1.1 	A bill for an act
1.2 	relating to education; providing for early childhood,
1.3 	adult, family, and kindergarten through grade 12
1.4 	education including general education, excellence in
1.5 	education, special programs, facilities and
1.6 	technology, nutrition and accounting, libraries, early
1.7 	education, prevention, self-sufficiency and lifelong
1.8 	learning, state agencies, forecast deficiencies, and
1.9 	technical and conforming amendments; authorizing
1.10 	rulemaking; providing for reports; appropriating
1.11 	money; amending Minnesota Statutes 2004, sections
1.12 	13.32, subdivisions 1, 8; 119A.46, subdivisions 1, 2,
1.13 	3, 8; 120A.05, by adding a subdivision; 120A.22,
1.14 	subdivision 12; 120B.02; 120B.021, subdivision 1, by
1.15 	adding a subdivision; 120B.024; 120B.11, subdivisions
1.16 	1, 2, 3, 4, 5, 8; 120B.13, subdivisions 1, 3, by
1.17 	adding a subdivision; 120B.23; 120B.30, subdivisions
1.18 	1, 1a; 120B.31, subdivision 4; 121A.03, subdivision 1;
1.19 	121A.06, subdivisions 2, 3; 121A.17, subdivisions 1,
1.20 	3, 5; 121A.19; 121A.41, subdivision 10; 121A.47,
1.21 	subdivision 14; 121A.53; 121A.55; 122A.06, subdivision
1.22 	4; 122A.09, subdivisions 4, 10; 122A.12, subdivision
1.23 	2; 122A.18, subdivision 2a; 122A.40, subdivision 5;
1.24 	122A.41, subdivisions 2, 14; 122A.414; 122A.415,
1.25 	subdivisions 1, 3; 123A.05, subdivision 2; 123A.06,
1.26 	subdivision 1; 123A.24, subdivision 2; 123B.02, by
1.27 	adding a subdivision; 123B.09, subdivision 8;
1.28 	123B.143, subdivision 1; 123B.36, subdivision 1;
1.29 	123B.42, subdivision 3; 123B.49, subdivision 4;
1.30 	123B.53, subdivision 1; 123B.54; 123B.59, subdivisions
1.31 	3, 3a; 123B.63, subdivision 2; 123B.71, subdivisions
1.32 	8, 9, 12; 123B.749; 123B.75, subdivision 5, by adding
1.33 	a subdivision; 123B.76, subdivision 3; 123B.79,
1.34 	subdivision 6; 123B.81, subdivision 1; 123B.82;
1.35 	123B.83, subdivision 2; 123B.92, subdivisions 1, 5, 9;
1.36 	124D.095, subdivision 8; 124D.10, subdivisions 3, 4,
1.37 	6, 8, 15, 23; 124D.11, subdivisions 1, 2, 5, 6;
1.38 	124D.111, subdivisions 1, 2; 124D.118, subdivision 4;
1.39 	124D.135, subdivisions 1, 5; 124D.15, subdivisions 1,
1.40 	3, 5, 10, 12, by adding subdivisions; 124D.16,
1.41 	subdivisions 2, 3; 124D.20, subdivision 3; 124D.40;
1.42 	124D.52, subdivision 3; 124D.531, subdivisions 1, 4;
1.43 	124D.66, subdivision 3; 124D.68, subdivision 9;
1.44 	124D.69, subdivision 1; 124D.74, subdivision 1;
1.45 	124D.81, subdivision 1; 124D.84, subdivision 1;
1.46 	125A.091, subdivision 5; 125A.11, subdivision 1;
2.1 	125A.24; 125A.28; 125A.51; 125A.76, subdivisions 1, 4,
2.2 	by adding subdivisions; 125A.79, subdivisions 1, 5, 6,
2.3 	7, by adding subdivisions; 126C.01, subdivision 11;
2.4 	126C.05, by adding a subdivision; 126C.10,
2.5 	subdivisions 1, 2, 3, 6, 7, 8, 13, 13a, 17, 18, 24,
2.6 	31, by adding subdivisions; 126C.13, subdivision 4;
2.7 	126C.15, subdivisions 1, 2, 3, by adding a
2.8 	subdivision; 126C.17, subdivisions 2, 5, 7, 9, 13;
2.9 	126C.21, subdivision 4; 126C.40, subdivision 1;
2.10 	126C.43, subdivisions 2, 3; 126C.44; 126C.457;
2.11 	126C.48, subdivisions 2, 8, by adding a subdivision;
2.12 	126C.63, subdivisions 5, 8; 127A.41, subdivision 8;
2.13 	127A.42, subdivision 2; 127A.45, subdivisions 2, 10,
2.14 	11, 12, 13, 14, 16; 127A.47, subdivisions 7, 8;
2.15 	127A.49, subdivisions 2, 3; 127A.50, subdivision 5;
2.16 	128C.12, subdivisions 1, 3; 134.31, by adding a
2.17 	subdivision; 171.04, subdivision 1; 171.05,
2.18 	subdivisions 2, 2b, 3; 179A.03, subdivision 14;
2.19 	260C.007, subdivision 6, by adding a subdivision;
2.20 	260C.201, subdivision 1; 275.14; 275.16; 469.177,
2.21 	subdivision 9; Laws 1996, chapter 412, article 5,
2.22 	section 24; Laws 2003, First Special Session chapter
2.23 	9, article 1, sections 51; 53, subdivisions 2, as
2.24 	amended, 3, as amended, 11, as amended, 12, as
2.25 	amended; Laws 2003, First Special Session chapter 9,
2.26 	article 2, section 55, subdivisions 2, as amended, 5,
2.27 	as amended, 9, as amended, 12, as amended; Laws 2003,
2.28 	First Special Session chapter 9, article 3, section
2.29 	20, subdivisions 2, 4, as amended, 5, as amended, 6,
2.30 	as amended, 8, as amended, 9, as amended; Laws 2003,
2.31 	First Special Session chapter 9, article 4, section
2.32 	31, subdivisions 2, as amended, 3, as amended, 4; Laws
2.33 	2003, First Special Session chapter 9, article 5,
2.34 	section 35, subdivision 3, as amended; Laws 2003,
2.35 	First Special Session chapter 9, article 6, section 4,
2.36 	as amended; Laws 2003, First Special Session chapter
2.37 	9, article 7, section 11, subdivisions 2, 4; Laws
2.38 	2003, First Special Session chapter 9, article 8,
2.39 	section 7, subdivisions 2, as amended, 3, 5, as
2.40 	amended; Laws 2003, First Special Session chapter 9,
2.41 	article 9, section 9, subdivision 2, as amended;
2.42 	proposing coding for new law in Minnesota Statutes,
2.43 	chapters 120A; 120B; 121A; 122A; 123A; 123B; 124D;
2.44 	125B; 129C; 171; repealing Minnesota Statutes 2004,
2.45 	sections 122A.24; 122A.415, subdivision 2; 123B.83,
2.46 	subdivision 1; 124D.095, subdivision 9; 124D.15,
2.47 	subdivisions 2, 4, 6, 7, 8, 9, 11, 13; 124D.16,
2.48 	subdivisions 1, 4; 126C.12; 126C.42, subdivisions 1,
2.49 	4; 128C.12, subdivision 4.
2.50 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

2.51 	ARTICLE 1
2.52 	GENERAL EDUCATION

2.53 	Section 1. Minnesota Statutes 2004, section 120A.05, is
2.54 	amended by adding a subdivision to read:
2.55 		Subd. 18.Kindergarten. "Kindergarten" means a program
2.56 	designed for pupils five years of age on September 1 of the
2.57 	calendar year in which the school year commences that prepares
2.58 	pupils to enter first grade the following school year.  A
2.59 	program designed for pupils younger than five years of age on
2.60 	September 1 of the calendar year in which the school year
3.1 	commences that prepares pupils to enter kindergarten the
3.2 	following school year is a prekindergarten program.
3.3 	
EFFECTIVE DATE. This section is effective the day
3.4 	following final enactment.

3.5 	Sec. 2. Minnesota Statutes 2004, section 123A.05,
3.6 	subdivision 2, is amended to read:
3.7 		Subd. 2.Reserve revenue.  Each district that is a member
3.8 	of an area learning center must reserve revenue in an amount
3.9 	equal to the sum of (1) at least 90 percent of the district
3.10 	average general education revenue per pupil unit minus an amount
3.11 	equal to the product of the formula allowance according to
3.12 	section 126C.10, subdivision 2, times .0485, calculated without
3.13 	basic skills revenue,and transportation sparsity revenue, and
3.14 	the transportation portion of the transition revenue adjustment,
3.15 	times the number of pupil units attending an area learning
3.16 	center program under this section, plus (2) the amount of basic
3.17 	skills revenue generated by pupils attending the area learning
3.18 	center.  The amount of reserved revenue under this subdivision
3.19 	may only be spent on program costs associated with the area
3.20 	learning center. Compensatory revenue must be allocated
3.21 	according to section 126C.15, subdivision 2.

3.22 	Sec. 3. Minnesota Statutes 2004, section 123B.42,
3.23 	subdivision 3, is amended to read:
3.24 		Subd. 3.Cost; limitation.  (a) The cost per pupil of the
3.25 	textbooks, individualized instructional or cooperative learning
3.26 	materials, and standardized tests provided for in this section
3.27 	for each school year must not exceed the statewide average
3.28 	expenditure per pupil, adjusted pursuant according to clause 
3.29 	paragraph (b), by the Minnesota public elementary and secondary
3.30 	schools for textbooks, individualized instructional materials
3.31 	and standardized tests as computed and established by the
3.32 	department by February 1 of the preceding school year from the
3.33 	most recent public school year data then available.
3.34 	(b) The cost computed in clause paragraph (a) shall be
3.35 	increased by an inflation adjustment equal to the percent of
3.36 	increase in the formula allowance, pursuant to section 126C.10,
4.1 	subdivision 2, from the second preceding school year to the
4.2 	current school year 3.0 percent for fiscal year 2006, 6.19
4.3 	percent for fiscal year 2007, and 3.1 percent for fiscal year
4.4 	2008.
4.5 	(c) The commissioner shall allot to the districts or
4.6 	intermediary service areas the total cost for each school year
4.7 	of providing or loaning the textbooks, individualized
4.8 	instructional or cooperative learning materials, and
4.9 	standardized tests for the pupils in each nonpublic school.  The
4.10 	allotment shall not exceed the product of the statewide average
4.11 	expenditure per pupil, according to clause (a), adjusted
4.12 	pursuant to clause (b), multiplied by the number of nonpublic
4.13 	school pupils who make requests pursuant to this section and who
4.14 	are enrolled as of September 15 of the current school year.

4.15 	Sec. 4. Minnesota Statutes 2004, section 123B.75, is
4.16 	amended by adding a subdivision to read:
4.17 		Subd. 4a.Taconite revenue. Taconite revenue received in
4.18 	a calendar year by a school district under section 298.28,
4.19 	subdivisions 4, paragraphs (b) and (c), and 11, paragraph (d),
4.20 	is fully recognized in the fiscal year in which the February
4.21 	payment falls.
4.22 	[EFFECTIVE DATE.]This section is effective for revenue for
4.23 	fiscal year 2006.

4.24 	Sec. 5. Minnesota Statutes 2004, section 123B.76,
4.25 	subdivision 3, is amended to read:
4.26 		Subd. 3.Expenditures by building.  (a) For the purposes
4.27 	of this section, "building" means education site as defined in
4.28 	section 123B.04, subdivision 1.
4.29 	(b) Each district shall maintain separate accounts to
4.30 	identify general fund expenditures, excluding capital
4.31 	expenditures and pupil transportation,for each building.  All
4.32 	expenditures for regular instruction, secondary vocational
4.33 	instruction, and school administration must be reported to the
4.34 	department separately for each building.  All expenditures for
4.35 	special education instruction, instructional support services,
4.36 	and pupil support services provided within a specific building
5.1 	must be reported to the department separately for each
5.2 	building.  Salary expenditures reported by building must reflect
5.3 	actual salaries for staff at the building and must not be based
5.4 	on districtwide averages.  All other general fund expenditures
5.5 	may be reported by building or on a districtwide basis.
5.6 	(c) The department must annually report information showing
5.7 	school district general fund expenditures per pupil by program
5.8 	category for each building and estimated school district general
5.9 	fund revenue generated by pupils attending each building on its
5.10 	Web site.  For purposes of this report:
5.11 	(1) expenditures not required to be reported by building
5.12 	shall be allocated among buildings on a uniform per pupil basis;
5.13 	(2) basic skills revenue shall be allocated according to
5.14 	section 126C.10, subdivision 4;
5.15 	(3) secondary sparsity revenue and elementary sparsity
5.16 	revenue shall be allocated according to section 126C.10,
5.17 	subdivisions 7 and 8;
5.18 	(4) other general education revenue shall be allocated on a
5.19 	uniform per pupil unit basis;
5.20 	(5) first grade preparedness aid shall be allocated
5.21 	according to section 124D.081;
5.22 	(6) state and federal special education aid and Title I aid
5.23 	shall be allocated in proportion to district expenditures for
5.24 	these programs by building; and
5.25 	(7) other general fund revenues shall be allocated on a
5.26 	uniform per pupil basis, except that the department may allocate
5.27 	other revenues attributable to specific buildings directly to
5.28 	those buildings.

5.29 	Sec. 6. Minnesota Statutes 2004, section 123B.79,
5.30 	subdivision 6, is amended to read:
5.31 		Subd. 6.Account transfer for statutory operating debt.
 5.32 	On June 30 of each year, a district may make a permanent
5.33 	transfer from the general fund account entitled " undesignated 
5.34 	net unreserved general fund balance since statutory operating
5.35 	debt" to the account entitled "reserved fund balance reserve
5.36 	account for purposes of statutory operating debt reduction."
6.1 	The amount of the transfer is limited to the lesser of (a) the
6.2 	net undesignated operating unreserved general fund balance, or
6.3 	(b) the sum of the remaining statutory operating debt levies
6.4 	authorized for all future years according to section 126C.42,
6.5 	subdivision 1.  If the net undesignated operating unreserved
6.6 	general fund balance is less than zero, the district may not
6.7 	make a transfer.

6.8 	Sec. 7. Minnesota Statutes 2004, section 123B.81,
6.9 	subdivision 1, is amended to read:
6.10 		Subdivision 1.Operating debt.  The "operating debt" of a
6.11 	school district means the net negative undesignated unreserved
6.12 	general fund balance in all school district funds, other than
6.13 	capital expenditure, building construction, debt service, and
6.14 	trust and agency,calculated as of June 30 of each year in
6.15 	accordance with the uniform financial accounting and reporting
6.16 	standards for Minnesota school districts.

6.17 	Sec. 8. Minnesota Statutes 2004, section 123B.82, is
6.18 	amended to read:
6.19 	123B.82 REORGANIZATION OPERATING DEBT.
6.20 	The "reorganization operating debt" of a school district
6.21 	means the net negative undesignated unreserved fund balance 
6.22 	balances in all school district funds, other than building
6.23 	construction, debt redemption, and trust and agency, calculated
6.24 	in accordance with the uniform financial accounting and
6.25 	reporting standards for Minnesota school districts as of:
6.26 	(1) June 30 of the fiscal year before the first year that a
6.27 	district receives revenue according to section 123A.39,
6.28 	subdivision 3; or
6.29 	(2) June 30 of the fiscal year before the effective date of
6.30 	reorganization according to section 123A.46 or 123A.48.

6.31 	Sec. 9. Minnesota Statutes 2004, section 123B.83,
6.32 	subdivision 2, is amended to read:
6.33 		Subd. 2.undesignated unreserved fund balances.
 6.34 	Beginning in fiscal year 1978 and each year thereafter, any A
6.35 	school district not subject to the provisions of subdivision 1 
6.36 	must limit its expenditures so that its undesignated net
7.1 	unreserved general fund balances do balance does not constitute
7.2 	statutory operating debt as defined in section 126C.42.

