
51.35 	instructional sites by essential personnel employed by the
51.36 	district's program for children with a disability;
52.1 	(vi) transportation for resident pupils with disabilities
52.2 	to and from board and lodging facilities when the pupil is
52.3 	boarded and lodged for educational purposes; and
52.4 	(vii) services described in clauses (i) to (vi), when
52.5 	provided for pupils with disabilities in conjunction with a
52.6 	summer instructional program that relates to the pupil's
52.7 	individual education plan or in conjunction with a learning year
52.8 	program established under section 124D.128.
52.9 	For purposes of computing special education base revenue
52.10 	under section 125A.76, subdivision 2, the cost of providing
52.11 	transportation for children with disabilities includes (A) the
52.12 	additional cost of transporting a homeless student from a
52.13 	temporary nonshelter home in another district to the school of
52.14 	origin, or a formerly homeless student from a permanent home in
52.15 	another district to the school of origin but only through the
52.16 	end of the academic year; and (B) depreciation on district-owned
52.17 	school buses purchased after July 1, 2005, and used primarily
52.18 	for transportation of pupils with disabilities, calculated
52.19 	according to paragraph (a), clauses (ii) and (iii).
52.20 	Depreciation costs included in the disabled transportation
52.21 	category must be excluded in calculating the actual expenditure
52.22 	per pupil transported in the regular and excess transportation
52.23 	categories according to paragraph (a).
52.24 	(5) "Nonpublic nonregular transportation" is:
52.25 	(i) transportation from one educational facility to another
52.26 	within the district for resident pupils enrolled on a
52.27 	shared-time basis in educational programs, excluding
52.28 	transportation for nonpublic pupils with disabilities under
52.29 	clause (4);
52.30 	(ii) transportation within district boundaries between a
52.31 	nonpublic school and a public school or a neutral site for
52.32 	nonpublic school pupils who are provided pupil support services
52.33 	pursuant to section 123B.44; and
52.34 	(iii) late transportation home from school or between
52.35 	schools within a district for nonpublic school pupils involved
52.36 	in after-school activities.
53.1 	(c) "Mobile unit" means a vehicle or trailer designed to
53.2 	provide facilities for educational programs and services,
53.3 	including diagnostic testing, guidance and counseling services,
53.4 	and health services.  A mobile unit located off nonpublic school
53.5 	premises is a neutral site as defined in section 123B.41,
53.6 	subdivision 13.

53.7 	Sec. 10. Minnesota Statutes 2004, section 123B.92,
53.8 	subdivision 5, is amended to read:
53.9 		Subd. 5.District reports. (a) Each district must report
53.10 	data to the department as required by the department to account
53.11 	for transportation expenditures.
53.12 	(b) Salaries and fringe benefits of district employees
53.13 	whose primary duties are other than transportation, including
53.14 	central office administrators and staff, building administrators
53.15 	and staff, teachers, social workers, school nurses, and
53.16 	instructional aides, must not be included in a district's
53.17 	transportation expenditures, except that a district may include
53.18 	salaries and benefits according to paragraph (c) for (1) an
53.19 	employee designated as the district transportation director, (2)
53.20 	an employee providing direct support to the transportation
53.21 	director, or (3) an employee providing direct transportation
53.22 	services such as a bus driver or bus aide.
53.23 	(c) Salaries and fringe benefits of other district
53.24 	employees who work part-time in transportation and part-time in
53.25 	other areas must not be included in a district's transportation
53.26 	expenditures unless the district maintains documentation of the
53.27 	employee's time spent on pupil transportation matters in the
53.28 	form and manner prescribed by the department.
53.29 	(d) Pupil transportation expenditures, excluding
53.30 	expenditures for capital outlay, leased buses, student board and
53.31 	lodging, crossing guards, and aides on buses, must be allocated
53.32 	among transportation categories based on a cost per mile, cost
53.33 	per student, cost per hour, or cost per route, regardless of
53.34 	whether the transportation services are provided on
53.35 	district-owned or contractor-owned school buses.  Expenditures
53.36 	for school bus driver salaries and fringe benefits may either be
54.1 	directly charged to the appropriate transportation category or
54.2 	may be allocated among transportation categories on a cost per
54.3 	mile, cost per student basis, cost per hour, or cost per route.
54.4 	Expenditures by private contractors or individuals who provide
54.5 	transportation exclusively in one transportation category must
54.6 	be charged directly to the appropriate transportation category.
54.7 	Transportation services provided by contractor-owned school bus
54.8 	companies incorporated under different names but owned by the
54.9 	same individual or group of individuals must be treated as the
54.10 	same company for cost allocation purposes.
54.11 	
EFFECTIVE DATE. This section is effective for expenditure
54.12 	reporting for fiscal year 2006 and later.

54.13 	Sec. 11. Minnesota Statutes 2004, section 123B.92,
54.14 	subdivision 9, is amended to read:
54.15 		Subd. 9.Nonpublic pupil transportation aid.  (a) A
54.16 	district's nonpublic pupil transportation aid for the 1996-1997
54.17 	and later school years fiscal year 2006 and later for
54.18 	transportation services for nonpublic school pupils according to
54.19 	sections 123B.88, 123B.84 to 123B.86, and this section, equals
54.20 	the sum of the amounts computed in paragraphs (b) and (c).  This
54.21 	aid does not limit the obligation to transport pupils under
54.22 	sections 123B.84 to 123B.87.
54.23 	(b) For regular and excess transportation according to
54.24 	subdivision 1, paragraph (b), clauses (1) and (2), an amount
54.25 	equal to the product of:
54.26 	(1) the district's actual expenditure per pupil transported
54.27 	in the regular and excess transportation categories during the
54.28 	second preceding school year; times
54.29 	(2) the number of nonpublic school pupils residing in the
54.30 	district who receive regular or excess transportation service or
54.31 	reimbursement for the current school year; times
54.32 	(3) the ratio of the formula allowance pursuant to section
54.33 	126C.10, subdivision 2, for the current school year to the
54.34 	formula allowance pursuant to section 126C.10, subdivision 2,
54.35 	for the second preceding school year 1.02 for fiscal year 2006,
54.36 	1.0404 for fiscal year 2007, 1.02 for fiscal year 2008, and 1.0
55.1 	for fiscal year 2009 and later.
55.2 	(c) For nonpublic nonregular transportation according to
55.3 	subdivision 1, paragraph (b), clause (5), an amount equal to the
55.4 	product of:
55.5 	(1) the district's actual expenditure for nonpublic
55.6 	nonregular transportation during the second preceding school
55.7 	year; times
55.8 	(2) the ratio of the formula allowance pursuant to section
55.9 	126C.10, subdivision 2, for the current school year to the
55.10 	formula allowance pursuant to section 126C.10, subdivision 2,
55.11 	for the second preceding school year 1.02 for fiscal year 2006,
55.12 	1.0404 for fiscal year 2007, 1.02 for fiscal year 2008, and 1.0
55.13 	for fiscal year 2009 and later.
55.14 	(d) Notwithstanding the amount of the formula allowance for
55.15 	fiscal year 2004 in section 126C.10, subdivision 2, the
55.16 	commissioner shall use the amount of the formula allowance for
55.17 	the current year minus $415 in determining the nonpublic pupil
55.18 	transportation revenue in paragraphs (b) and (c) for fiscal year
55.19 	2004.

55.20 	Sec. 12. Minnesota Statutes 2004, section 124D.081,
55.21 	subdivision 6, is amended to read:
55.22 		Subd. 6.Preparedness revenue.  (a) A qualifying school
55.23 	district is eligible for first-grade preparedness revenue equal
55.24 	to the basic formula allowance for that year $2,537 times the
55.25 	number of children five years of age or older enrolled in a
55.26 	kindergarten program at the site on October 1 of the previous
55.27 	year times .53.
55.28 	(b) This revenue must supplement and not replace
55.29 	compensatory revenue that the district uses for the same or
55.30 	similar purposes under chapters 120B, 123A, 123B, 124D, 126C,
55.31 	and 127A.
55.32 	(c) A pupil enrolled in the first grade preparedness
55.33 	program at a qualifying school site is eligible for
55.34 	transportation under section 123B.88, subdivision 1.
55.35 	(d) First grade preparedness revenue paid to a charter
55.36 	school for which a school district is providing transportation
56.1 	according to section 124D.10, subdivision 16, shall be decreased
56.2 	by an amount equal to the product of the formula allowance
56.3 	according to section 126C.10, subdivision 2, times.0485 .0458 
56.4 	times the pupil units calculated according to paragraph (a).
56.5 	This amount shall be paid to the school district for
56.6 	transportation costs.
56.7 	
EFFECTIVE DATE. This section is effective for revenue for
56.8 	fiscal year 2007.

56.9 	Sec. 13. Minnesota Statutes 2004, section 125A.51, is
56.10 	amended to read:
56.11 	125A.51 PLACEMENT OF CHILDREN WITHOUT DISABILITIES;
56.12 	EDUCATION AND TRANSPORTATION.
56.13 	The responsibility for providing instruction and
56.14 	transportation for a pupil without a disability who has a
56.15 	short-term or temporary physical or emotional illness or
56.16 	disability, as determined by the standards of the commissioner,
56.17 	and who is temporarily placed for care and treatment for that
56.18 	illness or disability, must be determined as provided in this
56.19 	section.
56.20 	(a) The school district of residence of the pupil is the
56.21 	district in which the pupil's parent or guardian resides.
56.22 	(b) When parental rights have been terminated by court
56.23 	order, the legal residence of a child placed in a residential or
56.24 	foster facility for care and treatment is the district in which
56.25 	the child resides.
56.26 	(c) Before the placement of a pupil for care and treatment,
56.27 	the district of residence must be notified and provided an
56.28 	opportunity to participate in the placement decision.  When an
56.29 	immediate emergency placement is necessary and time does not
56.30 	permit resident district participation in the placement
56.31 	decision, the district in which the pupil is temporarily placed,
56.32 	if different from the district of residence, must notify the
56.33 	district of residence of the emergency placement within 15 days
56.34 	of the placement.
56.35 	(d) When a pupil without a disability is temporarily placed
56.36 	for care and treatment in a day program and the pupil continues
57.1 	to live within the district of residence during the care and
57.2 	treatment, the district of residence must provide instruction
57.3 	and necessary transportation to and from the treatment facility
57.4 	for the pupil.  Transportation shall only be provided by the
57.5 	district during regular operating hours of the district.  The
57.6 	district may provide the instruction at a school within the
57.7 	district of residence, at the pupil's residence, or in the case
57.8 	of a placement outside of the resident district, in the district
57.9 	in which the day treatment program is located by paying tuition
57.10 	to that district.  The district of placement may contract with a
57.11 	facility to provide instruction by teachers licensed by the
57.12 	state Board of Teaching.
57.13 	(e) When a pupil without a disability is temporarily placed
57.14 	in a residential program for care and treatment, the district in
57.15 	which the pupil is placed must provide instruction for the pupil
57.16 	and necessary transportation while the pupil is receiving
57.17 	instruction, and in the case of a placement outside of the
57.18 	district of residence, the nonresident district must bill the
57.19 	district of residence for the actual cost of providing the
57.20 	instruction for the regular school year and for summer school,
57.21 	excluding transportation costs.
57.22 	(f) Notwithstanding paragraph (e), if the pupil is homeless
57.23 	and placed in a public or private homeless shelter, then the
57.24 	district that enrolls the pupil under section 127A.47,
57.25 	subdivision 2, shall provide the transportation, unless the
57.26 	district that enrolls the pupil and the district in which the
57.27 	pupil is temporarily placed agree that the district in which the
57.28 	pupil is temporarily placed shall provide transportation.When
57.29 	a pupil without a disability is temporarily placed in a
57.30 	residential program outside the district of residence, the
57.31 	administrator of the court placing the pupil must send timely
57.32 	written notice of the placement to the district of residence.
57.33 	The district of placement may contract with a residential
57.34 	facility to provide instruction by teachers licensed by the
57.35 	state Board of Teaching. For purposes of this section, the state
57.36 	correctional facilities operated on a fee-for-service basis are
58.1 	considered to be residential programs for care and treatment.
58.2 	(f) (g) The district of residence must include the pupil in
58.3 	its residence count of pupil units and pay tuition as provided
58.4 	in section 123A.488 to the district providing the instruction.
58.5 	Transportation costs must be paid by the district providing the
58.6 	transportation and the state must pay transportation aid to that
58.7 	district.  For purposes of computing state transportation aid,
58.8 	pupils governed by this subdivision must be included in the
58.9 	disabled transportation category if the pupils cannot be
58.10 	transported on a regular school bus route without special
58.11 	accommodations.

58.12 	Sec. 14. Minnesota Statutes 2004, section 126C.40,
58.13 	subdivision 1, is amended to read:
58.14 		Subdivision 1.To lease building or land.  (a) When an
58.15 	independent or a special school district or a group of
58.16 	independent or special school districts finds it economically
58.17 	advantageous to rent or lease a building or land for any
58.18 	instructional purposes or for school storage or furniture
58.19 	repair, and it determines that the operating capital revenue
58.20 	authorized under section 126C.10, subdivision 13, is
58.21 	insufficient for this purpose, it may apply to the commissioner
58.22 	for permission to make an additional capital expenditure levy
58.23 	for this purpose.  An application for permission to levy under
58.24 	this subdivision must contain financial justification for the
58.25 	proposed levy, the terms and conditions of the proposed lease,
58.26 	and a description of the space to be leased and its proposed use.
58.27 	(b) The criteria for approval of applications to levy under
58.28 	this subdivision must include:  the reasonableness of the price,
58.29 	the appropriateness of the space to the proposed activity, the
58.30 	feasibility of transporting pupils to the leased building or
58.31 	land, conformity of the lease to the laws and rules of the state
58.32 	of Minnesota, and the appropriateness of the proposed lease to
58.33 	the space needs and the financial condition of the district.
58.34 	The commissioner must not authorize a levy under this
58.35 	subdivision in an amount greater than 90 percent of the cost to
58.36 	the district of renting or leasing a building or land for
59.1 	approved purposes.  The proceeds of this levy must not be used
59.2 	for custodial or other maintenance services.  A district may not
59.3 	levy under this subdivision for the purpose of leasing or
59.4 	renting a district-owned building or site to itself.
59.5 	(c) For agreements finalized after July 1, 1997, a district
59.6 	may not levy under this subdivision for the purpose of leasing:
59.7 	(1) a newly constructed building used primarily for regular
59.8 	kindergarten, elementary, or secondary instruction; or (2) a
59.9 	newly constructed building addition or additions used primarily
59.10 	for regular kindergarten, elementary, or secondary instruction
59.11 	that contains more than 20 percent of the square footage of the
59.12 	previously existing building.
59.13 	(d) Notwithstanding paragraph (b), a district may levy
59.14 	under this subdivision for the purpose of leasing or renting a
59.15 	district-owned building or site to itself only if the amount is
59.16 	needed by the district to make payments required by a lease
59.17 	purchase agreement, installment purchase agreement, or other
59.18 	deferred payments agreement authorized by law, and the levy
59.19 	meets the requirements of paragraph (c).  A levy authorized for
59.20 	a district by the commissioner under this paragraph may be in
59.21 	the amount needed by the district to make payments required by a
59.22 	lease purchase agreement, installment purchase agreement, or
59.23 	other deferred payments agreement authorized by law, provided
59.24 	that any agreement include a provision giving the school
59.25 	districts the right to terminate the agreement annually without
59.26 	penalty.
59.27 	(e) The total levy under this subdivision for a district
59.28 	for any year must not exceed $90 $108 times the resident pupil
59.29 	units for the fiscal year to which the levy is attributable.
59.30 	(f) For agreements for which a review and comment have been
59.31 	submitted to the Department of Education after April 1, 1998,
59.32 	the term "instructional purpose" as used in this subdivision
59.33 	excludes expenditures on stadiums.
59.34 	(g) The commissioner of education may authorize a school
59.35 	district to exceed the limit in paragraph (e) if the school
59.36 	district petitions the commissioner for approval.  The
60.1 	commissioner shall grant approval to a school district to exceed
60.2 	the limit in paragraph (e) for not more than five years if the
60.3 	district meets the following criteria:
60.4 	(1) the school district has been experiencing pupil
60.5 	enrollment growth in the preceding five years;
60.6 	(2) the purpose of the increased levy is in the long-term
60.7 	public interest;
60.8 	(3) the purpose of the increased levy promotes colocation
60.9 	of government services; and
60.10 	(4) the purpose of the increased levy is in the long-term
60.11 	interest of the district by avoiding over construction of school
60.12 	facilities.
60.13 	(h) A school district that is a member of an intermediate
60.14 	school district may include in its authority under this section
60.15 	90 percent of the costs associated with leases of administrative
60.16 	and classroom space for intermediate school district programs.
60.17 	This authority must not exceed $22.50 $27 times the adjusted
60.18 	marginal cost pupil units of the member districts.  This
60.19 	authority is in addition to any other authority authorized under
60.20 	this section.
60.21 	(i) In addition to the allowable capital levies in
60.22 	paragraph (a), a district that is a member of the "Technology
60.23 	and Information Education Systems" data processing joint board,
60.24 	that finds it economically advantageous to enter into a lease
60.25 	purchase agreement for a building for a group of school
60.26 	districts or special school districts for staff development
60.27 	purposes, may levy for its portion of lease costs attributed to
60.28 	the district within the total levy limit in paragraph (e).
60.29 	(j) For taxes payable in 2006 and later, no lease levy
60.30 	shall be authorized under this subdivision unless the amount is
60.31 	needed by the district to make payments required by a lease
60.32 	purchase agreement, installment purchase agreement, or other
60.33 	deferred payment agreement where ownership of the leased
60.34 	property is being acquired by the lessee at the end of the lease
60.35 	term, and the agreement was entered into prior to January 1,
60.36 	2005.

61.1 	Sec. 15. Minnesota Statutes 2004, section 126C.48, is
61.2 	amended by adding a subdivision to read:
61.3 		Subd. 9.Reverse referendum. (a) At the time a district
61.4 	certifies its proposed levy to the county auditor according to
61.5 	section 275.065, subdivision 1, the school board must certify
61.6 	the amount of discretionary revenue, special education levy
61.7 	revenue, and deferred maintenance revenue per pupil unit that
61.8 	the board intends to raise.  If the board certifies an amount
61.9 	for fiscal year 2007 greater than the sum of the district's
61.10 	training and experience revenue for fiscal year 2006 plus the
61.11 	district's levy limitation for taxes payable in 2005 for the
61.12 	levies specified in subdivision 31, paragraph (b), clause
61.13 	(1)(iii), plus $76 times the district's fiscal year 2007
61.14 	adjusted pupil units, the excess amount certified is subject to
61.15 	reverse referendum under paragraphs (b) and (c).  If the amount
61.16 	certified for fiscal year 2008 and later exceeds the amount
61.17 	certified for the previous fiscal year, the increase over the
61.18 	amount certified for the previous fiscal year is subject to
61.19 	reverse referendum under paragraphs (b) and (c).
61.20 	(b) If a district certifies revenue under paragraph (a)
61.21 	that is subject to reverse referendum, the district must publish
61.22 	notice of the intended increase subject to reverse referendum by
61.23 	September 30.  The notice must include the amount of the revenue
61.24 	increase per adjusted pupil unit and the property tax increase
61.25 	in annual dollars for typical residential homesteads,
61.26 	agricultural homesteads, apartments, and commercial-industrial
61.27 	property within the district.
61.28 	(c) Revenue tentatively authorized by the board under this
61.29 	subdivision becomes authorized unless a petition signed by more
61.30 	than 15 percent of the registered voters of the district is
61.31 	filed with the school board within 30 days of the publication of
61.32 	notice.  The percentage is to be determined with reference to
61.33 	the number of registered voters in the district on the last day
61.34 	before the petition is filed with the board.  The petition must
61.35 	call for a referendum on the question of whether to increase the
61.36 	revenue.  The approval of 50 percent plus one of those voting on
62.1 	the question is required to pass a referendum authorized by this
62.2 	section.  The referendum must be held on the last Tuesday in
62.3 	January.

62.4 	Sec. 16. Minnesota Statutes 2004, section 127A.49,
62.5 	subdivision 2, is amended to read:
62.6 		Subd. 2.Abatements.  Whenever by virtue of chapter 278,
62.7 	sections 270.07, 375.192, or otherwise, the net tax capacity of
62.8 	any district for any taxable year is changed after the taxes for
62.9 	that year have been spread by the county auditor and the local
62.10 	tax rate as determined by the county auditor based upon the
62.11 	original net tax capacity is applied upon the changed net tax
62.12 	capacities, the county auditor shall, prior to February 1 of
62.13 	each year, certify to the commissioner of education the amount
62.14 	of any resulting net revenue loss that accrued to the district
62.15 	during the preceding year.  Each year, the commissioner shall
62.16 	pay an abatement adjustment to the district in an amount
62.17 	calculated according to the provisions of this subdivision.
62.18 	This amount shall be deducted from the amount of the levy
62.19 	authorized by section 126C.46.  The amount of the abatement
62.20 	adjustment must be the product of:
62.21 	(1) the net revenue loss as certified by the county
62.22 	auditor, times
62.23 	(2) the ratio of:
62.24 	(i) the sum of the amounts of the district's certified levy
62.25 	in the third preceding year according to the following:
62.26 	(A) section 123B.57, if the district received health and
62.27 	safety aid according to that section for the second preceding
62.28 	year;
62.29 	(B) section 124D.20, if the district received aid for
62.30 	community education programs according to that section for the
62.31 	second preceding year;
62.32 	(C) section 124D.135, subdivision 3, if the district
62.33 	received early childhood family education aid according to
62.34 	section 124D.135 for the second preceding year; and
62.35 	(D) section 126C.17, subdivision 6, if the district
62.36 	received referendum equalization aid according to that section
63.1 	for the second preceding year; to
63.2 	(ii) the total amount of the district's certified levy in
63.3 	the third preceding December, plus or minus auditor's
63.4 	adjustments.

63.5 	Sec. 17. SCHOOL BUS LEVY; CARPENTER SCHOOL BUSES.
 63.6 	For taxes payable in 2006 through 2010, a school district
63.7 	may levy an amount, not to exceed in the aggregate, $30,000
63.8 	times the number of Carpenter school buses in its fleet as of
63.9 	January 1, 2004, that have been determined to have potentially
63.10 	defective welds and are subject to limitations imposed by the
63.11 	Minnesota Department of Public Safety.

63.12 	EFFECTIVE DATE. This section is effective for taxes
63.13 	payable in 2006.

63.14 	Sec. 18. APPROPRIATIONS.
 63.15 		Subdivision 1.Department of education. The sums
63.16 	indicated in this section are appropriated from the general fund
63.17 	to the Department of Education for the fiscal years designated.
63.18 		Subd. 2.Enrollment options transportation. For
63.19 	transportation of pupils attending postsecondary institutions
63.20 	under Minnesota Statutes, section 124D.09, or for transportation
63.21 	of pupils attending nonresident districts under Minnesota
63.22 	Statutes, section 124D.03:
63.23 	$55,000 .....2006 
63.24 	$55,000 .....2007 
63.25 		Subd. 3.Abatement revenue. For abatement aid under
63.26 	Minnesota Statutes, section 127A.49:
63.27 	$820,000 .....2006 
63.28 	$870,000 .....2007 
63.29 	The 2006 appropriation includes $216,000 for 2005 and
63.30 	$604,000 for 2006.
63.31 	The 2007 appropriation includes $133,000 for 2006 and
63.32 	$737,000 for 2007.
63.33 		Subd. 4.Consolidation transition. For districts
63.34 	consolidating under Minnesota Statutes, section 123A.485:
63.35 	$246,000 .....2007 
63.36 	The 2007 appropriation includes $-0- for 2006 and $246,000
64.1 	for 2007.
64.2 		Subd. 5.Nonpublic pupil aid. For nonpublic pupil
64.3 	education aid under Minnesota Statutes, sections 123B.87 and
64.4 	123B.40 to 123B.43:
64.5 	$15,797,000 .....2006 
64.6 	$16,770,000 .....2007 
64.7 	The 2006 appropriation includes $2,718,000 for 2005 and
64.8 	$13,079,000 for 2006.
64.9 	The 2007 appropriation includes $2,890,000 for 2006 and
64.10 	$13,880,000 for 2007.
64.11 		Subd. 6.Nonpublic pupil transportation. For nonpublic
64.12 	pupil transportation aid under Minnesota Statutes, section
64.13 	123B.92, subdivision 9:
64.14 	$22,098,000 .....2006 
64.15 	$23,249,000 .....2007 
64.16 	The 2006 appropriation includes $3,788,000 for 2005 and
64.17 	$18,310,000 for 2006.
64.18 	The 2007 appropriation includes $4,046,000 for 2006 and
64.19 	$19,203,000 for 2007.
64.20 		Subd. 7.First grade preparedness. For first grade
64.21 	preparedness grants under Minnesota Statutes, section 124D.081:
64.22 	$7,250,000 .....2006 
64.23 	$7,250,000 .....2007 
64.24 		Subd. 8.One room schoolhouse. For a grant to
64.25 	Independent School District No. 690, Warroad, to operate the
64.26 	Angle Inlet School:
64.27 	$50,000 .....2006 
64.28 	$50,000 .....2007 
64.29 		Subd. 9.Declining pupil aid; albert lea. For declining
64.30 	pupil aid to Independent School District No. 241, Albert Lea:
64.31 	$75,000 .....2006 
64.32 		Subd. 10.Declining pupil aid; mesabi east. For
64.33 	declining pupil aid to Independent School District No. 2711,
64.34 	Mesabi East:
64.35 	$50,000 .....2006 
64.36 		Subd. 11.Declining pupil aid; roseau. For declining
65.1 	pupil aid to Independent School District No. 682, Roseau:
65.2 	$10,000 .....2006 

65.3 	Sec. 19. REPEALER.
 65.4 	Minnesota Statutes 2004, sections 123A.39, subdivision 3;
65.5 	126C.41, subdivision 5; 126C.43, subdivisions 2 and 3; 126C.44;
65.6 	126C.445; 126C.45; and 126C.455, are repealed effective for
65.7 	taxes payable in 2006.
65.8 	Laws 1996, chapter 412, article 5, section 28; Laws 1997,
65.9 	First Special Session chapter 4, article 4, section 31; Laws
65.10 	2001, First Special Session chapter 5, article 3, section 87;
65.11 	and Laws 2001, First Special Session chapter 6, article 1,
65.12 	section 53, as amended by Laws 2002, chapter 377, article 5,
65.13 	section 5, are repealed effective for taxes payable in 2006.