7.3 	Sec. 10. Minnesota Statutes 2004, section 123B.92,
7.4 	subdivision 1, is amended to read:
7.5 		Subdivision 1.Definitions.  For purposes of this section
7.6 	and section 125A.76, the terms defined in this subdivision have
7.7 	the meanings given to them.
7.8 	(a) "Actual expenditure per pupil transported in the
7.9 	regular and excess transportation categories" means the quotient
7.10 	obtained by dividing:
7.11 	(1) the sum of:
7.12 	(i) all expenditures for transportation in the regular
7.13 	category, as defined in paragraph (b), clause (1), and the
7.14 	excess category, as defined in paragraph (b), clause (2), plus
7.15 	(ii) an amount equal to one year's depreciation on the
7.16 	district's school bus fleet and mobile units computed on a
7.17 	straight line basis at the rate of 15 percent per year for
7.18 	districts operating a program under section 124D.128 for grades
7.19 	1 to 12 for all students in the district and 12-1/2 percent per
7.20 	year for other districts of the cost of the fleet, plus
7.21 	(iii) an amount equal to one year's depreciation on the
7.22 	district's type three school buses, as defined in section
7.23 	169.01, subdivision 6, clause (5), which must be used a majority
7.24 	of the time for pupil transportation purposes, computed on a
7.25 	straight line basis at the rate of 20 percent per year of the
7.26 	cost of the type three school buses by:
7.27 	(2) the number of pupils eligible for transportation in the
7.28 	regular category, as defined in paragraph (b), clause (1), and
7.29 	the excess category, as defined in paragraph (b), clause (2).
7.30 	(b) "Transportation category" means a category of
7.31 	transportation service provided to pupils as follows:
7.32 	(1) Regular transportation is:
7.33 	(i) transportation to and from school during the regular
7.34 	school year for resident elementary pupils residing one mile or
7.35 	more from the public or nonpublic school they attend, and
7.36 	resident secondary pupils residing two miles or more from the
8.1 	public or nonpublic school they attend, excluding desegregation
8.2 	transportation and noon kindergarten transportation; but with
8.3 	respect to transportation of pupils to and from nonpublic
8.4 	schools, only to the extent permitted by sections 123B.84 to
8.5 	123B.87;
8.6 	(ii) transportation of resident pupils to and from language
8.7 	immersion programs;
8.8 	(iii) transportation of a pupil who is a custodial parent
8.9 	and that pupil's child between the pupil's home and the child
8.10 	care provider and between the provider and the school, if the
8.11 	home and provider are within the attendance area of the school;
8.12 	(iv) transportation to and from or board and lodging in
8.13 	another district, of resident pupils of a district without a
8.14 	secondary school; and
8.15 	(v) transportation to and from school during the regular
8.16 	school year required under subdivision 3 for nonresident
8.17 	elementary pupils when the distance from the attendance area
8.18 	border to the public school is one mile or more, and for
8.19 	nonresident secondary pupils when the distance from the
8.20 	attendance area border to the public school is two miles or
8.21 	more, excluding desegregation transportation and noon
8.22 	kindergarten transportation.
8.23 	For the purposes of this paragraph, a district may
8.24 	designate a licensed day care facility, respite care facility,
8.25 	the residence of a relative, or the residence of a person chosen
8.26 	by the pupil's parent or guardian as the home of a pupil for
8.27 	part or all of the day, if requested by the pupil's parent or
8.28 	guardian, and if that facility or residence is within the
8.29 	attendance area of the school the pupil attends.
8.30 	(2) Excess transportation is:
8.31 	(i) transportation to and from school during the regular
8.32 	school year for resident secondary pupils residing at least one
8.33 	mile but less than two miles from the public or nonpublic school
8.34 	they attend, and transportation to and from school for resident
8.35 	pupils residing less than one mile from school who are
8.36 	transported because of extraordinary traffic, drug, or crime
9.1 	hazards; and
9.2 	(ii) transportation to and from school during the regular
9.3 	school year required under subdivision 3 for nonresident
9.4 	secondary pupils when the distance from the attendance area
9.5 	border to the school is at least one mile but less than two
9.6 	miles from the public school they attend, and for nonresident
9.7 	pupils when the distance from the attendance area border to the
9.8 	school is less than one mile from the school and who are
9.9 	transported because of extraordinary traffic, drug, or crime
9.10 	hazards.
9.11 	(3) Desegregation transportation is transportation within
9.12 	and outside of the district during the regular school year of
9.13 	pupils to and from schools located outside their normal
9.14 	attendance areas under a plan for desegregation mandated by the
9.15 	commissioner or under court order.
9.16 	(4) "Transportation services for pupils with disabilities"
9.17 	is:
9.18 	(i) transportation of pupils with disabilities who cannot
9.19 	be transported on a regular school bus between home or a respite
9.20 	care facility and school;
9.21 	(ii) necessary transportation of pupils with disabilities
9.22 	from home or from school to other buildings, including centers
9.23 	such as developmental achievement centers, hospitals, and
9.24 	treatment centers where special instruction or services required
9.25 	by sections 125A.03 to 125A.24, 125A.26 to 125A.48, and 125A.65
9.26 	are provided, within or outside the district where services are
9.27 	provided;
9.28 	(iii) necessary transportation for resident pupils with
9.29 	disabilities required by sections 125A.12, and 125A.26 to
9.30 	125A.48;
9.31 	(iv) board and lodging for pupils with disabilities in a
9.32 	district maintaining special classes;
9.33 	(v) transportation from one educational facility to another
9.34 	within the district for resident pupils enrolled on a
9.35 	shared-time basis in educational programs, and necessary
9.36 	transportation required by sections 125A.18, and 125A.26 to
10.1 	125A.48, for resident pupils with disabilities who are provided
10.2 	special instruction and services on a shared-time basis or if
10.3 	resident pupils are not transported, the costs of necessary
10.4 	travel between public and private schools or neutral
10.5 	instructional sites by essential personnel employed by the
10.6 	district's program for children with a disability;
10.7 	(vi) transportation for resident pupils with disabilities
10.8 	to and from board and lodging facilities when the pupil is
10.9 	boarded and lodged for educational purposes; and
10.10 	(vii) services described in clauses (i) to (vi), when
10.11 	provided for pupils with disabilities in conjunction with a
10.12 	summer instructional program that relates to the pupil's
10.13 	individual education plan or in conjunction with a learning year
10.14 	program established under section 124D.128.
10.15 	For purposes of computing special education base revenue
10.16 	under section 125A.76, subdivision 2, the cost of providing
10.17 	transportation for children with disabilities includes (A) the
10.18 	additional cost of transporting a homeless student from a
10.19 	temporary nonshelter home in another district to the school of
10.20 	origin, or a formerly homeless student from a permanent home in
10.21 	another district to the school of origin but only through the
10.22 	end of the academic year; and (B) depreciation on district-owned
10.23 	school buses purchased after July 1, 2005, and used primarily
10.24 	for transportation of pupils with disabilities, calculated
10.25 	according to paragraph (a), clauses (ii) and (iii).
10.26 	Depreciation costs included in the disabled transportation
10.27 	category must be excluded in calculating the actual expenditure
10.28 	per pupil transported in the regular and excess transportation
10.29 	categories according to paragraph (a).
10.30 	(5) "Nonpublic nonregular transportation" is:
10.31 	(i) transportation from one educational facility to another
10.32 	within the district for resident pupils enrolled on a
10.33 	shared-time basis in educational programs, excluding
10.34 	transportation for nonpublic pupils with disabilities under
10.35 	clause (4);
10.36 	(ii) transportation within district boundaries between a
11.1 	nonpublic school and a public school or a neutral site for
11.2 	nonpublic school pupils who are provided pupil support services
11.3 	pursuant to section 123B.44; and
11.4 	(iii) late transportation home from school or between
11.5 	schools within a district for nonpublic school pupils involved
11.6 	in after-school activities.
11.7 	(c) "Mobile unit" means a vehicle or trailer designed to
11.8 	provide facilities for educational programs and services,
11.9 	including diagnostic testing, guidance and counseling services,
11.10 	and health services.  A mobile unit located off nonpublic school
11.11 	premises is a neutral site as defined in section 123B.41,
11.12 	subdivision 13.

11.13 	Sec. 11. Minnesota Statutes 2004, section 123B.92,
11.14 	subdivision 5, is amended to read:
11.15 		Subd. 5.District reports. (a) Each district must report
11.16 	data to the department as required by the department to account
11.17 	for transportation expenditures.
11.18 	(b) Salaries and fringe benefits of district employees
11.19 	whose primary duties are other than transportation, including
11.20 	central office administrators and staff, building administrators
11.21 	and staff, teachers, social workers, school nurses, and
11.22 	instructional aides, must not be included in a district's
11.23 	transportation expenditures, except that a district may include
11.24 	salaries and benefits according to paragraph (c) for (1) an
11.25 	employee designated as the district transportation director, (2)
11.26 	an employee providing direct support to the transportation
11.27 	director, or (3) an employee providing direct transportation
11.28 	services such as a bus driver or bus aide.
11.29 	(c) Salaries and fringe benefits of other district
11.30 	employees who work part time in transportation and part time in
11.31 	other areas must not be included in a district's transportation
11.32 	expenditures unless the district maintains documentation of the
11.33 	employee's time spent on pupil transportation matters in the
11.34 	form and manner prescribed by the department.
11.35 	(d) Pupil transportation expenditures, excluding
11.36 	expenditures for capital outlay, leased buses, student board and
12.1 	lodging, crossing guards, and aides on buses, must be allocated
12.2 	among transportation categories based on cost-per-mile,
12.3 	cost-per-student, cost-per-hour, or cost-per-route, regardless
12.4 	of whether the transportation services are provided on
12.5 	district-owned or contractor-owned school buses.  Expenditures
12.6 	for school bus driver salaries and fringe benefits may either be
12.7 	directly charged to the appropriate transportation category or
12.8 	may be allocated among transportation categories based on
12.9 	cost-per-mile, cost-per-student, cost-per-hour, or
12.10 	cost-per-route.  Expenditures by private contractors or
12.11 	individuals who provide transportation exclusively in one
12.12 	transportation category must be charged directly to the
12.13 	appropriate transportation category.  Transportation services
12.14 	provided by contractor-owned school bus companies incorporated
12.15 	under different names but owned by the same individual or group
12.16 	of individuals must be treated as the same company for cost
12.17 	allocation purposes.
12.18 	
EFFECTIVE DATE. This section is effective for expenditure
12.19 	reporting for fiscal year 2006.

12.20 	Sec. 12. Minnesota Statutes 2004, section 123B.92,
12.21 	subdivision 9, is amended to read:
12.22 		Subd. 9.Nonpublic pupil transportation aid.  (a) A
12.23 	district's nonpublic pupil transportation aid for the 1996-1997
12.24 	and later school years for transportation services for nonpublic
12.25 	school pupils according to sections 123B.88, 123B.84 to 123B.86,
12.26 	and this section, equals the sum of the amounts computed in
12.27 	paragraphs (b) and (c).  This aid does not limit the obligation
12.28 	to transport pupils under sections 123B.84 to 123B.87.
12.29 	(b) For regular and excess transportation according to
12.30 	subdivision 1, paragraph (b), clauses (1) and (2), an amount
12.31 	equal to the product of:
12.32 	(1) the district's actual expenditure per pupil transported
12.33 	in the regular and excess transportation categories during the
12.34 	second preceding school year; times
12.35 	(2) the number of nonpublic school pupils residing in the
12.36 	district who receive regular or excess transportation service or
13.1 	reimbursement for the current school year; times
13.2 	(3) the ratio of the formula allowance pursuant to section
13.3 	126C.10, subdivision 2, for the current school year to the
13.4 	formula allowance pursuant to section 126C.10, subdivision 2,
13.5 	for the second preceding school year 1.03 for fiscal year 2006,
13.6 	1.0619 for fiscal year 2007, 1.031 for fiscal year 2008, and 1.0
13.7 	for fiscal year 2009 and later.
13.8 	(c) For nonpublic nonregular transportation according to
13.9 	subdivision 1, paragraph (b), clause (5), an amount equal to the
13.10 	product of:
13.11 	(1) the district's actual expenditure for nonpublic
13.12 	nonregular transportation during the second preceding school
13.13 	year; times
13.14 	(2) the ratio of the formula allowance pursuant to section
13.15 	126C.10, subdivision 2, for the current school year to the
13.16 	formula allowance pursuant to section 126C.10, subdivision 2,
13.17 	for the second preceding school year 1.03 for fiscal year 2006,
13.18 	1.0619 for fiscal year 2007, 1.031 for fiscal year 2008, and 1.0
13.19 	for fiscal year 2009 and later.
13.20 	(d) Notwithstanding the amount of the formula allowance for
13.21 	fiscal year 2004 in section 126C.10, subdivision 2, the
13.22 	commissioner shall use the amount of the formula allowance for
13.23 	the current year minus $415 in determining the nonpublic pupil
13.24 	transportation revenue in paragraphs (b) and (c) for fiscal year
13.25 	2004.

13.26 	Sec. 13. Minnesota Statutes 2004, section 124D.68,
13.27 	subdivision 9, is amended to read:
13.28 		Subd. 9.Enrollment verification.  (a) For a pupil
13.29 	attending an eligible program full time under subdivision 3,
13.30 	paragraph (d), the department must pay 90 percent of the
13.31 	district's average general education revenue less basic skills
13.32 	revenue to the eligible program and ten percent of the
13.33 	district's average general education revenue less basic skills
13.34 	revenue to the contracting district within 30 days after the
13.35 	eligible program verifies enrollment using the form provided by
13.36 	the department.  For a pupil attending an eligible program part
14.1 	time, revenue, excluding compensatory revenue,shall be reduced
14.2 	proportionately, according to the amount of time the pupil
14.3 	attends the program, and the payments to the eligible program
14.4 	and the contracting district shall be reduced accordingly.  A
14.5 	pupil for whom payment is made according to this section may not
14.6 	be counted by any district for any purpose other than
14.7 	computation of general education revenue.  If payment is made
14.8 	for a pupil under this subdivision, a district shall not
14.9 	reimburse a program under section 124D.69 for the same
14.10 	pupil. The basic skills revenue shall be paid generated by
14.11 	pupils attending the eligible program according to section
14.12 	126C.10, subdivision 4, shall be paid to the eligible program.
14.13 	(b) The department must pay up to 100 percent of the
14.14 	revenue to the eligible program if there is an agreement to that
14.15 	effect between the school district and the eligible program.
14.16 	(c) Notwithstanding paragraphs (a) and (b), for an eligible
14.17 	program that provides chemical treatment services to students,
14.18 	the department must pay 100 percent of the revenue to the
14.19 	eligible program.

14.20 	Sec. 14. Minnesota Statutes 2004, section 124D.69,
14.21 	subdivision 1, is amended to read:
14.22 		Subdivision 1.Aid.  If a pupil enrolls in an alternative
14.23 	program, eligible under section 124D.68, subdivision 3,
14.24 	paragraph (d), or subdivision 4, operated by a private
14.25 	organization that has contracted with a school district to
14.26 	provide educational services for eligible pupils under section
14.27 	124D.68, subdivision 2, the district contracting with the
14.28 	private organization must reimburse the provider an amount equal
14.29 	to the sum of (1) at least 95 percent of the district's average
14.30 	general education less basic skills revenue per pupil unit times
14.31 	the number of pupil units for pupils attending the program., and
14.32 	(2) the amount of basic skills revenue shall be paid generated
14.33 	by pupils attending the program according to section 126C.10,
14.34 	subdivision 4. Compensatory revenue must be allocated according
14.35 	to section 126C.15, subdivision 2.For a pupil attending the
14.36 	program part time, the revenue paid to the program, excluding
15.1 	compensatory revenue,must be reduced proportionately, according
15.2 	to the amount of time the pupil attends the program, and revenue
15.3 	paid to the district shall be reduced accordingly.  Pupils for
15.4 	whom a district provides reimbursement may not be counted by the
15.5 	district for any purpose other than computation of general
15.6 	education revenue.  If payment is made to a district or program
15.7 	for a pupil under this section, the department must not make a
15.8 	payment for the same pupil under section 124D.68, subdivision 9.
15.9 	Notwithstanding sections 125A.15, 125A.51, and 125A.515, general
15.10 	education revenue for a student who receives educational
15.11 	services under this section shall be paid according to this
15.12 	section.

15.13 	Sec. 15. Minnesota Statutes 2004, section 125A.51, is
15.14 	amended to read:
15.15 	125A.51 PLACEMENT OF CHILDREN WITHOUT DISABILITIES;
15.16 	EDUCATION AND TRANSPORTATION.
15.17 	The responsibility for providing instruction and
15.18 	transportation for a pupil without a disability who has a
15.19 	short-term or temporary physical or emotional illness or
15.20 	disability, as determined by the standards of the commissioner,
15.21 	and who is temporarily placed for care and treatment for that
15.22 	illness or disability, must be determined as provided in this
15.23 	section.
15.24 	(a) The school district of residence of the pupil is the
15.25 	district in which the pupil's parent or guardian resides.
15.26 	(b) When parental rights have been terminated by court
15.27 	order, the legal residence of a child placed in a residential or
15.28 	foster facility for care and treatment is the district in which
15.29 	the child resides.
15.30 	(c) Before the placement of a pupil for care and treatment,
15.31 	the district of residence must be notified and provided an
15.32 	opportunity to participate in the placement decision.  When an
15.33 	immediate emergency placement is necessary and time does not
15.34 	permit resident district participation in the placement
15.35 	decision, the district in which the pupil is temporarily placed,
15.36 	if different from the district of residence, must notify the
16.1 	district of residence of the emergency placement within 15 days
16.2 	of the placement.
16.3 	(d) When a pupil without a disability is temporarily placed
16.4 	for care and treatment in a day program and the pupil continues
16.5 	to live within the district of residence during the care and
16.6 	treatment, the district of residence must provide instruction
16.7 	and necessary transportation to and from the treatment facility
16.8 	for the pupil.  Transportation shall only be provided by the
16.9 	district during regular operating hours of the district.  The
16.10 	district may provide the instruction at a school within the
16.11 	district of residence, at the pupil's residence, or in the case
16.12 	of a placement outside of the resident district, in the district
16.13 	in which the day treatment program is located by paying tuition
16.14 	to that district.  The district of placement may contract with a
16.15 	facility to provide instruction by teachers licensed by the
16.16 	state Board of Teaching.
16.17 	(e) When a pupil without a disability is temporarily placed
16.18 	in a residential program for care and treatment, the district in
16.19 	which the pupil is placed must provide instruction for the pupil
16.20 	and necessary transportation while the pupil is receiving
16.21 	instruction, and in the case of a placement outside of the
16.22 	district of residence, the nonresident district must bill the
16.23 	district of residence for the actual cost of providing the
16.24 	instruction for the regular school year and for summer school,
16.25 	excluding transportation costs.
16.26 	(f) Notwithstanding paragraph (e), if the pupil is homeless
16.27 	and placed in a public or private homeless shelter, then the
16.28 	district that enrolls the pupil under section 127A.47,
16.29 	subdivision 2, shall provide the transportation, unless the
16.30 	district that enrolls the pupil and the district in which the
16.31 	pupil is temporarily placed agree that the district in which the
16.32 	pupil is temporarily placed shall provide transportation.When
16.33 	a pupil without a disability is temporarily placed in a
16.34 	residential program outside the district of residence, the
16.35 	administrator of the court placing the pupil must send timely
16.36 	written notice of the placement to the district of residence.
17.1 	The district of placement may contract with a residential
17.2 	facility to provide instruction by teachers licensed by the
17.3 	state Board of Teaching. For purposes of this section, the state
17.4 	correctional facilities operated on a fee-for-service basis are
17.5 	considered to be residential programs for care and treatment.
17.6 	(f) (g) The district of residence must include the pupil in
17.7 	its residence count of pupil units and pay tuition as provided
17.8 	in section 123A.488 to the district providing the instruction.
17.9 	Transportation costs must be paid by the district providing the
17.10 	transportation and the state must pay transportation aid to that
17.11 	district.  For purposes of computing state transportation aid,
17.12 	pupils governed by this subdivision must be included in the
17.13 	disabled transportation category if the pupils cannot be
17.14 	transported on a regular school bus route without special
17.15 	accommodations.