65.14 	ARTICLE 3
65.15 	EDUCATION EXCELLENCE

65.16 	Section 1. Minnesota Statutes 2004, section 13.321, is
65.17 	amended by adding a subdivision to read:
65.18 		Subd. 10.Teacher data from value-added assessment
65.19 	model. Data on individual teachers generated from a value-added
65.20 	assessment model are governed under section 120B.362.
65.21 	
EFFECTIVE DATE. This section is effective the day
65.22 	following final enactment.

65.23 	Sec. 2. [120A.23] SCHOOL ATTENDANCE REQUIREMENT; DRIVING
65.24 	PRIVILEGES.
65.25 		Subdivision 1.Attendance. The school attendance
65.26 	requirement for driving privileges is a tool available to school
65.27 	districts to encourage students to regularly attend school.  A
65.28 	student meets the school attendance requirement when the student
65.29 	provides verification that the student:
65.30 	(1) has a high school diploma or general education
65.31 	development certificate (GED);
65.32 	(2) has withdrawn from school under section 120A.22,
65.33 	subdivision 8;
65.34 	(3) is enrolled and attending a public school, SAAP, or
65.35 	charter school, or is receiving alternative educational services
65.36 	during the pendency of a school expulsion, or is homeschooled or
66.1 	attending a nonpublic school, and does not meet the definition
66.2 	of a habitual truant under section 260C.007, subdivision 19; or 
66.3 	(4) has conformed to attendance laws, rules, and policies
66.4 	of the student's school, school district, and the state.
66.5 		Subd. 2.Certification of attendance. Upon student
66.6 	request, a school principal or other administrator at the
66.7 	student's public school, SAAP, or charter school must sign a
66.8 	written certificate form in a timely manner that verifies the
66.9 	student does not meet the definition of a habitual truant as
66.10 	defined in section 260C.007, subdivision 19, for the school's
66.11 	last and current grading period, to the extent that data is
66.12 	available.  As set forth in section 171.056, the Department of
66.13 	Public Safety shall develop a certificate form for the school
66.14 	administrator to complete that includes the student's name, date
66.15 	of birth, and address.  For any data not included in the school
66.16 	district, SAAP, or charter school definition of directory
66.17 	information, the school district, SAAP, or charter school must
66.18 	obtain the informed consent of the parent or guardian to release
66.19 	data to the Department of Public Safety.  The school, district,
66.20 	SAAP, or charter school must include in the student attendance
66.21 	policy it distributes to the parent or guardian and student that
66.22 	it will request a parent or guardian to sign an informed consent
66.23 	form to transfer directory information about the student to the
66.24 	Department of Public Safety.
66.25 		Subd. 3.Ongoing reporting of truancy data to department
66.26 	of public safety. A school district, SAAP, or charter school
66.27 	may notify the Department of Public Safety electronically in a
66.28 	manner and format prescribed by the Department of Public Safety
66.29 	of students who meet the definition of habitual truancy for the
66.30 	last grading period.  The electronic notification must include
66.31 	each student's name, date of birth, and address.  For any data
66.32 	not included in the school district, SAAP, or charter school
66.33 	definition of directory information, the school district, SAAP,
66.34 	or charter school must obtain the informed consent of the parent
66.35 	or guardian to release the data to the Department of Public
66.36 	Safety.
67.1 		Subd. 4.Opt out provision. A district school board,
67.2 	board of a state approved alternative program (SAAP), or charter
67.3 	school board of directors may, by majority vote, waive the
67.4 	school attendance requirement for driving privileges under
67.5 	section 171.056 for students enrolled in the district, SAAP, or
67.6 	charter school.  The school board, SAAP board, or board of
67.7 	directors must vote to waive the requirement on or before
67.8 	September 30 of the initial school year for which the waiver is
67.9 	effective.  If a school board, SAAP board, or board of directors
67.10 	intends to rescind its waiver and require students to comply
67.11 	with the school attendance requirement under section 171.056,
67.12 	for a later school year or school years, the board must vote on
67.13 	or before September 30 of the school year for which the waiver
67.14 	is initially rescinded.  For a school district, charter school,
67.15 	or SAAP that opts out, the school board must send an annual
67.16 	certificate to the Department of Public Safety verifying that it
67.17 	is opting out of the attendance requirement for driving
67.18 	privileges for its students.  The Department of Public Safety
67.19 	shall develop a certificate form for the school board to
67.20 	complete if that school district has opted out of the attendance
67.21 	requirement for driving privileges.
67.22 		Subd. 5.Notice. School districts, SAAPs, and charter
67.23 	schools that choose to participate in the school attendance
67.24 	requirement for driving privileges must include that notice in
67.25 	their district wide school attendance policy and include the
67.26 	steps a student must take to obtain an initial certification of
67.27 	attendance, the required steps to obtain certification of
67.28 	attendance after a student has failed to obtain an initial
67.29 	license or after a license is cancelled, the appeal provision,
67.30 	and the frequency and method followed if it chooses to send
67.31 	ongoing truancy reports to the Department of Public Safety
67.32 	regarding students 15 years and older who are habitually truant
67.33 	as defined in section 260C.007, subdivision 19.
67.34 		Subd. 6.Hardship waiver. (a) Pursuant to section
67.35 	171.30, subdivision 1, a student may seek a limited license from
67.36 	the Department of Public Safety based upon the hardship that
68.1 	would occur by cancellation of a student's driver's license or
68.2 	permit or by the student's inability to obtain an initial
68.3 	provisional or driver's license.  The school district
68.4 	superintendent or the equivalent administrator of a SAAP or
68.5 	charter school may consult with the Department of Public Safety
68.6 	to assist in making the limited license determination.
68.7 	(b) In addition, the school board, SAAP board, or charter
68.8 	school board may choose to include in their attendance policy an
68.9 	internal appeal process for students to utilize prior to
68.10 	electronically submitting truancy data to the Department of
68.11 	Public Safety or when a school administrator has not signed a
68.12 	certificate of attendance.  The student seeking review would
68.13 	submit a request for a hardship waiver hearing to the school
68.14 	district superintendent or the equivalent administrator of a
68.15 	SAAP or charter school in a manner and on a form the school
68.16 	administrator prescribes.  The attendance policy would set forth
68.17 	the time frame and process utilized by the district
68.18 	superintendent or equivalent administrator to make its
68.19 	determination.  The student and the student's parent or guardian
68.20 	would be able to submit documentary and oral evidence as part of
68.21 	the appeal process.  Upon completion of the appeal process, the
68.22 	school district superintendent or the equivalent administrator
68.23 	would submit its written decision to the student and the
68.24 	student's parent or guardian within two business days after the
68.25 	determination is made.  The decision must include a provision
68.26 	informing the student of the right to seek a limited license
68.27 	under section 171.30 from the Department of Public Safety.
68.28 		Subd. 7.Model school policy. The commissioner of the
68.29 	Department of Education will develop and make available to
68.30 	districts a districtwide model school policy for attendance.
68.31 		Subd. 8.Nonpublic schools. Nonpublic schools may choose
68.32 	to participate in the school attendance requirement for driving
68.33 	privileges.
68.34 	
EFFECTIVE DATE. This section is effective September 1,
68.35 	2005, and applies to all persons under 18 years of age
68.36 	possessing or applying for a motorized bicycle permit, driver's
69.1 	instruction permit, or provisional license on or after that date.

69.2 	Sec. 3. Minnesota Statutes 2004, section 120A.22,
69.3 	subdivision 12, is amended to read:
69.4 		Subd. 12.Legitimate exemptions.  A parent, guardian, or
69.5 	other person having control of a child may apply to a school
69.6 	district to have the child excused from attendance for the whole
69.7 	or any part of the time school is in session during any school
69.8 	year.  Application may be made to any member of the board, a
69.9 	truant officer, a principal, or the superintendent. The school
69.10 	district may include a provision in its attendance policy that
69.11 	written documentation from the student's parent or legal
69.12 	guardian may be requested to verify the reason for the school
69.13 	absence.The board of the district in which the child resides
69.14 	may approve the application upon the following being
69.15 	demonstrated to the satisfaction of that board:
69.16 	(1) that the child's bodily or mental condition is such as
69.17 	to prevent attendance at school or application to study for the
69.18 	period required; or , which shall include:
69.19 	(i) student illness, medical, dental, orthodontic, or
69.20 	counseling appointments;
69.21 	(ii) family emergencies;
69.22 	(iii) the death or serious illness or funeral of an
69.23 	immediate family member; or 
69.24 	(iv) active duty in any military branch of the United
69.25 	States;
69.26 	(2) that for the school years 1988-1989 through 1999-2000
69.27 	the child has already completed the studies ordinarily required
69.28 	in the 10th grade and that for the school years beginning with
69.29 	the 2000-2001 school year the child has already completed the
69.30 	studies ordinarily required to graduate the child has already
69.31 	completed the state and district standard requirements for
69.32 	graduation from high school; or
69.33 	(3) that it is the wish of the parent, guardian, or other
69.34 	person having control of the child, that the child attend for a
69.35 	period or periods not exceeding in the aggregate three hours in
69.36 	any week, a school for religious instruction conducted and
70.1 	maintained by some church, or association of churches, or any
70.2 	Sunday school association incorporated under the laws of this
70.3 	state, or any auxiliary thereof.  This school for religious
70.4 	instruction must be conducted and maintained in a place other
70.5 	than a public school building, and it must not, in whole or in
70.6 	part, be conducted and maintained at public expense.  However, a
70.7 	child may be absent from school on such days as the child
70.8 	attends upon instruction according to the ordinances of some
70.9 	church.

70.10 	Sec. 4. Minnesota Statutes 2004, section 120B.02, is
70.11 	amended to read:
70.12 	120B.02 EDUCATIONAL EXPECTATIONS FOR MINNESOTA'S
70.13 	STUDENTS.
70.14 	(a) The legislature is committed to establishing rigorous
70.15 	academic standards for Minnesota's public school students.  To
70.16 	that end, the commissioner shall adopt in rule statewide
70.17 	academic standards.  The commissioner shall not prescribe in
70.18 	rule or otherwise the delivery system, classroom assessments, or
70.19 	form of instruction that school sites must use.  For purposes of
70.20 	this chapter, a school site is a separate facility, or a
70.21 	separate program within a facility that a local school board
70.22 	recognizes as a school site for funding purposes.
70.23 	(b) All commissioner actions regarding the rule must be
70.24 	premised on the following:
70.25 	(1) the rule is intended to raise academic expectations for
70.26 	students, teachers, and schools;
70.27 	(2) any state action regarding the rule must evidence
70.28 	consideration of school district autonomy; and
70.29 	(3) the Department of Education, with the assistance of
70.30 	school districts, must make available information about all
70.31 	state initiatives related to the rule to students and parents,
70.32 	teachers, and the general public in a timely format that is
70.33 	appropriate, comprehensive, and readily understandable.
70.34 	(c) When fully implemented, the requirements for high
70.35 	school graduation in Minnesota must require students to pass the
70.36 	basic skills test requirements and satisfactorily complete, as
71.1 	determined by the school district, the course credit
71.2 	requirements under section 120B.024and:
71.3 	(1) for students enrolled in grade 8 before the 2005-2006
71.4 	school year, to pass the basic skills test requirements; or 
71.5 	(2) for students enrolled in grade 8 in the 2005-2006
71.6 	school year and later, to pass the Minnesota Comprehensive
71.7 	Assessments Second Edition (MCA-IIs).
71.8 	(d) The commissioner shall periodically review and report
71.9 	on the state's assessment process.
71.10 	(e) School districts are not required to adopt specific
71.11 	provisions of the Goals 2000 and the federal School-to-Work
71.12 	programs.

71.13 	Sec. 5. [120B.128] EDUCATIONAL PLANNING AND ASSESSMENT
71.14 	SYSTEM (EPAS) PROGRAM.
71.15 	(a) School districts and charter schools may elect to
71.16 	participate in the Educational Planning and Assessment System
71.17 	(EPAS) program offered by ACT, Inc. to provide a longitudinal,
71.18 	systematic approach to student educational and career planning,
71.19 	assessment, instructional support, and evaluation.  The EPAS
71.20 	achievement tests include English, reading, mathematics,
71.21 	science, and components on planning for high school and
71.22 	postsecondary education, interest inventory, needs assessments,
71.23 	and student education plans.  These tests are linked to the ACT
71.24 	assessment for college admission and allow students, parents,
71.25 	teachers, and schools to determine the student's college
71.26 	readiness before grades 11 and 12.
71.27 	(b) The commissioner of education shall provide ACT Explore
71.28 	tests for students in grade 8 and the ACT Plan test for students
71.29 	in grade 10 to assess individual student academic strengths and
71.30 	weaknesses, academic achievement and progress, higher order
71.31 	thinking skills, and college readiness.  The state shall pay the
71.32 	test costs for school districts and charter schools that choose
71.33 	to participate in the EPAS program.  The commissioner shall
71.34 	establish an application procedure and a process for state
71.35 	payment of costs.

71.36 	Sec. 6. Minnesota Statutes 2004, section 120B.13,
72.1 	subdivision 1, is amended to read:
72.2 		Subdivision 1.Program structure; training programs for
72.3 	teachers.  (a) The advanced placement and international
72.4 	baccalaureate programs are well-established academic programs
72.5 	for mature, academically directed high school students.  These
72.6 	programs, in addition to providing academic rigor, offer sound
72.7 	curricular design, accountability, comprehensive external
72.8 	assessment, feedback to students and teachers, and the
72.9 	opportunity for high school students to compete academically on
72.10 	a global level.  Advanced placement and international
72.11 	baccalaureate programs allow students to leave high school with
72.12 	the academic skills and self-confidence to succeed in college
72.13 	and beyond.  The advanced placement and international
72.14 	baccalaureate programs help provide Minnesota students with
72.15 	world-class educational opportunity.
72.16 	(b) Critical to schools' educational success is ongoing
72.17 	advanced placement/international baccalaureate-approved teacher
72.18 	training.  A secondary teacher assigned by a district public or
72.19 	nonpublic school to teach an advanced placement or international
72.20 	baccalaureate course or other interested educator may
72.21 	participate in a training program offered by The College Board
72.22 	or International Baccalaureate North America, Inc.  The state
72.23 	may pay a portion of the tuition, room, and board, and
72.24 	out-of-state travel costs a teacher or other interested educator
72.25 	incurs in participating in a training program.  The commissioner
72.26 	shall determine application procedures and deadlines, and select
72.27 	teachers and other interested educators to participate in the
72.28 	training program, and determine the payment process and amount
72.29 	of the subsidy.  The procedures determined by the commissioner
72.30 	shall, to the extent possible, ensure that advanced placement
72.31 	and international baccalaureate courses become available in all
72.32 	parts of the state and that a variety of course offerings are
72.33 	available in school districts.  This subdivision does not
72.34 	prevent teacher or other interested educator participation in
72.35 	training programs offered by The College Board or International
72.36 	Baccalaureate North America, Inc., when tuition is paid by a
73.1 	source other than the state.

73.2 	Sec. 7. Minnesota Statutes 2004, section 120B.13,
73.3 	subdivision 3, is amended to read:
73.4 		Subd. 3.Subsidy for examination fees.  The state may pay
73.5 	all or part of the fee for advanced placement or international
73.6 	baccalaureate examinations for pupils of low-income families in
73.7 	public and nonpublic schools.  The commissioner shall adopt a
73.8 	schedule for fee subsidies that may allow payment of the entire
73.9 	fee for pay all examination fees for all public and nonpublic
73.10 	students of low-income families, as defined by the commissioner,
73.11 	and to the limit of the available appropriation, shall also pay
73.12 	a portion or all of the examination fees for other public and
73.13 	nonpublic students sitting for an advanced placement
73.14 	examination, international baccalaureate examination, or both.
73.15 	The commissioner shall determine procedures for state payments
73.16 	of fees.

73.17 	Sec. 8. Minnesota Statutes 2004, section 120B.13, is
73.18 	amended by adding a subdivision to read:
73.19 		Subd. 3a.Teacher stipends. A teacher who teaches an
73.20 	advanced placement or international baccalaureate course shall
73.21 	receive a stipend for each student in the teacher's course who
73.22 	receives a three or higher on the advanced placement examination
73.23 	or the international baccalaureate examination that covers the
73.24 	subject matter of the course.  The commissioner shall determine
73.25 	the payment process and the amount of teacher stipends.

73.26 	Sec. 9. Minnesota Statutes 2004, section 120B.13, is
73.27 	amended by adding a subdivision to read:
73.28 		Subd. 3b.College credit. The colleges and universities
73.29 	of the Minnesota State Colleges and Universities system must
73.30 	award, and the University of Minnesota and private postsecondary
73.31 	institutions are encouraged to award, college credit to high
73.32 	school students who receive a score of three or higher on an
73.33 	advanced placement or International Baccalaureate program
73.34 	examination.

73.35 	Sec. 10. [120B.131] COLLEGE-LEVEL EXAMINATION PROGRAM
73.36 	(CLEP).
74.1 		Subdivision 1.Program structure. The College-Level
74.2 	Examination Program (CLEP) offered by The College Board provides
74.3 	students with the opportunity to demonstrate college-level
74.4 	achievement and receive college credit or advanced standing
74.5 	through a program of examinations in undergraduate college
74.6 	courses.  Schools must provide information about CLEP and the
74.7 	opportunity to receive college credit from a Minnesota
74.8 	postsecondary institution to students successfully completing a
74.9 	college-level course.
74.10 		Subd. 2.Reimbursement for examination fees. The state
74.11 	may reimburse CLEP examination fees for a Minnesota public high
74.12 	school student who has successfully completed one or more
74.13 	college-level courses in high school and earned a satisfactory
74.14 	score on one or more CLEP examinations in the following subjects:
74.15 	composition and literature, mathematics and science, social
74.16 	sciences and history, foreign languages, and business and
74.17 	humanitites.  The state may reimburse each successful student
74.18 	for up to six examination fees.  The commissioner shall
74.19 	establish application procedures and a process and schedule for
74.20 	fee reimbursements.  The commissioner must give priority to
74.21 	reimburse the CLEP examination fees of students of low-income
74.22 	families.
74.23 		Subd. 3.College credit. The colleges and universities
74.24 	of the Minnesota State Colleges and Universities system must
74.25 	award, and the University of Minnesota and private postsecondary
74.26 	institutions are encouraged to award, college credit to high
74.27 	school students who receive a satisfactory score on a CLEP
74.28 	examination under this section.  The commissioner, in
74.29 	consultation with the Minnesota State Colleges and Universities,
74.30 	shall set a passing score for college credits.

74.31 	Sec. 11. Minnesota Statutes 2004, section 120B.30,
74.32 	subdivision 1, is amended to read:
74.33 		Subdivision 1.Statewide testing.  (a) The commissioner,
74.34 	with advice from experts with appropriate technical
74.35 	qualifications and experience and stakeholders, consistent with
74.36 	subdivision 1a, shall include in the comprehensive assessment
75.1 	system, for each grade level to be tested, state-constructed
75.2 	tests developed from and aligned with the state's required
75.3 	academic standards under section 120B.021 and administered
75.4 	annually to all students in grades 3 through 8 and at the high
75.5 	school level.  A state-developed test in a subject other than
75.6 	writing, developed after the 2002-2003 school year, must include
75.7 	both multiple choice and constructed response questions.  The
75.8 	commissioner shall establish one or more months during which
75.9 	schools shall administer the tests to students each school
75.10 	year. For students enrolled in grade 8 before the 2005-2006
75.11 	school year,only Minnesota basic skills tests in reading,
75.12 	mathematics, and writing shall fulfill students' basic skills
75.13 	testing requirements for a passing state notation.  The passing
75.14 	scores of the state tests in reading and mathematics are the
75.15 	equivalent of:
75.16 	(1) 70 percent correct for students entering grade 9 in
75.17 	1996; and
75.18 	(2) 75 percent correct for students entering grade 9 in
75.19 	1997 and thereafter, as based on the first uniform test
75.20 	administration of February 1998.
75.21 	For students enrolled in grade 8 in the 2005-2006 school
75.22 	year and later, only the Minnesota Comprehensive Assessments
75.23 	Second Edition (MCA-IIs) in reading, mathematics, and writing
75.24 	shall fulfill students' academic standard requirements.
75.25 	(b) The third through 8th grade and high school level test
75.26 	results shall be available to districts for diagnostic purposes
75.27 	affecting student learning and district instruction and
75.28 	curriculum, and for establishing educational accountability.
75.29 	The commissioner must disseminate to the public the test results
75.30 	upon receiving those results.
75.31 	(c) State tests must be constructed and aligned with state
75.32 	academic standards.  The testing process and the order of
75.33 	administration shall be determined by the commissioner.  The
75.34 	statewide results shall be aggregated at the site and district
75.35 	level, consistent with subdivision 1a.
75.36 	(d) In addition to the testing and reporting requirements
76.1 	under this section, the commissioner shall include the following
76.2 	components in the statewide public reporting system:
76.3 	(1) uniform statewide testing of all students in grades 3
76.4 	through 8 and at the high school level that provides exemptions,
76.5 	only with parent or guardian approval, for those very few
76.6 	students for whom the student's individual education plan team
76.7 	under sections 125A.05 and 125A.06, determines that the student
76.8 	is incapable of taking a statewide test, or for a limited
76.9 	English proficiency student under section 124D.59, subdivision
76.10 	2, if the student has been in the United States for fewer than
76.11 	three years;
76.12 	(2) educational indicators that can be aggregated and
76.13 	compared across school districts and across time on a statewide
76.14 	basis, including average daily attendance, high school
76.15 	graduation rates, and high school drop-out rates by age and
76.16 	grade level;
76.17 	(3) students' scores on the American College Test; and
76.18 	(4) state results from participation in the National
76.19 	Assessment of Educational Progress so that the state can
76.20 	benchmark its performance against the nation and other states,
76.21 	and, where possible, against other countries, and contribute to
76.22 	the national effort to monitor achievement.
76.23 	(e) Districts must report exemptions under paragraph (d),
76.24 	clause (1), to the commissioner consistent with a format
76.25 	provided by the commissioner.

76.26 	Sec. 12. Minnesota Statutes 2004, section 120B.30,
76.27 	subdivision 1a, is amended to read:
76.28 		Subd. 1a.Statewide and local assessments; results.  (a)
76.29 	The commissioner must develop language arts reading,
76.30 	mathematics, and science assessments aligned with state academic
76.31 	standards that districts and sites must use to monitor student
76.32 	growth toward achieving those standards.  The commissioner must
76.33 	not develop statewide assessments for academic standards in
76.34 	social studies and the arts.  The commissioner must require:
76.35 	(1) annual language arts reading and mathematics
76.36 	assessments in grades 3 through 8 and at the high school level
77.1 	for the 2005-2006 school year and later; and
77.2 	(2) annual science assessments in one grade in the grades 3
77.3 	through 5 span, the grades 6 through 9 span, and a life sciences
77.4 	assessment in the grades 10 through 12 span for the 2007-2008
77.5 	school year and later.
77.6 	(b) The commissioner must ensure that all statewide tests
77.7 	administered to elementary and secondary students measure
77.8 	students' academic knowledge and skills and not students'
77.9 	values, attitudes, and beliefs.
77.10 	(c) Reporting of assessment results must:
77.11 	(1) provide timely, useful, and understandable information
77.12 	on the performance of individual students, schools, school
77.13 	districts, and the state;
77.14 	(2) include, by the 2006-2007 school year, a value-added
77.15 	component to measure student achievement growth over time; and
77.16 	(3) for students enrolled in grade 8 before the 2005-2006
77.17 	school year,determine whether students have met the state's
77.18 	basic skills requirements; or 
77.19 	(4) for students enrolled in grade 8 in the 2005-2006
77.20 	school year and later, determine whether students have met the
77.21 	state's academic standards.
77.22 	(d) Consistent with applicable federal law and subdivision
77.23 	1, paragraph (d), clause (1), the commissioner must include
77.24 	alternative assessments for the very few students with
77.25 	disabilities for whom statewide assessments are inappropriate
77.26 	and for students with limited English proficiency.
77.27 	(e) A school, school district, and charter school must
77.28 	administer statewide assessments under this section, as the
77.29 	assessments become available, to evaluate student progress in
77.30 	achieving the academic standards.  If a state assessment is not
77.31 	available, a school, school district, and charter school must
77.32 	determine locally if a student has met the required academic
77.33 	standards.  A school, school district, or charter school may use
77.34 	a student's performance on a statewide assessment as one of
77.35 	multiple criteria to determine grade promotion or retention.  A
77.36 	school, school district, or charter school may use a high school
78.1 	student's performance on a statewide assessment as a percentage
78.2 	of the student's final grade in a course, or place a student's
78.3 	assessment score on the student's transcript.