17.16 	Sec. 16. Minnesota Statutes 2004, section 126C.01,
17.17 	subdivision 11, is amended to read:
17.18 		Subd. 11.Net unappropriated operating unreserved general 
17.19 	fund balance.  "Net unappropriated operating unreserved general 
17.20 	fund balance" means the sum of the unreserved general fund
17.21 	balances in the general, food service, and community service
17.22 	funds minus the balances reserved for statutory operating debt
17.23 	reduction, bus purchase, severance pay, taconite, unemployment
17.24 	benefits, maintenance levy reduction, operating capital,
17.25 	disabled access, health and safety,balance and encumbrances,
17.26 	computed as of June 30 each year.

17.27 	Sec. 17. Minnesota Statutes 2004, section 126C.05, is
17.28 	amended by adding a subdivision to read:
17.29 		Subd. 20.Project-based average daily membership. (a) To
17.30 	receive general education revenue for a pupil enrolled in a
17.31 	public school with a project-based program, a school must meet
17.32 	the requirements in this paragraph.  The school must:
17.33 	(1) register with the commissioner as a project-based
17.34 	program by May 30 of the preceding fiscal year;
17.35 	(2) provide a minimum teacher contact of no less than one
17.36 	hour per week per project-based credit for each pupil;
18.1 	(3) maintain a record system that shows when each credit or
18.2 	portion thereof was reported for membership for each pupil; and 
18.3 	(4) report pupil membership consistent with paragraph (b).
18.4 	(b) The commissioner must develop a formula for reporting
18.5 	pupil membership to compute average daily membership for each
18.6 	registered project-based school.  Average daily membership for a
18.7 	pupil in a registered project-based program is the lesser of:
18.8 	(1) 1.0; or 
18.9 	(2) the ratio of (i) the number of membership hours
18.10 	generated by project-based credits completed during the school
18.11 	year plus membership hours generated by credits completed in a
18.12 	seat-based setting to (ii) the annual required instructional
18.13 	hours at that grade level.  Membership hours for a partially
18.14 	completed project-based credit must be prorated.

18.15 	Sec. 18. Minnesota Statutes 2004, section 126C.10,
18.16 	subdivision 1, is amended to read:
18.17 		Subdivision 1.General education revenue. (a) For fiscal
18.18 	year 2003, the general education revenue for each district
18.19 	equals the sum of the district's basic revenue, basic skills
18.20 	revenue, training and experience revenue, secondary sparsity
18.21 	revenue, elementary sparsity revenue, transportation sparsity
18.22 	revenue, total operating capital revenue, and equity revenue.
18.23 	(b) For fiscal year 2004 2006 and later, the general
18.24 	education revenue for each district equals the sum of the
18.25 	district's basic revenue, extended time revenue, gifted and
18.26 	talented revenue,basic skills revenue, training and experience
18.27 	revenue, secondary sparsity revenue, elementary sparsity
18.28 	revenue, transportation sparsity revenue, total operating
18.29 	capital revenue, equity revenue, alternative compensation
18.30 	revenue,and transition revenue.
18.31 	
EFFECTIVE DATE. This section is effective for revenue for
18.32 	fiscal year 2006.

18.33 	Sec. 19. Minnesota Statutes 2004, section 126C.10,
18.34 	subdivision 2, is amended to read:
18.35 		Subd. 2.Basic revenue.  The basic revenue for each
18.36 	district equals the formula allowance times the adjusted
19.1 	marginal cost pupil units for the school year.  The formula
19.2 	allowance for fiscal year 2001 2006 is $3,964.  The formula
19.3 	allowance for fiscal year 2002 is $4,068.  The formula allowance
19.4 	for fiscal year 2003 and subsequent years is $4,601 $4,740. The
19.5 	formula allowance for fiscal year 2007 and later is $4,885.

19.6 	Sec. 20. Minnesota Statutes 2004, section 126C.10, is
19.7 	amended by adding a subdivision to read:
19.8 		Subd. 2b.Gifted and talented revenue. Gifted and
19.9 	talented revenue for each district equals $15 times the
19.10 	district's adjusted marginal cost pupil units.  For fiscal year
19.11 	2006 only, a district is eligible for start-up revenue equal to
19.12 	$3 times the adjusted marginal cost pupil units for that year.
19.13 	A school district must reserve gifted and talented revenue and,
19.14 	consistent with section 120B.15, must spend the revenue only to:
19.15 	(1) identify gifted and talented students;
19.16 	(2) provide education programs for gifted and talented
19.17 	students; or 
19.18 	(3) provide staff development to prepare teachers to best
19.19 	meet the unique needs of gifted and talented students.
19.20 	
EFFECTIVE DATE. This section is effective for revenue for
19.21 	fiscal year 2006 and later.

19.22 	Sec. 21. Minnesota Statutes 2004, section 126C.10,
19.23 	subdivision 3, is amended to read:
19.24 		Subd. 3.Compensatory education revenue.  (a) For fiscal
19.25 	year 2006 and later,the compensatory education revenue for each
19.26 	building in the district equals the formula allowance minus
19.27 	$415 $4,186 times the compensation revenue pupil units computed
19.28 	according to section 126C.05, subdivision 3.  Revenue shall be
19.29 	paid to the district and must be allocated according to section
19.30 	126C.15, subdivision 2.
19.31 	(b) When the district contracting with an alternative
19.32 	program under section 124D.69 changes prior to the start of a
19.33 	school year, the compensatory revenue generated by pupils
19.34 	attending the program shall be paid to the district contracting
19.35 	with the alternative program for the current school year, and
19.36 	shall not be paid to the district contracting with the
20.1 	alternative program for the prior school year.
20.2 	(c) When the fiscal agent district for an area learning
20.3 	center changes prior to the start of a school year, the
20.4 	compensatory revenue shall be paid to the fiscal agent district
20.5 	for the current school year, and shall not be paid to the fiscal
20.6 	agent district for the prior school year.

20.7 	Sec. 22. Minnesota Statutes 2004, section 126C.10,
20.8 	subdivision 6, is amended to read:
20.9 		Subd. 6.Definitions.  The definitions in this
20.10 	subdivision apply only to subdivisions 7 and 8.
20.11 	(a) "High school" means a secondary school that has pupils
20.12 	enrolled in at least the 10th, 11th, and 12th grades.  If there
20.13 	is no secondary school in the district that has pupils enrolled
20.14 	in at least the 10th, 11th, and 12th grades, and the school is
20.15 	at least 19 miles from the next nearest school, the commissioner
20.16 	must designate one school in the district as a high school for
20.17 	the purposes of this section.
20.18 	(b) "Secondary average daily membership" means, for a
20.19 	district that has only one high school, the average daily
20.20 	membership of pupils served in grades 7 through 12.  For a
20.21 	district that has more than one high school, "secondary average
20.22 	daily membership" for each high school means the product of the
20.23 	average daily membership of pupils served in grades 7 through 12
20.24 	in the high school, times the ratio of six to the number of
20.25 	grades in the high school.
20.26 	(c) "Attendance area" means the total surface area of the
20.27 	district, in square miles, divided by the number of high schools
20.28 	in the district.  For a district that does not operate a high
20.29 	school and is less than 19 miles from the nearest operating high
20.30 	school, the attendance area equals zero.
20.31 	(d) "Isolation index" for a high school means the square
20.32 	root of 55 percent of the attendance area plus the distance in
20.33 	miles, according to the usually traveled routes, between the
20.34 	high school and the nearest high school.  For a district in
20.35 	which there is located land defined in section 84A.01, 84A.20,
20.36 	or 84A.31, the distance in miles is the sum of:
21.1 	(1) the square root of one-half of the attendance area; and
21.2 	(2) the distance from the border of the district to the
21.3 	nearest high school.
21.4 	(e) "Qualifying high school" means a high school that has
21.5 	an isolation index greater than 23 and that has secondary
21.6 	average daily membership of less than 400.
21.7 	(f) "Qualifying elementary school" means an elementary
21.8 	school that is located 19 miles or more from the nearest
21.9 	elementary school or from the nearest elementary school within
21.10 	the district and, in either case, has an elementary average
21.11 	daily membership of an average of 20 or fewer per grade.
21.12 	(g) "Elementary average daily membership" means, for a
21.13 	district that has only one elementary school, the average daily
21.14 	membership of pupils served in kindergarten through grade 6.
21.15 	For a district that has more than one elementary school,
21.16 	"average daily membership" for each school means the average
21.17 	daily membership of pupils served in kindergarten through grade
21.18 	6 multiplied by the ratio of seven to the number of grades in
21.19 	the elementary school.
21.20 	(h) "Sparsity allowance" means $4,740 for fiscal year 2006
21.21 	and $4,885 for fiscal year 2007 and later.

21.22 	Sec. 23. Minnesota Statutes 2004, section 126C.10,
21.23 	subdivision 7, is amended to read:
21.24 		Subd. 7.Secondary sparsity revenue.  (a) A district's
21.25 	secondary sparsity revenue for a school year equals the sum of
21.26 	the results of the following calculation for each qualifying
21.27 	high school in the district:
21.28 	(1) the formula sparsity allowance for the school year,
21.29 	multiplied by
21.30 	(2) the secondary average daily membership of pupils served
21.31 	in the high school, multiplied by
21.32 	(3) the quotient obtained by dividing 400 minus the
21.33 	secondary average daily membership by 400 plus the secondary
21.34 	daily membership, multiplied by
21.35 	(4) the lesser of 1.5 or the quotient obtained by dividing
21.36 	the isolation index minus 23 by ten.
22.1 	(b) A newly formed district that is the result of districts
22.2 	combining under the cooperation and combination program or
22.3 	consolidating under section 123A.48 must receive secondary
22.4 	sparsity revenue equal to the greater of:  (1) the amount
22.5 	calculated under paragraph (a) for the combined district; or (2)
22.6 	the sum of the amounts of secondary sparsity revenue the former
22.7 	districts had in the year prior to consolidation, increased for
22.8 	any subsequent changes in the secondary sparsity formula.

22.9 	Sec. 24. Minnesota Statutes 2004, section 126C.10,
22.10 	subdivision 8, is amended to read:
22.11 		Subd. 8.Elementary sparsity revenue.  A district's
22.12 	elementary sparsity revenue equals the sum of the following
22.13 	amounts for each qualifying elementary school in the district:
22.14 	(1) the formula sparsity allowance for the year, multiplied
22.15 	by
22.16 	(2) the elementary average daily membership of pupils
22.17 	served in the school, multiplied by
22.18 	(3) the quotient obtained by dividing 140 minus the
22.19 	elementary average daily membership by 140 plus the average
22.20 	daily membership.

22.21 	Sec. 25. Minnesota Statutes 2004, section 126C.10,
22.22 	subdivision 13, is amended to read:
22.23 		Subd. 13.Total operating capital revenue.  (a) For
22.24 	fiscal year 2000 2006 and thereafter, total operating capital
22.25 	revenue for a district equals the amount determined under
22.26 	paragraph (b) or (c), plus $73 $93 times the adjusted marginal
22.27 	cost pupil units for the school year.  The revenue must be
22.28 	placed in a reserved account in the general fund and may only be
22.29 	used according to paragraph (d) or subdivision 14.
22.30 	(b) For fiscal years 2000 2006 and later, capital revenue
22.31 	for a district equals $100 times the district's maintenance cost
22.32 	index times its adjusted marginal cost pupil units for the
22.33 	school year.
22.34 	(c) For fiscal years 2000 and later,The revenue for a
22.35 	district that operates a program under section 124D.128, is
22.36 	increased by an amount equal to $30 times the number of marginal
23.1 	cost pupil units served at the site where the program is
23.2 	implemented.
23.3 	(d) For fiscal years 2001, 2002, and 2003, the district
23.4 	must reserve an amount equal to $5 per adjusted marginal cost
23.5 	pupil unit for telecommunication access costs.  Reserve revenue
23.6 	under this paragraph must first be used to pay for ongoing or
23.7 	recurring telecommunication access costs, including access to
23.8 	data and video connections, including Internet access.  Any
23.9 	revenue remaining after covering all ongoing or recurring access
23.10 	costs may be used for computer hardware or equipment.

23.11 	Sec. 26. Minnesota Statutes 2004, section 126C.10,
23.12 	subdivision 13a, is amended to read:
23.13 		Subd. 13a.Operating capital levy.  To obtain operating
23.14 	capital revenue for fiscal year 2005 2007 and later, a district
23.15 	may levy an amount not more than the product of its operating
23.16 	capital revenue for the fiscal year times the lesser of one or
23.17 	the ratio of its adjusted net tax capacity per adjusted marginal
23.18 	cost pupil unit to $22,222 the operating capital equalizing
23.19 	factor. The operating capital equalizing factor equals $24,300
23.20 	for taxes payable in 2006 and 2007, and $15,400 for taxes
23.21 	payable in 2008 and later.
23.22 	
EFFECTIVE DATE. This section is effective for revenue for
23.23 	fiscal year 2007.

23.24 	Sec. 27. Minnesota Statutes 2004, section 126C.10,
23.25 	subdivision 17, is amended to read:
23.26 		Subd. 17.Transportation sparsity definitions.  The
23.27 	definitions in this subdivision apply to subdivisions 18 and 19.
23.28 	(a) "Sparsity index" for a district means the greater of .2
23.29 	or the ratio of the square mile area of the district to the
23.30 	resident pupil units of the district.
23.31 	(b) "Density index" for a district means the ratio of the
23.32 	square mile area of the district to the resident pupil units of
23.33 	the district.  However, the density index for a district cannot
23.34 	be greater than .2 or less than .005.
23.35 	(c) "Transportation allowance" means $4,601 for fiscal year
23.36 	2007 and later.

24.1 	Sec. 28. Minnesota Statutes 2004, section 126C.10,
24.2 	subdivision 18, is amended to read:
24.3 		Subd. 18.Transportation sparsity revenue allowance.  (a)
24.4 	A district's transportation sparsity allowance equals the
24.5 	greater of zero or the result of the following computation:
24.6 	(i) (1) Multiply the formula transportation allowance
24.7 	according to subdivision 2,by .1469.
24.8 	(ii) (2) Multiply the result in clause (i) (1) by the
24.9 	district's sparsity index raised to the 26/100 power.
24.10 	(iii) (3) Multiply the result in clause (ii) (2) by the
24.11 	district's density index raised to the 13/100 power.
24.12 	(iv) (4) Multiply the formula transportation allowance
24.13 	according to subdivision 2,by .0485.
24.14 	(v) (5) Subtract the result in clause (iv) (4) from the
24.15 	result in clause (iii) (3).
24.16 	(b) Transportation sparsity revenue is equal to the
24.17 	transportation sparsity allowance times the adjusted marginal
24.18 	cost pupil units times 1.08.

24.19 	Sec. 29. Minnesota Statutes 2004, section 126C.10,
24.20 	subdivision 24, is amended to read:
24.21 		Subd. 24.Equity revenue.  (a) A school district
24.22 	qualifies for equity revenue if:
24.23 	(1) the school district's adjusted marginal cost pupil unit
24.24 	amount of basic revenue, supplemental revenue, transition
24.25 	revenue, and referendum revenue is less than the value of the
24.26 	school district at or immediately above the 95th percentile of
24.27 	school districts in its equity region for those revenue
24.28 	categories; and
24.29 	(2) the school district's administrative offices are not
24.30 	located in a city of the first class on July 1, 1999.
24.31 	(b) Equity revenue for a qualifying district that receives
24.32 	referendum revenue under section 126C.17, subdivision 4, equals
24.33 	the product of (1) the district's adjusted marginal cost pupil
24.34 	units for that year; times (2) the sum of (i) $13, plus (ii)
24.35 	$75, times the school district's equity index computed under
24.36 	subdivision 27.
25.1 	(c) Equity revenue for a qualifying district that does not
25.2 	receive referendum revenue under section 126C.17, subdivision 4,
25.3 	equals the product of the district's adjusted marginal cost
25.4 	pupil units for that year times $13.
25.5 	(d) A school district's equity revenue is increased by the
25.6 	greater of zero or an amount equal to the district's resident
25.7 	marginal pupil units times the difference between ten percent of
25.8 	the statewide average amount of referendum revenue per resident
25.9 	marginal cost pupil unit for that year and the district's
25.10 	referendum revenue per resident marginal cost pupil unit.  A
25.11 	school district's revenue under this paragraph must not exceed
25.12 	$100,000 for that year.
25.13 	(e) A school district's equity revenue for a school
25.14 	district located in the metro equity region equals the amount
25.15 	computed in paragraphs (b), (c), and (d) multiplied by 1.25.
25.16 	
EFFECTIVE DATE. This section is effective for revenue for
25.17 	fiscal year 2006.