78.4 	Sec. 13. [120B.362] VALUE-ADDED ASSESSMENT PROGRAM.
78.5 	(a) The commissioner of education must implement a
78.6 	value-added assessment program to assist school districts,
78.7 	public schools, and charter schools in assessing and reporting
78.8 	students' growth in academic achievement under section 120B.30,
78.9 	subdivision 1a.  The program must use assessments of students'
78.10 	academic achievement to make longitudinal comparisons of each
78.11 	student's academic growth over time.  School districts, public
78.12 	schools, and charter schools may apply to the commissioner to
78.13 	participate in the initial trial program using a form and in the
78.14 	manner the commissioner prescribes.  The commissioner must
78.15 	select program participants from urban, suburban, and rural
78.16 	areas throughout the state.
78.17 	(b) The commissioner may issue a request for a proposal to
78.18 	contract with an organization that provides a value-added
78.19 	assessment model that reliably estimates school and school
78.20 	district effects on students' academic achievement over time.
78.21 	The model the commissioner selects must accommodate diverse data
78.22 	and must use each student's test data across grades.
78.23 	(c) The contract under paragraph (b) must be consistent
78.24 	with the definition of "best value" under section 16C.02,
78.25 	subdivision 4.

78.26 	EFFECTIVE DATE. This section is effective the day
78.27 	following final enactment.

78.28 	Sec. 14. Minnesota Statutes 2004, section 122A.12,
78.29 	subdivision 2, is amended to read:
78.30 		Subd. 2.Terms; compensation; removal; administration;
78.31 	reimbursement. (a) Membership terms, removal of members, and
78.32 	the filling of membership vacancies are as provided in section
78.33 	214.09.  The terms of the initial board members must be
78.34 	determined by lot as follows:
78.35 	(1) three members must be appointed for terms that expire
78.36 	August 1, 2002;
79.1 	(2) three members must be appointed for terms that expire
79.2 	August 1, 2003; and
79.3 	(3) four members must be appointed for terms that expire
79.4 	August 1, 2004.
79.5 	Members shall not receive the daily payment under section
79.6 	214.09, subdivision 3.  The public employer of a member shall
79.7 	not reduce the member's compensation or benefits for the
79.8 	member's absence from employment when engaging in the business
79.9 	of the board.  The provision of staff, administrative services,
79.10 	and office space; the review and processing of complaints; the
79.11 	setting of fees; the selection and duties of an executive
79.12 	secretary to serve the board; and other provisions relating to
79.13 	board operations are as provided in chapter 214.  Fiscal year
79.14 	and reporting requirements are as provided in sections 214.07
79.15 	and 214.08.
79.16 	(b) The board may reimburse local school districts for the
79.17 	cost of a substitute teacher employed when a regular teacher is
79.18 	providing professional assistance to the state by serving on the
79.19 	board or on a committee or task force appointed by the board.

79.20 	Sec. 15. [122A.245] TEACHER TRAINING PROGRAM FOR
79.21 	QUALIFIED PROFESSIONALS.
79.22 		Subdivision 1.Scope and requirements. (a) As an
79.23 	alternative to postsecondary teacher preparation programs and
79.24 	alternative preparation licensing for teachers under section
79.25 	122A.24, a teacher training program is established for qualified
79.26 	professionals to acquire an entrance license.  Providers,
79.27 	approved by the commissioner under subdivision 3, may offer the
79.28 	program in the instructional fields of science, mathematics,
79.29 	world languages, English as a second language, and special
79.30 	education.
79.31 	(b) To participate in the teacher training program, the
79.32 	applicant must:
79.33 	(1) have, at a minimum, a bachelor's degree from an
79.34 	accredited four-year postsecondary institution;
79.35 	(2) have an undergraduate major or postbaccalaureate degree
79.36 	in the subject to be taught or in an equivalent or related
80.1 	subject area in which the applicant is seeking licensure;
80.2 	(3) pass an examination of skills in reading, writing, and
80.3 	mathematics as required by section 122A.18;
80.4 	(4) pass Praxis II Subject Assessment for each subject area
80.5 	to be taught;
80.6 	(5) have a cumulative grade point average requirement of
80.7 	2.75 or higher on a 4.0 scale for a bachelor's degree;
80.8 	(6) have evidence of employment related to the subject to
80.9 	be taught; and 
80.10 	(7) have evidence of being hired as a teacher on condition
80.11 	of participating in an approved program described in subdivision
80.12 	2.
80.13 		Subd. 2.Program. A teacher training program provided
80.14 	under this section is one year in duration and must include:
80.15 	(1) a nine-credit summer or preinduction preparation
80.16 	program that includes classroom management techniques and
80.17 	on-site classroom observation that must be completed before the
80.18 	candidate is employed in the classroom;
80.19 	(2) 200 clock hours of instruction in essential skills and
80.20 	knowledge including curriculum, instruction, and classroom
80.21 	management presented after school, Saturdays, or both throughout
80.22 	the year.  The completed 200 clock hours shall lead to a
80.23 	teaching license and may provide up to 15 graduate credits
80.24 	toward a master's degree in education;
80.25 	(3) on-the-job mentoring, supervision, and evaluation
80.26 	arranged by the local district of employment.  Mentoring must be
80.27 	provided by an experienced teacher with licensure in the subject
80.28 	taught by applicant.  Three evaluations, including at least
80.29 	three classroom observations, must be conducted by the
80.30 	evaluation team and a written report of each evaluation
80.31 	prepared.  The third evaluation contains the team's
80.32 	recommendation for licensure.  The evaluation team must include
80.33 	the mentor, the principal, and a member of the approved teacher
80.34 	training program; and 
80.35 	(4) a one-week intensive workshop that includes analysis
80.36 	and reflection of the first year of teaching at the completion
81.1 	of the school year.  These hours may be counted as part of 200
81.2 	clock hours required in clause (2).
81.3 		Subd. 3.Program approval. Program proposals submitted
81.4 	to the commissioner of education for approval must be developed
81.5 	and submitted by a Minnesota public or private postsecondary
81.6 	institution.  Notwithstanding any law to the contrary, the
81.7 	commissioner must approve teacher training programs under this
81.8 	section based on criteria developed by an advisory group
81.9 	appointed by the commissioner.  The advisory group shall
81.10 	include, at a minimum, a representative of the Board of
81.11 	Teaching, school superintendents, principals, teachers, the
81.12 	Department of Education, and postsecondary institutions,
81.13 	including those offering degrees in teaching preparation.
81.14 		Subd. 4.Eligibility license. Notwithstanding any law to
81.15 	the contrary, an applicant who successfully meets the criteria
81.16 	established under subdivision 1, paragraph (b), shall receive a
81.17 	one-year eligibility license to teach at the place of employment
81.18 	identified under subdivision 1, paragraph (b), clause (7).
81.19 	During the one-year eligibility period, a mentor must be
81.20 	assigned under subdivision 2, clause (3).  The applicant teacher
81.21 	and teacher mentor must meet to confer on classroom and
81.22 	instructional issues a minimum of once every week throughout the
81.23 	full school year.
81.24 	The hiring district may deduct the cost of providing the
81.25 	mentor for the teacher training program participant from the
81.26 	participant's salary for the year of training.
81.27 		Subd. 5.Standard entrance license. Notwithstanding any
81.28 	law to the contrary, the Board of Teaching must issue a standard
81.29 	entrance license to a training program licensee who successfully
81.30 	completes the program under subdivision 2, successfully teaches
81.31 	in a classroom for one complete school year, and receives a
81.32 	positive recommendation from the applicant's evaluation team.
81.33 		Subd. 6.Qualified teacher. A person with a valid
81.34 	eligibility license under subdivision 5 is a qualified teacher
81.35 	under section 122A.16.

81.36 	Sec. 16. [122A.601] STAFF DEVELOPMENT PROGRAM.
82.1 		Subdivision 1.Requirement. Each school district must
82.2 	implement a staff development program that improves the quality
82.3 	of teaching and increases the achievement of all students.
82.4 	Staff development must be a part of each district and site
82.5 	improvement plan and must be aligned with state and federal
82.6 	requirements.  A school board must use the revenue authorized in
82.7 	section 122A.61 for staff development that addresses areas
82.8 	identified for improvement by the district advisory committee
82.9 	and site teams, or for violence prevention training authorized
82.10 	in section 120B.22, subdivision 2.
82.11 		Subd. 2.District staff development advisory
82.12 	committee. (a) The school board must appoint a district staff
82.13 	development advisory committee.  A majority of the advisory
82.14 	committee must be teachers representing various grade levels,
82.15 	subject areas, and special education.  The district committee
82.16 	must also include personnel who work with federal programs,
82.17 	nonteaching staff, parents, paraprofessionals, and
82.18 	administrators including the superintendent or superintendent's
82.19 	designee.
82.20 	(b) The district staff development advisory committee shall:
82.21 	(1) analyze student achievement and other kinds of
82.22 	district-related data;
82.23 	(2) establish districtwide staff development goals and
82.24 	learning outcomes based on the analysis of data, including the
82.25 	goal of eliminating achievement gaps among students;
82.26 	(3) review the site team staff development plans for
82.27 	alignment with district goals;
82.28 	(4) review the site team staff development plans for
82.29 	alignment with applications for federal funding;
82.30 	(5) approve the site team plans or consult with site teams
82.31 	as needed to align with district goals and applications for
82.32 	federal funding;
82.33 	(6) forward the approved site team plans and district staff
82.34 	development goals and learning outcomes to the superintendent
82.35 	and to the school board for approval prior to implementation.
82.36 		Subd. 3.Staff development school site team. (a) Each
83.1 	school site in a district must establish a staff development
83.2 	school site team that must include the principal.  A majority of
83.3 	the site team must be teachers representing various grade
83.4 	levels, subject areas, and special education.  The site team may
83.5 	also include nonteaching staff, personnel who work with federal
83.6 	programs, parents, and paraprofessionals.  Kindergarten through
83.7 	grade 12 sites may function with a single committee that serves
83.8 	as both the site team and the district advisory committee.
83.9 	(b) The staff development site team shall create a staff
83.10 	development plan for the site that improves instruction and
83.11 	student achievement.  The plan shall:
83.12 	(1) analyze student achievement and other kinds of
83.13 	site-related data;
83.14 	(2) establish staff development goals and learning outcomes
83.15 	for the site based on the analysis of data, including the goal
83.16 	of eliminating achievement gaps among groups of students;
83.17 	(3) identify procedures at each site for annually assessing
83.18 	and evaluating progress toward meeting the goals and outcomes;
83.19 	(4) specify the staff development activities needed to
83.20 	increase the content knowledge and instructional skills of
83.21 	staff; and 
83.22 	(5) specify the staff development activities needed to
83.23 	enhance the leadership skills of principals to support
83.24 	instruction.
83.25 		Subd. 4.Effective staff development activities. Staff
83.26 	development activities must:
83.27 	(1) focus on the school classroom and research-based
83.28 	strategies that improve student learning;
83.29 	(2) provide opportunities for teachers to practice and
83.30 	improve their skills over time;
83.31 	(3) provide opportunities for teachers to use data to
83.32 	increase student achievement as part of their daily work;
83.33 	(4) enhance teacher content knowledge and instructional
83.34 	skills;
83.35 	(5) align with state and local academic standards; and 
83.36 	(6) provide opportunities to build professional
84.1 	relationships, foster collaboration among principals and staff
84.2 	who provide instruction, and provide opportunities for
84.3 	teacher-to-teacher mentoring.
84.4 	Staff development activities may include curriculum development
84.5 	and curriculum training programs, and activities that provide
84.6 	teachers and other members of site-based teams training to
84.7 	enhance team performance.  In addition, the school district may
84.8 	implement other staff development activities as required by law
84.9 	and those associated with alternative teacher compensation
84.10 	models.  Release time provided for teachers to supervise
84.11 	students on field trips and school activities, or independent
84.12 	tasks not associated with enhancing the teacher's knowledge and
84.13 	skills, such as preparing report cards, calculating grades, or
84.14 	organizing classroom materials, may not be counted as staff
84.15 	development time that is financed with staff development
84.16 	reserved revenue under section 122A.61.
84.17 		Subd. 5.Staff development report. (a) By October 15 of
84.18 	each year, the district and site staff development committees
84.19 	shall write and submit a report of staff development activities
84.20 	and expenditures for the previous year, in the form and manner
84.21 	determined by the commissioner.  The report must include
84.22 	assessment and evaluation data indicating progress toward
84.23 	district and site staff development goals based on teaching and
84.24 	learning outcomes, including the percentage of teachers
84.25 	participating in effective staff development activities under
84.26 	subdivision 4.
84.27 	(b) The report must provide a breakdown of expenditures for:
84.28 	(1) curriculum development and curriculum training
84.29 	programs; and 
84.30 	(2) staff development training models, workshops, and
84.31 	conferences, and the cost of releasing teachers or providing
84.32 	substitute teachers for staff development purposes.
84.33 	The report must also include whether the expenditures were
84.34 	incurred at the district level or the school site level, and
84.35 	whether the school site expenditures were made possible by
84.36 	grants to school sites that demonstrate exemplary use of
85.1 	allocated staff development revenue.  These expenditures must be
85.2 	reported using the Uniform Financial and Accounting and
85.3 	Reporting Standards.
85.4 	(c) The commissioner shall report the staff development
85.5 	progress and expenditure data to the house of representatives
85.6 	and senate committees having jurisdiction over education by
85.7 	February 15 each year.

85.8 	Sec. 17. Minnesota Statutes 2004, section 122A.61,
85.9 	subdivision 1, is amended to read:
85.10 		Subdivision 1.Staff development revenue.  A district is
85.11 	required to reserve an amount equal to at least two percent of
85.12 	the basic revenue under section 126C.10, subdivision 2, for
85.13 	in-service staff development education for programs under
85.14 	section 120B.22, subdivision 2, for district and site staff
85.15 	development plans, including plans for challenging instructional
85.16 	activities and experiences under planning and implementation of
85.17 	staff development activities consistent with section
85.18 	122A.60, and for curriculum development and programs, other
85.19 	in-service education, teachers' workshops, teacher conferences,
85.20 	the cost of substitute teachers for staff development purposes,
85.21 	preservice and in-service education for special education
85.22 	professionals and paraprofessionals, other staff in the district
85.23 	plan,and other related costs for staff development efforts as
85.24 	specified in the district plan. The school district must use
85.25 	staff development revenue for activities under section 122A.60.
85.26 	A district may reduce the amount reserved for the current year
85.27 	by the amount expended for these purposes in the current fiscal
85.28 	year from its reserved for staff development fund balance.
85.29 	Prior to the end of the reporting school year,a district
85.30 	may annually waive the annual requirement to reserve their two
85.31 	percent of its basic revenue or some portion for the next school
85.32 	year,under this section if by a majority vote of the licensed
85.33 	teachers in the district and a majority vote of the school board
85.34 	agree to a resolution to waive the requirement.  A district in
85.35 	statutory operating debt is exempt from reserving basic revenue
85.36 	according to this section, but must develop district plans, site
86.1 	plans, and the annual report under section 122A.60.  Districts
86.2 	may expend an additional amount of unreserved revenue for staff
86.3 	development based on their needs.  With the exception of amounts
86.4 	reserved for staff development from revenues allocated directly
86.5 	to school sites, the board must initially allocate 50 percent of
86.6 	the reserved revenue to each school site sites in the district
86.7 	on a per teacher basis, which must be retained by the school
86.8 	site until used with a proportionate amount per site based on
86.9 	the number of teachers.  The board may retain 25 up to 50 
86.10 	percent to be used for district wide staff development efforts,
86.11 	for grants to sites for staff development, or both. The
86.12 	remaining 25 percent of the revenue must be used to make grants
86.13 	to school sites for best practices methods.  A grant may be used
86.14 	for any purpose authorized under section 120B.22, subdivision 2,
86.15 	122A.60, or for the costs of curriculum development and
86.16 	programs, other in-service education, teachers' workshops,
86.17 	teacher conferences, substitute teachers for staff development
86.18 	purposes, and other staff development efforts, and determined by
86.19 	the site professional development team.  The site professional
86.20 	development team must demonstrate to the school board the extent
86.21 	to which staff at the site have met the outcomes of the
86.22 	program.The board may withhold a portion of initial allocation
86.23 	of revenue if the staff development goals are not being
86.24 	addressed or if the learning outcomes are not being met.

86.25 	Sec. 18. Minnesota Statutes 2004, section 123B.09,
86.26 	subdivision 8, is amended to read:
86.27 		Subd. 8.Duties.  The board must superintend and manage
86.28 	the schools of the district; adopt rules for their organization,
86.29 	government, and instruction; keep registers; and prescribe
86.30 	textbooks and courses of study.  The board may enter into an
86.31 	agreement with a postsecondary institution for secondary or
86.32 	postsecondary nonsectarian courses to be taught at a secondary
86.33 	school, nonsectarian postsecondary institution, or another
86.34 	location. The board must not enter into an agreement which
86.35 	limits a district superintendent's duty to assign and reassign
86.36 	teachers or administrators to the schools in which the teachers
87.1 	will teach or the administrators will administer.
87.2 	
EFFECTIVE DATE. This section is effective for agreements
87.3 	entered into on or after July 1, 2005.

87.4 	Sec. 19. Minnesota Statutes 2004, section 123B.143,
87.5 	subdivision 1, is amended to read:
87.6 		Subdivision 1.Contract; duties.  All districts
87.7 	maintaining a classified secondary school must employ a
87.8 	superintendent who shall be an ex officio nonvoting member of
87.9 	the school board.  The authority for selection and employment of
87.10 	a superintendent must be vested in the board in all cases.  An
87.11 	individual employed by a board as a superintendent shall have an
87.12 	initial employment contract for a period of time no longer than
87.13 	three years from the date of employment.  Any subsequent
87.14 	employment contract must not exceed a period of three years.  A
87.15 	board, at its discretion, may or may not renew an employment
87.16 	contract.  A board must not, by action or inaction, extend the
87.17 	duration of an existing employment contract.  Beginning 365 days
87.18 	prior to the expiration date of an existing employment contract,
87.19 	a board may negotiate and enter into a subsequent employment
87.20 	contract to take effect upon the expiration of the existing
87.21 	contract.  A subsequent contract must be contingent upon the
87.22 	employee completing the terms of an existing contract.  If a
87.23 	contract between a board and a superintendent is terminated
87.24 	prior to the date specified in the contract, the board may not
87.25 	enter into another superintendent contract with that same
87.26 	individual that has a term that extends beyond the date
87.27 	specified in the terminated contract.  A board may terminate a
87.28 	superintendent during the term of an employment contract for any
87.29 	of the grounds specified in section 122A.40, subdivision 9 or 13.
87.30 	A superintendent shall not rely upon an employment contract with
87.31 	a board to assert any other continuing contract rights in the
87.32 	position of superintendent under section 122A.40.
87.33 	Notwithstanding the provisions of sections 122A.40, subdivision
87.34 	10 or 11, 123A.32, 123A.75, or any other law to the contrary, no
87.35 	individual shall have a right to employment as a superintendent
87.36 	based on order of employment in any district.  If two or more
88.1 	districts enter into an agreement for the purchase or sharing of
88.2 	the services of a superintendent, the contracting districts have
88.3 	the absolute right to select one of the individuals employed to
88.4 	serve as superintendent in one of the contracting districts and
88.5 	no individual has a right to employment as the superintendent to
88.6 	provide all or part of the services based on order of employment
88.7 	in a contracting district. The superintendent of a district
88.8 	shall perform the following:
88.9 	(1) visit and supervise the schools in the district, report
88.10 	and make recommendations about their condition when advisable or
88.11 	on request by the board;
88.12 	(2) recommend to the board employment and dismissal of
88.13 	teachers;
88.14 	(3) before the start of the school year, and at other times
88.15 	as needed, superintend the assignment of teachers or
88.16 	administrators to schools to best meet student and school needs
88.17 	as determined by the superintendent;
88.18 	(4) superintend school grading practices and examinations
88.19 	for promotions;
88.20 	(4) (5) make reports required by the commissioner;
88.21 	(5) (6) by January 10, submit an annual report to the
88.22 	commissioner in a manner prescribed by the commissioner, in
88.23 	consultation with school districts, identifying the expenditures
88.24 	that the district requires to ensure an 80 percent student
88.25 	passage rate on the basic standards test taken in the eighth
88.26 	grade, identifying the highest student passage rate the district
88.27 	expects it will be able to attain on the basic standards test by
88.28 	grade 12, the amount of expenditures that the district requires
88.29 	to attain the targeted student passage rate, and how much the
88.30 	district is cross-subsidizing programs with special education,
88.31 	basic skills, and general education revenue; and
88.32 	(6) (7) perform other duties prescribed by the board.
88.33 	
EFFECTIVE DATE. This section is effective July 1, 2005.

88.34 	Sec. 20. Minnesota Statutes 2004, section 124D.11,
88.35 	subdivision 1, is amended to read:
88.36 		Subdivision 1.General education revenue.  (a) General
89.1 	education revenue must be paid to a charter school as though it
89.2 	were a district. For fiscal years 2004 and 2005,the general
89.3 	education revenue for each adjusted marginal cost pupil unit is
89.4 	the state average general education revenue per pupil unit, plus
89.5 	the referendum equalization aid allowance in the pupil's
89.6 	district of residence, minus an amount equal to the product of
89.7 	the formula allowance according to section 126C.10, subdivision
89.8 	2, times.0485 0.0485, calculated without basic skills
89.9 	revenue, extended time revenue, transition revenue,and
89.10 	transportation sparsity revenue, plus basic skills revenue and
89.11 	transition revenue as though the school were a school district.
89.12 	For fiscal year 2006, the general education revenue for each
89.13 	adjusted marginal cost pupil unit is the state average general
89.14 	education revenue per pupil unit, plus the referendum
89.15 	equalization aid allowance in the pupil's district of residence,
89.16 	minus an amount equal to the product of the formula allowance
89.17 	according to section 126C.10, subdivision 2, times 0.0485,
89.18 	calculated without basic skills revenue, extended time revenue,
89.19 	alternative compensation revenue, transition revenue, and
89.20 	transportation sparsity revenue, plus basic skills revenue and
89.21 	transition revenue as though the school were a school district,
89.22 	plus the basic alternative compensation aid according to section
89.23 	126C.10, subdivision 34.  For fiscal year 2007 and later, the
89.24 	general education revenue for each adjusted pupil unit is the
89.25 	state average general education revenue per pupil unit, plus the
89.26 	referendum equalization aid allowance in the pupil's district of
89.27 	residence, minus an amount equal to the product of the formula
89.28 	allowance according to section 126C.10, subdivision 2, times
89.29 	0.0458, calculated without basic skills revenue, extended time
89.30 	revenue, secondary education revenue, declining enrollment
89.31 	revenue, alternative compensation revenue, transition revenue,
89.32 	and transportation sparsity revenue, plus secondary education
89.33 	revenue, declining enrollment revenue, basic skills revenue, and
89.34 	transition revenue as though the school were a school district
89.35 	plus the basic alternative compensation aid according to section
89.36 	126C.10, subdivision 34.  For fiscal year 2006, the general
90.1 	education revenue for each extended time marginal cost pupil
90.2 	unit equals $4,465.  For fiscal year 2007 and later, the general
90.3 	education revenue for each extended time pupil unit equals
90.4 	$5,535.  Notwithstanding section 126C.10, the general education
90.5 	aid for a charter school for general education revenue
90.6 	categories that require a levy equals the school's revenue for
90.7 	those categories.
90.8 	(b) Notwithstanding paragraph (a), for charter schools in
90.9 	the first year of operation, general education revenue for
90.10 	fiscal year 2006 shall be computed using the number of adjusted
90.11 	pupil units in the current fiscal year.

90.12 	Sec. 21. Minnesota Statutes 2004, section 124D.11,
90.13 	subdivision 2, is amended to read:
90.14 		Subd. 2.Transportation revenue.  Transportation revenue
90.15 	must be paid to a charter school that provides transportation
90.16 	services according to section 124D.10, subdivision 16, according
90.17 	to this subdivision.  Transportation aid shall equal
90.18 	transportation revenue.
90.19 	In addition to the revenue under subdivision 1, for fiscal
90.20 	year 2006,a charter school providing transportation services
90.21 	must receive general education aid for each pupil unit equal to
90.22 	the sum of the product of (i) an amount equal to the product of
90.23 	the formula allowance according to section 126C.10, subdivision
90.24 	2, times.0485 0.0485, plus the transportation sparsity
90.25 	allowance for the school district in which the charter school is
90.26 	located times (ii) the adjusted marginal cost pupil units, plus
90.27 	the product of $228 times the extended time marginal cost pupil
90.28 	units.
90.29 	In addition to the revenue under subdivision 1, for fiscal
90.30 	year 2007 and later, a charter school providing transportation
90.31 	services must receive general education aid equal to the sum of
90.32 	the product of (i) the formula allowance according to section
90.33 	126C.10, subdivision 2, times 0.0458, plus the transportation
90.34 	sparsity allowance for the school district in which the charter
90.35 	school is located times (ii) the adjusted pupil units, plus the
90.36 	product of $266 times the extended time pupil units.

91.1 	Sec. 22. Minnesota Statutes 2004, section 124D.11,
91.2 	subdivision 4, is amended to read:
91.3 		Subd. 4.Building lease aid. (a) When a charter school
91.4 	finds it economically advantageous to rent or lease a building
91.5 	or land for any instructional purposes and it determines that
91.6 	the total operating capital revenue under section 126C.10,
91.7 	subdivision 13, is insufficient for this purpose, it may apply
91.8 	to the commissioner for building lease aid for this purpose.
91.9 	The commissioner must review and either approve or deny a lease
91.10 	aid application using the following criteria:
91.11 	(1) the reasonableness of the price based on current market
91.12 	values;
91.13 	(2) the extent to which the lease conforms to applicable
91.14 	state laws and rules; and
91.15 	(3) the appropriateness of the proposed lease in the
91.16 	context of the space needs and financial circumstances of the
91.17 	charter school.
91.18 	A charter school must not use the building lease aid it receives
91.19 	for custodial, maintenance service, utility, or other operating
91.20 	costs.
91.21 	(b) For fiscal year 2006,the amount of building lease aid
91.22 	per pupil unit served for a charter school for any year shall
91.23 	not exceed the lesser of (a) 90 percent of the approved cost or
91.24 	(b) the product of the pupil units served for the current school
91.25 	year times the greater of the charter school's building lease
91.26 	aid per pupil unit served for fiscal year 2003, excluding the
91.27 	adjustment under Laws 2002, chapter 392, article 6, section 4,
91.28 	or $1,200. For fiscal year 2007 and later, the amount of
91.29 	building lease aid for a charter school shall not exceed the
91.30 	lesser of (1) 90 percent of the approved cost or (2) the greater
91.31 	of (i) the sum of the elementary pupil units served for the
91.32 	current school year times $1,316 plus the secondary pupil units
91.33 	served for the current school year times $1,552 or (ii) the
91.34 	product of the charter school's building lease aid per pupil
91.35 	unit served for fiscal year 2003 as adjusted according to
91.36 	section 126C.05, subdivision 14, excluding the adjustment under
92.1 	Laws 2002, chapter 392, article 6, section 4, times the pupil
92.2 	units served for the current school year.

92.3 	Sec. 23. Minnesota Statutes 2004, section 124D.11,
92.4 	subdivision 8, is amended to read:
92.5 		Subd. 8.Start-up costs. (a) During the first two years
92.6 	of a charter school's operation, the charter school is eligible
92.7 	for aid to pay for start-up costs and additional operating costs.
92.8 	For fiscal year 2006,start-up cost aid equals the greater of:
92.9 	(1) $50,000 per charter school; or
92.10 	(2) $500 times the charter school's pupil units served for
92.11 	that year.
92.12 	(b) For fiscal year 2007 and later, start-up cost aid
92.13 	equals the greater of:
92.14 	(1) $50,000 per charter school; or 
92.15 	(2) the sum of $550 times the charter school's pupil units
92.16 	served in prekindergarten through grade 6 for that year plus
92.17 	$648 times the charter school's pupil units served in grades 7
92.18 	through 12.

92.19 	Sec. 24. [124D.4531] CAREER AND TECHNICAL LEVY.
92.20 		Subdivision 1.Career and technical levy. (a) A district
92.21 	with a career and technical program approved under this section
92.22 	for the fiscal year in which the levy is certified may levy an
92.23 	amount equal to the lesser of:
92.24 	(1) $80 times the district's average daily membership in
92.25 	grades 10 through 12 for the fiscal year in which the levy is
92.26 	certified; or 
92.27 	(2) 25 percent of approved expenditures in the fiscal year
92.28 	in which the levy is certified for the following:
92.29 	(i) salaries paid to essential, licensed personnel
92.30 	providing direct instructional services to students in that
92.31 	fiscal year for services rendered in the district's approved
92.32 	career and technical education programs;
92.33 	(ii) contracted services provided by a public or private
92.34 	agency other than a Minnesota school district or cooperative
92.35 	center under subdivision 7;
92.36 	(iii) necessary travel between instructional sites by
93.1 	licensed career and technical education personnel;
93.2 	(iv) necessary travel by licensed career and technical
93.3 	education personnel for vocational student organization
93.4 	activities held within the state for instructional purposes;
93.5 	(v) curriculum development activities that are part of a
93.6 	five-year plan for improvement based on program assessment;
93.7 	(vi) necessary travel by licensed career and technical
93.8 	education personnel for noncollegiate credit-bearing
93.9 	professional development; and 
93.10 	(vii) specialized vocational instructional supplies.
93.11 	(b) Up to ten percent of a district's career and technical
93.12 	levy may be spent on equipment purchases.  Districts using the
93.13 	career and technical levy for equipment purchases must report to
93.14 	the department on the improved learning opportunities for
93.15 	students that result from the investment in equipment.
93.16 	(c) The district must recognize the full amount of this
93.17 	levy as revenue for the fiscal year in which it is certified.
93.18 		Subd. 2.Allocation from cooperative centers and
93.19 	intermediate districts. For purposes of this section, a
93.20 	cooperative center or an intermediate district must allocate its
93.21 	approved expenditures for career and technical education
93.22 	programs among participating districts.
93.23 		Subd. 3.Levy guarantee. Notwithstanding subdivision 1,
93.24 	the career and technical education levy for a district is not
93.25 	less than the lesser of:
93.26 	(1) the district's career and technical education levy
93.27 	authority for the previous fiscal year; or 
93.28 	(2) 100 percent of the approved expenditures for career and
93.29 	technical programs included in subdivision 1, paragraph (b), for
93.30 	the fiscal year in which the levy is certified.
93.31 		Subd. 4.Compliance with rules. (a) Levy authority must
93.32 	be granted under this section only for services rendered or for
93.33 	costs incurred in career and technical education programs
93.34 	approved by the commissioner and operated in accordance with
93.35 	rules adopted by the commissioner.  The rules must not require
93.36 	any minimum number of administrative staff, any minimum period
94.1 	of coordination time or extended employment for career and
94.2 	technical education personnel, or the availability of vocational
94.3 	student activities or organizations for a career and technical
94.4 	education program to qualify for this levy.  Levy authority
94.5 	shall be granted only for services rendered and for costs
94.6 	incurred by essential, licensed personnel, or approved
94.7 	paraprofessionals who meet the requirements for licensure
94.8 	pursuant to the rules of the Minnesota Board of Teaching.
94.9 	For the purposes of this paragraph, "licensed personnel"
94.10 	means persons holding a valid career and technical license
94.11 	issued by the commissioner.  If an average of five or fewer
94.12 	secondary full-time equivalent students are enrolled per teacher
94.13 	in an approved postsecondary program at Intermediate District
94.14 	No. 287, 916, or 917, "licensed personnel" means persons holding
94.15 	a valid vocational license issued by the commissioner or the
94.16 	Board of Trustees of the Minnesota State Colleges and
94.17 	Universities.
94.18 	(b) Notwithstanding section 127A.42, the commissioner may
94.19 	modify or withdraw the program or levy authority under this
94.20 	section without proceeding under section 127A.42, at any time.
94.21 	To do so, the commissioner must determine that the program does
94.22 	not comply with rules of the Department of Education or that any
94.23 	facts concerning the program or its budget differ from the facts
94.24 	in the district's approved application.
94.25 		Subd. 5.Limit. The commissioner may reduce the levy
94.26 	under this section for a career and technical education program
94.27 	that receives funds from any other source.  A district or center
94.28 	must not receive a total amount of levy authority pursuant to
94.29 	this section which, when added to funds from other sources, will
94.30 	provide the program an amount for salaries and travel which
94.31 	exceeds 100 percent of the amount of its expenditures for
94.32 	salaries and travel in the program.
94.33 		Subd. 6.Levy for contracted services. In addition to
94.34 	the provisions of subdivisions 4 and 5, a school district or
94.35 	cooperative center may contract with a public or private agency
94.36 	other than a Minnesota school district or cooperative center for
95.1 	the provision of career and technical education services.  The
95.2 	commissioner must adopt rules relating to program approval
95.3 	procedures and criteria for these contracts and levy authority
95.4 	must be granted only for contracts approved by the
95.5 	commissioner.  The district or cooperative center contracting
95.6 	for these services must be construed to be providing the
95.7 	services.
95.8 		Subd. 7.District reports. Each district or cooperative
95.9 	center must report data to the department for all career and
95.10 	technical education programs as required by the department to
95.11 	implement the career and technical levy formula.
95.12 	
EFFECTIVE DATE. This section is effective for taxes
95.13 	payable in 2008.

95.14 	Sec. 25. Minnesota Statutes 2004, section 124D.66,
95.15 	subdivision 3, is amended to read:
95.16 		Subd. 3.Eligible services.  (a) Assurance of mastery
95.17 	programs may provide direct instructional services to an
95.18 	eligible pupil, or a group of eligible pupils, under the
95.19 	following conditions in paragraphs (b) to (d).
95.20 	(b) Instruction may be provided at one or more grade levels
95.21 	from kindergarten to grade 8 and for students in grades 9
95.22 	through 12 who were enrolled in grade 8 before the 2005-2006
95.23 	school year and have failed the basic skills tests, or were
95.24 	enrolled in grade 8 in the 2005-2006 school year and later and
95.25 	who have failed the Minnesota Comprehensive Assessments
95.26 	(MCA-IIs) in reading, mathematics, or writing as required for
95.27 	high school graduation under section 120B.02.  If an assessment
95.28 	of pupils' needs within a district demonstrates that the
95.29 	eligible pupils in grades kindergarten to grade 8 are being
95.30 	appropriately served, a district may serve eligible pupils in
95.31 	grades 9 to 12.
95.32 	(c) Instruction must be provided under the supervision of
95.33 	the eligible pupil's regular classroom teacher.  Instruction may
95.34 	be provided by the eligible pupil's classroom teacher, by
95.35 	another teacher, by a team of teachers, or by an education
95.36 	assistant or aide.  A special education teacher may provide
96.1 	instruction, but instruction that is provided under this section
96.2 	is not eligible for aid under section 125A.76.
96.3 	(d) The instruction that is provided must differ from the
96.4 	initial instruction the pupil received in the regular classroom
96.5 	setting.  The instruction may differ by presenting different
96.6 	curriculum than was initially presented in the regular classroom
96.7 	or by presenting the same curriculum:
96.8 	(1) at a different rate or in a different sequence than it
96.9 	was initially presented;
96.10 	(2) using different teaching methods or techniques than
96.11 	were used initially; or
96.12 	(3) using different instructional materials than were used
96.13 	initially.

96.14 	Sec. 26. Minnesota Statutes 2004, section 124D.83,
96.15 	subdivision 2, is amended to read:
96.16 		Subd. 2.Revenue amount.  An American Indian-controlled
96.17 	tribal contract or grant school that is located on a reservation
96.18 	within the state and that complies with the requirements in
96.19 	subdivision 1 is eligible to receive tribal contract or grant
96.20 	school aid.  The amount of aid is derived by:
96.21 	(1) multiplying the formula allowance under section
96.22 	126C.10, subdivision 2, less $170,$5,425 times the difference
96.23 	between (i) the resident pupil units as defined in section
96.24 	126C.05, subdivision 6, in average daily membership, excluding
96.25 	section 126C.05, subdivision 13, and (ii) the number of pupils
96.26 	for the current school year, weighted according to section
96.27 	126C.05, subdivision 1, receiving benefits under section 123B.42
96.28 	or 123B.44 or for which the school is receiving reimbursement
96.29 	under section 124D.69;
96.30 	(2) adding to the result in clause (1) an amount equal to
96.31 	the product of the formula allowance under section 126C.10,
96.32 	subdivision 2, less $300 $4,475 times the tribal contract
96.33 	compensation revenue pupil units;
96.34 	(3) subtracting from the result in clause (2) the amount of
96.35 	money allotted to the school by the federal government through
96.36 	Indian School Equalization Program of the Bureau of Indian
97.1 	Affairs, according to Code of Federal Regulations, title 25,
97.2 	part 39, subparts A to E, for the basic program as defined by
97.3 	section 39.11, paragraph (b), for the base rate as applied to
97.4 	kindergarten through twelfth grade, excluding small school
97.5 	adjustments and additional weighting, but not money allotted
97.6 	through subparts F to L for contingency funds, school board
97.7 	training, student training, interim maintenance and minor
97.8 	repair, interim administration cost, prekindergarten, and
97.9 	operation and maintenance, and the amount of money that is
97.10 	received according to section 124D.69;
97.11 	(4) dividing the result in clause (3) by the sum of the
97.12 	resident pupil units in average daily membership, excluding
97.13 	section 126C.05, subdivision 13, plus the tribal contract
97.14 	compensation revenue pupil units; and
97.15 	(5) multiplying the sum of the resident pupil units,
97.16 	including section 126C.05, subdivision 13, in average daily
97.17 	membership plus the tribal contract compensation revenue pupil
97.18 	units by the lesser of $1,500 $1,676 or the result in clause (4).
97.19 	
EFFECTIVE DATE. This section is effective for revenue for
97.20 	fiscal year 2007.

97.21 	Sec. 27. Minnesota Statutes 2004, section 124D.86,
97.22 	subdivision 3, is amended to read:
97.23 		Subd. 3.Integration revenue.  Integration revenue equals
97.24 	the following amounts:
97.25 	(1) for Independent School District No. 709, Duluth, $206
97.26 	times the adjusted pupil units for the school year fiscal year
97.27 	2006 and $249 times the adjusted pupil units for fiscal year
97.28 	2007 and later;
97.29 	(2) for Independent School District No. 625, St. Paul, $445
97.30 	times the adjusted pupil units for the school year fiscal year
97.31 	2006 and $534 times the adjusted pupil units for fiscal year
97.32 	2007 and later;
97.33 	(3) for Special School District No. 1, Minneapolis, the sum
97.34 	of $445 times the adjusted pupil units for the school year and
97.35 	an additional $35 times the adjusted pupil units for the school
97.36 	year that is provided entirely through a local levy for fiscal
98.1 	year 2006, and the sum of $534 times the adjusted pupil units
98.2 	and an additional $43 times the adjusted pupil units that is
98.3 	provided entirely through a local levy for fiscal year 2007 and
98.4 	later;
98.5 	(4) for a district not listed in clause (1), (2), or (3),
98.6 	that must implement a plan under Minnesota Rules, parts
98.7 	3535.0100 to 3535.0180, where the district's enrollment of
98.8 	protected students, as defined under Minnesota Rules, part
98.9 	3535.0110, exceeds 15 percent, the lesser of (i) the actual cost
98.10 	of implementing the plan during the fiscal year minus the aid
98.11 	received under subdivision 6, or (ii) $129 times the adjusted
98.12 	pupil units for the school year fiscal year 2006 and $156 times
98.13 	the adjusted pupil units for fiscal year 2007 and later;
98.14 	(5) for a district not listed in clause (1), (2), (3), or
98.15 	(4), that is required to implement a plan according to the
98.16 	requirements of Minnesota Rules, parts 3535.0100 to 3535.0180,
98.17 	the lesser of
98.18 	(i) the actual cost of implementing the plan during the
98.19 	fiscal year minus the aid received under subdivision 6, or
98.20 	(ii) $92 times the adjusted pupil units for the school year 
98.21 	fiscal year 2006 and $111 times the adjusted pupil units for
98.22 	fiscal year 2007 and later.
98.23 	Any money received by districts in clauses (1) to (3) which
98.24 	exceeds the amount received in fiscal year 2000 shall be subject
98.25 	to the budget requirements in subdivision 1a; and
98.26 	(6) for a member district of a multidistrict integration
98.27 	collaborative that files a plan with the commissioner, but is
98.28 	not contiguous to a racially isolated district, integration
98.29 	revenue equals the amount defined in clause (5).

98.30 	Sec. 28. Minnesota Statutes 2004, section 124D.88,
98.31 	subdivision 4, is amended to read:
98.32 		Subd. 4.Start-up costs.  During the first two years of a
98.33 	metropolitan magnet school's operation, the school is eligible
98.34 	for aid to pay for start-up costs and additional operating
98.35 	costs. For fiscal year 2006,start-up cost aid equals $500
98.36 	times the magnet school's pupil units served for that year. For
99.1 	fiscal year 2007 and later, start-up cost aid equals $569 times
99.2 	the magnet school's pupil units served for that year.

99.3 	Sec. 29. [124D.98] SCHOLARSHIP GRANTING ORGANIZATIONS.
99.4 		Subdivision 1.Definitions. (a) For the purposes of this
99.5 	section the following terms have the meanings given.
99.6 	(b) "Federal poverty guidelines" mean the poverty
99.7 	guidelines for the 48 contiguous states used by the United
99.8 	States Department of Health and Human Services as most recently
99.9 	published in the Federal Register.
99.10 	(c) "Liability for tax" means the tax imposed under chapter
99.11 	290 for the taxable year reduced by the sum of the nonrefundable
99.12 	credits allowed under chapter 290.
99.13 	(d) "Qualified school" means an elementary or secondary
99.14 	nonpublic school, not including home schools, wherein a resident
99.15 	of this state may legally fulfill the state's compulsory
99.16 	attendance laws, which is accredited by an education accrediting
99.17 	agency recognized by the Minnesota Nonpublic Education Council
99.18 	under section 123B.445, paragraph (a), which is not operated for
99.19 	profit, and which adheres to the provisions of the Civil Rights
99.20 	Act of 1964 and chapter 363A.
99.21 	(e) "Scholarship granting organization" or "SGO" means a
99.22 	charitable organization that is exempt from federal taxation
99.23 	under section 501(c)(3) of the Internal Revenue Code, is
99.24 	registered with the attorney general's office, and is certified
99.25 	by the commissioner of education as meeting the criteria of this
99.26 	section.
99.27 		Subd. 2.Commissioner duties. The commissioner of
99.28 	education:
99.29 	(1) must maintain a list of SGOs;
99.30 	(2) must make the list available on the Department of
99.31 	Education's Web site and by other means;
99.32 	(3) must develop an application process for SGOs to be
99.33 	certified by the Department of Education under this section;
99.34 	(4) may remove an organization from the list of qualifying
99.35 	SGOs, after notifying the organization and providing an
99.36 	opportunity for a public hearing, if the organization has a
100.1 	history of financial mismanagement or repeated violations of the
100.2 	law;
100.3 	(5) must develop a process for SGOs to annually report to
100.4 	the department as described under this section; and 
100.5 	(6) may audit the scholarship funds of an SGO.
100.6 		Subd. 3.Qualifications of an sgo. To qualify as a
100.7 	scholarship granting organization, the charitable organization:
100.8 	(1) must allocate at least 80 percent of its annual revenue
100.9 	from contributions claimed for credit under section 290.0676,
100.10 	subdivision 1, for education scholarship grants to children to
100.11 	allow them to attend any qualified school of their parents'
100.12 	choice;
100.13 	(2) may only award scholarship grants funded by
100.14 	contributions claimed for credit under section 290.0676,
100.15 	subdivision 1, to students who are residents of Minnesota and
100.16 	are from families with incomes equal to or less than 200 percent
100.17 	of the federal poverty guidelines;
100.18 	(3) must not restrict the availability of scholarships to
100.19 	students of one school;
100.20 	(4) may not charge a fee of any kind to students under
100.21 	consideration for a scholarship;
100.22 	(5) may only award scholarship grants funded by
100.23 	contributions claimed for the tax credit to students who are not
100.24 	enrolled in a nonpublic school during the school year in which
100.25 	the students first apply for scholarship grants from an SGO;
100.26 	(6) must require parents of a child awarded a scholarship
100.27 	grant funded by contributions under the tax credit program to
100.28 	sign a written notification authorizing their child's school to
100.29 	release data about their child's performance on state
100.30 	assessments, other standardized tests, or both to the SGO and
100.31 	the department.  The SGO and department would be required to
100.32 	protect the privacy of individual student data and to report
100.33 	academic achievement data for scholarship recipients to the
100.34 	public only in the aggregate;
100.35 	(7) must require a private school receiving payment of
100.36 	tuition through a scholarship grant funded by contributions
101.1 	under the tax credit program and awarded by an SGO to an
101.2 	enrolled student of the school to sign an agreement that it:
101.3 	(i) will provide data about the student's performance on
101.4 	state assessments, other standardized tests, or both to the SGO
101.5 	and department once it has received written authorization from
101.6 	the student's parents; and 
101.7 	(ii) will not use different admissions standards for a
101.8 	student with a scholarship grant from an SGO;
101.9 	(8) must agree to annually report to the department:
101.10 	(i) the number of students awarded scholarship grants
101.11 	funded by contributions under the tax credit program;
101.12 	(ii) the total amount of scholarship grant dollars awarded
101.13 	from contributions under the tax credit program;
101.14 	(iii) the total number of schools attended by scholarship
101.15 	grant recipients;
101.16 	(iv) the total amount of contributions received under the
101.17 	tax credit program; and 
101.18 	(v) the percentage of contributions received under the tax
101.19 	credit program that was provided as scholarship grants to
101.20 	families;
101.21 	(9) must provide the department with the same annual report
101.22 	that the organization is required to provide the attorney
101.23 	general's office under section 309.53;
101.24 	(10) may only award scholarship grants funded by
101.25 	contributions claimed for the tax credit to students entering
101.26 	grades 3 through 11 who meet the criteria for being academically
101.27 	at risk as defined in 124D.68, subdivision 2, paragraph (a),
101.28 	clause (1) or (2) during the school year in which they first
101.29 	apply for a scholarship grant from an SGO.  A student entering
101.30 	grade 12 may receive a scholarship grant if the student received
101.31 	a scholarship grant in grade 11; and 
101.32 	(11) may only award scholarship grants funded by
101.33 	contributions claimed for the tax credit that will equal 100
101.34 	percent of the tuition and fees charged by a qualified school.
101.35 	The maximum scholarship grant that may be awarded by an SGO is
101.36 	$5,000 for students entering grades 3 through 8, and $10,000 for
102.1 	students entering grades 9 through 12.
102.2 		Subd. 4.Application for credit certificate. The
102.3 	corporation shall apply to the Department of Education for a tax
102.4 	credit certificate.  A corporation shall receive a tax credit
102.5 	certificate under section 290.0676 if the scholarship granting
102.6 	organization (SGO) appears on the list of qualifying SGOs
102.7 	maintained by the Department of Education.  Tax credit
102.8 	certificates under this section shall be made available by the
102.9 	Department of Education on a first-come, first-served basis
102.10 	until the maximum statewide credit amount has been reached.  The
102.11 	statewide credit maximum amount is $0 in fiscal year 2006 and
102.12 	$3,500,000 in fiscal year 2007.  A contribution by a corporation
102.13 	to a SGO shall be made no later than 60 days following written
102.14 	notification of the approval of an application.  The
102.15 	commissioner of education shall issue the tax credit certificate
102.16 	in the amount of one-half of the amount contributed to the SGO
102.17 	after the corporation has made the contribution to the SGO.  The
102.18 	commissioner of education shall not issue a tax credit
102.19 	certificate for an amount greater than $100,000.
102.20 	
EFFECTIVE DATE. This section is effective for taxable
102.21 	years beginning after December 31, 2005.

102.22 	Sec. 30. Minnesota Statutes 2004, section 126C.457, is
102.23 	amended to read:
102.24 	126C.457 CAREER AND TECHNICAL LEVY.
102.25 	For taxes payable in 2006 and 2007,a school district may
102.26 	levy an amount equal to the greater of (1) $10,000, or (2) the
102.27 	district's fiscal year 2001 entitlement for career and technical
102.28 	aid under Minnesota Statutes 2000, section 124D.453.  The
102.29 	district must recognize the full amount of this levy as revenue
102.30 	for the fiscal year in which it is certified.  Revenue received
102.31 	under this section must be reserved and used only for career and
102.32 	technical programs.

102.33 	Sec. 31. Minnesota Statutes 2004, section 127A.47,
102.34 	subdivision 8, is amended to read:
102.35 		Subd. 8.Charter schools.  (a) The general education aid
102.36 	for districts must be adjusted for each pupil attending a
103.1 	charter school under section 124D.10.  The adjustments must be
103.2 	made according to this subdivision.
103.3 	(b) For fiscal year 2006,general education aid paid to a
103.4 	district in which a charter school not providing transportation
103.5 	according to section 124D.10, subdivision 16, is located must be
103.6 	increased by an amount equal to the sum of:
103.7 	(1) the product of: (1) (i) the sum of an amount equal to
103.8 	the product of the formula allowance according to section
103.9 	126C.10, subdivision 2, times .0485, plus the transportation
103.10 	sparsity allowance for the district; times (2) (ii) the adjusted
103.11 	marginal cost pupil units attributable to the pupil; plus 
103.12 	(2) the product of $228 times the extended time marginal
103.13 	cost pupil units attributable to the pupil.
103.14 	(c) For fiscal year 2007 and later, general education aid
103.15 	paid to a district in which a charter school not providing
103.16 	transportation according to section 124D.10, subdivision 16, is
103.17 	located must be increased by an amount equal to the sum of:
103.18 	(1) the product of:  (i) the sum of an amount equal to the
103.19 	product of the transportation allowance according to section
103.20 	126C.10, subdivision 17, times .0458, plus the transportation
103.21 	sparsity allowance for the district; times (ii) the adjusted
103.22 	pupil units attributable to the pupil; plus 
103.23 	(2) the product of $266 times the extended time pupil units
103.24 	attributable to the pupil.