25.18 	Sec. 30. Minnesota Statutes 2004, section 126C.10,
25.19 	subdivision 31, is amended to read:
25.20 		Subd. 31.Transition revenue.  (a) A district's
25.21 	transition allowance for fiscal years 2004 through 2008 equals
25.22 	the greater of zero or the product of the ratio of the number of
25.23 	adjusted marginal cost pupil units the district would have
25.24 	counted for fiscal year 2004 under Minnesota Statutes 2002 to
25.25 	the district's adjusted marginal cost pupil units for fiscal
25.26 	year 2004, times the difference between:  (1) the lesser of the
25.27 	district's general education revenue per adjusted marginal cost
25.28 	pupil unit for fiscal year 2003 or the amount of general
25.29 	education revenue the district would have received per adjusted
25.30 	marginal cost pupil unit for fiscal year 2004 according to
25.31 	Minnesota Statutes 2002, and (2) the district's general
25.32 	education revenue for fiscal year 2004 excluding transition
25.33 	revenue divided by the number of adjusted marginal cost pupil
25.34 	units the district would have counted for fiscal year 2004 under
25.35 	Minnesota Statutes 2002.
25.36 	A district's transition allowance for fiscal year 2009 and
26.1 	later is zero.
26.2 	(b) A district's transition revenue for fiscal year 2004
26.3 	and later 2006 and later equals the sum of (1) the product of
26.4 	the district's transition allowance times the district's
26.5 	adjusted marginal cost pupil units.plus (2) the amount of
26.6 	referendum revenue under section 126C.17 and general education
26.7 	revenue, excluding transition revenue, for fiscal year 2004
26.8 	attributable to pupils four or five years of age on September 1,
26.9 	2003, enrolled in a prekindergarten program implemented by the
26.10 	district before July 1, 2003, and reported as kindergarten
26.11 	pupils under section 126C.05, subdivision 1, for fiscal year
26.12 	2004, plus (3) the amount of compensatory education revenue
26.13 	under subdivision 3 for fiscal year 2005 attributable to pupils
26.14 	four years of age on September 1, 2003, enrolled in a
26.15 	prekindergarten program implemented by the district before July
26.16 	1, 2003, and reported as kindergarten pupils under section
26.17 	126C.05, subdivision 1, for fiscal year 2004.

26.18 	Sec. 31. Minnesota Statutes 2004, section 126C.10, is
26.19 	amended by adding a subdivision to read:
26.20 		Subd. 34.Basic alternative compensation aid. (a) For
26.21 	fiscal year 2006, the basic alternative compensation aid for a
26.22 	district or charter school with an alternative compensation plan
26.23 	approved under section 122A.415 equals the alternative
26.24 	compensation revenue according to section 122A.415, subdivision
26.25 	1.  The basic alternative compensation aid for a charter school
26.26 	with an approved alternative compensation plan under section
26.27 	122A.415, subdivision 1, paragraph (c), equals $260 times the
26.28 	number of pupils enrolled in the school on October 1 of the
26.29 	previous school year, or on October 1 of the current fiscal year
26.30 	for a charter school in the first year of operation.
26.31 	(b) For fiscal year 2007 and later, the basic alternative
26.32 	compensation aid for a district with an alternative compensation
26.33 	plan approved under section 122A.415 equals 73.1 percent of the
26.34 	alternative compensation revenue according to section 122A.415,
26.35 	subdivision 1.  The basic alternative compensation aid for a
26.36 	charter school with an alternative compensation plan approved
27.1 	under section 122A.415 equals $260 times the number of pupils
27.2 	enrolled in the school on October 1 of the previous fiscal year,
27.3 	or on October 1 of the current fiscal year for a charter school
27.4 	in the first year of operation, times the ratio of the sum of
27.5 	the alternative compensation aid and alternative compensation
27.6 	levy for all participating school districts to the maximum
27.7 	alternative compensation revenue for those districts according
27.8 	to section 122A.415, subdivision 1.
27.9 	(c) Notwithstanding paragraphs (a) and (b) and section
27.10 	122A.415, subdivision 1, the state total basic alternative
27.11 	compensation aid entitlement must not exceed $19,329,000 for
27.12 	fiscal year 2006 and $75,636,000 for fiscal year 2007 and
27.13 	later.  The commissioner must limit the amount of alternative
27.14 	compensation aid approved under section 122A.415 so as not to
27.15 	exceed these limits.

27.16 	Sec. 32. Minnesota Statutes 2004, section 126C.10, is
27.17 	amended by adding a subdivision to read:
27.18 		Subd. 35.Alternative compensation levy. For fiscal year
27.19 	2007 and later, the alternative compensation levy for a district
27.20 	receiving basic alternative compensation aid equals the product
27.21 	of (1) the difference between the district's alternative
27.22 	compensation revenue and the district's basic alternative
27.23 	compensation aid times (2) the lesser of one or the ratio of the
27.24 	district's adjusted net tax capacity per adjusted pupil unit to
27.25 	$5,913.

27.26 	Sec. 33. Minnesota Statutes 2004, section 126C.10, is
27.27 	amended by adding a subdivision to read:
27.28 		Subd. 36.Alternative compensation aid. (a) For fiscal
27.29 	year 2007 and later, a district's alternative compensation
27.30 	equalization aid equals the district's alternative compensation
27.31 	revenue minus the district's basic alternative compensation aid
27.32 	minus the district's alternative compensation levy.  If a
27.33 	district does not levy the entire amount permitted, the
27.34 	alternative compensation equalization aid must be reduced in
27.35 	proportion to the actual amount levied.
27.36 	(b) A district's alternative compensation aid equals the
28.1 	sum of the district's basic alternative compensation aid and the
28.2 	district's alternative compensation equalization aid.

28.3 	Sec. 34. Minnesota Statutes 2004, section 126C.13,
28.4 	subdivision 4, is amended to read:
28.5 		Subd. 4.General education aid.  (a) For fiscal year
28.6 	2004, a district's general education aid is the sum of the
28.7 	following amounts:
28.8 	(1) general education revenue;
28.9 	(2) shared time aid according to section 126C.01,
28.10 	subdivision 7;
28.11 	(3) referendum aid according to section 126C.17; and 
28.12 	(4) online learning aid according to section 126C.24.
28.13 	(b) For fiscal year 2005 and later 2006, a district's
28.14 	general education aid is the sum of the following amounts:
28.15 	(1) general education revenue, excluding equity revenue,
28.16 	total operating capital, and transition revenue;
28.17 	(2) operating capital aid according to section 126C.10,
28.18 	subdivision 13b;
28.19 	(3) equity aid according to section 126C.10, subdivision
28.20 	30;
28.21 	(4) transition aid according to section 126C.10,
28.22 	subdivision 33;
28.23 	(5) shared time aid according to section 126C.01,
28.24 	subdivision 7;
28.25 	(6) referendum aid according to section 126C.17; and
28.26 	(7) online learning aid according to section 126C.24.
28.27 	(b) For fiscal year 2007 and later, a district's general
28.28 	education aid is the sum of the following amounts:
28.29 	(1) general education revenue, excluding equity revenue,
28.30 	total operating capital revenue, alternative compensation
28.31 	revenue, and transition revenue;
28.32 	(2) operating capital aid according to section 126C.10,
28.33 	subdivision 13b;
28.34 	(3) equity aid according to section 126C.10, subdivision
28.35 	30;
28.36 	(4) alternative compensation aid according to section
29.1 	126C.10, subdivision 36;
29.2 	(5) transition aid according to section 126C.10,
29.3 	subdivision 33;
29.4 	(6) shared time aid according to section 126C.01,
29.5 	subdivision 7;
29.6 	(7) referendum aid according to section 126C.17; and 
29.7 	(8) online learning aid according to section 126C.24.

29.8 	Sec. 35. Minnesota Statutes 2004, section 126C.15,
29.9 	subdivision 1, is amended to read:
29.10 		Subdivision 1.Use of the revenue. Except for revenue
29.11 	allocated for prekindergarten programs under subdivision 2,
29.12 	paragraph (c),the basic skills revenue under section 126C.10,
29.13 	subdivision 4, must be reserved and used to meet the educational
29.14 	needs of pupils who enroll under-prepared to learn and whose
29.15 	progress toward meeting state or local content or performance
29.16 	standards is below the level that is appropriate for learners of
29.17 	their age.  Any of the following may be provided to meet these
29.18 	learners' needs:
29.19 	(1) direct instructional services under the assurance of
29.20 	mastery program according to section 124D.66;
29.21 	(2) remedial instruction in reading, language arts,
29.22 	mathematics, other content areas, or study skills to improve the
29.23 	achievement level of these learners;
29.24 	(3) additional teachers and teacher aides to provide more
29.25 	individualized instruction to these learners through individual
29.26 	tutoring, lower instructor-to-learner ratios, or team teaching;
29.27 	(4) a longer school day or week during the regular school
29.28 	year or through a summer program that may be offered directly by
29.29 	the site or under a performance-based contract with a
29.30 	community-based organization;
29.31 	(5) comprehensive and ongoing staff development consistent
29.32 	with district and site plans according to section 122A.60, for
29.33 	teachers, teacher aides, principals, and other personnel to
29.34 	improve their ability to identify the needs of these learners
29.35 	and provide appropriate remediation, intervention,
29.36 	accommodations, or modifications;
30.1 	(6) instructional materials and technology appropriate for
30.2 	meeting the individual needs of these learners;
30.3 	(7) programs to reduce truancy, encourage completion of
30.4 	high school, enhance self-concept, provide health services,
30.5 	provide nutrition services, provide a safe and secure learning
30.6 	environment, provide coordination for pupils receiving services
30.7 	from other governmental agencies, provide psychological services
30.8 	to determine the level of social, emotional, cognitive, and
30.9 	intellectual development, and provide counseling services,
30.10 	guidance services, and social work services;
30.11 	(8) bilingual programs, bicultural programs, and programs
30.12 	for learners of limited English proficiency;
30.13 	(9) all day kindergarten;
30.14 	(10) extended school day and extended school year programs;
30.15 	and
30.16 	(11) substantial parent involvement in developing and
30.17 	implementing remedial education or intervention plans for a
30.18 	learner, including learning contracts between the school, the
30.19 	learner, and the parent that establish achievement goals and
30.20 	responsibilities of the learner and the learner's parent or
30.21 	guardian.

30.22 	Sec. 36. Minnesota Statutes 2004, section 126C.15,
30.23 	subdivision 2, is amended to read:
30.24 		Subd. 2.Building allocation.  (a) A district must
30.25 	allocate its compensatory revenue to each school building in the
30.26 	district where the children who have generated the revenue are
30.27 	served unless the school district has received permission under
30.28 	section 63 to allocate compensatory revenue according to student
30.29 	performance measures developed by the school board.
30.30 	(b) Notwithstanding paragraph (a), a district may allocate
30.31 	up to five percent of the amount of compensatory revenue that
30.32 	the district received during the previous fiscal year receives 
30.33 	to school sites according to a plan adopted by the school board.
30.34 	(c) Notwithstanding paragraph (a), a district may allocate
30.35 	up to ten percent of the amount of compensatory revenue the
30.36 	district receives to support prekindergarten programs under
31.1 	subdivision 2a.
31.2 	(d) For the purposes of this section and section 126C.05,
31.3 	subdivision 3, "building" means education site as defined in
31.4 	section 123B.04, subdivision 1.
31.5 	(d) (e) If the pupil is served at a site other than one
31.6 	owned and operated by the district, the revenue shall be paid to
31.7 	the district and used for services for pupils who generate the
31.8 	revenue.
31.9 	
EFFECTIVE DATE. This section is effective July 1, 2005,
31.10 	for revenue for fiscal year 2006.

31.11 	Sec. 37. Minnesota Statutes 2004, section 126C.15,
31.12 	subdivision 3, is amended to read:
31.13 		Subd. 3.Recommendation.  A school site decision-making
31.14 	team, as defined in section 123B.04, subdivision 2, paragraph
31.15 	(a), or the instruction and curriculum advisory committee under
31.16 	section 120B.11, if the school has no school site decision team,
31.17 	shall recommend how the compensatory education revenue will be
31.18 	used to carry out the purpose of this section. A school
31.19 	district that has received permission under section 63 to
31.20 	allocate compensatory revenue according to school performance
31.21 	measures shall share its plan for the distribution of
31.22 	compensatory revenue with the school site decision team.
31.23 	
EFFECTIVE DATE. This section is effective July 1, 2005,
31.24 	for revenue for fiscal year 2006.

31.25 	Sec. 38. Minnesota Statutes 2004, section 126C.17,
31.26 	subdivision 2, is amended to read:
31.27 		Subd. 2.Referendum allowance limit.  (a) Notwithstanding
31.28 	subdivision 1, for fiscal year 2003, a district's referendum
31.29 	allowance must not exceed the greater of:
31.30 	(1) the sum of a district's referendum allowance for fiscal
31.31 	year 1994 times 1.162 plus its referendum conversion allowance
31.32 	for fiscal year 2003, minus $415;
31.33 	(2) 18.2 percent of the formula allowance;
31.34 	(3) for a newly reorganized district created on July 1,
31.35 	2002, the referendum revenue authority for each reorganizing
31.36 	district in the year preceding reorganization divided by its
32.1 	resident marginal cost pupil units for the year preceding
32.2 	reorganization, minus $415; or 
32.3 	(4) for a newly reorganized district created after July 1,
32.4 	2002, the referendum revenue authority for each reorganizing
32.5 	district in the year preceding reorganization divided by its
32.6 	resident marginal cost pupil units for the year preceding
32.7 	reorganization.
32.8 	(b) Notwithstanding subdivision 1, for fiscal year 2004 
32.9 	2007 and later, a district's referendum allowance must not
32.10 	exceed the greater of:
32.11 	(1) the sum of:  (i) a district's referendum allowance for
32.12 	fiscal year 1994 times 1.177 times the annual inflationary
32.13 	increase as calculated under paragraph (c) (b) plus (ii) its
32.14 	referendum conversion allowance for fiscal year 2003, minus
32.15 	(iii) $415 $115;
32.16 	(2) the greater of (i) 18.6 28 percent of the formula
32.17 	allowance or (ii) $855.79 $1,368 times the annual inflationary
32.18 	increase as calculated under paragraph (c); or
32.19 	(3) for a newly reorganized district created after July 1,
32.20 	2002 2006, the referendum revenue authority for each
32.21 	reorganizing district in the year preceding reorganization
32.22 	divided by its resident marginal cost pupil units for the year
32.23 	preceding reorganization.
32.24 	(c) (b) For purposes of this subdivision, for fiscal year
32.25 	2005 and later, "inflationary increase" means one plus the
32.26 	percentage change in the Consumer Price Index for urban
32.27 	consumers, as prepared by the United States Bureau of Labor
32.28 	Standards, for the current fiscal year to fiscal year 2004.  For
32.29 	fiscal years 2009 and later, for purposes of paragraph (b) (a),
32.30 	clause (1), the inflationary increase equals the inflationary
32.31 	increase for fiscal year 2008 plus one-fourth of the percentage
32.32 	increase in the formula allowance for that year compared with
32.33 	the formula allowance for fiscal year 2008.
32.34 	
EFFECTIVE DATE. This section is effective for revenue for
32.35 	fiscal year 2007.

32.36 	Sec. 39. Minnesota Statutes 2004, section 126C.17,
33.1 	subdivision 5, is amended to read:
33.2 		Subd. 5.Referendum equalization revenue.  (a) For fiscal
33.3 	year 2003 and later, a district's referendum equalization
33.4 	revenue equals the sum of the first tier referendum equalization
33.5 	revenue and the second tier referendum equalization revenue.
33.6 	(b) A district's first tier referendum equalization revenue
33.7 	equals the district's first tier referendum equalization
33.8 	allowance times the district's resident marginal cost pupil
33.9 	units for that year.
33.10 	(c) For fiscal years 2003 and 2004, a district's first tier
33.11 	referendum equalization allowance equals the lesser of the
33.12 	district's referendum allowance under subdivision 1 or $126.
33.13 	For fiscal year 2005, a district's first tier referendum
33.14 	equalization allowance equals the lesser of the district's
33.15 	referendum allowance under subdivision 1 or $405.For fiscal
33.16 	year 2006 and later, a district's first tier referendum
33.17 	equalization allowance equals the lesser of the district's
33.18 	referendum allowance under subdivision 1 or $500. For fiscal
33.19 	year 2007, a district's first tier referendum equalization
33.20 	allowance equals the lesser of the district's referendum
33.21 	allowance under subdivision 1 or $600.
33.22 	For fiscal year 2008, a district's first tier referendum
33.23 	equalization allowance equals the lesser of the district's
33.24 	referendum allowance under subdivision 1 or $700.  For fiscal
33.25 	years 2009 and later, a district's first tier referendum
33.26 	equalization allowance equals the lesser of the district's
33.27 	referendum allowance under subdivision 1 or $800.
33.28 	(d) A district's second tier referendum equalization
33.29 	revenue equals the district's second tier referendum
33.30 	equalization allowance times the district's resident marginal
33.31 	cost pupil units for that year.
33.32 	(e) For fiscal year 2006,a district's second tier
33.33 	referendum equalization allowance equals the lesser of the
33.34 	district's referendum allowance under subdivision 1 or 18.6
33.35 	percent of the formula allowance, minus the district's first
33.36 	tier referendum equalization allowance. For fiscal year 2007
34.1 	and later, a district's second tier referendum equalization
34.2 	allowance equals the lesser of the district's referendum
34.3 	allowance under subdivision 1 or 28 percent of the formula
34.4 	allowance, minus the district's first tier referendum
34.5 	equalization allowance.
34.6 	(f) Notwithstanding paragraph (e), the second tier
34.7 	referendum allowance for a district qualifying for secondary
34.8 	sparsity revenue under section 126C.10, subdivision 7, or
34.9 	elementary sparsity revenue under section 126C.10, subdivision
34.10 	8, equals the district's referendum allowance under subdivision
34.11 	1 minus the district's first tier referendum equalization
34.12 	allowance.