103.25 	Sec. 32. Minnesota Statutes 2004, section 171.04,
103.26 	subdivision 1, is amended to read:
103.27 		Subdivision 1.Persons not eligible.  The department
103.28 	shall not issue a driver's license:
103.29 	(1) to any person under 18 years unless:
103.30 	(i) the applicant is 16 or 17 years of age and has a
103.31 	previously issued valid license from another state or country or
103.32 	the applicant has, for the 12 consecutive months preceding
103.33 	application, held a provisional license and during that time has
103.34 	incurred (A) no conviction for a violation of section 169A.20,
103.35 	169A.33, 169A.35, or sections 169A.50 to 169A.53, (B) no
103.36 	conviction for a crash-related moving violation, and (C) not
104.1 	more than one conviction for a moving violation that is not
104.2 	crash related.  "Moving violation" means a violation of a
104.3 	traffic regulation but does not include a parking violation,
104.4 	vehicle equipment violation, or warning citation;
104.5 	(ii) the application for a license is approved by (A)
104.6 	either parent when both reside in the same household as the
104.7 	minor applicant or, if otherwise, then (B) the parent or spouse
104.8 	of the parent having custody or, in the event there is no court
104.9 	order for custody, then (C) the parent or spouse of the parent
104.10 	with whom the minor is living or, if subitems (A) to (C) do not
104.11 	apply, then (D) the guardian having custody of the minor or, in
104.12 	the event a person under the age of 18 has no living father,
104.13 	mother, or guardian, or is married or otherwise legally
104.14 	emancipated, then (E) the minor's adult spouse, adult close
104.15 	family member, or adult employer; provided, that the approval
104.16 	required by this item contains a verification of the age of the
104.17 	applicant and the identity of the parent, guardian, adult
104.18 	spouse, adult close family member, or adult employer; and 
104.19 	(iii) the applicant presents a certification by the person
104.20 	who approves the application under item (ii), stating that the
104.21 	applicant has driven a motor vehicle accompanied by and under
104.22 	supervision of a licensed driver at least 21 years of age for at
104.23 	least ten hours during the period of provisional licensure; and 
104.24 	(iv) the applicant presents a certificate of school
104.25 	attendance under section 171.056, or the school board, SAAP
104.26 	board, or charter school board has submitted a certificate that
104.27 	it has waived the attendance requirement for the driving
104.28 	privilege for its students in accordance with section 120A.23;
104.29 	(2) to any person who is 18 years of age or younger, unless
104.30 	the person has applied for, been issued, and possessed the
104.31 	appropriate instruction permit for a minimum of six months, and,
104.32 	with respect to a person under 18 years of age, a provisional
104.33 	license for a minimum of 12 months;
104.34 	(3) to any person who is 19 years of age or older, unless
104.35 	that person has applied for, been issued, and possessed the
104.36 	appropriate instruction permit for a minimum of three months;
105.1 	(4) to any person whose license has been suspended during
105.2 	the period of suspension except that a suspended license may be
105.3 	reinstated during the period of suspension upon the licensee
105.4 	furnishing proof of financial responsibility in the same manner
105.5 	as provided in the Minnesota No-Fault Automobile Insurance Act;
105.6 	(5) to any person whose license has been revoked except
105.7 	upon furnishing proof of financial responsibility in the same
105.8 	manner as provided in the Minnesota No-Fault Automobile
105.9 	Insurance Act and if otherwise qualified;
105.10 	(6) to any drug-dependent person, as defined in section
105.11 	254A.02, subdivision 5;
105.12 	(7) to any person who has been adjudged legally incompetent
105.13 	by reason of mental illness, mental deficiency, or inebriation,
105.14 	and has not been restored to capacity, unless the department is
105.15 	satisfied that the person is competent to operate a motor
105.16 	vehicle with safety to persons or property;
105.17 	(8) to any person who is required by this chapter to take a
105.18 	vision, knowledge, or road examination, unless the person has
105.19 	successfully passed the examination.  An applicant who fails
105.20 	four road tests must complete a minimum of six hours of
105.21 	behind-the-wheel instruction with an approved instructor before
105.22 	taking the road test again;
105.23 	(9) to any person who is required under the Minnesota
105.24 	No-Fault Automobile Insurance Act to deposit proof of financial
105.25 	responsibility and who has not deposited the proof;
105.26 	(10) to any person when the commissioner has good cause to
105.27 	believe that the operation of a motor vehicle on the highways by
105.28 	the person would be inimical to public safety or welfare;
105.29 	(11) to any person when, in the opinion of the
105.30 	commissioner, the person is afflicted with or suffering from a
105.31 	physical or mental disability or disease that will affect the
105.32 	person in a manner as to prevent the person from exercising
105.33 	reasonable and ordinary control over a motor vehicle while
105.34 	operating it upon the highways;
105.35 	(12) to a person who is unable to read and understand
105.36 	official signs regulating, warning, and directing traffic;
106.1 	(13) to a child for whom a court has ordered denial of
106.2 	driving privileges under section 260C.201, subdivision 1, or
106.3 	260B.235, subdivision 5, until the period of denial is
106.4 	completed; or
106.5 	(14) to any person whose license has been canceled, during
106.6 	the period of cancellation.
106.7 	
EFFECTIVE DATE. This section is effective October 1,
106.8 	2005, and applies to all students under 18 years of age
106.9 	possessing or applying for a driver's instruction permit or
106.10 	provisional license on or after that date.

106.11 	Sec. 33. Minnesota Statutes 2004, section 171.05,
106.12 	subdivision 2, is amended to read:
106.13 		Subd. 2.Person less than 18 years of age.  (a)
106.14 	Notwithstanding any provision in subdivision 1 to the contrary,
106.15 	the department may issue an instruction permit to an applicant
106.16 	who is 15, 16, or 17 years of age and who:
106.17 	(1) has completed a course of driver education in another
106.18 	state, has a previously issued valid license from another state,
106.19 	or is enrolled in either:
106.20 	(i) a public, private, or commercial driver education
106.21 	program that is approved by the commissioner of public safety
106.22 	and that includes classroom and behind-the-wheel training; or
106.23 	(ii) an approved behind-the-wheel driver education program
106.24 	when the student is receiving full-time instruction in a home
106.25 	school within the meaning of sections 120A.22 and 120A.24, the
106.26 	student is working toward a homeschool diploma, the student's
106.27 	status as a homeschool student has been certified by the
106.28 	superintendent of the school district in which the student
106.29 	resides, and the student is taking home-classroom driver
106.30 	training with classroom materials approved by the commissioner
106.31 	of public safety;
106.32 	(2) has completed the classroom phase of instruction in the
106.33 	driver education program;
106.34 	(3) has passed a test of the applicant's eyesight;
106.35 	(4) has passed a department-administered test of the
106.36 	applicant's knowledge of traffic laws;
107.1 	(5) has completed the required application, which must be
107.2 	approved by (i) either parent when both reside in the same
107.3 	household as the minor applicant or, if otherwise, then (ii) the
107.4 	parent or spouse of the parent having custody or, in the event
107.5 	there is no court order for custody, then (iii) the parent or
107.6 	spouse of the parent with whom the minor is living or, if items
107.7 	(i) to (iii) do not apply, then (iv) the guardian having custody
107.8 	of the minor or, in the event a person under the age of 18 has
107.9 	no living father, mother, or guardian, or is married or
107.10 	otherwise legally emancipated, then (v) the applicant's adult
107.11 	spouse, adult close family member, or adult employer; provided,
107.12 	that the approval required by this clause contains a
107.13 	verification of the age of the applicant and the identity of the
107.14 	parent, guardian, adult spouse, adult close family member, or
107.15 	adult employer; and 
107.16 	(6) presents a certificate of school attendance under
107.17 	section 171.056, or the school board, SAAP board, or charter
107.18 	school board has submitted a certificate that it has waived the
107.19 	attendance requirement for the driving privilege for its
107.20 	students in accordance with section 120A.23; and 
107.21 	(7) has paid the fee required in section 171.06,
107.22 	subdivision 2.
107.23 	(b) The instruction permit is valid for one year from the
107.24 	date of application and may be renewed upon payment of a fee
107.25 	equal to the fee for issuance of an instruction permit under
107.26 	section 171.06, subdivision 2.
107.27 	
EFFECTIVE DATE. This section is effective October 1,
107.28 	2005, and applies to all students under 18 years of age
107.29 	possessing or applying for a driver's instruction permit on or
107.30 	after that date.

107.31 	Sec. 34. Minnesota Statutes 2004, section 171.05,
107.32 	subdivision 2b, is amended to read:
107.33 		Subd. 2b.Instruction permit use by person under age 18.
 107.34 	(a) This subdivision applies to persons who have applied for and
107.35 	received an instruction permit under subdivision 2.
107.36 	(b) The permit holder may, with the permit in possession,
108.1 	operate a motor vehicle, but must be accompanied by and be under
108.2 	the supervision of a certified driver education instructor, the
108.3 	permit holder's parent or guardian, or another licensed driver
108.4 	age 21 or older.  The supervisor must occupy the seat beside the
108.5 	permit holder.
108.6 	(c) The permit holder may operate a motor vehicle only when
108.7 	every occupant under the age of 18 has a seat belt or child
108.8 	passenger restraint system properly fastened.  A person who
108.9 	violates this paragraph is subject to a fine of $25.  A peace
108.10 	officer may not issue a citation for a violation of this
108.11 	paragraph unless the officer lawfully stopped or detained the
108.12 	driver of the motor vehicle for a moving violation as defined in
108.13 	section 171.04, subdivision 1.  The commissioner shall not
108.14 	record a violation of this paragraph on a person's driving
108.15 	record.
108.16 	(d) The permit holder must maintain a driving record free
108.17 	of convictions for moving violations, as defined in section
108.18 	171.04, subdivision 1, and free of convictions for violation of
108.19 	section 169A.20, 169A.33, 169A.35, or sections 169A.50 to
108.20 	169A.53.  If the permit holder drives a motor vehicle in
108.21 	violation of the law, the commissioner shall suspend, cancel, or
108.22 	revoke the permit in accordance with the statutory section
108.23 	violated.
108.24 	(e) The permit holder must comply with the school
108.25 	attendance requirement under section 171.056, except when the
108.26 	attendance requirement is waived under section 120A.23.  If the
108.27 	permit holder does not attend school as required, the
108.28 	commissioner shall cancel the permit according to section
108.29 	171.056.
108.30 	
EFFECTIVE DATE. This section is effective October 1,
108.31 	2005, and applies to all students under 18 years of age
108.32 	possessing or applying for a driver's instruction permit on or
108.33 	after that date.

108.34 	Sec. 35. Minnesota Statutes 2004, section 171.05,
108.35 	subdivision 3, is amended to read:
108.36 		Subd. 3.Motorized bicycle.  Notwithstanding any
109.1 	provision in subdivision 1 to the contrary, the department, upon
109.2 	application and payment of the fee prescribed in section 171.02,
109.3 	subdivision 3, may issue a motorized bicycle instruction permit
109.4 	to an applicant who is 15 years of age and who has successfully
109.5 	completed the written portion of the examination prescribed by
109.6 	the commissioner.  The holder of this instruction permit who has
109.7 	the permit in possession may operate a motorized bicycle within
109.8 	one mile of the holder's residence for the purpose of practicing
109.9 	to take the operator portion of the examination prescribed by
109.10 	the commissioner, and who presents a school attendance
109.11 	certificate under section 171.056, or the school board, SAAP
109.12 	board, or charter school board has submitted a certificate that
109.13 	it has waived the attendance requirement for the driving
109.14 	privilege for its students in accordance with section 120A.23.
109.15 	
EFFECTIVE DATE. This section is effective October 1,
109.16 	2005, and applies to all students under 18 years of age
109.17 	possessing or applying for a motorized bicycle instruction
109.18 	permit on or after that date.

109.19 	Sec. 36. [171.056] SCHOOL ATTENDANCE REQUIREMENT FOR
109.20 	DRIVER'S INSTRUCTION PERMIT, MOTORIZED BICYCLE PERMIT, AND
109.21 	PROVISIONAL LICENSE.
109.22 	Subdivision 1.[ISSUANCE OR RENEWAL OF DRIVER'S
109.23 	INSTRUCTION PERMIT, MOTORIZED BICYCLE PERMIT, OR PROVISIONAL
109.24 	LICENSE.] (a) Notwithstanding any law to the contrary, except
109.25 	when the attendance requirement is waived under section 120A.23,
109.26 	school attendance is a requirement for the issuance of a new
109.27 	driver's instruction permit, motorized bicycle permit, or
109.28 	provisional license or the renewal of a permit to a student
109.29 	under 18 years of age.  The student meets the school attendance
109.30 	requirement when the student:
109.31 	(1) has a high school diploma or general education
109.32 	development certificate (GED);
109.33 	(2) has withdrawn from school under section 120A.22,
109.34 	subdivision 8; or 
109.35 	(3)(i) is enrolled and attending a public school, SAAP, or
109.36 	charter school; is not truant under section 260C.007,
110.1 	subdivision 19; or is receiving alternative educational services
110.2 	during the pendency of a school expulsion, or is homeschooled or
110.3 	attending a nonpublic school; and 
110.4 	(ii) has conformed to attendance laws, rules, and policies
110.5 	of the student's school, school district, and the state.
110.6 	(b) A student under 18 years of age who applies for a
110.7 	motorized bicycle permit, instruction permit, or provisional
110.8 	license must submit information in the manner and format
110.9 	prescribed by the Department of Public Safety certifying that
110.10 	the student has met the requirement for the permit or license
110.11 	under paragraph (a).
110.12 	(c) As set forth in section 120A.23, a school principal or
110.13 	other administrator at the student's school must sign a written
110.14 	certificate form that verifies the student does not meet the
110.15 	definition of a habitual truant as defined in section 260C.007,
110.16 	subdivision 19, for the last grading period and the student's
110.17 	current grading period.  The Department of Public Safety shall
110.18 	develop a certificate form for the school administrator to
110.19 	complete that includes the student's name, date of birth, and
110.20 	address.  For any data not included in the school district,
110.21 	SAAP, or charter school definition of directory information, the
110.22 	school district, SAAP, or charter school must obtain the
110.23 	informed consent of the parent or guardian to release data to
110.24 	the Department of Public Safety.  The school district, SAAP, or
110.25 	charter school must include in the student attendance policy it
110.26 	distributes to the parent or guardian and student that it will
110.27 	request a parent or guardian to sign an informed consent form to
110.28 	transfer directory information about the student to the
110.29 	department.  The Department of Public Safety shall develop a
110.30 	certificate form for the school administrator to complete if
110.31 	that school district has opted out of the attendance requirement
110.32 	for driving privileges.
110.33 		Subd. 2.Cancellation of permit or license. (a)
110.34 	Notwithstanding any law to the contrary, the Department of
110.35 	Public Safety shall cancel the motorized bicycle permit,
110.36 	instruction permit, or provisional license of a student under 18
111.1 	years of age when a school administrator notifies the department
111.2 	in writing that the student:
111.3 	(1) meets the definition of a habitual truant under section
111.4 	260C.007, subdivision 19, has not withdrawn from school under
111.5 	section 120A.22, subdivision 8, is not being homeschooled or
111.6 	attending a nonpublic school, and has not obtained a high school
111.7 	diploma or general education development certificate (GED); or 
111.8 	(2) has been expelled from a public or charter school, is
111.9 	not enrolled and attending school at another public or nonpublic
111.10 	school, including being homeschooled, and has refused to
111.11 	participate in the alternative educational services offered by
111.12 	the district, as required by section 121A.55, during the
111.13 	pendency of the expulsion.  The school district, SAAP, or
111.14 	charter school must obtain the informed consent of the parent or
111.15 	guardian to release this data to the department.
111.16 	(b) Notwithstanding section 171.14, or other law to the
111.17 	contrary, the Department of Public Safety shall cancel the
111.18 	permit or license of a student under 18 years of age until the
111.19 	earliest of:
111.20 	(1) the student becomes 18 years of age;
111.21 	(2) the student withdraws from school under section
111.22 	120A.22;
111.23 	(3) the student obtained a high school diploma or general
111.24 	education development certificate (GED);
111.25 	(4) the student has withdrawn from the student's prior
111.26 	public school and is now being homeschooled or attending a
111.27 	nonpublic school; or 
111.28 	(5) a school administrator notifies the department to
111.29 	reinstate the student's permit or license because the student
111.30 	attended school or participated in alternative educational
111.31 	services for 30 consecutive school days without an unexcused
111.32 	absence immediately following the date the department issued its
111.33 	cancellation notice.
111.34 	(c) If a school district, SAAP, or charter school chooses
111.35 	to send truancy data to the Department of Public Safety each
111.36 	grading period, it shall notify:
112.1 	(1) the Department of Public Safety electronically in a
112.2 	manner and format prescribed by the department that includes the
112.3 	student's name, date of birth, and address.  For any data not
112.4 	included in the school district, SAAP, or charter school
112.5 	definition of directory information, the school district, SAAP,
112.6 	or charter school must obtain the informed consent of the parent
112.7 	or guardian to release the data to the department; and 
112.8 	(2) the student and the student's parent or legal guardian,
112.9 	by first class mail or other reasonable means, that the
112.10 	student's motorized bicycle permit, instruction permit, or
112.11 	provisional license may be canceled and the student may request
112.12 	a hardship waiver from the Department of Public Safety.  The
112.13 	Department of Public Safety may consult with the student's
112.14 	school to obtain relevant information prior to issuing its
112.15 	hardship waiver determination, based upon the provisions in
112.16 	section 171.30.
112.17 	The Department of Public Safety shall notify the student
112.18 	and the student's parent or guardian in writing that the
112.19 	student's permit or license has been canceled under section
112.20 	171.14, except that the cancellation shall begin ten calendar
112.21 	days from the date the written notice is issued.  The notice
112.22 	shall provide notification to the student and the student's
112.23 	parent or guardian of the student's right to seek a hardship
112.24 	waiver and the procedure and timelines involved for that
112.25 	proceeding.
112.26 	(d) When a student satisfies a requirement for reinstating
112.27 	driving privileges under paragraph (b), a school administrator
112.28 	must electronically certify to the department, in the manner and
112.29 	format the department prescribes, that the student has satisfied
112.30 	a requirement under paragraph (b).  The school district, SAAP,
112.31 	or charter school must obtain the informed consent of the parent
112.32 	or guardian to release this data to the department.
112.33 	Subd. 3.[EXPUNGEMENT OF DRIVER'S LICENSE RECORD.] Once
112.34 	the student turns 18 years of age, the student may submit a
112.35 	request to have the student's truancy data and any record of a
112.36 	refusal to issue or cancellation of a provisional or driver's
113.1 	license based upon a student's truancy expunged from the
113.2 	Department of Public Safety motor vehicle records.  Upon proof
113.3 	of the student's age, the department must expunge the student's
113.4 	record.

113.5 	Sec. 37. Minnesota Statutes 2004, section 171.30,
113.6 	subdivision 1, is amended to read:
113.7 		Subdivision 1.Conditions of issuance.  (a) In any case
113.8 	where a person's license has been suspended under section
113.9 	171.056,171.18, 171.173, or 171.186, or revoked under section
113.10 	169.792, 169.797, 169A.52, 169A.54, 171.17, or 171.172, the
113.11 	commissioner may issue a limited license to the driver including
113.12 	under the following conditions:
113.13 	(1) if the driver's livelihood or attendance at a chemical
113.14 	dependency treatment or counseling program depends upon the use
113.15 	of the driver's license;
113.16 	(2) if the use of a driver's license by a homemaker is
113.17 	necessary to prevent the substantial disruption of the
113.18 	education, medical, or nutritional needs of the family of the
113.19 	homemaker; or 
113.20 	(3) if attendance at a postsecondary institution of
113.21 	education, or attendance at a public school by an enrolled
113.22 	student of that institution or public school depends upon the
113.23 	use of the driver's license; or 
113.24 	(4) if the use of a driver's license by a minor is
113.25 	necessary for the employment of the minor or the minor's family,
113.26 	or to prevent the substantial disruption of the educational,
113.27 	nutritional, or medical needs of the minor or the minor's family.
113.28 	(b) The commissioner in issuing a limited license may
113.29 	impose such conditions and limitations as in the commissioner's
113.30 	judgment are necessary to the interests of the public safety and
113.31 	welfare including reexamination as to the driver's
113.32 	qualifications.  The license may be limited to the operation of
113.33 	particular vehicles, to particular classes and times of
113.34 	operation, and to particular conditions of traffic.  The
113.35 	commissioner may require that an applicant for a limited license
113.36 	affirmatively demonstrate that use of public transportation or
114.1 	carpooling as an alternative to a limited license would be a
114.2 	significant hardship.
114.3 	(c) For purposes of this subdivision,:
114.4 	(1) "homemaker" refers to the person primarily performing
114.5 	the domestic tasks in a household of residents consisting of at
114.6 	least the person and the person's dependent child or other
114.7 	dependents; and 
114.8 	(2) "minor" refers to a student under the age of 18 who has
114.9 	not withdrawn from public school.
114.10 	(d) The limited license issued by the commissioner shall
114.11 	clearly indicate the limitations imposed and the driver
114.12 	operating under the limited license shall have the license in
114.13 	possession at all times when operating as a driver.
114.14 	(e) In determining whether to issue a limited license, the
114.15 	commissioner shall consider the number and the seriousness of
114.16 	prior convictions and the entire driving record of the driver
114.17 	and shall consider the number of miles driven by the driver
114.18 	annually.
114.19 	(f) If the person's driver's license or permit to drive has
114.20 	been revoked under section 169.792 or 169.797, the commissioner
114.21 	may only issue a limited license to the person after the person
114.22 	has presented an insurance identification card, policy, or
114.23 	written statement indicating that the driver or owner has
114.24 	insurance coverage satisfactory to the commissioner of public
114.25 	safety.  The commissioner of public safety may require the
114.26 	insurance identification card provided to satisfy this
114.27 	subdivision be certified by the insurance company to be
114.28 	noncancelable for a period not to exceed 12 months.
114.29 	(g) The limited license issued by the commissioner to a
114.30 	person under section 171.186, subdivision 4, must expire 90 days
114.31 	after the date it is issued.  The commissioner must not issue a
114.32 	limited license to a person who previously has been issued a
114.33 	limited license under section 171.186, subdivision 4.
114.34 	
EFFECTIVE DATE. This section is effective October 1, 2005.

114.35 	Sec. 38. Minnesota Statutes 2004, section 260A.03, is
114.36 	amended to read:
115.1 	260A.03 NOTICE TO PARENT OR GUARDIAN WHEN CHILD IS A
115.2 	CONTINUING TRUANT.
115.3 	Upon a child's initial classification as a continuing
115.4 	truant, the school attendance officer or other designated school
115.5 	official shall notify the child's parent or legal guardian, by
115.6 	first-class mail or other reasonable means, of the following:
115.7 	(1) that the child is truant;
115.8 	(2) that the parent or guardian should notify the school if
115.9 	there is a valid excuse for the child's absences;
115.10 	(3) that the parent or guardian is obligated to compel the
115.11 	attendance of the child at school pursuant to section 120A.22
115.12 	and parents or guardians who fail to meet this obligation may be
115.13 	subject to prosecution under section 120A.34;
115.14 	(4) that this notification serves as the notification
115.15 	required by section 120A.34;
115.16 	(5) that alternative educational programs and services may
115.17 	be available in the district;
115.18 	(6) that the parent or guardian has the right to meet with
115.19 	appropriate school personnel to discuss solutions to the child's
115.20 	truancy;
115.21 	(7) that if a student meets the habitual truant definition
115.22 	under section 260C.007, subdivision 19, the student may not be
115.23 	able to obtain a driver's license or permit, or an existing
115.24 	license or permit, may be canceled, unless the school waived the
115.25 	attendance requirement under section 120A.23.  The school
115.26 	district, SAAP, or charter school must obtain the informed
115.27 	consent of the parent or guardian to release this data to the
115.28 	Department of Public Safety;
115.29 	(8) that if the child continues to be truant, the parent
115.30 	and child may be subject to juvenile court proceedings under
115.31 	chapter 260C;
115.32 	(8) (9) that if the child is subject to juvenile court
115.33 	proceedings, the child may be subject to suspension,
115.34 	restriction, or delay of the child's driving privilege pursuant
115.35 	to section 260C.201; and
115.36 	(9) (10) that it is recommended that the parent or guardian
116.1 	accompany the child to school and attend classes with the child
116.2 	for one day.