34.13 	Sec. 40. Minnesota Statutes 2004, section 126C.17,
34.14 	subdivision 7, is amended to read:
34.15 		Subd. 7.Referendum equalization aid.  (a) A district's
34.16 	referendum equalization aid equals the difference between its
34.17 	referendum equalization revenue and levy.
34.18 	(b) If a district's actual levy for first or second tier
34.19 	referendum equalization revenue is less than its maximum levy
34.20 	limit for that tier, aid shall be proportionately reduced.
34.21 	(c) Notwithstanding paragraph (a), the referendum
34.22 	equalization aid for a district, where the referendum
34.23 	equalization aid under paragraph (a) exceeds 90 percent of the
34.24 	referendum revenue, must not exceed 18.6 28 percent of the
34.25 	formula allowance times the district's resident marginal cost
34.26 	pupil units.  A district's referendum levy is increased by the
34.27 	amount of any reduction in referendum aid under this paragraph.
34.28 	
EFFECTIVE DATE. This section is effective for revenue for
34.29 	fiscal year 2007.

34.30 	Sec. 41. Minnesota Statutes 2004, section 126C.17,
34.31 	subdivision 9, is amended to read:
34.32 		Subd. 9.Referendum revenue.  (a) The revenue authorized
34.33 	by section 126C.10, subdivision 1, may be increased in the
34.34 	amount approved by the voters of the district at a referendum
34.35 	called for the purpose.  The referendum may be called by the
34.36 	board or shall be called by the board upon written petition of
35.1 	qualified voters of the district.  The referendum must be
35.2 	conducted one or two calendar years before the increased levy
35.3 	authority, if approved, first becomes payable.  Only one
35.4 	election to approve an increase may be held in a calendar year.
35.5 	Unless the referendum is conducted by mail under paragraph (g),
35.6 	the referendum must be held on the first Tuesday after the first
35.7 	Monday in November.  The ballot must state the maximum amount of
35.8 	the increased revenue per resident marginal cost pupil unit, the
35.9 	estimated referendum tax rate as a percentage of referendum
35.10 	market value in the first year it is to be levied, and that the
35.11 	revenue must be used to finance school operations.  The ballot
35.12 	may state a schedule, determined by the board, of increased
35.13 	revenue per resident marginal cost pupil unit that differs from
35.14 	year to year over the number of years for which the increased
35.15 	revenue is authorized. If the ballot contains a schedule
35.16 	showing different amounts, it must also indicate the estimated
35.17 	referendum tax rate as a percent of referendum market value for
35.18 	the amount specified for the first year and for the maximum
35.19 	amount specified in the schedule.The ballot may state that
35.20 	existing referendum levy authority is expiring.  In this case,
35.21 	the ballot may also compare the proposed levy authority to the
35.22 	existing expiring levy authority, and express the proposed
35.23 	increase as the amount, if any, over the expiring referendum
35.24 	levy authority.  The ballot must designate the specific number
35.25 	of years, not to exceed ten, for which the referendum
35.26 	authorization applies. The ballot, including a ballot on the
35.27 	question to revoke or reduce the increased revenue amount under
35.28 	paragraph (c), must abbreviate the term "per resident marginal
35.29 	cost pupil unit" as "per pupil." The notice required under
35.30 	section 275.60 may be modified to read, in cases of renewing
35.31 	existing levies:
35.32 	"BY VOTING "YES" ON THIS BALLOT QUESTION, YOU MAY BE VOTING
35.33 	FOR A PROPERTY TAX INCREASE."
35.34 	The ballot may contain a textual portion with the
35.35 	information required in this subdivision and a question stating
35.36 	substantially the following:
36.1 	"Shall the increase in the revenue proposed by (petition
36.2 	to) the board of ........., School District No. .., be approved?"
36.3 	If approved, an amount equal to the approved revenue per
36.4 	resident marginal cost pupil unit times the resident marginal
36.5 	cost pupil units for the school year beginning in the year after
36.6 	the levy is certified shall be authorized for certification for
36.7 	the number of years approved, if applicable, or until revoked or
36.8 	reduced by the voters of the district at a subsequent referendum.
36.9 	(b) The board must prepare and deliver by first class mail
36.10 	at least 15 days but no more than 30 days before the day of the
36.11 	referendum to each taxpayer a notice of the referendum and the
36.12 	proposed revenue increase.  The board need not mail more than
36.13 	one notice to any taxpayer.  For the purpose of giving mailed
36.14 	notice under this subdivision, owners must be those shown to be
36.15 	owners on the records of the county auditor or, in any county
36.16 	where tax statements are mailed by the county treasurer, on the
36.17 	records of the county treasurer.  Every property owner whose
36.18 	name does not appear on the records of the county auditor or the
36.19 	county treasurer is deemed to have waived this mailed notice
36.20 	unless the owner has requested in writing that the county
36.21 	auditor or county treasurer, as the case may be, include the
36.22 	name on the records for this purpose.  The notice must project
36.23 	the anticipated amount of tax increase in annual dollars and
36.24 	annual percentage for typical residential homesteads,
36.25 	agricultural homesteads, apartments, and commercial-industrial
36.26 	property within the school district.
36.27 	The notice for a referendum may state that an existing
36.28 	referendum levy is expiring and project the anticipated amount
36.29 	of increase over the existing referendum levy in the first year,
36.30 	if any, in annual dollars and annual percentage for typical
36.31 	residential homesteads, agricultural homesteads, apartments, and
36.32 	commercial-industrial property within the district.
36.33 	The notice must include the following statement:  "Passage
36.34 	of this referendum will result in an increase in your property
36.35 	taxes."  However, in cases of renewing existing levies, the
36.36 	notice may include the following statement:  "Passage of this
37.1 	referendum may result in an increase in your property taxes."
37.2 	(c) A referendum on the question of revoking or reducing
37.3 	the increased revenue amount authorized pursuant to paragraph
37.4 	(a) may be called by the board and shall be called by the board
37.5 	upon the written petition of qualified voters of the district.
37.6 	A referendum to revoke or reduce the revenue amount must state
37.7 	the amount per resident marginal cost pupil unit by which the
37.8 	authority is to be reduced.  Revenue authority approved by the
37.9 	voters of the district pursuant to paragraph (a) must be
37.10 	available to the school district at least once before it is
37.11 	subject to a referendum on its revocation or reduction for
37.12 	subsequent years.  Only one revocation or reduction referendum
37.13 	may be held to revoke or reduce referendum revenue for any
37.14 	specific year and for years thereafter.
37.15 	(d) A petition authorized by paragraph (a) or (c) is
37.16 	effective if signed by a number of qualified voters in excess of
37.17 	15 percent of the registered voters of the district on the day
37.18 	the petition is filed with the board.  A referendum invoked by
37.19 	petition must be held on the date specified in paragraph (a).
37.20 	(e) The approval of 50 percent plus one of those voting on
37.21 	the question is required to pass a referendum authorized by this
37.22 	subdivision.
37.23 	(f) At least 15 days before the day of the referendum, the
37.24 	district must submit a copy of the notice required under
37.25 	paragraph (b) to the commissioner and to the county auditor of
37.26 	each county in which the district is located.  Within 15 days
37.27 	after the results of the referendum have been certified by the
37.28 	board, or in the case of a recount, the certification of the
37.29 	results of the recount by the canvassing board, the district
37.30 	must notify the commissioner of the results of the referendum.

37.31 	Sec. 42. Minnesota Statutes 2004, section 126C.17,
37.32 	subdivision 13, is amended to read:
37.33 		Subd. 13.Referendum conversion allowance. (a) A school
37.34 	district that received supplemental or transition revenue in
37.35 	fiscal year 2002 may convert its supplemental revenue conversion
37.36 	allowance and transition revenue conversion allowance to
38.1 	additional referendum allowance under subdivision 1 for fiscal
38.2 	year 2003 and thereafter.  A majority of the school board must
38.3 	approve the conversion at a public meeting before November 1,
38.4 	2001.  For a district with other referendum authority, the
38.5 	referendum conversion allowance approved by the board continues
38.6 	until the portion of the district's other referendum authority
38.7 	with the earliest expiration date after June 30, 2006, expires.
38.8 	For a district with no other referendum authority, the
38.9 	referendum conversion allowance approved by the board continues
38.10 	until June 30, 2012.
38.11 	(b) A school district that received transition revenue in
38.12 	fiscal year 2004 may convert all or part of its transition
38.13 	revenue to referendum revenue with voter approval in a
38.14 	referendum called for the purpose.  The referendum must be held
38.15 	in accordance with subdivision 9, except that the ballot may
38.16 	state that existing transition revenue authority is being
38.17 	canceled or is expiring.  In this case, the ballot shall compare
38.18 	the proposed referendum allowance to the canceled or expiring
38.19 	transition revenue allowance.  For purposes of this comparison,
38.20 	the canceled or expiring transition revenue allowance per
38.21 	adjusted marginal cost pupil unit shall be converted to an
38.22 	allowance per resident marginal cost pupil unit based on the
38.23 	district's ratio of adjusted marginal cost pupil units to
38.24 	resident marginal cost pupil units for the preceding fiscal
38.25 	year.  The referendum must be held on the first Tuesday after
38.26 	the first Monday in November.  The notice required under section
38.27 	275.60 may be modified to read:  "BY VOTING 'YES' ON THIS BALLOT
38.28 	QUESTION, YOU MAY BE VOTING FOR A PROPERTY TAX INCREASE."
38.29 	Elections under this paragraph must be held in 2007 or earlier.

38.30 	Sec. 43. Minnesota Statutes 2004, section 126C.21,
38.31 	subdivision 4, is amended to read:
38.32 		Subd. 4.Taconite deductions. (1) Notwithstanding any
38.33 	provisions of any other law to the contrary, the adjusted net
38.34 	tax capacity used in calculating general education aid may
38.35 	include only that property that is currently taxable in the
38.36 	district.
39.1 	(2) For districts that received payments have revenue under
39.2 	sections 298.018; 298.225; 229.24 to 298.28, excluding 298.26
39.3 	and 298.28, subdivision 4, paragraph (d); 298.34 to 298.39;
39.4 	298.391 to 298.396; and 298.405; and 477A.15, or any law
39.5 	imposing a tax upon severed mineral values; or recognized
39.6 	revenue under section 477A.15;,the general education aid must
39.7 	be reduced in the final adjustment payment by (1) the difference
39.8 	between the dollar amount of the payments received revenue
39.9 	recognized pursuant to those sections, or revenue recognized
39.10 	under section 477A.15 in for the fiscal year to which the final
39.11 	adjustment is attributable and , less (2) the amount that was
39.12 	calculated, pursuant to section 126C.48, subdivision 8, as a
39.13 	reduction of the levy attributable to the fiscal year to which
39.14 	the final adjustment is attributable.  If the final adjustment
39.15 	of a district's general education aid for a fiscal year is a
39.16 	negative amount because of this clause subdivision, the next
39.17 	fiscal year's general education aid to that district must be
39.18 	reduced by this negative amount in the following manner:  there
39.19 	must be withheld from each scheduled general education aid
39.20 	payment due the district in such fiscal year, 15 percent of the
39.21 	total negative amount, until the total negative amount has been
39.22 	withheld.  The amount reduced from general education aid
39.23 	pursuant to this clause subdivision must be recognized as reduce 
39.24 	revenue in the fiscal year to which the final adjustment payment
39.25 	is attributable.
39.26 	[EFFECTIVE DATE.]This section is effective for revenue for
39.27 	fiscal year 2006.

39.28 	Sec. 44. Minnesota Statutes 2004, section 126C.40,
39.29 	subdivision 1, is amended to read:
39.30 		Subdivision 1.To lease building or land.  (a) When an
39.31 	independent or a special school district or a group of
39.32 	independent or special school districts finds it economically
39.33 	advantageous to rent or lease a building or land for any
39.34 	instructional purposes or ,for school storage or furniture
39.35 	repair, or for administrative space according to paragraph (j),
39.36 	and it determines that the operating capital revenue authorized
40.1 	under section 126C.10, subdivision 13, is insufficient for this
40.2 	purpose, it may apply to the commissioner for permission to make
40.3 	an additional capital expenditure levy for this purpose.  An
40.4 	application for permission to levy under this subdivision must
40.5 	contain financial justification for the proposed levy, the terms
40.6 	and conditions of the proposed lease, and a description of the
40.7 	space to be leased and its proposed use.
40.8 	(b) The criteria for approval of applications to levy under
40.9 	this subdivision must include:  the reasonableness of the price,
40.10 	the appropriateness of the space to the proposed activity, the
40.11 	feasibility of transporting pupils to the leased building or
40.12 	land, conformity of the lease to the laws and rules of the state
40.13 	of Minnesota, and the appropriateness of the proposed lease to
40.14 	the space needs and the financial condition of the district.
40.15 	The commissioner must not authorize a levy under this
40.16 	subdivision in an amount greater than 90 percent of the cost to
40.17 	the district of renting or leasing a building or land for
40.18 	approved purposes.  The proceeds of this levy must not be used
40.19 	for custodial or other maintenance services.  A district may not
40.20 	levy under this subdivision for the purpose of leasing or
40.21 	renting a district-owned building or site to itself.
40.22 	(c) For agreements finalized after July 1, 1997, a district
40.23 	may not levy under this subdivision for the purpose of leasing:
40.24 	(1) a newly constructed building used primarily for regular
40.25 	kindergarten, elementary, or secondary instruction; or (2) a
40.26 	newly constructed building addition or additions used primarily
40.27 	for regular kindergarten, elementary, or secondary instruction
40.28 	that contains more than 20 percent of the square footage of the
40.29 	previously existing building.
40.30 	(d) Notwithstanding paragraph (b), a district may levy
40.31 	under this subdivision for the purpose of leasing or renting a
40.32 	district-owned building or site to itself only if the amount is
40.33 	needed by the district to make payments required by a lease
40.34 	purchase agreement, installment purchase agreement, or other
40.35 	deferred payments agreement authorized by law, and the levy
40.36 	meets the requirements of paragraph (c).  A levy authorized for
41.1 	a district by the commissioner under this paragraph may be in
41.2 	the amount needed by the district to make payments required by a
41.3 	lease purchase agreement, installment purchase agreement, or
41.4 	other deferred payments agreement authorized by law, provided
41.5 	that any agreement include a provision giving the school
41.6 	districts the right to terminate the agreement annually without
41.7 	penalty.
41.8 	(e) The total levy under this subdivision for a district
41.9 	for any year must not exceed $90 $100 times the resident pupil
41.10 	units for the fiscal year to which the levy is attributable.
41.11 	(f) For agreements for which a review and comment have been
41.12 	submitted to the Department of Education after April 1, 1998,
41.13 	the term "instructional purpose" as used in this subdivision
41.14 	excludes expenditures on stadiums.
41.15 	(g) The commissioner of education may authorize a school
41.16 	district to exceed the limit in paragraph (e) if the school
41.17 	district petitions the commissioner for approval.  The
41.18 	commissioner shall grant approval to a school district to exceed
41.19 	the limit in paragraph (e) for not more than five years if the
41.20 	district meets the following criteria:
41.21 	(1) the school district has been experiencing pupil
41.22 	enrollment growth in the preceding five years;
41.23 	(2) the purpose of the increased levy is in the long-term
41.24 	public interest;
41.25 	(3) the purpose of the increased levy promotes colocation
41.26 	of government services; and
41.27 	(4) the purpose of the increased levy is in the long-term
41.28 	interest of the district by avoiding over construction of school
41.29 	facilities.
41.30 	(h) A school district that is a member of an intermediate
41.31 	school district may include in its authority under this section
41.32 	90 percent of the costs associated with leases of administrative
41.33 	and classroom space for intermediate school district programs.
41.34 	This authority must not exceed $22.50 $25 times the adjusted
41.35 	marginal cost pupil units of the member districts.  This
41.36 	authority is in addition to any other authority authorized under
42.1 	this section.
42.2 	(i) In addition to the allowable capital levies in
42.3 	paragraph (a), a district that is a member of the "Technology
42.4 	and Information Education Systems" data processing joint board,
42.5 	that finds it economically advantageous to enter into a lease
42.6 	purchase agreement for a building for a group of school
42.7 	districts or special school districts for staff development
42.8 	purposes, may levy for its portion of lease costs attributed to
42.9 	the district within the total levy limit in paragraph (e).
42.10 	(j) A school district may lease administrative space under
42.11 	this section if the district can demonstrate to the
42.12 	commissioner's satisfaction that the administrative space is
42.13 	less expensive than instructional space that the district would
42.14 	otherwise lease.

42.15 	Sec. 45. Minnesota Statutes 2004, section 126C.43,
42.16 	subdivision 2, is amended to read:
42.17 		Subd. 2.Payment to unemployment insurance program trust
42.18 	fund by state and political subdivisions.  A district may
42.19 	levy 90 percent of the amount exceeding $10 times the district's
42.20 	adjusted marginal cost pupil units for the fiscal year ending in
42.21 	the year before the year the levy is certified necessary (i) to
42.22 	pay the district's obligations under section 268.052,
42.23 	subdivision 1, and (ii) to pay for job placement services
42.24 	offered to employees who may become eligible for benefits
42.25 	pursuant to section 268.085 for the fiscal year the levy is
42.26 	certified.
42.27 	
EFFECTIVE DATE. This section is effective for taxes
42.28 	payable in 2006.

42.29 	Sec. 46. Minnesota Statutes 2004, section 126C.43,
42.30 	subdivision 3, is amended to read:
42.31 		Subd. 3.Tax levy for judgment.  A district may levy 90
42.32 	percent of the amount exceeding $10 times the district's
42.33 	adjusted marginal cost pupil units for the fiscal year ending in
42.34 	the year before the year the levy is certified necessary to pay
42.35 	judgments against the district under section 123B.25 that became
42.36 	final after the date the district certified its proposed levy in
43.1 	the previous year.  With the approval of the commissioner, a
43.2 	district may spread this levy over a period not to exceed three
43.3 	years.  Upon approval through the adoption of a resolution by
43.4 	each of an intermediate district's member school district
43.5 	boards, a member school district may include its proportionate
43.6 	share of the costs of a judgment against an intermediate school
43.7 	district that became final under section 123B.25 after the date
43.8 	that the earliest member school district certified its proposed
43.9 	levy in the previous year.  With the approval of the
43.10 	commissioner, an intermediate school district member school
43.11 	district may spread this levy over a period not to exceed three
43.12 	years.
43.13 	
EFFECTIVE DATE. This section is effective for taxes
43.14 	payable in 2006.

43.15 	Sec. 47. Minnesota Statutes 2004, section 126C.44, is
43.16 	amended to read:
43.17 	126C.44 SAFE SCHOOLS LEVY.
43.18 	Each district may make a levy on all taxable property
43.19 	located within the district for the purposes specified in this
43.20 	section.  The maximum amount which may be levied for all costs
43.21 	under this section shall be equal to $27 $30 multiplied by the
43.22 	district's adjusted marginal cost pupil units for the school
43.23 	year.  The proceeds of the levy must be used for directly
43.24 	funding the following purposes or for reimbursing the cities and
43.25 	counties who contract with the district for the following
43.26 	purposes:  (1) to pay the costs incurred for the salaries,
43.27 	benefits, and transportation costs of peace officers and
43.28 	sheriffs for liaison in services in the district's schools; (2)
43.29 	to pay the costs for a drug abuse prevention program as defined
43.30 	in section 609.101, subdivision 3, paragraph (e), in the
43.31 	elementary schools; (3) to pay the costs for a gang resistance
43.32 	education training curriculum in the district's schools; (4) to
43.33 	pay the costs for security in the district's schools and on
43.34 	school property; or (5) to pay the costs incurred for the
43.35 	salaries and benefits of school counselors; or (6) to pay the
43.36 	costs for other crime prevention, drug abuse, student and staff
44.1 	safety, and violence prevention measures taken by the school
44.2 	district.  The district must initially attempt to contract for
44.3 	services to be provided by peace officers or sheriffs with the
44.4 	police department of each city or the sheriff's department of
44.5 	the county within the district containing the school receiving
44.6 	the services.  If a local police department or a county
44.7 	sheriff's department does not wish to provide the necessary
44.8 	services, the district may contract for these services with any
44.9 	other police or sheriff's department located entirely or
44.10 	partially within the school district's boundaries.  The levy
44.11 	authorized under this section is not included in determining the
44.12 	school district's levy limitations.

44.13 	EFFECTIVE DATE. This section is effective for taxes
44.14 	payable in 2006.

44.15 	Sec. 48. Minnesota Statutes 2004, section 126C.48, is
44.16 	amended by adding a subdivision to read:
44.17 		Subd. 9.Reverse referendum. (a) At the time a district
44.18 	certifies its proposed levy to the county auditor according to
44.19 	section 275.065, subdivision 1, the school board must certify
44.20 	the amount of deferred maintenance revenue per pupil unit that
44.21 	the board intends to raise.  If the board certifies an amount
44.22 	for fiscal year 2007, the amount certified is subject to reverse
44.23 	referendum under paragraphs (b) and (c).  If the amount
44.24 	certified for fiscal year 2008 and later exceeds the amount
44.25 	certified for the previous fiscal year, excluding any amount
44.26 	disallowed by reverse referendum, the increase over the amount
44.27 	certified for the previous fiscal year excluding any amount
44.28 	disallowed by reverse referendum, is subject to reverse
44.29 	referendum under paragraphs (b) and (c).
44.30 	(b) If a district certifies revenue under paragraph (a)
44.31 	that is subject to reverse referendum, the district must publish
44.32 	notice of the intended increase subject to reverse referendum by
44.33 	October 10.  The notice must include the amount of the revenue
44.34 	increase per adjusted pupil unit and the property tax increase
44.35 	in annual dollars for typical residential homesteads,
44.36 	agricultural homesteads, apartments, and commercial-industrial
45.1 	property within the district.
45.2 	(c) Revenue tentatively authorized by the board under this
45.3 	subdivision becomes authorized unless a petition signed by more
45.4 	than 15 percent of the registered voters of the district is
45.5 	filed with the school board within 30 days of the publication of
45.6 	notice.  The percentage is to be determined with reference to
45.7 	the number of registered voters in the district on the last day
45.8 	before the petition is filed with the board.  The petition must
45.9 	call for a referendum on the question of whether to increase the
45.10 	revenue.  The approval of 50 percent plus one of those voting on
45.11 	the question is required to pass a referendum authorized by this
45.12 	section.  The referendum must be held on the last Tuesday in
45.13 	January.
45.14 	(d) The ballot must state that the board proposes to
45.15 	increase its deferred maintenance revenue, the maximum amount of
45.16 	the increased revenue per pupil, and the estimated tax rate as a
45.17 	percentage of net tax capacity in the first year it is to be
45.18 	levied.  The ballot shall contain a textual portion with the
45.19 	information required in this paragraph and a question stating
45.20 	substantially the following:  "Shall the increase in revenue
45.21 	proposed by the Board of ......., Independent School District
45.22 	No. ......., be approved?" 
45.23 	(e) The district's final and deferred maintenance revenue
45.24 	per pupil unit for a fiscal year must not exceed the sum of the
45.25 	amounts certified by the district according to paragraph (a).  A
45.26 	district may elect to reduce the amount certified according to
45.27 	paragraph (a) at the time of final levy certification.  If the
45.28 	criteria for a reverse referendum have been met, but the amount
45.29 	certified is reduced to a level that would not require a reverse
45.30 	referendum, the reverse referendum is canceled.

45.31 	Sec. 49. Minnesota Statutes 2004, section 126C.48,
45.32 	subdivision 2, is amended to read:
45.33 		Subd. 2.Notice to commissioner; forms.  By October 7 of
45.34 	each year each district must notify the commissioner of the
45.35 	proposed levies in compliance with the levy limitations of this
45.36 	chapter and chapters 120B, 122A, 123A, 123B, 124D, 125A, 127A,
46.1 	and 136D.  By January 15 7 of each year each district must
46.2 	notify the commissioner of the final levies certified.  The
46.3 	commissioner shall prescribe the form of these notifications and
46.4 	may request any additional information necessary to compute
46.5 	certified levy amounts.

46.6 	Sec. 50. Minnesota Statutes 2004, section 126C.48,
46.7 	subdivision 8, is amended to read:
46.8 		Subd. 8.Taconite payment and other reductions.  (1)
46.9 	Reductions in levies pursuant to subdivision 1 must be made
46.10 	prior to the reductions in clause (2).
46.11 	(2) Notwithstanding any other law to the contrary,
46.12 	districts which received payments that have revenue pursuant to
46.13 	sections 298.018; 298.225; 298.24 to 298.28, except an amount
46.14 	distributed under section sections 298.26;298.28, subdivision
46.15 	4, paragraph paragraphs (c), clause (ii), and (d); 298.34 to
46.16 	298.39; 298.391 to 298.396; 298.405; 477A.15;and any law
46.17 	imposing a tax upon severed mineral values; or recognized
46.18 	revenue under section 477A.15 must not include a portion of
46.19 	these aids in their permissible levies pursuant to those
46.20 	sections, but instead must reduce the permissible levies
46.21 	authorized by this chapter and chapters 120B, 122A, 123A, 123B,
46.22 	124A, 124D, 125A, and 127A by the greater of the following:95
46.23 	percent of the previous year's revenue specified under this
46.24 	clause.
46.25 	(a) an amount equal to 50 percent of the total dollar
46.26 	amount of the payments received pursuant to those sections or
46.27 	revenue recognized under section 477A.15 in the previous fiscal
46.28 	year; or 
46.29 	(b) an amount equal to the total dollar amount of the
46.30 	payments received pursuant to those sections or revenue
46.31 	recognized under section 477A.15 in the previous fiscal year
46.32 	less the product of the same dollar amount of payments or
46.33 	revenue times five percent.
46.34 	For levy year 2002 only, 77 percent of the amounts
46.35 	distributed under section 298.225 and 298.28, and 100 percent of
46.36 	the amounts distributed under sections 298.018; 298.34 to
47.1 	298.39; 298.391 to 298.396; 298.405; and any law imposing a tax
47.2 	upon severed mineral values, or recognized revenue under section
47.3 	477A.15, shall be used for purposes of the calculations under
47.4 	this paragraph.  For levy year 2003 only, the levy reductions
47.5 	under this subdivision must be calculated as if section 298.28,
47.6 	subdivision 4, paragraph (f), did not apply for the 2003
47.7 	distribution.
47.8 	(3) The amount of any voter approved referendum, facilities
47.9 	down payment, and debt levies shall not be reduced by more than
47.10 	50 percent under this subdivision.  In administering this
47.11 	paragraph, the commissioner shall first reduce the nonvoter
47.12 	approved levies of a district; then, if any payments, severed
47.13 	mineral value tax revenue or recognized revenue under paragraph
47.14 	(2) remains, the commissioner shall reduce any voter approved
47.15 	referendum levies authorized under section 126C.17; then, if any
47.16 	payments, severed mineral value tax revenue or recognized
47.17 	revenue under paragraph (2) remains, the commissioner shall
47.18 	reduce any voter approved facilities down payment levies
47.19 	authorized under section 123B.63 and then, if any payments,
47.20 	severed mineral value tax revenue or recognized revenue under
47.21 	paragraph (2) remains, the commissioner shall reduce any voter
47.22 	approved debt levies.
47.23 	(4) Before computing the reduction pursuant to this
47.24 	subdivision of the health and safety levy authorized by sections
47.25 	123B.57 and 126C.40, subdivision 5, the commissioner shall
47.26 	ascertain from each affected school district the amount it
47.27 	proposes to levy under each section or subdivision.  The
47.28 	reduction shall be computed on the basis of the amount so
47.29 	ascertained.
47.30 	(5) To the extent the levy reduction calculated under
47.31 	paragraph (2) exceeds the limitation in paragraph (3), an amount
47.32 	equal to the excess must be distributed from the school
47.33 	district's distribution under sections 298.225, 298.28, and
47.34 	477A.15 in the following year to the cities and townships within
47.35 	the school district in the proportion that their taxable net tax
47.36 	capacity within the school district bears to the taxable net tax
48.1 	capacity of the school district for property taxes payable in
48.2 	the year prior to distribution.  No city or township shall
48.3 	receive a distribution greater than its levy for taxes payable
48.4 	in the year prior to distribution.  The commissioner of revenue
48.5 	shall certify the distributions of cities and towns under this
48.6 	paragraph to the county auditor by September 30 of the year
48.7 	preceding distribution.  The county auditor shall reduce the
48.8 	proposed and final levies of cities and towns receiving
48.9 	distributions by the amount of their distribution.
48.10 	Distributions to the cities and towns shall be made at the times
48.11 	provided under section 298.27.
48.12 	
EFFECTIVE DATE. This section is effective for revenue for
48.13 	fiscal year 2006.

48.14 	Sec. 51. Minnesota Statutes 2004, section 127A.45,
48.15 	subdivision 11, is amended to read:
48.16 		Subd. 11.Payment percentage for reimbursement aids.  One
48.17 	hundred percent of the aid for the previous fiscal year must be
48.18 	paid in the current year for the following aids:
48.19 	telecommunications/Internet access equity and according to
48.20 	section 125B.26,special education special pupil aid according
48.21 	to section 125A.75, subdivision 3, aid for litigation costs
48.22 	according to section 125A.75, subdivision 8, aid for
48.23 	court-placed special education expenses according to section
48.24 	125A.79, subdivision 4, and aid for special education
48.25 	out-of-state tuition according to section 125A.79, subdivision
48.26 	8, and shared time aid according to section 126C.01, subdivision
48.27 	7.

48.28 	Sec. 52. Minnesota Statutes 2004, section 127A.49,
48.29 	subdivision 2, is amended to read:
48.30 		Subd. 2.Abatements.  Whenever by virtue of chapter 278,
48.31 	sections 270.07, 375.192, or otherwise, the net tax capacity of
48.32 	any district for any taxable year is changed after the taxes for
48.33 	that year have been spread by the county auditor and the local
48.34 	tax rate as determined by the county auditor based upon the
48.35 	original net tax capacity is applied upon the changed net tax
48.36 	capacities, the county auditor shall, prior to February 1 of
49.1 	each year, certify to the commissioner of education the amount
49.2 	of any resulting net revenue loss that accrued to the district
49.3 	during the preceding year.  Each year, the commissioner shall
49.4 	pay an abatement adjustment to the district in an amount
49.5 	calculated according to the provisions of this subdivision.
49.6 	This amount shall be deducted from the amount of the levy
49.7 	authorized by section 126C.46.  The amount of the abatement
49.8 	adjustment must be the product of:
49.9 	(1) the net revenue loss as certified by the county
49.10 	auditor, times
49.11 	(2) the ratio of:
49.12 	(i) the sum of the amounts of the district's certified levy
49.13 	in the third preceding year according to the following:
49.14 	(A) section 123B.57, if the district received health and
49.15 	safety aid according to that section for the second preceding
49.16 	year;
49.17 	(B) section 124D.20, if the district received aid for
49.18 	community education programs according to that section for the
49.19 	second preceding year;
49.20 	(C) section 124D.135, subdivision 3, if the district
49.21 	received early childhood family education aid according to
49.22 	section 124D.135 for the second preceding year; and
49.23 	(D) section 126C.17, subdivision 6, if the district
49.24 	received referendum equalization aid according to that section
49.25 	for the second preceding year; to
49.26 	(ii) the total amount of the district's certified levy in
49.27 	the third preceding December, plus or minus auditor's
49.28 	adjustments.

49.29 	Sec. 53. Minnesota Statutes 2004, section 127A.49,
49.30 	subdivision 3, is amended to read:
49.31 		Subd. 3.Excess tax increment.  (a) If a return of excess
49.32 	tax increment is made to a district pursuant to section sections 
49.33 	469.176, subdivision 2, and 469.177, subdivision 9,or upon
49.34 	decertification of a tax increment district, the school
49.35 	district's aid and levy limitations must be adjusted for the
49.36 	fiscal year in which the excess tax increment is paid under the
50.1 	provisions of this subdivision.
50.2 	(b) An amount must be subtracted from the district's aid
50.3 	for the current fiscal year equal to the product of:
50.4 	(1) the amount of the payment of excess tax increment to
50.5 	the district, times
50.6 	(2) the ratio of:
50.7 	(i) the sum of the amounts of the district's certified levy
50.8 	for the fiscal year in which the excess tax increment is paid
50.9 	according to the following:
50.10 	(A) section 123B.57, if the district received health and
50.11 	safety aid according to that section for the second preceding
50.12 	year;
50.13 	(B) section 124D.20, if the district received aid for
50.14 	community education programs according to that section for the
50.15 	second preceding year;
50.16 	(C) section 124D.135, subdivision 3, if the district
50.17 	received early childhood family education aid according to
50.18 	section 124D.135 for the second preceding year; and
50.19 	(D) section 126C.17, subdivision 6, if the district
50.20 	received referendum equalization aid according to that section
50.21 	for the second preceding year; to
50.22 	(ii) the total amount of the district's certified levy for
50.23 	the fiscal year, plus or minus auditor's adjustments.
50.24 	(c) An amount must be subtracted from the school district's
50.25 	levy limitation for the next levy certified equal to the
50.26 	difference between:
50.27 	(1) the amount of the distribution of excess increment; and
50.28 	(2) the amount subtracted from aid pursuant to clause (a).
50.29 	If the aid and levy reductions required by this subdivision
50.30 	cannot be made to the aid for the fiscal year specified or to
50.31 	the levy specified, the reductions must be made from aid for
50.32 	subsequent fiscal years, and from subsequent levies.  The school
50.33 	district must use the payment of excess tax increment to replace
50.34 	the aid and levy revenue reduced under this subdivision.
50.35 	(d) This subdivision applies only to the total amount of
50.36 	excess increments received by a district for a calendar year
51.1 	that exceeds $25,000.

51.2 	Sec. 54. Minnesota Statutes 2004, section 127A.50,
51.3 	subdivision 5, is amended to read:
51.4 		Subd. 5.Adjustment phase-out and termination.  All
51.5 	adjustments under this section terminate on June 30, 2020. For
51.6 	fiscal year 2007 and later, the adjustment under this section
51.7 	equals 75 percent of the adjustment for fiscal year 2006.
51.8 	
EFFECTIVE DATE. This section is effective for revenue for
51.9 	fiscal year 2007.