116.3 	EFFECTIVE DATE. This section is effective September 1,
116.4 	2005.

116.5 	Sec. 39. Minnesota Statutes 2004, section 290.01,
116.6 	subdivision 19c, is amended to read:
116.7 		Subd. 19c.Corporations; additions to federal taxable
116.8 	income.  For corporations, there shall be added to federal
116.9 	taxable income:
116.10 	(1) the amount of any deduction taken for federal income
116.11 	tax purposes for income, excise, or franchise taxes based on net
116.12 	income or related minimum taxes, including but not limited to
116.13 	the tax imposed under section 290.0922, paid by the corporation
116.14 	to Minnesota, another state, a political subdivision of another
116.15 	state, the District of Columbia, or any foreign country or
116.16 	possession of the United States;
116.17 	(2) interest not subject to federal tax upon obligations
116.18 	of:  the United States, its possessions, its agencies, or its
116.19 	instrumentalities; the state of Minnesota or any other state,
116.20 	any of its political or governmental subdivisions, any of its
116.21 	municipalities, or any of its governmental agencies or
116.22 	instrumentalities; the District of Columbia; or Indian tribal
116.23 	governments;
116.24 	(3) exempt-interest dividends received as defined in
116.25 	section 852(b)(5) of the Internal Revenue Code;
116.26 	(4) the amount of any net operating loss deduction taken
116.27 	for federal income tax purposes under section 172 or 832(c)(10)
116.28 	of the Internal Revenue Code or operations loss deduction under
116.29 	section 810 of the Internal Revenue Code;
116.30 	(5) the amount of any special deductions taken for federal
116.31 	income tax purposes under sections 241 to 247 of the Internal
116.32 	Revenue Code;
116.33 	(6) losses from the business of mining, as defined in
116.34 	section 290.05, subdivision 1, clause (a), that are not subject
116.35 	to Minnesota income tax;
116.36 	(7) the amount of any capital losses deducted for federal
117.1 	income tax purposes under sections 1211 and 1212 of the Internal
117.2 	Revenue Code;
117.3 	(8) the exempt foreign trade income of a foreign sales
117.4 	corporation under sections 921(a) and 291 of the Internal
117.5 	Revenue Code;
117.6 	(9) the amount of percentage depletion deducted under
117.7 	sections 611 through 614 and 291 of the Internal Revenue Code;
117.8 	(10) for certified pollution control facilities placed in
117.9 	service in a taxable year beginning before December 31, 1986,
117.10 	and for which amortization deductions were elected under section
117.11 	169 of the Internal Revenue Code of 1954, as amended through
117.12 	December 31, 1985, the amount of the amortization deduction
117.13 	allowed in computing federal taxable income for those
117.14 	facilities;
117.15 	(11) the amount of any deemed dividend from a foreign
117.16 	operating corporation determined pursuant to section 290.17,
117.17 	subdivision 4, paragraph (g);
117.18 	(12) the amount of any environmental tax paid under section
117.19 	59(a) of the Internal Revenue Code;
117.20 	(13) the amount of a partner's pro rata share of net income
117.21 	which does not flow through to the partner because the
117.22 	partnership elected to pay the tax on the income under section
117.23 	6242(a)(2) of the Internal Revenue Code;
117.24 	(14) the amount of net income excluded under section 114 of
117.25 	the Internal Revenue Code;
117.26 	(15) any increase in subpart F income, as defined in
117.27 	section 952(a) of the Internal Revenue Code, for the taxable
117.28 	year when subpart F income is calculated without regard to the
117.29 	provisions of section 614 of Public Law 107-147; and 
117.30 	(16) 80 percent of the depreciation deduction allowed under
117.31 	section 168(k) of the Internal Revenue Code.  For purposes of
117.32 	this clause, if the taxpayer has an activity that in the taxable
117.33 	year generates a deduction for depreciation under section 168(k)
117.34 	and the activity generates a loss for the taxable year that the
117.35 	taxpayer is not allowed to claim for the taxable year, "the
117.36 	depreciation allowed under section 168(k)" for the taxable year
118.1 	is limited to excess of the depreciation claimed by the activity
118.2 	under section 168(k) over the amount of the loss from the
118.3 	activity that is not allowed in the taxable year.  In succeeding
118.4 	taxable years when the losses not allowed in the taxable year
118.5 	are allowed, the depreciation under section 168(k) is allowed;
118.6 	and 
118.7 	(17) the amount deducted under section 170 of the Internal
118.8 	Revenue Code that represents contributions to a scholarship
118.9 	granting organization for which a credit is claimed under
118.10 	section 290.0676.

118.11 	Sec. 40. [290.0676] CREDIT FOR CONTRIBUTIONS TO
118.12 	SCHOLARSHIP GRANTING ORGANIZATIONS.
118.13 	A corporation is allowed a credit against the corporate
118.14 	franchise tax due under this chapter equal to 50 percent of the
118.15 	amount contributed to a scholarship granting organization under
118.16 	section 124D.98.  The maximum credit allowed in a taxable year
118.17 	is $100,000.  The credit may not be claimed for contributions
118.18 	designated for the use of a specific student.  The credit for
118.19 	the taxable year may not exceed the corporation's liability for
118.20 	tax.  The commissioner of revenue shall prescribe the manner in
118.21 	which the credit may be claimed.  This may include allowing the
118.22 	credit only as a separately processed claim for refund.

118.23 	EFFECTIVE DATE. This section is effective for taxable
118.24 	years beginning after December 31, 2005.

118.25 	Sec. 41. BOARD OF SCHOOL ADMINISTRATORS; RULEMAKING
118.26 	AUTHORITY.
 118.27 	On or before June 30, 2007, the Board of School
118.28 	Administrators may adopt rules to revise and clarify Minnesota
118.29 	Rules, chapter 3512.

118.30 	Sec. 42. CAREER AND TECHNICAL EDUCATION PROGRAM RULES.
 118.31 	By January 1, 2007, the commissioner of education must
118.32 	adopt rules for approval of career and technical education
118.33 	programs consistent with Minnesota Statutes, section 124D.4531,
118.34 	subdivisions 4 and 6, that emphasize emerging workforce skills.
118.35 	Program approval for fiscal year 2008 and later must be based on
118.36 	the rules.

119.1 	Sec. 43. MINNESOTA COMPREHENSIVE ASSESSMENTS; RULES.
 119.2 	The commissioner of education shall adopt rules on or
119.3 	before January 1, 2005, to implement the Minnesota Comprehensive
119.4 	Assessments Second Edition (MCA-IIs) in reading, mathematics,
119.5 	and writing.

119.6 	Sec. 44. APPROPRIATIONS.
 119.7 		Subdivision 1.Department. The sums indicated in this
119.8 	section are appropriated from the general fund to the Department
119.9 	of Education for the fiscal years designated.
119.10 		Subd. 2.Examination fees; teacher training and support
119.11 	programs; teacher stipends. For student examination fees,
119.12 	training and related costs for teachers and other interested
119.13 	educators, and teacher stipends under Minnesota Statutes,
119.14 	section 120B.13:
119.15 	$2,000,000 .....2006 
119.16 	$2,000,000 .....2007 
119.17 	The advanced placement program shall receive 75 percent of
119.18 	the appropriation each year and the international baccalaureate
119.19 	program shall receive 25 percent of the appropriation each
119.20 	year.  The department, in consultation with representatives of
119.21 	the advanced placement and international baccalaureate programs
119.22 	selected by the Advanced Placement Advisory Council and IBMN,
119.23 	respectively, shall determine the amounts of the expenditures
119.24 	each year for examination fees, training and support programs,
119.25 	and teacher stipends for each program.
119.26 	Any balance in the first year does not cancel but is
119.27 	available in the second year.
119.28 		Subd. 3.Charter school building lease aid. For building
119.29 	lease aid under Minnesota Statutes, section 124D.11, subdivision
119.30 	4:
119.31 	$25,401,000 .....2006 
119.32 	$30,791,000 .....2007 
119.33 	The 2006 appropriation includes $3,894,000 for 2005 and
119.34 	$21,507,000 for 2006.
119.35 	The 2007 appropriation includes $4,752,000 for 2006 and
119.36 	$26,039,000 for 2007.
120.1 		Subd. 4.Charter school startup aid. For charter school
120.2 	startup cost aid under Minnesota Statutes, section 124D.11:
120.3 	$1,353,000 .....2006 
120.4 	$3,141,000 .....2007 
120.5 	The 2006 appropriation includes $-0- for 2005 and
120.6 	$1,353,000 for 2006.
120.7 	The 2007 appropriation includes $299,000 for 2006 and
120.8 	$2,842,000 for 2007.
120.9 		Subd. 5.Integration aid. For integration aid under
120.10 	Minnesota Statutes, section 124D.86, subdivision 5:
120.11 	$57,513,000 .....2006 
120.12 	$57,310,000 .....2007 
120.13 	The 2006 appropriation includes $9,820,000 for 2005 and
120.14 	$47,693,000 for 2006.
120.15 	The 2007 appropriation includes $10,539,000 for 2006 and
120.16 	$46,771,000 for 2007.
120.17 		Subd. 6.Magnet school grants. For magnet school and
120.18 	program grants:
120.19 	$  750,000 .....2006 
120.20 	$  750,000 .....2007 
120.21 	These amounts may be used for magnet school programs under
120.22 	Minnesota Statutes, section 124D.88.
120.23 		Subd. 7.Magnet school startup aid. For magnet school
120.24 	startup aid under Minnesota Statutes, section 124D.88:
120.25 	$  221,000 .....2007 
120.26 	The 2007 appropriation includes $-0- for 2006 and $221,000
120.27 	for 2007.
120.28 		Subd. 8.Interdistrict desegregation or integration
120.29 	transportation grants. For interdistrict desegregation or
120.30 	integration transportation grants under Minnesota Statutes,
120.31 	section 124D.87:
120.32 	$7,714,000 .....2006 
120.33 	$9,851,000 .....2007 
120.34 		Subd. 9.Success for the future. For American Indian
120.35 	success for the future grants under Minnesota Statutes, section
120.36 	124D.81:
121.1 	$2,137,000 .....2006 
121.2 	$2,137,000 .....2007 
121.3 	The 2006 appropriation includes $386,000 for 2005 and
121.4 	$1,751,000 for 2006.
121.5 	The 2007 appropriation includes $386,000 for 2006 and
121.6 	$1,751,000 for 2007.
121.7 		Subd. 10.American indian scholarships. For American
121.8 	Indian scholarships under Minnesota Statutes, section 124D.84:
121.9 	$1,875,000 .....2006 
121.10 	$1,875,000 .....2007 
121.11 		Subd. 11.American indian teacher preparation
121.12 	grants. For joint grants to assist American Indian people to
121.13 	become teachers under Minnesota Statutes, section 122A.63:
121.14 	$  190,000 .....2006 
121.15 	$  190,000 .....2007 
121.16 		Subd. 12.Tribal contract schools. For tribal contract
121.17 	school aid under Minnesota Statutes, section 124D.83:
121.18 	$2,169,000 .....2006 
121.19 	$2,362,000 .....2007 
121.20 	The 2006 appropriation includes $363,000 for 2005 and
121.21 	$1,806,000 for 2006.
121.22 	The 2007 appropriation includes $398,000 for 2006 and
121.23 	$1,964,000 for 2007.
121.24 		Subd. 13.Early childhood programs at tribal
121.25 	schools. For early childhood family education programs at
121.26 	tribal contract schools under Minnesota Statutes, section
121.27 	124D.83, subdivision 4:
121.28 	$   68,000 .....2006 
121.29 	$   68,000 .....2007 
121.30 		Subd. 14.Youthworks program. For funding youthworks
121.31 	programs under Minnesota Statutes, sections 124D.37 to 124D.45:
121.32 	$  900,000 .....2006 
121.33 	$  900,000 .....2007 
121.34 	A grantee organization may provide health and child care
121.35 	coverage to the dependents of each participant enrolled in a
121.36 	full-time youth works program to the extent such coverage is not
122.1 	otherwise available.
122.2 		Subd. 15.Student organizations. For student
122.3 	organizations:
122.4 	$  625,000 .....2006 
122.5 	$  625,000 .....2007 
122.6 		Subd. 16.Online learning aid. For online learning aid
122.7 	under Minnesota Statutes, section 124D.096:
122.8 	$2,250,000 .....2006 
122.9 	$3,250,000 .....2007 
122.10 		Subd. 17.Education planning and assessment program. For
122.11 	the Educational Planning and Assessment (EPAS) program under
122.12 	Minnesota Statutes, section 120B.128:
122.13 	$  829,000 .....2006 
122.14 	$  829,000 .....2007 
122.15 	Subd. 18.[COLLEGE LEVEL EXAMINATION PROGRAM (CLEP).] For
122.16 	the College Level Examination program (CLEP) under Minnesota
122.17 	Statutes, section 120B.131:
122.18 	$  825,000 .....2006 
122.19 	$1,650,000 .....2007 
122.20 	This is a onetime appropriation.
122.21 		Subd. 19.Collaborative urban educator. For the
122.22 	collaborative urban educator program:
122.23 	$  528,000 .....2006 
122.24 	$  528,000 .....2007 
122.25 		Subd. 20.Career and technical education grants. For
122.26 	career and technical education grants:
122.27 	$1,000,000 .....2006 
122.28 	$1,000,000 .....2007 

122.29 	Sec. 45. REPEALER.
 122.30 	Minnesota Statutes 2004, section 122A.60, is repealed.

122.31 	ARTICLE 4
122.32 	SPECIAL PROGRAMS

122.33 	Section 1. Minnesota Statutes 2004, section 124D.11,
122.34 	subdivision 5, is amended to read:
122.35 		Subd. 5.Special education aid. (a) Except as provided
122.36 	in subdivision 2, special education aid must be paid to a
123.1 	charter school according to section 125A.76, as though it were a
123.2 	school district.
123.3 	(b) For fiscal year 2006,the charter school may charge
123.4 	tuition to the district of residence as follows:
123.5 	(1) if the charter school does not receive general
123.6 	education revenue on behalf of the student according to
123.7 	subdivision 1, tuition shall be charged as provided in section
123.8 	125A.11; or 
123.9 	(2) if the charter school receives general education
123.10 	revenue on behalf of the student according to subdivision 1,
123.11 	tuition shall be charged as provided in section 127A.47,
123.12 	subdivision 7, paragraph (d).
123.13 	(c) For fiscal year 2007 and later, the special education
123.14 	aid paid to the charter school shall be adjusted as follows:
123.15 	(1) if the charter school does not receive general
123.16 	education revenue on behalf of the student according to
123.17 	subdivision 1, the aid shall be adjusted as provided in section
123.18 	125A.11; or 
123.19 	(2) if the charter school receives general education
123.20 	revenue on behalf of the student according to subdivision 1, the
123.21 	aid shall be adjusted as provided in section 127A.47,
123.22 	subdivision 7, paragraph (d).

123.23 	Sec. 2. Minnesota Statutes 2004, section 125A.11,
123.24 	subdivision 1, is amended to read:
123.25 		Subdivision 1.Nonresident tuition rate; other costs.
 123.26 	(a) For fiscal year 2006,when a school district provides
123.27 	instruction and services outside the district of residence,
123.28 	board and lodging, and any tuition to be paid, shall be paid by
123.29 	the district of residence.  The tuition rate to be charged for
123.30 	any child with a disability, excluding a pupil for whom tuition
123.31 	is calculated according to section 127A.47, subdivision 7,
123.32 	paragraph (d),must be the sum of (1) the actual cost of
123.33 	providing special instruction and services to the child
123.34 	including a proportionate amount for capital outlay and debt
123.35 	service but not including any amount for special transportation,
123.36 	plus (2) the amount of general education revenue and referendum
124.1 	aid excluding portions attributable to district and school
124.2 	administration, district support services, operations and
124.3 	maintenance, capital expenditures, and pupil transportation
124.4 	attributable to that pupil for the portion of time the pupil
124.5 	receives instruction in the regular classroom, plus (3) the
124.6 	portion of general education revenue and referendum aid
124.7 	attributable to district and school administration, district
124.8 	support services, operations and maintenance, capital
124.9 	expenditures, and pupil transportation attributable to that
124.10 	pupil,minus (4) the amount of special education aid for
124.11 	children with a disability received on behalf of that child.  If
124.12 	the boards involved do not agree upon the tuition rate, either
124.13 	board may apply to the commissioner to fix the rate. Without
124.14 	regard to chapter 14,the commissioner must then set a date for
124.15 	a hearing or request a written statement from each board, giving
124.16 	each board at least ten days' notice, and after the hearing or
124.17 	review of the written statements the commissioner must make an
124.18 	order fixing the tuition rate, which is binding on both school
124.19 	districts. General education revenue and referendum aid
124.20 	attributable to a pupil must be calculated using the resident
124.21 	district's average general education and referendum revenue per
124.22 	adjusted average daily membership.
124.23 	(b) For fiscal year 2007 and later, when a school district
124.24 	provides special instruction and services for a pupil with a
124.25 	disability as defined in section 125A.02 outside the district of
124.26 	residence, excluding a pupil for whom an adjustment to special
124.27 	education aid is calculated according to section 127A.47,
124.28 	subdivision 7, paragraph (e), special education aid paid to the
124.29 	resident district must be reduced by an amount equal to (1) the
124.30 	actual cost of providing special instruction and services
124.31 	including special transportation to the pupil, plus (2) the
124.32 	amount of general education revenue and referendum aid excluding
124.33 	portions attributable to district and school administration,
124.34 	district support services, operations and maintenance, capital
124.35 	expenditures, and pupil transportation attributable to that
124.36 	pupil for the portion of time the pupil receives instruction in
125.1 	the regular classroom, plus (3) the portion of general education
125.2 	revenue and referendum aid attributable to district and school
125.3 	administration, district support services, operations and
125.4 	maintenance, capital expenditures, and pupil transportation
125.5 	attributable to that pupil, minus (4) the amount of special
125.6 	education aid received on behalf of that child.  General
125.7 	education revenue and referendum aid attributable to a pupil
125.8 	must be calculated using the resident district's average general
125.9 	education and referendum revenue per adjusted average daily
125.10 	membership.  If the resident district's special education aid is
125.11 	insufficient to make the full adjustment, the remaining
125.12 	adjustment shall be made to other state aid due to the district.

125.13 	Sec. 3. Minnesota Statutes 2004, section 125A.76,
125.14 	subdivision 1, is amended to read:
125.15 		Subdivision 1.Definitions.  For the purposes of this
125.16 	section, the definitions in this subdivision apply.
125.17 	(a) "Base year" for fiscal year 1998 and later fiscal years
125.18 	means the second fiscal year preceding the fiscal year for which
125.19 	aid will be paid.
125.20 	(b) "Basic revenue" has the meaning given it in section
125.21 	126C.10, subdivision 2.  For the purposes of computing basic
125.22 	revenue pursuant to this section, each child with a disability
125.23 	shall be counted as prescribed in section 126C.05, subdivision 1.
125.24 	(c) "Essential personnel" means teachers, cultural
125.25 	liaisons, related services, and support services staff providing
125.26 	direct services to students.  Essential personnel may also
125.27 	include special education paraprofessionals or clericals
125.28 	providing support to teachers and students by preparing
125.29 	paperwork and making arrangements related to special education
125.30 	compliance requirements, including parent meetings and
125.31 	individual education plans.
125.32 	(d) "Average daily membership" has the meaning given it in
125.33 	section 126C.05.
125.34 	(e) "Program growth factor" means 1.046 1.04 for fiscal
125.35 	year 2003 years 2007 and 2008, and 1.0 for fiscal year 2004 2009 
125.36 	and later.

126.1 	Sec. 4. Minnesota Statutes 2004, section 125A.76,
126.2 	subdivision 4, is amended to read:
126.3 		Subd. 4.State total special education aid. The state
126.4 	total special education aid for fiscal year 2004 equals
126.5 	$530,642,000.The state total special education aid for fiscal
126.6 	year 2005 equals $529,164,000.  The state total special
126.7 	education aid for later fiscal years equals:
126.8 	(1) the state total special education aid for the preceding
126.9 	fiscal year; times
126.10 	(2) the program growth factor; times 
126.11 	(3) the ratio of the state total average daily membership
126.12 	for the current fiscal year to the state total average daily
126.13 	membership for the preceding fiscal year.

126.14 	Sec. 5. Minnesota Statutes 2004, section 125A.76, is
126.15 	amended by adding a subdivision to read:
126.16 		Subd. 5a.Special education levy revenue. (a) For fiscal
126.17 	year 2007, the state total special education revenue equals the
126.18 	state total special education aid times the program growth
126.19 	factor.  For fiscal year 2008 and later, the state total special
126.20 	education revenue equals:
126.21 	(1) the state total special education revenue for the
126.22 	preceding fiscal year, times 
126.23 	(2) the program growth factor, times 
126.24 	(3) the ratio of the state total average daily membership
126.25 	for the current fiscal year to the state total average daily
126.26 	membership for the preceding fiscal year.
126.27 	(b) For fiscal year 2007 and later, the state total special
126.28 	education levy revenue equals the difference between the state
126.29 	total special education revenue and the state total special
126.30 	education aid.
126.31 	(c) For fiscal year 2007 and later, the special education
126.32 	levy revenue for a school district, charter school, or state
126.33 	academy equals the product of the state total special education
126.34 	levy revenue times the ratio of the school district, charter
126.35 	school, or state academy's special education aid to the state
126.36 	total special education aid.
127.1 	(d) Special education levy equalization revenue is subject
127.2 	to reverse referendum according to section 126C.48, subdivision
127.3 	9.

127.4 	Sec. 6. Minnesota Statutes 2004, section 125A.76, is
127.5 	amended by adding a subdivision to read:
127.6 		Subd. 5b.Special education levy. To obtain special
127.7 	education levy revenue for fiscal year 2007 and later, a
127.8 	district may levy an amount not more than the product of its
127.9 	special education levy revenue for the fiscal year times the
127.10 	lesser of one or the ratio of its adjusted net tax capacity per
127.11 	adjusted pupil unit to $6,900.

127.12 	Sec. 7. Minnesota Statutes 2004, section 125A.76, is
127.13 	amended by adding a subdivision to read:
127.14 		Subd. 5c.Special education levy equalization aid. (a)
127.15 	For fiscal year 2007 and later, a school district's special
127.16 	education levy equalization aid equals its special education
127.17 	levy equalization revenue minus its special education levy times
127.18 	the ratio of the actual amount levied to the permitted levy.
127.19 	(b) The special education levy equalization aid for a
127.20 	charter school or a state academy equals the charter school or
127.21 	state academy's special education levy revenue.

127.22 	Sec. 8. Minnesota Statutes 2004, section 125A.79,
127.23 	subdivision 1, is amended to read:
127.24 		Subdivision 1.Definitions.  For the purposes of this
127.25 	section, the definitions in this subdivision apply.
127.26 	(a) "Unreimbursed special education cost" means the sum of
127.27 	the following:
127.28 	(1) expenditures for teachers' salaries, contracted
127.29 	services, supplies, equipment, and transportation services
127.30 	eligible for revenue under section 125A.76; plus
127.31 	(2) expenditures for tuition bills received under sections
127.32 	125A.03 to 125A.24 and 125A.65 for services eligible for revenue
127.33 	under section 125A.76, subdivision 2; minus
127.34 	(3) revenue for teachers' salaries, contracted services,
127.35 	supplies, and equipment under section 125A.76; minus
127.36 	(4) tuition receipts under sections 125A.03 to 125A.24 and
128.1 	125A.65 for services eligible for revenue under section 125A.76,
128.2 	subdivision 2.
128.3 	(b) "General revenue" means for fiscal year 1996, the sum
128.4 	of the general education revenue according to section 126C.10,
128.5 	subdivision 1, as adjusted according to section 127A.47,
128.6 	subdivision 7, plus the total referendum revenue according to
128.7 	section 126C.17, subdivision 4.  For fiscal years 1997 and
128.8 	later,"General revenue" means the sum of the general education
128.9 	revenue according to section 126C.10, subdivision 1, as adjusted
128.10 	according to section 127A.47, subdivisions 7 and 8, plus the
128.11 	total referendum revenue minus transportation sparsity revenue
128.12 	minus total operating capital revenue.
128.13 	(c) "Average daily membership" has the meaning given it in
128.14 	section 126C.05.
128.15 	(d) "Program growth factor" means 1.02 for fiscal year
128.16 	2003, and 1.0 for fiscal year 2004 and later.

128.17 	Sec. 9. Minnesota Statutes 2004, section 125A.79,
128.18 	subdivision 5, is amended to read:
128.19 		Subd. 5.Initial excess cost aid; fiscal years 2004 and
128.20 	2005.  For fiscal years 2002 2004 and later 2005, a district's
128.21 	initial excess cost aid equals the greatest of:
128.22 	(1) 75 percent of the difference between (i) the district's
128.23 	unreimbursed special education cost and (ii) 4.36 percent of the
128.24 	district's general revenue;
128.25 	(2) 70 percent of the difference between (i) the increase
128.26 	in the district's unreimbursed special education cost between
128.27 	the base year as defined in section 125A.76, subdivision 1, and
128.28 	the current year and (ii) 1.6 percent of the district's general
128.29 	revenue; or
128.30 	(3) zero.

128.31 	Sec. 10. Minnesota Statutes 2004, section 125A.79, is
128.32 	amended by adding a subdivision to read:
128.33 		Subd. 5a.Initial excess cost aid. For fiscal years 2006
128.34 	and later, a district's initial excess cost aid equals the
128.35 	greater of:
128.36 	(1) 75 percent of the difference between (i) the district's
129.1 	unreimbursed special education cost for the previous fiscal
129.2 	year, and (ii) 4.36 percent of the district's general revenue
129.3 	for the previous fiscal year; or 
129.4 	(2) zero.

129.5 	Sec. 11. Minnesota Statutes 2004, section 125A.79, is
129.6 	amended by adding a subdivision to read:
129.7 		Subd. 5b.Supplemental excess cost aid. (a) For fiscal
129.8 	years 2006 and later, a district's supplemental excess cost aid
129.9 	equals the greater of:
129.10 	(1) 75 percent of the difference between (i) the increase
129.11 	in the district's unreimbursed special education excess cost
129.12 	between the previous fiscal year and the current fiscal year,
129.13 	and (ii) $80 times the district's adjusted marginal cost pupil
129.14 	units for the current fiscal year; or 
129.15 	(2) zero.
129.16 	(b) The state total supplemental excess cost aid for any
129.17 	fiscal year must not exceed $2,000,000.  If the state total
129.18 	supplemental excess cost aid according to paragraph (a) exceeds
129.19 	$2,000,000, the supplemental excess cost aid for each district
129.20 	shall be reduced proportionately so that the state total equals
129.21 	$2,000,000.

129.22 	Sec. 12. Minnesota Statutes 2004, section 125A.79,
129.23 	subdivision 7, is amended to read:
129.24 		Subd. 7.District special education excess cost aid. (a) 
129.25 	A district's special education excess cost aid for fiscal year
129.26 	2002 and later years 2004 and 2005 equals the state total
129.27 	special education excess cost aid times the ratio of the
129.28 	district's initial excess cost aid to the state total initial
129.29 	excess cost aid.
129.30 	(b) A district's special education excess cost aid for
129.31 	fiscal year 2006 and later equals the sum of:
129.32 	(1) the product of the difference between the state total
129.33 	special education excess cost aid and the state total
129.34 	supplemental excess cost aid times the ratio of the district's
129.35 	initial excess cost aid to the state total initial excess cost
129.36 	aid; and 
130.1 	(2) the district's supplemental excess cost aid according
130.2 	to subdivision 5b.