51.10 	Sec. 55. Minnesota Statutes 2004, section 275.14, is
51.11 	amended to read:
51.12 	275.14 CENSUS.
51.13 	For the purposes of sections 275.124 to 275.16, the
51.14 	population of a city shall be that established by the last
51.15 	federal census, by a special census taken by the United States
51.16 	Bureau of the Census, by an estimate made by the Metropolitan
51.17 	Council, or by the state demographer made according to section
51.18 	4A.02, whichever has the latest stated date of count or
51.19 	estimate, before July 2 of the current levy year.The
51.20 	population of a school district must be as certified by the
51.21 	Department of Education from the most recent federal census.  In
51.22 	any year in which no federal census is taken pursuant to law in
51.23 	any school district affected by sections 275.124 to
51.24 	275.16 124D.20 and 124D.531a population estimate may be made
51.25 	and submitted to the state demographer for approval as
51.26 	hereinafter provided.  The school board of a school district, in
51.27 	case it desires a population estimate, shall pass a resolution
51.28 	by July 1 containing a current estimate of the population of the
51.29 	school district and shall submit the resolution to the state
51.30 	demographer.  The resolution shall describe the criteria on
51.31 	which the estimate is based and shall be in a form and
51.32 	accompanied by the data prescribed by the state demographer.
51.33 	The state demographer shall determine whether or not the
51.34 	criteria and process described in the resolution provide a
51.35 	reasonable basis for the population estimate and shall inform
51.36 	the school district of that determination within 30 days of
52.1 	receipt of the resolution.  If the state demographer determines
52.2 	that the criteria and process described in the resolution do not
52.3 	provide a reasonable basis for the population estimate, the
52.4 	resolution shall be of no effect.  If the state demographer
52.5 	determines that the criteria and process do provide a reasonable
52.6 	basis for the population estimate, the estimate shall be treated
52.7 	as the population of the school district for the purposes of
52.8 	sections 275.124 to 275.16124D.20 and 124D.531until the
52.9 	population of the school district has been established by the
52.10 	next federal census or until a more current population estimate
52.11 	is prepared and approved as provided herein, whichever occurs
52.12 	first.  The state demographer shall establish guidelines for
52.13 	acceptable population estimation criteria and processes.  The
52.14 	state demographer shall issue advisory opinions upon request in
52.15 	writing to cities or school districts as to proposed criteria
52.16 	and processes prior to their implementation in an estimation.
52.17 	The advisory opinion shall be final and binding upon the
52.18 	demographer unless the demographer can show cause why it should
52.19 	not be final and binding.
52.20 	In the event that a census tract employed in taking a
52.21 	federal or local census overlaps two or more school districts,
52.22 	the county auditor shall, on the basis of the best information
52.23 	available, allocate the population of said census tract to the
52.24 	school districts involved.
52.25 	The term "council," as used in sections 275.124 to 275.16,
52.26 	means any board or body, whether composed of one or more
52.27 	branches, authorized to make ordinances for the government of a
52.28 	city within this state.

52.29 	Sec. 56. Minnesota Statutes 2004, section 275.16, is
52.30 	amended to read:
52.31 	275.16 COUNTY AUDITOR TO FIX AMOUNT OF LEVY.
52.32 	If any such municipality shall return to the county auditor
52.33 	a levy greater than permitted by chapters 123A, 123B, 124D,
52.34 	126C, and 136C, and 136D,sections 275.124 to 275.16, and 275.70
52.35 	to 275.74, such county auditor shall extend only such amount of
52.36 	taxes as the limitations herein prescribed will permit;
53.1 	provided, if such levy shall include any levy for the payment of
53.2 	bonded indebtedness or judgments, such levies for bonded
53.3 	indebtedness or judgments shall be extended in full, and the
53.4 	remainder of the levies shall be reduced so that the total
53.5 	thereof, including levies for bonds and judgments, shall not
53.6 	exceed such amount as the limitations herein prescribed will
53.7 	permit.

53.8 	Sec. 57. Minnesota Statutes 2004, section 469.177,
53.9 	subdivision 9, is amended to read:
53.10 		Subd. 9.Distributions of excess taxes on captured net
53.11 	tax capacity.  (a) If the amount of tax paid on captured net tax
53.12 	capacity exceeds the amount of tax increment, the county auditor
53.13 	shall distribute the excess to the municipality, county, and
53.14 	school district as follows:  each governmental unit's share of
53.15 	the excess equals
53.16 	(1) the total amount of the excess for the tax increment
53.17 	financing district, multiplied by
53.18 	(2) a fraction, the numerator of which is the current local
53.19 	tax rate of the governmental unit less the governmental unit's
53.20 	local tax rate for the year the original local tax rate for the
53.21 	district was certified (in no case may this amount be less than
53.22 	zero) and the denominator of which is the sum of the numerators
53.23 	for the municipality, county, and school district.
53.24 	If the entire increase in the local tax rate is attributable to
53.25 	a taxing district, other than the municipality, county, or
53.26 	school district, then the excess must be distributed to the
53.27 	municipality, county, and school district in proportion to their
53.28 	respective local tax rates.
53.29 	(b) The amounts distributed shall be deducted in computing
53.30 	the levy limits of the taxing district for the succeeding
53.31 	taxable year. In the case of a school district, only the
53.32 	proportion of the excess taxes attributable to unequalized
53.33 	levies that are subject to a fixed dollar amount levy limit
53.34 	shall be deducted from the levy limit.
53.35 	(c) In the case of distributions to a school district that
53.36 	are attributable to state equalized levies, the county auditor
54.1 	shall report amounts distributed to the commissioner of
54.2 	education in the same manner as provided for excess increments
54.3 	under section 469.176, subdivision 2, and the distribution shall
54.4 	be deducted from the school district's state aid payments and
54.5 	levy limitation according to section 127A.49, subdivision 3.

54.6 	Sec. 58. Laws 2003, First Special Session chapter 9,
54.7 	article 1, section 51, is amended to read:

54.8 	Sec. 51. STAFF DEVELOPMENT RESERVED REVENUE; FISCAL YEARS
54.9 	2004 AND 2005.
 54.10 		Subdivision 1.Fiscal years 2004 and 2005.
 54.11 	Notwithstanding Minnesota Statutes, section 122A.61, subdivision
54.12 	1, for fiscal years 2004 and 2005 only, a school district must
54.13 	reserve an amount equal to at least zero percent of the basic
54.14 	revenue under Minnesota Statutes, section 126C.10, subdivision
54.15 	2.  A district may waive this requirement by a majority vote of
54.16 	the licensed teachers in the district and a majority vote of the
54.17 	school board.  A district in statutory operating debt is exempt
54.18 	from this requirement.
54.19 		Subd. 2.Fiscal years 2006 and 2007. A school district
54.20 	is not subject to Minnesota Statutes, sections 122A.60 and
54.21 	122A.61, subdivision 1, for fiscal years 2006 and 2007.
54.22 	
EFFECTIVE DATE. This section is effective July 1, 2005.

54.23 	Sec. 59. KINDERGARTEN REPORTING.
 54.24 	Notwithstanding Minnesota Statutes, sections 120A.05,
54.25 	subdivision 18; 120A.20, subdivision 1; and 124D.02, subdivision
54.26 	1, pupils four or five years of age on September 1 of the
54.27 	calendar year in which the school year commences and enrolled in
54.28 	a prekindergarten program implemented by the district before
54.29 	July 1, 2003, may be reported as kindergarten pupils under
54.30 	Minnesota Statutes, section 126C.05, subdivision 1, for fiscal
54.31 	years 2004 and earlier.

54.32 	EFFECTIVE DATE. This section is effective the day
54.33 	following final enactment and applies to fiscal years 2004 and
54.34 	earlier.

54.35 	Sec. 60. TRANSITION REVENUE ADJUSTMENTS.
 54.36 	For taxes payable in 2006, a district may levy an amount
55.1 	equal to the increase in the district's transition revenue for
55.2 	fiscal year 2006 under Minnesota Statutes, section 126C.10,
55.3 	subdivision 31, paragraphs (c) and (d).

55.4 	Sec. 61. ALTERNATIVE COMPENSATION REVENUE GUARANTEE.
 55.5 	Notwithstanding Minnesota Statutes, sections 122A.415,
55.6 	subdivision 1, and 126C.10, subdivision 34, paragraphs (a) and
55.7 	(b), a school district that received alternative compensation
55.8 	aid for fiscal year 2005, but does not qualify for alternative
55.9 	compensation revenue for all sites in the district for fiscal
55.10 	year 2006 or 2007, shall receive additional basic alternative
55.11 	compensation aid for that fiscal year equal to the lesser of the
55.12 	amount of alternative compensation aid it received for fiscal
55.13 	year 2005 or the amount it would have received for that fiscal
55.14 	year under Minnesota Statutes 2004, section 122A.415,
55.15 	subdivision 1, for teachers at sites not qualifying for
55.16 	alternative compensation revenue for that fiscal year, if the
55.17 	district submits a timely application and the commissioner
55.18 	determines that the district continues to implement an
55.19 	alternative professional pay system, consistent with its
55.20 	application under Minnesota Statutes 2004, section 122A.415, for
55.21 	fiscal year 2005.  The additional basic alternative compensation
55.22 	aid under this section must not be used in calculating the
55.23 	alternative compensation levy under Minnesota Statutes, section
55.24 	126C.10, subdivision 35.  This section applies only to fiscal
55.25 	years 2006 and 2007 and does not apply to later fiscal years.

55.26 	Sec. 62. SCHOOL BUS LEVY; CARPENTER SCHOOL BUSES.
 55.27 	For taxes payable in 2006 through 2010, a school district
55.28 	may levy an amount, not to exceed in the aggregate, $30,000
55.29 	times the number of Carpenter school buses in its fleet as of
55.30 	January 1, 2003, that have been determined to have potentially
55.31 	defective welds and are subject to limitations imposed by the
55.32 	Department of Public Safety.

55.33 	Sec. 63. COMPENSATORY REVENUE ALLOCATION; TEST SCORE
55.34 	PILOT PROGRAM.
 55.35 		Subdivision 1.Pilot program created. A three-year pilot
55.36 	program is created to allow a school district to allocate
56.1 	compensatory revenue received under Minnesota Statutes, section
56.2 	126C.10, subdivision 3, among its school buildings according to
56.3 	each building's school performance measures.
56.4 		Subd. 2.Application process. A school district that
56.5 	seeks to allocate its compensatory revenue to school sites based
56.6 	on student performance may submit an application to the
56.7 	commissioner of education by June 1, 2005.  The application must
56.8 	include a written resolution approved by the school board that:
56.9 	(1) identifies the test results that will be used to assess
56.10 	student performance; (2) describes the method for distribution
56.11 	of compensatory revenue to the school sites; and (3) summarizes
56.12 	the evaluation procedure the district will use to determine if
56.13 	the redistribution of compensatory revenue improves overall
56.14 	student performance.  The application must be submitted in the
56.15 	form and manner specified by the commissioner.
56.16 		Subd. 3.Commissioner selection. The commissioner may
56.17 	select up to five school districts to participate in the pilot
56.18 	program.  The commissioner must notify the selected school
56.19 	districts by July 1, 2005.
56.20 		Subd. 4.Report. The commissioner of education must
56.21 	submit a report by February 15, 2008, to the education
56.22 	committees of the legislature evaluating the effectiveness of
56.23 	the pilot program.
56.24 	
EFFECTIVE DATE. This section is effective the day
56.25 	following final enactment.

56.26 	Sec. 64. FISCAL YEAR 2006 ONLY.
 56.27 	For fiscal year 2006 only, the increases in equity revenue
56.28 	and operating capital revenue under Minnesota Statutes, section
56.29 	126C.10, are payable entirely in state aid.

56.30 	Sec. 65. FISCAL YEAR 2006 COMPENSATORY REVENUE FOR
56.31 	REFUGEES.
 56.32 	(a) Notwithstanding Minnesota Statutes, section 126C.05,
56.33 	subdivisions 3 and 16, refugees from the Wat Krabok Refugee Camp
56.34 	in Thailand who were not enrolled in a Minnesota public school
56.35 	on October 1, 2004, but who were enrolled in a Minnesota public
56.36 	school on June 1, 2005, must be included in the calculation of
57.1 	compensatory revenue pupil units for fiscal year 2006.
57.2 	(b) The total aid expended under this section must not
57.3 	exceed $2,000,000.

57.4 	Sec. 66. APPROPRIATIONS.
 57.5 		Subdivision 1.Department of education. The sums
57.6 	indicated in this section are appropriated from the general fund
57.7 	to the Department of Education for the fiscal years designated.
57.8 		Subd. 2.General education aid. For general education
57.9 	aid under Minnesota Statutes, section 126C.13, subdivision 4:
57.10 	$5,137,772,000 .....2006 
57.11 	$5,362,117,000 .....2007 
57.12 	The 2006 appropriation includes $784,978,000 for 2005 and
57.13 	$4,352,794,000 for 2006.
57.14 	The 2007 appropriation includes $815,002,000 for 2006 and
57.15 	$4,547,088,000 for 2007.
57.16 		Subd. 3.Referendum tax base replacement aid. For
57.17 	referendum tax base replacement aid under Minnesota Statutes,
57.18 	section 126C.17, subdivision 7a:
57.19 	$8,704,000 .....2006 
57.20 	$8,704,000 .....2007 
57.21 	The 2006 appropriation includes $1,366,000 for 2005 and
57.22 	$7,338,000 for 2006.
57.23 	The 2007 appropriation includes $1,366,000 for 2006 and
57.24 	$7,338,000 for 2007.
57.25 		Subd. 4.Enrollment options transportation. For
57.26 	transportation of pupils attending postsecondary institutions
57.27 	under Minnesota Statutes, section 124D.09, or for transportation
57.28 	of pupils attending nonresident districts under Minnesota
57.29 	Statutes, section 124D.03:
57.30 	$55,000 .....2006 
57.31 	$55,000 .....2007 
57.32 		Subd. 5.Abatement revenue. For abatement aid under
57.33 	Minnesota Statutes, section 127A.49:
57.34 	$903,000 .....2006 
57.35 	$955,000 .....2007 
57.36 	The 2006 appropriation includes $187,000 for 2005 and
58.1 	$716,000 for 2006.
58.2 	The 2007 appropriation includes $133,000 for 2006 and
58.3 	$822,000 for 2007.
58.4 		Subd. 6.Consolidation transition. For districts
58.5 	consolidating under Minnesota Statutes, section 123A.485:
58.6 	$253,000 .....2007 
58.7 	The 2007 appropriation includes $0 for 2006 and $253,000
58.8 	for 2007.
58.9 		Subd. 7.Nonpublic pupil education aid. For nonpublic
58.10 	pupil education aid under Minnesota Statutes, sections 123B.87
58.11 	and 123B.40 to 123B.43:
58.12 	$15,324,000 .....2006 
58.13 	$16,327,000 .....2007 
58.14 	The 2006 appropriation includes $2,305,000 for 2005 and
58.15 	$13,019,000 for 2006.
58.16 	The 2007 appropriation includes $2,424,000 for 2006 and
58.17 	$13,903,000 for 2007.
58.18 		Subd. 8.Nonpublic pupil transportation. For nonpublic
58.19 	pupil transportation aid under Minnesota Statutes, section
58.20 	123B.92, subdivision 9:
58.21 	$21,287,000 .....2006 
58.22 	$22,670,000 .....2007 
58.23 	The 2006 appropriation includes $3,274,000 for 2005 and
58.24 	$18,013,000 for 2006.
58.25 	The 2007 appropriation includes $3,354,000 for 2006 and
58.26 	$19,316,000 for 2007.
58.27 		Subd. 9.One room schoolhouse. For a grant to
58.28 	Independent School District No. 690, Warroad, to operate the
58.29 	Angle Inlet School:
58.30 	$50,000 .....2006 
58.31 	$50,000 .....2007 
58.32 		Subd. 10.Declining pupil aid; albert lea. For declining
58.33 	pupil aid to Independent School District No. 241, Albert Lea:
58.34 	$75,000 .....2006 
58.35 		Subd. 11.Declining pupil aid; mesabi east. For
58.36 	declining pupil aid to Independent School District No. 2711,
59.1 	Mesabi East:
59.2 	$50,000 .....2006 
59.3 		Subd. 12.Declining pupil aid; roseau. For declining
59.4 	pupil aid to Independent School District No. 682, Roseau:
59.5 	$10,000 .....2006 
59.6 		Subd. 13.Compensatory revenue pilot project. For a
59.7 	grant to Independent School District No. 11, Anoka-Hennepin, for
59.8 	participation in the compensatory revenue pilot program under
59.9 	section 63:
59.10 	$2,000,000 .....2006 
59.11 	$2,000,000 .....2007 
59.12 	This appropriation is part of the base budget for
59.13 	subsequent fiscal years.

59.14 	Sec. 67. REPEALER.
 59.15 		Subdivision 1.July 1, 2005. Minnesota Statutes 2004,
59.16 	sections 122A.415, subdivision 2; 123B.83, subdivision 1; and
59.17 	126C.42, subdivisions 1 and 4, are repealed.
59.18 		Subd. 2.Fiscal year 2007. Minnesota Statutes 2004,
59.19 	section 126C.12, is repealed for revenue for fiscal year 2007.

59.20 	ARTICLE 2
59.21 	EXCELLENCE IN EDUCATION

59.22 	Section 1. Minnesota Statutes 2004, section 13.32,
59.23 	subdivision 1, is amended to read:
59.24 		Subdivision 1.Definitions.  As used in this section:
59.25 	(a) "Continuing truant" means a student under section
59.26 	260A.02, subdivision 3, who is absent without valid excuse from
59.27 	instruction in a school.
59.28 	(b) "Educational data" means data on individuals maintained
59.29 	by a public educational agency or institution or by a person
59.30 	acting for the agency or institution which relates to a student.
59.31 	Records of instructional personnel which are in the sole
59.32 	possession of the maker thereof and are not accessible or
59.33 	revealed to any other individual except a substitute teacher,
59.34 	and are destroyed at the end of the school year, shall not be
59.35 	deemed to be government data.
59.36 	Records of a law enforcement unit of a public educational
60.1 	agency or institution which are maintained apart from education
60.2 	data and are maintained solely for law enforcement purposes, and
60.3 	are not disclosed to individuals other than law enforcement
60.4 	officials of the jurisdiction are not educational data;
60.5 	provided, that education records maintained by the educational
60.6 	agency or institution are not disclosed to the personnel of the
60.7 	law enforcement unit.  The University of Minnesota police
60.8 	department is a law enforcement agency for purposes of section
60.9 	13.82 and other sections of Minnesota Statutes dealing with law
60.10 	enforcement records.  Records of organizations providing
60.11 	security services to a public educational agency or institution
60.12 	must be administered consistent with section 13.861.
60.13 	Records relating to a student who is employed by a public
60.14 	educational agency or institution which are made and maintained
60.15 	in the normal course of business, relate exclusively to the
60.16 	individual in that individual's capacity as an employee, and are
60.17 	not available for use for any other purpose are classified
60.18 	pursuant to section 13.43.
60.19 	(b) (c) "Habitual truant" means a student under section
60.20 	260C.007, subdivision 19, who is absent without lawful excuse
60.21 	from attendance at school.
60.22 	(d) "Juvenile justice system" includes criminal justice
60.23 	agencies and the judiciary when involved in juvenile justice
60.24 	activities.
60.25 	(c) (e) "Student" means an individual currently or formerly
60.26 	enrolled or registered, applicants for enrollment or
60.27 	registration at a public educational agency or institution, or
60.28 	individuals who receive shared time educational services from a
60.29 	public agency or institution.
60.30 	(d) (f) "Substitute teacher" means an individual who
60.31 	performs on a temporary basis the duties of the individual who
60.32 	made the record, but does not include an individual who
60.33 	permanently succeeds to the position of the maker of the record.
60.34 	
EFFECTIVE DATE. This section is effective July 1, 2005.