130.3 	Sec. 13. Minnesota Statutes 2004, section 127A.47,
130.4 	subdivision 7, is amended to read:
130.5 		Subd. 7.Alternative attendance programs.  The general
130.6 	education aid and special education aid for districts must be
130.7 	adjusted for each pupil attending a nonresident district under
130.8 	sections 123A.05 to 123A.08, 124D.03, 124D.06, 124D.08, and
130.9 	124D.68.  The adjustments must be made according to this
130.10 	subdivision.
130.11 	(a) General education aid paid to a resident district must
130.12 	be reduced by an amount equal to the referendum equalization aid
130.13 	attributable to the pupil in the resident district.
130.14 	(b) General education aid paid to a district serving a
130.15 	pupil in programs listed in this subdivision must be increased
130.16 	by an amount equal to the referendum equalization aid
130.17 	attributable to the pupil in the nonresident district.
130.18 	(c) If the amount of the reduction to be made from the
130.19 	general education aid of the resident district is greater than
130.20 	the amount of general education aid otherwise due the district,
130.21 	the excess reduction must be made from other state aids due the
130.22 	district.
130.23 	(d) For fiscal year 2006,the district of residence must
130.24 	pay tuition to a district or an area learning center, operated
130.25 	according to paragraph (e) (f), providing special instruction
130.26 	and services to a pupil with a disability, as defined in section
130.27 	125A.02, or a pupil, as defined in section 125A.51, who is
130.28 	enrolled in a program listed in this subdivision.  The tuition
130.29 	must be equal to (1) the actual cost of providing special
130.30 	instruction and services to the pupil, including a proportionate
130.31 	amount for debt service and for capital expenditure facilities
130.32 	and equipment, and debt service but not including any amount for 
130.33 	special transportation, minus (2) the amount of general
130.34 	education revenue and referendum aid attributable to that pupil
130.35 	for the portion of time the pupil receives special instruction
130.36 	and services outside of the regular classroom, excluding
131.1 	portions attributable to district and school administration,
131.2 	district support services, operations and maintenance, capital
131.3 	expenditures, and pupil transportation, minus (3) special
131.4 	education aid but not including any amount for transportation,
131.5 	attributable to that pupil, that is received by the district
131.6 	providing special instruction and services. For purposes of
131.7 	this paragraph, general education revenue and referendum aid
131.8 	attributable to a pupil must be calculated using the serving
131.9 	district's average general education revenue and referendum aid
131.10 	per adjusted average daily membership.
131.11 	(e) For fiscal year 2007 and later, special education aid
131.12 	paid to a resident district must be reduced by an amount equal
131.13 	to (1) the actual cost of providing special instruction and
131.14 	services, including special transportation, for a pupil with a
131.15 	disability, as defined in section 125A.02, or a pupil, as
131.16 	defined in section 125A.51, who is enrolled in a program listed
131.17 	in this subdivision, minus (2) the amount of general education
131.18 	revenue and referendum aid attributable to that pupil for the
131.19 	portion of time the pupil receives special instruction and
131.20 	services outside of the regular classroom, excluding portions
131.21 	attributable to district and school administration, district
131.22 	support services, operations and maintenance, capital
131.23 	expenditures, and pupil transportation, minus (3) special
131.24 	education aid attributable to that pupil, that is received by
131.25 	the district providing special instruction and services.  For
131.26 	purposes of this paragraph, general education revenue and
131.27 	referendum aid attributable to a pupil must be calculated using
131.28 	the serving district's average general education revenue and
131.29 	referendum aid per adjusted average daily membership.  Special
131.30 	education aid paid to the district providing special instruction
131.31 	and services for the pupil, or to the fiscal agent district for
131.32 	a cooperative, must be increased by the amount of the reduction
131.33 	in the aid paid to the resident district.  If the resident
131.34 	district's special education aid is insufficient to make the
131.35 	full adjustment, the remaining adjustment shall be made to other
131.36 	state aids due to the district.
132.1 	(f) An area learning center operated by a service
132.2 	cooperative, intermediate district, education district, or a
132.3 	joint powers cooperative may elect through the action of the
132.4 	constituent boards to charge the resident district tuition for
132.5 	pupils rather than to have the general education revenue paid to
132.6 	a fiscal agent school district.  Except as provided in paragraph
132.7 	(d) or (e), the district of residence must pay tuition equal to
132.8 	at least 90 percent of the district average general education
132.9 	revenue per pupil unit minus an amount equal to the product of
132.10 	the formula allowance according to section 126C.10, subdivision
132.11 	2, times .0485 for fiscal year 2006, and .0458 for fiscal year
132.12 	2007 and later fiscal years, calculated without basic skills
132.13 	revenue and transportation sparsity revenue, times the number of
132.14 	pupil units for pupils attending the area learning center, plus
132.15 	the amount of compensatory revenue generated by pupils attending
132.16 	the area learning center.

132.17 	Sec. 14. APPROPRIATIONS.
 132.18 		Subdivision 1.Department of education. The sums
132.19 	indicated in this section are appropriated from the general fund
132.20 	to the Department of Education for the fiscal years designated.
132.21 		Subd. 2.Special education; regular. For special
132.22 	education aid under Minnesota Statutes, section 125A.75:
132.23 	$527,768,000 .....2006 
132.24 	$526,102,000 .....2007 
132.25 	The 2006 appropriation includes $95,778,000 for 2005 and
132.26 	$431,990,000 for 2006.
132.27 	The 2007 appropriation includes $95,471,000 for 2006 and
132.28 	$430,631,000 for 2007.
132.29 		Subd. 3.Special education regular equalization aid. For
132.30 	special education regular equalization aid:
132.31 	$2,030,000 .....2007 
132.32 		Subd. 4.Aid for children with disabilities. For aid
132.33 	under Minnesota Statutes, section 125A.75, subdivision 3, for
132.34 	children with disabilities placed in residential facilities
132.35 	within the district boundaries for whom no district of residence
132.36 	can be determined:
133.1 	$3,351,000 .....2006 
133.2 	$3,942,000 .....2007 
133.3 	If the appropriation for either year is insufficient, the
133.4 	appropriation for the other year is available.
133.5 		Subd. 5.Travel for home-based services. For aid for
133.6 	teacher travel for home-based services under Minnesota Statutes,
133.7 	section 125A.75, subdivision 1:
133.8 	$  186,000 .....2006 
133.9 	$  192,000 .....2007 
133.10 	The 2006 appropriation includes $32,000 for 2005 and
133.11 	$154,000 for 2006.
133.12 	The 2007 appropriation includes $33,000 for 2006 and
133.13 	$159,000 for 2007.
133.14 		Subd. 6.Special education; excess costs. For excess
133.15 	cost aid under Minnesota Statutes, section 125A.79, subdivision
133.16 	7:
133.17 	$91,786,000 .....2006 
133.18 	$91,360,000 .....2007 
133.19 	The 2006 appropriation includes $39,003,000 for 2005 and
133.20 	$52,783,000 for 2006.
133.21 	The 2007 appropriation includes $38,724,000 for 2006 and
133.22 	$52,636,000 for 2007.
133.23 		Subd. 7.Litigation costs for special education. For
133.24 	paying the costs a district incurs under Minnesota Statutes,
133.25 	section 125A.75, subdivision 8:
133.26 	$   17,000 .....2006 
133.27 	$   17,000 .....2007 
133.28 		Subd. 8.Transition for disabled students. For aid for
133.29 	transition programs for children with disabilities under
133.30 	Minnesota Statutes, section 124D.454:
133.31 	$8,774,000 .....2006 
133.32 	$8,748,000 .....2007 
133.33 	The 2006 appropriation includes $1,591,000 for 2005 and
133.34 	$7,183,000 for 2006.
133.35 	The 2007 appropriation includes $1,587,000 for 2006 and
133.36 	$7,161,000 for 2007.
134.1 		Subd. 9.Court-placed special education revenue. For
134.2 	reimbursing serving school districts for unreimbursed eligible
134.3 	expenditures attributable to children placed in the serving
134.4 	school district by court action under Minnesota Statutes,
134.5 	section 125A.79, subdivision 4:
134.6 	$   65,000 .....2006 
134.7 	$   70,000 .....2007 
134.8 		Subd. 10.Out-of-state tuition special education. For
134.9 	special education out-of-state tuition according to Minnesota
134.10 	Statutes, section 125A.79, subdivision 8:
134.11 	$  250,000 .....2006 
134.12 	$  250,000 .....2007 

134.13 	ARTICLE 5
134.14 	FACILITIES AND TECHNOLOGY

134.15 	Section 1. Minnesota Statutes 2004, section 123B.53,
134.16 	subdivision 5, is amended to read:
134.17 		Subd. 5.Equalized debt service levy.  (a) The equalized
134.18 	debt service levy of a district equals the sum of the first tier
134.19 	equalized debt service levy and the second tier equalized debt
134.20 	service levy.
134.21 	(b) A district's first tier equalized debt service levy
134.22 	equals the district's first tier debt service equalization
134.23 	revenue times the lesser of one or the ratio of:
134.24 	(1) the quotient derived by dividing the adjusted net tax
134.25 	capacity of the district for the year before the year the levy
134.26 	is certified by the adjusted pupil units in the district for the
134.27 	school year ending in the year prior to the year the levy is
134.28 	certified; to
134.29 	(2) $3,200 $3,832.
134.30 	(c) A district's second tier equalized debt service levy
134.31 	equals the district's second tier debt service equalization
134.32 	revenue times the lesser of one or the ratio of:
134.33 	(1) the quotient derived by dividing the adjusted net tax
134.34 	capacity of the district for the year before the year the levy
134.35 	is certified by the adjusted pupil units in the district for the
134.36 	school year ending in the year prior to the year the levy is
135.1 	certified; to
135.2 	(2) $8,000 $9,546.

135.3 	Sec. 2. Minnesota Statutes 2004, section 123B.54, is
135.4 	amended to read:
135.5 	123B.54 DEBT SERVICE APPROPRIATION.
135.6 	(a) $28,367,000 $19,167,000 in fiscal year 2006 2008 and
135.7 	$25,560,000 $16,403,000 in fiscal year 2007 2009 and later are
135.8 	appropriated from the general fund to the commissioner of
135.9 	education for payment of debt service equalization aid under
135.10 	section 123B.53.
135.11 	(b) The appropriations in paragraph (a) must be reduced by
135.12 	the amount of any money specifically appropriated for the same
135.13 	purpose in any year from any state fund.

135.14 	Sec. 3. Minnesota Statutes 2004, section 123B.57,
135.15 	subdivision 4, is amended to read:
135.16 		Subd. 4.Health and safety levy.  To receive health and
135.17 	safety revenue, a district may levy an amount equal to the
135.18 	district's health and safety revenue as defined in subdivision 3
135.19 	multiplied by the lesser of one, or the ratio of the quotient
135.20 	derived by dividing the adjusted net tax capacity of the
135.21 	district for the year preceding the year the levy is certified
135.22 	by the adjusted marginal cost pupil units in the district for
135.23 	the school year to which the levy is attributable,
135.24 	to $2,935 $3,535.

135.25 	Sec. 4. [123B.591] DEFERRED MAINTENANCE REVENUE.
135.26 		Subdivision 1.Eligibility. (a) An independent or
135.27 	special school district that does not qualify to participate in
135.28 	the alternative facilities bonding and levy under section
135.29 	123B.59, subdivision 1, paragraph (a), is eligible to receive
135.30 	deferred maintenance revenue.
135.31 	(b) Deferred maintenance revenue is subject to reverse
135.32 	referendum according to section 126C.48, subdivision 9.
135.33 		Subd. 2.Deferred maintenance revenue. The deferred
135.34 	maintenance revenue for an eligible school district equals the
135.35 	product of $50 times the adjusted pupil units for the school
135.36 	year times the lesser of one or the ratio of the district's
136.1 	average age of building space to 35 years.
136.2 		Subd. 3.Deferred maintenance levy. To obtain deferred
136.3 	maintenance revenue for fiscal year 2007 and later, a district
136.4 	may levy an amount not more than the product of its deferred
136.5 	maintenance revenue for the fiscal year times the lesser of one
136.6 	or the ratio of its adjusted net tax capacity per adjusted pupil
136.7 	unit to $6,900.
136.8 		Subd. 4.Deferred maintenance aid. For fiscal year 2007
136.9 	and later, a district's deferred maintenance aid equals its
136.10 	deferred maintenance revenue minus its deferred maintenance levy
136.11 	times the ratio of the actual amount levied to the permitted
136.12 	levy.
136.13 		Subd. 5.Reserve account. Deferred maintenance revenue
136.14 	must be maintained in a reserve account within the general fund.
136.15 	Deferred maintenance revenue may be used only for expenditures
136.16 	that would be eligible for alternative facilities bonding and
136.17 	levy revenue under section 123B.59, subdivision 2, paragraph
136.18 	(a), if the district qualified for that revenue under section
136.19 	123B.59, subdivision 1, paragraph (a).
136.20 	
EFFECTIVE DATE. This section is effective for revenue for
136.21 	fiscal year 2007.

136.22 	Sec. 5. [125B.26] TELECOMMUNICATIONS/INTERNET ACCESS
136.23 	EQUITY AID.
136.24 		Subdivision 1.Costs to be submitted. (a) A district or
136.25 	charter school shall submit its actual
136.26 	telecommunications/Internet access costs for the previous fiscal
136.27 	year, adjusted for any e-rate revenue received, to the
136.28 	department by August 15 of each year as prescribed by the
136.29 	commissioner.  Costs eligible for reimbursement under this
136.30 	program are limited to the following:
136.31 	(1) ongoing or recurring telecommunications/Internet access
136.32 	costs associated with Internet access, data lines, and video
136.33 	links providing:
136.34 	(i) the equivalent of one data line, video link, or
136.35 	integrated data/video link that relies on a transport medium
136.36 	that operates at a minimum speed of 1.544 megabytes per second
137.1 	(T1) for each elementary school, middle school, or high school
137.2 	under section 120A.05, subdivisions 9, 11, and 13, including the
137.3 	recurring telecommunications line lease costs and ongoing
137.4 	Internet access service fees; or 
137.5 	(ii) the equivalent of one data line or video circuit, or
137.6 	integrated data/video link that relies on a transport medium
137.7 	that operates at a minimum speed of 1.544 megabytes per second
137.8 	(T1) for each district, including recurring telecommunications
137.9 	line lease costs and ongoing Internet access service fees;
137.10 	(2) recurring costs of contractual or vendor-provided
137.11 	maintenance on the school district's wide area network to the
137.12 	point of presence at the school building up to the router,
137.13 	codec, or other service delivery equipment located at the point
137.14 	of presence termination at the school or school district;
137.15 	(3) recurring costs of cooperative, shared arrangements for
137.16 	regional delivery of telecommunications/Internet access between
137.17 	school districts, postsecondary institutions, and public
137.18 	libraries including network gateways, peering points, regional
137.19 	network infrastructure, Internet2 access, and network support,
137.20 	maintenance, and coordination; and 
137.21 	(4) service provider installation fees for installation of
137.22 	new telecommunications lines or increased bandwidth.
137.23 	(b) Costs not eligible for reimbursement under this program
137.24 	include:
137.25 	(1) recurring costs of school district staff providing
137.26 	network infrastructure support;
137.27 	(2) recurring costs associated with voice and standard
137.28 	telephone service;
137.29 	(3) costs associated with purchase of network hardware,
137.30 	telephones, computers, or other peripheral equipment needed to
137.31 	deliver telecommunications access to the school or school
137.32 	district;
137.33 	(4) costs associated with laying fiber for
137.34 	telecommunications access;
137.35 	(5) costs associated with wiring school or school district
137.36 	buildings;
138.1 	(6) costs associated with purchase, installation, or
138.2 	purchase and installation of Internet filtering; and 
138.3 	(7) costs associated with digital content, including
138.4 	on-line learning or distance learning programming, and
138.5 	information databases.
138.6 		Subd. 2.E-rates. To be eligible for aid under this
138.7 	section, a district or charter school is required to file an
138.8 	e-rate application either separately or through its
138.9 	telecommunications access cluster and have a current technology
138.10 	plan on file with the department.  Discounts received on
138.11 	telecommunications expenditures shall be reflected in the costs
138.12 	submitted to the department for aid under this section.
138.13 		Subd. 3.Reimbursement criteria. The commissioner shall
138.14 	develop criteria for approving costs submitted by school
138.15 	districts and charter schools under subdivision 1.
138.16 		Subd. 4.District aid. For fiscal year 2006, a district
138.17 	or charter school's Internet access equity aid equals 90 percent
138.18 	of the district or charter school's approved cost for the
138.19 	previous fiscal year according to subdivision 1 exceeding $15
138.20 	times the district's adjusted marginal cost pupil units for the
138.21 	previous fiscal year.  For fiscal year 2007 and later, a
138.22 	district or a district or charter school's Internet access
138.23 	equity aid equals 90 percent of the district or charter school's
138.24 	approved cost for the previous fiscal year according to
138.25 	subdivision 1 exceeding $18 times the district's adjusted pupil
138.26 	units for the previous fiscal year, as adjusted under section
138.27 	126C.05, subdivision 14.
138.28 		Subd. 5.Telecommunications/internet access services for
138.29 	nonpublic schools. (a) Districts shall provide each year upon
138.30 	formal request by or on behalf of a nonpublic school, not
138.31 	including home schools, located in that district or area,
138.32 	ongoing or recurring telecommunications access services to the
138.33 	nonpublic school either through existing district providers or
138.34 	through separate providers.
138.35 	(b) The amount of district aid for telecommunications
138.36 	access services for each nonpublic school under this subdivision
139.1 	equals the lesser of:
139.2 	(1) 90 percent of the nonpublic school's approved cost for
139.3 	the previous fiscal year according to subdivision 1 exceeding
139.4 	$10 for fiscal year 2006 and $13 for fiscal year 2007 and later
139.5 	times the number of weighted pupils enrolled at the nonpublic
139.6 	school as of October 1 of the previous school year; or 
139.7 	(2) the product of the district's aid per pupil unit
139.8 	according to subdivision 4 times the number of weighted pupils
139.9 	enrolled at the nonpublic school as of October 1 of the previous
139.10 	school year.
139.11 	(c) For purposes of this subdivision, nonpublic school
139.12 	pupils shall be weighted by grade level using the weighting
139.13 	factors defined in section 126C.05, subdivision 1.
139.14 	(d) Each year, a district providing services under
139.15 	paragraph (a) may claim up to five percent of the aid determined
139.16 	in paragraph (b) for costs of administering this subdivision.
139.17 	No district may expend an amount for these telecommunications
139.18 	access services which exceeds the amount allocated under this
139.19 	subdivision.  The nonpublic school is responsible for the
139.20 	Internet access costs not covered by this section.
139.21 	(e) At the request of a nonpublic school, districts may
139.22 	allocate the amount determined in paragraph (b) directly to the
139.23 	nonpublic school to pay for or offset the nonpublic school's
139.24 	costs for telecommunications access services, however, the
139.25 	amount allocated directly to the nonpublic school may not exceed
139.26 	the actual amount of the school's ongoing or recurring
139.27 	telecommunications access costs.
139.28 		Subd. 6.Severability. If any portion of this section is
139.29 	found by a court to be unconstitutional, the remaining portions
139.30 	of the section shall remain in effect.
139.31 	
EFFECTIVE DATE. This section is effective for revenue for
139.32 	fiscal year 2006.

139.33 	Sec. 6. Minnesota Statutes 2004, section 126C.63,
139.34 	subdivision 5, is amended to read:
139.35 		Subd. 5.Levy.  "Levy" means a district's net debt
139.36 	service levy after the reduction of debt service equalization
140.1 	aid under section 123B.53, subdivision 6.  For taxes payable in
140.2 	2003 and later, each district's maximum effort debt service levy
140.3 	for purposes of subdivision 8, must be reduced by an equal
140.4 	number of percentage points if the commissioner of finance
140.5 	determines that the levy reduction will not result in a payment
140.6 	from the general fund in the state treasury according to section
140.7 	16A.641, as would be required under section 126C.72, subdivision
140.8 	3.  A district's levy that is adjusted under this section must
140.9 	not be reduced below 30.1 25 percent of the district's adjusted
140.10 	net tax capacity.

140.11 	Sec. 7. Minnesota Statutes 2004, section 126C.63,
140.12 	subdivision 8, is amended to read:
140.13 		Subd. 8.Maximum effort debt service levy.  (a) "Maximum
140.14 	effort debt service levy" means the lesser of:
140.15 	(1) a levy in whichever of the following amounts is
140.16 	applicable:
140.17 	(i) in any district receiving a debt service loan for a
140.18 	debt service levy payable in 2002 and thereafter, or granted a
140.19 	capital loan after January 1, 2002, a levy in total dollar
140.20 	amount computed at a rate of 40 32 percent of adjusted net tax
140.21 	capacity for taxes payable in 2002 and thereafter;
140.22 	(ii) in any district receiving a debt service loan for a
140.23 	debt service levy payable in 2001 or earlier, or granted a
140.24 	capital loan before January 2, 2001 2002, a levy in a total
140.25 	dollar amount computed at a rate of 32 28 percent of adjusted
140.26 	net tax capacity for taxes payable in 2002 and thereafter; or
140.27 	(2) a levy in any district for which a capital loan was
140.28 	approved prior to August 1, 1981, a levy in a total dollar
140.29 	amount equal to the sum of the amount of the required debt
140.30 	service levy and an amount which when levied annually will in
140.31 	the opinion of the commissioner be sufficient to retire the
140.32 	remaining interest and principal on any outstanding loans from
140.33 	the state within 30 years of the original date when the capital
140.34 	loan was granted.
140.35 	(b) The board in any district affected by the provisions of
140.36 	paragraph (a), clause (2), may elect instead to determine the
141.1 	amount of its levy according to the provisions of paragraph (a),
141.2 	clause (1).  If a district's capital loan is not paid within 30
141.3 	years because it elects to determine the amount of its levy
141.4 	according to the provisions of paragraph (a), clause (2), the
141.5 	liability of the district for the amount of the difference
141.6 	between the amount it levied under paragraph (a), clause (2),
141.7 	and the amount it would have levied under paragraph (a), clause
141.8 	(1), and for interest on the amount of that difference, must not
141.9 	be satisfied and discharged pursuant to Minnesota Statutes 1988,
141.10 	or an earlier edition of Minnesota Statutes if applicable,
141.11 	section 124.43, subdivision 4.

141.12 	Sec. 8. APPROPRIATIONS.
 141.13 		Subdivision 1.Department of education. The sums
141.14 	indicated in this section are appropriated from the general fund
141.15 	to the Department of Education for the fiscal years designated.
141.16 		Subd. 2.Health and safety revenue. For health and
141.17 	safety aid according to Minnesota Statutes, section 123B.57,
141.18 	subdivision 5:
141.19 	$  818,000 .....2006 
141.20 	$  575,000 .....2007 
141.21 	The 2006 appropriation includes $244,000 for 2005 and
141.22 	$574,000 for 2006.
141.23 	The 2007 appropriation includes $126,000 for 2006 and
141.24 	$449,000 for 2007.
141.25 		Subd. 3.Debt service equalization. For debt service aid
141.26 	according to Minnesota Statutes, section 123B.53, subdivision 6:
141.27 	$25,882,000 .....2006 
141.28 	$21,769,000 .....2007 
141.29 	The 2006 appropriation includes $5,365,000 for 2005 and
141.30 	$20,517,000 for 2006.
141.31 	The 2007 appropriation includes $4,534,000 for 2006 and
141.32 	$17,235,000 for 2007.
141.33 		Subd. 4.Alternative facilities bonding aid. For
141.34 	alternative facilities bonding aid, according to Minnesota
141.35 	Statutes, section 123B.59, subdivision 1:
141.36 	$19,287,000 .....2006 
142.1 	$19,287,000 .....2007 
142.2 	The 2006 appropriation includes $3,490,000 for 2005 and
142.3 	$15,797,000 for 2006.
142.4 	The 2007 appropriation includes $3,490,000 for 2006 and
142.5 	$15,797,000 for 2007.
142.6 		Subd. 5.Equity in telecommunications access. For equity
142.7 	in telecommunications access:
142.8 	$4,500,000 .....2006 
142.9 	$4,600,000 .....2007 
142.10 		Subd. 6.Deferred maintenance aid. For deferred
142.11 	maintenance aid under Minnesota Statutes, section 123B.591:
142.12 	$2,383,000 .....2007 

142.13 	ARTICLE 6
142.14 	NUTRITION

142.15 	Section 1. APPROPRIATIONS.
 142.16 		Subdivision 1.Department of education. The sums
142.17 	indicated in this section are appropriated from the general fund
142.18 	to the Department of Education for the fiscal years designated.
142.19 		Subd. 2.School lunch. For school lunch aid according to
142.20 	Minnesota Statutes, section 124D.111, and Code of Federal
142.21 	Regulations, title 7, section 210.17:
142.22 	$7,765,000 .....2006 
142.23 	$7,880,000 .....2007 
142.24 		Subd. 3.Traditional school breakfast. For traditional
142.25 	school breakfast aid under Minnesota Statutes, section 124D.116:
142.26 	$4,655,000 .....2006 
142.27 	$4,745,000 .....2007 
142.28 		Subd. 4.Summer school service replacement aid. For
142.29 	summer food service replacement aid under Minnesota Statutes,
142.30 	section 124D.119:
142.31 	$  150,000 .....2006 
142.32 	$  150,000 .....2007 

142.33 	ARTICLE 7
142.34 	LIBRARIES

142.35 	Section 1. APPROPRIATIONS.
 142.36 		Subdivision 1.Department of education. The sums
143.1 	indicated in this section are appropriated from the general fund
143.2 	to the Department of Education for the fiscal years designated.
143.3 		Subd. 2.Basic support. For basic support grants
143.4 	according to Minnesota Statutes, sections 134.32 to 134.35:
143.5 	$8,570,000 .....2006 
143.6 	$8,570,000 .....2007 
143.7 	The 2006 appropriation includes $1,551,000 for 2005 and
143.8 	$7,019,000 for 2006.
143.9 	The 2007 appropriation includes $1,551,000 for 2006 and
143.10 	$7,019,000 for 2007.
143.11 		Subd. 3.Multicounty, multitype library systems. For
143.12 	grants according to Minnesota Statutes, sections 134.353 and
143.13 	134.354, to multicounty, multitype library systems:
143.14 	$  903,000 .....2006 
143.15 	$  903,000 .....2007 
143.16 	The 2006 appropriation includes $163,000 for 2005 and
143.17 	$740,000 for 2006.
143.18 	The 2007 appropriation includes $163,000 for 2006 and
143.19 	$740,000 for 2007.
143.20 		Subd. 4.Electronic library for minnesota. For statewide
143.21 	licenses to on-line databases selected in cooperation with the
143.22 	Higher Education Services Office for school media centers,
143.23 	public libraries, and state government agency libraries, and
143.24 	public, private, or university libraries:
143.25 	$1,039,000 .....2006 
143.26 	$1,091,000 .....2007 
143.27 		Subd. 5.Regional library telecommunications aid. For
143.28 	regional library telecommunications aid under Minnesota
143.29 	Statutes, section 134.355:
143.30 	$1,200,000 .....2006 
143.31 	$1,200,000 .....2007 
143.32 	Of the 2006 appropriation, $217,000 is for 2005 and
143.33 	$983,000 is for 2006.
143.34 	Of the 2007 appropriation, $217,000 is for 2006 and
143.35 	$983,000 is for 2007.

143.36 	ARTICLE 8
144.1 	EARLY CHILDHOOD FAMILY SUPPORT

144.2 	Section 1. Minnesota Statutes 2004, section 121A.17,
144.3 	subdivision 1, is amended to read:
144.4 		Subdivision 1.Early childhood developmental screening.
 144.5 	Every school board must provide for a mandatory program of early
144.6 	childhood developmental screening for children once before
144.7 	school entrance, targeting children who are between 3-1/2 three 
144.8 	and four years old.  This screening program must be established
144.9 	either by one board, by two or more boards acting in
144.10 	cooperation, by service cooperatives, by early childhood family
144.11 	education programs, or by other existing programs.  This
144.12 	screening examination is a mandatory requirement for a student
144.13 	to continue attending kindergarten or first grade in a public
144.14 	school.  A child need not submit to developmental screening
144.15 	provided by a board if the child's health records indicate to
144.16 	the board that the child has received comparable developmental
144.17 	screening from a public or private health care organization or
144.18 	individual health care provider. A student identification
144.19 	number, as defined by the commissioner of education, shall be
144.20 	assigned at the time of early childhood developmental screening
144.21 	or at the time of the provision of health records indicating a
144.22 	comparable screening.  Each school district must provide the
144.23 	essential data in accordance with section 125B.07, subdivision
144.24 	6, to the Department of Education.Districts are encouraged to
144.25 	reduce the costs of preschool developmental screening programs
144.26 	by utilizing volunteers in implementing the program.

144.27 	Sec. 2. Minnesota Statutes 2004, section 121A.19, is
144.28 	amended to read:
144.29 	121A.19 DEVELOPMENTAL SCREENING AID.
144.30 	Each school year, the state must pay a district $40 $50 for
144.31 	each three-year-old child screened; $40 for each four-year-old
144.32 	child screened; and $30 for each five-year-old child screened
144.33 	prior to kindergarten according to the requirements of section
144.34 	121A.17.  If this amount of aid is insufficient, the district
144.35 	may permanently transfer from the general fund an amount that,
144.36 	when added to the aid, is sufficient.

145.1 	Sec. 3. Minnesota Statutes 2004, section 124D.15,
145.2 	subdivision 1, is amended to read:
145.3 		Subdivision 1.Establishment; purpose.  A district or a
145.4 	group of districts may establish a school readiness program
145.5 	for eligible children age three to kindergarten entrance.  The
145.6 	purpose of a school readiness program is to provide all eligible
145.7 	children adequate opportunities to participate in child
145.8 	development programs that enable the children to enter school
145.9 	with the necessary skills and behavior and family stability and
145.10 	support to progress and flourish prepare children to enter
145.11 	kindergarten.

145.12 	Sec. 4. Minnesota Statutes 2004, section 124D.15,
145.13 	subdivision 3, is amended to read:
145.14 		Subd. 3.Program eligibility requirements.  A school
145.15 	readiness program must include the following:
145.16 	(1) a comprehensive plan to anticipate and meet the needs
145.17 	of participating families by coordinating existing social
145.18 	services programs and by fostering collaboration among agencies
145.19 	or other community-based organizations and programs that provide
145.20 	a full range of flexible, family-focused services to families
145.21 	with young children Conduct a child development assessment on
145.22 	each child to guide intentional curriculum planning and promote
145.23 	kindergarten readiness.  This assessment must be conducted on
145.24 	each child at entrance into the program and once prior to exit
145.25 	of the program and be maintained as part of a child's cumulative
145.26 	record;
145.27 	(2) a development and learning component to help children
145.28 	develop appropriate social, cognitive, and physical skills, and
145.29 	emotional well-being adopt and implement department early
145.30 	learning standards;
145.31 	(3) health referral services to address children's medical,
145.32 	dental, mental health, and nutritional needs demonstrate use of
145.33 	comprehensive curriculum based on early childhood research and
145.34 	professional practice that prepares children for kindergarten;
145.35 	(4) a nutrition component to meet children's daily
145.36 	nutritional needs arrange for early childhood screening and
146.1 	appropriate referral;
146.2 	(5) parents' involvement in meeting children's educational,
146.3 	health, social service, and other needs involve parents in
146.4 	program planning and decision making;
146.5 	(6) community outreach to ensure participation by families
146.6 	who represent the racial, cultural, and economic diversity of
146.7 	the community;coordinate with relevant community-based
146.8 	services; and 
146.9 	(7) community-based staff and program resources, including
146.10 	interpreters, that reflect the racial and ethnic characteristics
146.11 	of the children participating in the program; and 
146.12 	(8) a literacy component to ensure that the literacy needs
146.13 	of parents are addressed through referral to and cooperation 
146.14 	cooperate with adult basic education programs and other adult
146.15 	literacy programs.

146.16 	Sec. 5. Minnesota Statutes 2004, section 124D.15, is
146.17 	amended by adding a subdivision to read:
146.18 		Subd. 3a.Application and reporting requirements. (a) A
146.19 	school readiness program must submit a biennial plan to the
146.20 	commissioner for approval to receive aid under section 124D.16.
146.21 	The plan must document that the program will meet the program
146.22 	requirements under subdivision 3.  A school district shall
146.23 	submit the biennial plan by April 1 to the commissioner on a
146.24 	form prescribed by the commissioner.  One-half of the districts
146.25 	shall first submit the plan by April 1, 2006, and one-half of
146.26 	the districts by April 1, 2007.
146.27 	(b) Programs receiving school readiness funds must submit
146.28 	an annual report to the department.

146.29 	Sec. 6. Minnesota Statutes 2004, section 124D.15,
146.30 	subdivision 5, is amended to read:
146.31 		Subd. 5.Services with new or existing providers.  A
146.32 	district is encouraged to may contract with a public charter
146.33 	school or nonprofit community-based organization to provide
146.34 	eligible children developmentally appropriate services that meet
146.35 	the program requirements in subdivision 3.  In the alternative,
146.36 	a district may pay tuition or fees to place an eligible child in
147.1 	an existing program.  A district may establish a new program
147.2 	where no existing, reasonably accessible program meets the
147.3 	program requirements in subdivision 3. A copy of each contract
147.4 	must be submitted to the commissioner with the biennial plan.
147.5 	Services may be provided in a site-based program or in the home
147.6 	of the child or a combination of both.  The district may not
147.7 	restrict participation to district residents.

147.8 	Sec. 7. Minnesota Statutes 2004, section 124D.15,
147.9 	subdivision 10, is amended to read:
147.10 		Subd. 10.Supervision.  A program provided by a board
147.11 	must be supervised by a licensed early childhood teacher, a
147.12 	certified early childhood educator, or a licensed parent
147.13 	educator. A program provided according to a contract between a
147.14 	district and a nonprofit organization or another private
147.15 	organization must be supervised and staffed according to the
147.16 	terms of the contract.

147.17 	Sec. 8. Minnesota Statutes 2004, section 124D.15,
147.18 	subdivision 12, is amended to read:
147.19 		Subd. 12.Program fees.  A district may must adopt a
147.20 	sliding fee schedule based on a family's income but must waive a
147.21 	fee for a participant unable to pay. The fees charged must be
147.22 	designed to enable eligible children of all socioeconomic levels
147.23 	to participate in the program.

147.24 	Sec. 9. Minnesota Statutes 2004, section 124D.15, is
147.25 	amended by adding a subdivision to read:
147.26 		Subd. 14.Assistance. The department must provide
147.27 	assistance to districts with programs described in this section.

147.28 	Sec. 10. Minnesota Statutes 2004, section 124D.16,
147.29 	subdivision 2, is amended to read:
147.30 		Subd. 2.Amount of aid.  (a) A district is eligible to
147.31 	receive school readiness aid for eligible prekindergarten pupils
147.32 	enrolled in a school readiness program under section 124D.15if
147.33 	the program biennial plan required by subdivision 1 section
147.34 	124D.15, subdivision 3a,has been approved by the commissioner.
147.35 	(b) For fiscal year 2002 and thereafter, a district must
147.36 	receive school readiness aid equal to:
148.1 	(1) the number of eligible four-year-old children in the
148.2 	district on October 1 for the previous school year times the
148.3 	ratio of 50 percent of the total school readiness aid for that
148.4 	year to the total number of eligible four-year-old children
148.5 	reported to the commissioner for the previous school year; plus
148.6 	(2) the number of pupils enrolled in the school district
148.7 	from families eligible for the free or reduced school lunch
148.8 	program for the second previous school year times the ratio of
148.9 	50 percent of the total school readiness aid for that year to
148.10 	the total number of pupils in the state from families eligible
148.11 	for the free or reduced school lunch program for the second 
148.12 	previous school year.

148.13 	Sec. 11. Minnesota Statutes 2004, section 124D.16,
148.14 	subdivision 3, is amended to read:
148.15 		Subd. 3.Use of aid.  School readiness aid shall be used
148.16 	only to provide a school readiness program and may be used to
148.17 	provide transportation.  Not more than five percent of the
148.18 	aid program revenue, as defined in subdivision 5,may be used
148.19 	for the cost of administering the program.  Aid must be used to
148.20 	supplement and not supplant local, state, and federal funding.
148.21 	Aid may not be used for instruction and services required under
148.22 	sections 125A.03 to 125A.24 and 125A.65. Aid may not be used to
148.23 	purchase land or construct buildings, but may be used to lease
148.24 	or renovate existing buildings.

148.25 	Sec. 12. APPROPRIATIONS.
 148.26 		Subdivision 1.Department of education. The sums
148.27 	indicated in this section are appropriated from the general fund
148.28 	to the Department of Education for the fiscal years designated.
148.29 		Subd. 2.School readiness. For revenue for school
148.30 	readiness programs under Minnesota Statutes, sections 124D.15
148.31 	and 124D.16:
148.32 	$8,893,000 .....2006 
148.33 	$8,888,000 .....2007 
148.34 	The 2006 appropriation includes $1,638,000 for 2005 and
148.35 	$7,255,000 for 2006.
148.36 	The 2007 appropriation includes $1,603,000 for 2006 and
149.1 	$7,285,000 for 2007.
149.2 		Subd. 3.Early childhood family education aid. For early
149.3 	childhood family education aid under Minnesota Statutes, section
149.4 	124D.135:
149.5 	$12,187,000 .....2006 
149.6 	$12,558,000 .....2007 
149.7 	The 2006 appropriation includes $2,150,000 for 2005 and
149.8 	$10,037,000 for 2006.
149.9 	The 2007 appropriation includes $2,217,000 for 2006 and
149.10 	$10,341,000 for 2007.
149.11 		Subd. 4.Health and developmental screening aid. For
149.12 	health and developmental screening aid under Minnesota Statutes,
149.13 	sections 121A.17 and 121A.19:
149.14 	$2,984,000 .....2006 
149.15 	$3,413,000 .....2007 
149.16 	The 2006 appropriation includes $481,000 for 2005 and
149.17 	$2,503,000 for 2006.
149.18 	The 2007 appropriation includes $552,000 for 2006 and
149.19 	$2,861,000 for 2007.
149.20 		Subd. 5.Head start program. For Head Start programs
149.21 	under Minnesota Statutes, section 119A.52:
149.22 	$17,100,000 .....2006 
149.23 	$17,100,000 .....2007 

149.24 	Sec. 13. REPEALER.
 149.25 	(a) Minnesota Statutes 2004, sections 124D.15, subdivisions
149.26 	2, 4, 6, 7, 8, 9, 11, and 13; and 124D.16, subdivision 4, are
149.27 	repealed.
149.28 	(b) Minnesota Statutes 2004, section 124D.16, subdivision
149.29 	1, is repealed effective July 1, 2006.

149.30 	ARTICLE 9
149.31 	COMMUNITY EDUCATION AND PREVENTION

149.32 	Section 1. Minnesota Statutes 2004, section 124D.22,
149.33 	subdivision 3, is amended to read:
149.34 		Subd. 3.School-age care levy.  To obtain school-age care
149.35 	revenue, a school district may levy an amount equal to the
149.36 	district's school-age care revenue as defined in subdivision 2
150.1 	multiplied by the lesser of one, or the ratio of the quotient
150.2 	derived by dividing the adjusted net tax capacity of the
150.3 	district for the year before the year the levy is certified by
150.4 	the resident pupil units in the district for the school year to
150.5 	which the levy is attributable, to $2,433 $2,925.
150.6 	
EFFECTIVE DATE. This section is effective for revenue for
150.7 	fiscal year 2007.

150.8 	Sec. 2. APPROPRIATIONS.
 150.9 		Subdivision 1.Department of education. The sums
150.10 	indicated in this section are appropriated from the general fund
150.11 	to the Department of Education for the fiscal years designated.
150.12 		Subd. 2.Community education aid. For community
150.13 	education aid under Minnesota Statutes, section 124D.20:
150.14 	$1,958,000 .....2006 
150.15 	$1,250,000 .....2007 
150.16 	The 2006 appropriation includes $459,000 for 2005 and
150.17 	$1,499,000 for 2006.
150.18 	The 2007 appropriation includes $331,000 for 2006 and
150.19 	$919,000 for 2007.
150.20 		Subd. 3.Adults with disabilities program aid. For
150.21 	adults with disabilities programs under Minnesota Statutes,
150.22 	section 124D.56:
150.23 	$  710,000 .....2006 
150.24 	$  710,000 .....2007 
150.25 	The 2006 appropriation includes $128,000 for 2005 and
150.26 	$582,000 for 2006.
150.27 	The 2007 appropriation includes $128,000 for 2006 and
150.28 	$582,000 for 2007.
150.29 		Subd. 4.Hearing-impaired adults. For programs for
150.30 	hearing-impaired adults under Minnesota Statutes, section
150.31 	124D.57:
150.32 	$   70,000 .....2006 
150.33 	$   70,000 .....2007 
150.34 		Subd. 5.School-age care revenue. For extended day aid
150.35 	under Minnesota Statutes, section 124D.22:
150.36 	$   15,000 .....2006 
151.1 	$    5,000 .....2007 
151.2 	The 2006 appropriation includes $4,000 for 2005 and $11,000
151.3 	for 2006.
151.4 	The 2007 appropriation includes $2,000 for 2006 and $3,000
151.5 	for 2007.

151.6 	ARTICLE 10
151.7 	SELF-SUFFICIENCY AND LIFELONG LEARNING

151.8 	Section 1. Minnesota Statutes 2004, section 124D.531,
151.9 	subdivision 1, is amended to read:
151.10 		Subdivision 1.State total adult basic education aid.
 151.11 	(a) The state total adult basic education aid for fiscal year
151.12 	2004 equals $34,388,000.  The state total adult basic education
151.13 	aid for fiscal year 2005 and later is $36,509,000. The state
151.14 	total adult basic education aid for fiscal year 2006 and later
151.15 	is $36,509,000 plus any amount that is not paid for during the
151.16 	previous fiscal year, as a result of adjustments under
151.17 	subdivision 4, paragraph (a), or section 124D.52, subdivision
151.18 	3.Beginning in fiscal year 2002, two percent of the state
151.19 	total adult basic education aid must be set aside for adult
151.20 	basic education supplemental service grants under section
151.21 	124D.522.
151.22 	(b) The state total adult basic education aid, excluding
151.23 	basic population aid, equals the difference between the amount
151.24 	computed in paragraph (a), and the state total basic population
151.25 	aid under subdivision 2.
151.26 	
EFFECTIVE DATE. This section is effective the day
151.27 	following final enactment and applies to revenue distributions
151.28 	for fiscal year 2006.

151.29 	Sec. 2. Minnesota Statutes 2004, section 124D.531,
151.30 	subdivision 4, is amended to read:
151.31 		Subd. 4.Adult basic education program aid limit.  (a)
151.32 	Notwithstanding subdivisions 2 and 3, the total adult basic
151.33 	education aid for a program per prior year contact hour must not
151.34 	exceed $21 per prior year contact hour computed under
151.35 	subdivision 3, clause (2).
151.36 	(b) For fiscal year 2004, the aid for a program under
152.1 	subdivision 3, clause (2), adjusted for changes in program
152.2 	membership, must not exceed the aid for that program under
152.3 	subdivision 3, clause (2), for fiscal year 2003 by more than the
152.4 	greater of eight percent or $10,000.
152.5 	(c) For fiscal year 2005, the aid for a program under
152.6 	subdivision 3, clause (2), adjusted for changes in program
152.7 	membership, must not exceed the sum of the aid for that program
152.8 	under subdivision 3, clause (2), and Laws 2003, First Special
152.9 	Session chapter 9, article 9, section 8, paragraph (a), for the
152.10 	preceding fiscal year by more than the greater of eight percent
152.11 	or $10,000.
152.12 	(d) For fiscal year 2006 and later, the aid for a program
152.13 	under subdivision 3, clause (2), adjusted for changes in program
152.14 	membership, must not exceed the aid for that program under
152.15 	subdivision 3, clause (2), for the first preceding fiscal year
152.16 	by more than the greater of eight percent or $10,000.
152.17 	(e) Adult basic education aid is payable to a program for
152.18 	unreimbursed costs occurring in the program year as defined in
152.19 	section 124D.52, subdivision 3.
152.20 	(f) Any adult basic education aid that is not paid to a
152.21 	program because of the program aid limitation under paragraph
152.22 	(a) must be added to the state total adult basic education aid
152.23 	for the next fiscal year under subdivision 1.  Any adult basic
152.24 	education aid that is not paid to a program because of the
152.25 	program aid limitations under paragraph (b), (c), or (d), must
152.26 	be reallocated among programs by adjusting the rate per contact
152.27 	hour under subdivision 3, clause (2).
152.28 	
EFFECTIVE DATE. This section is effective the day
152.29 	following final enactment and applies to revenue distributions
152.30 	for fiscal year 2006.

152.31 	Sec. 3. GRANTS FOR INTENSIVE ENGLISH INSTRUCTION FOR NEW
152.32 	ADULT REFUGEES.
 152.33 	The commissioner of education shall establish a
152.34 	reimbursement grant program to fund intensive English as a
152.35 	second language (ESL) programs for adult refugees. Intensive ESL
152.36 	programming must provide intensive instruction for adult
153.1 	refugees who are making inadequate literacy progress as measured
153.2 	by a standard assessment test.  The intensive instruction must
153.3 	be focused on participants gaining sufficient literacy to
153.4 	achieve self-sufficiency through employment.
153.5 	Organizations eligible for grants under this section
153.6 	include adult basic education programs, school districts,
153.7 	postsecondary institutions, and nonprofit or community-based
153.8 	organizations or other private organizations with experience in
153.9 	providing English language instruction to non-English speaking
153.10 	immigrants and refugees.  Grant applications must contain
153.11 	information required by the commissioner in the form prescribed
153.12 	by the commissioner.  At a minimum, the application must
153.13 	document experience in literacy programs serving immigrants and
153.14 	refugees, describe fiscal accounting systems and reporting
153.15 	capacity, ensure that administrative expenses are limited to
153.16 	five percent of grant funds, and provide a description of the
153.17 	proposed instructional services and training plans.  Funds must
153.18 	be paid to programs on a reimbursement basis.  The grant program
153.19 	expires on June 30, 2007.

153.20 	Sec. 4. APPROPRIATIONS.
 153.21 		Subdivision 1.Department of education. The sums
153.22 	indicated in this section are appropriated from the general fund
153.23 	to the Department of Education for the fiscal years designated.
153.24 		Subd. 2.Adult basic education aid. For adult basic
153.25 	education aid under Minnesota Statutes, section 124D.52, in
153.26 	fiscal year 2004 and Minnesota Statutes, section 124D.531, in
153.27 	fiscal year 2005:
153.28 	$36,514,000 .....2006 
153.29 	$36,541,000 .....2007 
153.30 	The 2006 appropriation includes $6,580,000 for 2005 and
153.31 	$29,934,000 for 2006.
153.32 	The 2007 appropriation includes $6,614,000 for 2006 and
153.33 	$29,927,000 for 2007.
153.34 		Subd. 3.Ged tests. For payment of 60 percent of the
153.35 	costs of GED tests under Laws 1993, chapter 224, article 4,
153.36 	section 44, subdivision 10:
154.1 	$  125,000 .....2006 
154.2 	$  125,000 .....2007 
154.3 		Subd. 4.Intensive english instruction. For grants for
154.4 	intensive English instruction for adult refugees under section 3:
154.5 	$1,000,000 .....2006 
154.6 	$1,000,000 .....2007 
154.7 		Subd. 5.Lead hazard reduction. For lead hazard
154.8 	reduction under Minnesota Statutes, section 119A.46:
154.9 	$  100,000 .....2006 
154.10 	$  100,000 .....2007 
154.11 	Any balance in the first year does not cancel but is
154.12 	available in the second year.  The commissioner of education may
154.13 	transfer this appropriation to the commissioner of health.

154.14 	ARTICLE 11
154.15 	STATE AGENCIES

154.16 	Section 1. APPROPRIATIONS; DEPARTMENT OF EDUCATION.
 154.17 		Subdivision 1.Department of education. Unless otherwise
154.18 	indicated, the sums indicated in this section are appropriated
154.19 	from the general fund to the Department of Education for the
154.20 	fiscal years designated.
154.21 		Subd. 2.Department. (a) For the Department of Education:
154.22 	$31,896,000 .....2006 
154.23 	$33,757,000 .....2007 
154.24 	Any balance in the first year does not cancel but is
154.25 	available in the second year.
154.26 	(b) $260,000 each year is for the Minnesota Children's
154.27 	Museum.
154.28 	(c) $41,000 each year is for the Minnesota Academy of
154.29 	Science.
154.30 	(d) $250,000 each year is for the administration of the
154.31 	scholarship tax credit.  The commissioner of education may
154.32 	transfer these funds to the Department of Revenue to assist with
154.33 	the administration of this program.
154.34 	(e) $9,000,000 each year is for statewide testing support
154.35 	under Minnesota Statutes, section 120B.30.
154.36 	(f) $500,000 in fiscal year 2007 is for alternative teacher
155.1 	programs.
155.2 	(g) $300,000 in fiscal year 2006 and $1,600,000 in fiscal
155.3 	year 2007 is for value added index assessment model.
155.4 	(h) $164,000 in fiscal year 2006 and $200,000 in fiscal
155.5 	year 2007 is for administration of the school readiness program
155.6 	under Minnesota Statutes, sections 124D.15 and 124D.16.
155.7 	(i) $1,200,000 each year is for development of interactive
155.8 	science assessments.
155.9 	(j) $50,000 in fiscal year 2006 and $75,000 in fiscal year
155.10 	2007 is for the development and distribution to school districts
155.11 	of materials addressing the dangers of methamphetamine.
155.12 		Subd. 3.Board of teaching. For the Board of Teaching:
155.13 	$605,000 .....2006 
155.14 	$605,000 .....2007 
155.15 		Subd. 4.Board of school administrators. For the Board
155.16 	of School Administrators:
155.17 	$180,000 .....2006 
155.18 	$160,000 .....2007 
155.19 		Subd. 5.Federal grants and aids. The expenditures of
155.20 	federal grants and aids as shown in the biennial budget document
155.21 	and its supplements are approved and appropriated and shall be
155.22 	spent as indicated.

155.23 	Sec. 2. APPROPRIATIONS; MINNESOTA STATE ACADEMIES.
 155.24 	The sums indicated in this section are appropriated from
155.25 	the general fund to the Minnesota State Academies for the Deaf
155.26 	and the Blind for the fiscal years designated:
155.27 	$10,800,000 .....2006 
155.28 	$10,953,000 .....2007 
155.29 	Any balance in the first year does not cancel but is
155.30 	available in the second year.

155.31 	Sec. 3. APPROPRIATIONS; PERPICH CENTER FOR ARTS
155.32 	EDUCATION.
 155.33 	The sums indicated in this section are appropriated from
155.34 	the general fund to the Perpich Center for Arts Education for
155.35 	the fiscal years designated:
155.36 	$6,255,000 .....2006 
156.1 	$6,255,000 .....2007 
156.2 	Any balance in the first year does not cancel but is
156.3 	available in the second year.