60.35 	Sec. 2. Minnesota Statutes 2004, section 13.32,
60.36 	subdivision 8, is amended to read:
61.1 		Subd. 8.Access by juvenile justice system.  (a) Upon
61.2 	request, the following education data shall be disclosed under
61.3 	subdivision 3, clause (i), to the juvenile justice system:  a
61.4 	student's full name, home address, telephone number, date of
61.5 	birth; a student's school schedule, daily attendance record, and
61.6 	photographs, if any; and parents' names, home addresses, and
61.7 	telephone numbers.
61.8 	(b) In addition, the existence of the following data about
61.9 	a student may be disclosed under subdivision 3, clause (i):
61.10 	(1) use of a controlled substance, alcohol, or tobacco;
61.11 	(2) assaultive or threatening conduct that could result in
61.12 	dismissal from school under section 121A.45, subdivision 2,
61.13 	clause (b) or (c);
61.14 	(3) possession or use of weapons or look-alike weapons;
61.15 	(4) theft; or
61.16 	(5) vandalism or other damage to property.
61.17 	Any request for access to data under this paragraph must
61.18 	contain an explanation of why access to the data is necessary to
61.19 	serve the student.
61.20 	(c) A principal or chief administrative officer of a school
61.21 	who receives a request to disclose information about a student
61.22 	to the juvenile justice system under paragraph (b) shall, to the
61.23 	extent permitted by federal law, notify the student's parent or
61.24 	guardian by certified mail of the request to disclose
61.25 	information before disclosing the information.  If the student's
61.26 	parent or guardian notifies the principal or chief
61.27 	administrative officer within ten days of receiving the
61.28 	certified notice that the parent or guardian objects to the
61.29 	disclosure, the principal or chief administrative officer must
61.30 	not disclose the information.  The principal or chief
61.31 	administrative officer must inform the requesting member of the
61.32 	juvenile justice system of the objection.
61.33 	(d) A principal or chief administrative officer is not
61.34 	required to create data under this subdivision.  Information
61.35 	provided in response to a data request under paragraph (b) shall
61.36 	indicate only whether the data described in paragraph (b)
62.1 	exist.  The principal or chief administrative officer is not
62.2 	authorized under paragraph (b) to disclose the actual data or
62.3 	other information contained in the student's education record.
62.4 	A principal or chief administrative officer is not required to
62.5 	provide data that are protected by court order.  A principal or
62.6 	chief administrative officer must respond to a data request
62.7 	within 14 days if no objection is received from the parent or
62.8 	guardian.
62.9 	(e) If the school board does not waive the school
62.10 	attendance requirement for driving privileges, then a principal
62.11 	or chief school administrator may disclose to the juvenile
62.12 	justice system only the student's continuing or habitual truancy
62.13 	status.
62.14 	(f) Nothing in this subdivision shall limit the disclosure
62.15 	of educational data pursuant to court order.
62.16 	(f) (g) A school district, its agents, and employees who
62.17 	provide data in good faith under this subdivision are not liable
62.18 	for compensatory or exemplary damages or an award of attorney
62.19 	fees in an action under section 13.08, or other law, or for a
62.20 	penalty under section 13.09.
62.21 	(g) (h) Section 13.03, subdivision 4, applies to data that
62.22 	are shared under this subdivision with a government entity.  If
62.23 	data are shared with a member of the juvenile justice system who
62.24 	is not a government entity, the person receiving the shared data
62.25 	must treat the data consistent with the requirements of this
62.26 	chapter applicable to a government entity.
62.27 	(h) (i) A member of the juvenile justice system who falsely
62.28 	certifies a request for data under this section is subject to
62.29 	the penalties under section 13.09.

62.30 	Sec. 3. Minnesota Statutes 2004, section 120A.22,
62.31 	subdivision 12, is amended to read:
62.32 		Subd. 12.Legitimate exemptions.  A parent, guardian, or
62.33 	other person having control of a child may apply to a school
62.34 	district to have the child excused from attendance for the whole
62.35 	or any part of the time school is in session during any school
62.36 	year.  Application may be made to any member of the board, a
63.1 	truant officer, a principal, or the superintendent. The school
63.2 	district may state in its school attendance policy that it may
63.3 	ask the student's parent or legal guardian to verify in writing
63.4 	the reason for the child's absence from school.The board of
63.5 	the district in which the child resides may approve the
63.6 	application upon the following being demonstrated to the
63.7 	satisfaction of that board:
63.8 	(1) that the child's bodily or mental condition is such as
63.9 	to prevent attendance at school or application to study for the
63.10 	period required; or , which includes:
63.11 	(i) child illness, medical, dental, orthodontic, or
63.12 	counseling appointments;
63.13 	(ii) family emergencies;
63.14 	(iii) the death or serious illness or funeral of an
63.15 	immediate family member;
63.16 	(iv) active duty in any military branch of the United
63.17 	States; or 
63.18 	(v) other exemptions included in the district's school
63.19 	attendance policy;
63.20 	(2) that for the school years 1988-1989 through 1999-2000
63.21 	the child has already completed the studies ordinarily required
63.22 	in the 10th grade and that for the school years beginning with
63.23 	the 2000-2001 school year the child has already completed the
63.24 	studies ordinarily required to graduate the child has already
63.25 	completed state and district standards required for graduation 
63.26 	from high school; or
63.27 	(3) that it is the wish of the parent, guardian, or other
63.28 	person having control of the child, that the child attend for a
63.29 	period or periods not exceeding in the aggregate three hours in
63.30 	any week, a school for religious instruction conducted and
63.31 	maintained by some church, or association of churches, or any
63.32 	Sunday school association incorporated under the laws of this
63.33 	state, or any auxiliary thereof.  This school for religious
63.34 	instruction must be conducted and maintained in a place other
63.35 	than a public school building, and it must not, in whole or in
63.36 	part, be conducted and maintained at public expense.  However, a
64.1 	child may be absent from school on such days as the child
64.2 	attends upon instruction according to the ordinances of some
64.3 	church.
64.4 	
EFFECTIVE DATE. This section is effective July 1, 2005.

64.5 	Sec. 4. [120A.23] SCHOOL ATTENDANCE REQUIREMENT; DRIVING
64.6 	PRIVILEGES.
64.7 	A district school board, board of a state approved
64.8 	alternative program (SAAP), or charter school board of directors
64.9 	by majority vote, may waive the school attendance requirement
64.10 	for driving privileges under section 171.056 for the students it
64.11 	enrolls.  The board must vote to waive the requirement before
64.12 	September 1 of the initial school year in which the waiver is
64.13 	effective and immediately must transmit an electronic notice to
64.14 	the Department of Public Safety.  If a board intends to rescind
64.15 	its waiver and require students to comply with the school
64.16 	attendance requirement under section 171.056 for any subsequent
64.17 	school year, the board must vote before September 1 of the
64.18 	school year in which the waiver is initially rescinded and
64.19 	immediately must transmit an electronic notice to the Department
64.20 	of Public Safety.

64.21 	EFFECTIVE DATE. This section is effective July 1, 2005.

64.22 	Sec. 5. Minnesota Statutes 2004, section 120B.02, is
64.23 	amended to read:
64.24 	120B.02 EDUCATIONAL EXPECTATIONS FOR MINNESOTA'S
64.25 	STUDENTS.
64.26 	(a) The legislature is committed to establishing rigorous
64.27 	academic standards for Minnesota's public school students.  To
64.28 	that end, the commissioner shall adopt in rule statewide
64.29 	academic standards.  The commissioner shall not prescribe in
64.30 	rule or otherwise the delivery system, classroom assessments, or
64.31 	form of instruction that school sites must use.  For purposes of
64.32 	this chapter, a school site is a separate facility, or a
64.33 	separate program within a facility that a local school board
64.34 	recognizes as a school site for funding purposes.
64.35 	(b) All commissioner actions regarding the rule must be
64.36 	premised on the following:
65.1 	(1) the rule is intended to raise academic expectations for
65.2 	students, teachers, and schools;
65.3 	(2) any state action regarding the rule must evidence
65.4 	consideration of school district autonomy; and
65.5 	(3) the Department of Education, with the assistance of
65.6 	school districts, must make available information about all
65.7 	state initiatives related to the rule to students and parents,
65.8 	teachers, and the general public in a timely format that is
65.9 	appropriate, comprehensive, and readily understandable.
65.10 	(c) When fully implemented, the requirements for high
65.11 	school graduation in Minnesota must require students to pass the
65.12 	basic skills test requirements and satisfactorily complete, as
65.13 	determined by the school district, the course credit
65.14 	requirements under section 120B.024and:
65.15 	(1) for students enrolled in grade 8 before the 2005-2006
65.16 	school year, to pass the basic skills test requirements; and 
65.17 	(2) for students enrolled in grade 8 in the 2005-2006
65.18 	school year and later, to pass the Minnesota Comprehensive
65.19 	Assessments Second Edition (MCA-IIs).
65.20 	(d) The commissioner shall periodically review and report
65.21 	on the state's assessment process.
65.22 	(e) School districts are not required to adopt specific
65.23 	provisions of the Goals 2000 and the federal School-to-Work
65.24 	programs.

65.25 	Sec. 6. Minnesota Statutes 2004, section 120B.021,
65.26 	subdivision 1, is amended to read:
65.27 		Subdivision 1.Required academic standards.  The
65.28 	following subject areas are required for statewide
65.29 	accountability:
65.30 	(1) language arts;
65.31 	(2) mathematics;
65.32 	(3) science;
65.33 	(4) social studies, including history, geography,
65.34 	economics, and government and citizenship;
65.35 	(5) health and physical education, for which locally
65.36 	developed academic standards apply; and
66.1 	(6) the arts, for which statewide or locally developed
66.2 	academic standards apply, as determined by the school district.
66.3 	Public elementary and middle schools must offer at least three
66.4 	and require at least two of the following four arts areas:
66.5 	dance; music; theater; and visual arts.  Public high schools
66.6 	must offer at least three and require at least one of the
66.7 	following five arts areas:  media arts; dance; music; theater;
66.8 	and visual arts.
66.9 	The commissioner must submit proposed standards in science
66.10 	and social studies to the legislature by February 1, 2004.
66.11 	For purposes of applicable federal law, the academic standards
66.12 	for language arts, mathematics, and science apply to all public
66.13 	school students, except the very few students with extreme
66.14 	cognitive or physical impairments for whom an individualized
66.15 	education plan team has determined that the required academic
66.16 	standards are inappropriate.  An individualized education plan
66.17 	team that makes this determination must establish alternative
66.18 	standards.
66.19 	A school district, no later than the 2007-2008 school year,
66.20 	must adopt graduation requirements that meet or exceed state
66.21 	graduation requirements established in law or rule.  A school
66.22 	district that incorporates these state graduation requirements
66.23 	before the 2007-2008 school year must provide students who enter
66.24 	the 9th grade in or before the 2003-2004 school year the
66.25 	opportunity to earn a diploma based on existing locally
66.26 	established graduation requirements in effect when the students
66.27 	entered the 9th grade.  District efforts to develop, implement,
66.28 	or improve instruction or curriculum as a result of the
66.29 	provisions of this section must be consistent with sections
66.30 	120B.10, 120B.11, and 120B.20.
66.31 	At a minimum, school districts must maintain for the
66.32 	2005-2006 through 2007-2008 school years the same physical
66.33 	education and health education student instruction time for
66.34 	kindergarten through 8th grade students adopted in the 2004-2005
66.35 	school year.

66.36 	Sec. 7. Minnesota Statutes 2004, section 120B.021, is
67.1 	amended by adding a subdivision to read:
67.2 		Subd. 1a.Rigorous course of study; waiver. (a) Upon
67.3 	receiving a student's application signed by the student's parent
67.4 	or guardian, a school district, area learning center, or charter
67.5 	school must declare that a student meets or exceeds a specific
67.6 	academic standard required for graduation under this section if
67.7 	the local school board, the school board of the school district
67.8 	in which the area learning center is located, or the charter
67.9 	school board of directors determines that the student:
67.10 	(1) is participating in a course of study including an
67.11 	advanced placement course or an international baccalaureate
67.12 	course or program that is consistent with state academic
67.13 	standards, a learning opportunity outside the curriculum of the
67.14 	district, area learning center or charter school, or an approved
67.15 	preparatory program for employment or postsecondary education
67.16 	that is equally or more rigorous than the corresponding state or
67.17 	local academic standard required by the district, area learning
67.18 	center, or charter school;
67.19 	(2) would be precluded from participating in the rigorous
67.20 	course of study, learning opportunity, or preparatory employment
67.21 	or postsecondary education program if the student were required
67.22 	to achieve the academic standard to be waived; and 
67.23 	(3) satisfactorily completes the requirements for the
67.24 	rigorous course of study, learning opportunity, or preparatory
67.25 	employment or postsecondary education program.
67.26 	Consistent with the requirements of this section, the local
67.27 	school board, the school board of the school district in which
67.28 	the area learning center is located, or the charter school board
67.29 	of directors also may formally determine other circumstances in
67.30 	which to declare that a student meets or exceeds a specific
67.31 	academic standard that the site requires for graduation under
67.32 	this section.
67.33 	(b) A student who satisfactorily completes a postsecondary
67.34 	enrollment options course or program under section 124D.09 is
67.35 	not required to complete other requirements of the academic
67.36 	standards corresponding to that specific rigorous course of
68.1 	study.

68.2 	Sec. 8. Minnesota Statutes 2004, section 120B.024, is
68.3 	amended to read:
68.4 	120B.024 GRADUATION REQUIREMENTS; COURSE CREDITS.
68.5 	Students beginning 9th grade in the 2004-2005 school year
68.6 	and later must successfully complete the following high school
68.7 	level course credits for graduation:
68.8 	(1) four credits of language arts;
68.9 	(2) three credits of mathematics, encompassing at least
68.10 	algebra, geometry, statistics, and probability sufficient to
68.11 	satisfy the academic standard;
68.12 	(3) three credits of science, including at least one credit
68.13 	in biology;
68.14 	(4) three and one-half credits of social studies,
68.15 	encompassing at least United States history, geography,
68.16 	government and citizenship, world history, and economics or
68.17 	three credits of social studies encompassing at least United
68.18 	States history, geography, government and citizenship, and world
68.19 	history, and one-half credit of economics taught in a school's
68.20 	social studies or business department;
68.21 	(5) one credit in the arts; and 
68.22 	(6) one-half credit in physical education and one-half
68.23 	credit in health education; and 
68.24 	(7) a minimum of seven six elective course credits.
68.25 	A course credit is equivalent to a student successfully
68.26 	completing an academic year of study or a student mastering the
68.27 	applicable subject matter, as determined by the local school
68.28 	district.

68.29 	Sec. 9. Minnesota Statutes 2004, section 120B.11,
68.30 	subdivision 1, is amended to read:
68.31 		Subdivision 1.Definitions.  For the purposes of this
68.32 	section and section 120B.10, the following terms have the
68.33 	meanings given them.
68.34 	(a) "Instruction" means methods of providing learning
68.35 	experiences that enables enable a student to meet state and
68.36 	district academic standards and graduation
69.1 	standards requirements.
69.2 	(b) "Curriculum" means district or school adopted programs
69.3 	and written plans for providing students with learning
69.4 	experiences that lead to expected knowledge,and skills, and
69.5 	positive attitudes.

69.6 	Sec. 10. Minnesota Statutes 2004, section 120B.11,
69.7 	subdivision 2, is amended to read:
69.8 		Subd. 2.Adopting policies.  (a) A school board shall
69.9 	adopt annually a have in place an adopted written policy that
69.10 	includes the following:
69.11 	(1) district goals for instruction and including the use of
69.12 	best practices, district and school curriculum, and achievement
69.13 	for all student subgroups;
69.14 	(2) a process for evaluating each student's progress toward
69.15 	meeting graduation academic standards and identifying the
69.16 	strengths and weaknesses of instruction and curriculum affecting
69.17 	students' progress;
69.18 	(3) a system for periodically reviewing and evaluating all
69.19 	instruction and curriculum;
69.20 	(4) a plan for improving instruction and ,curriculum, and
69.21 	student achievement; and
69.22 	(5) an instruction plan that includes education
69.23 	effectiveness processes developed under plan aligned with 
69.24 	section 122A.625and that integrates instruction, curriculum,
69.25 	and technology.

69.26 	Sec. 11. Minnesota Statutes 2004, section 120B.11,
69.27 	subdivision 3, is amended to read:
69.28 		Subd. 3.instruction and curriculum district advisory
69.29 	committee.  Each school board shall establish an Instruction and
69.30 	Curriculum advisory committee to ensure active community
69.31 	participation in all phases of planning and improving the
69.32 	instruction and curriculum affecting state graduation and
69.33 	district academic standards.  A district advisory committee, to
69.34 	the extent possible, shall reflect the diversity of the district
69.35 	and its learning sites, and shall include teachers, parents,
69.36 	support staff, pupils students, and other community residents.
70.1 	The district may establish building teams as subcommittees of
70.2 	the district advisory committee under subdivision 4.  The
70.3 	district advisory committee shall recommend to the school
70.4 	board districtwide education standards rigorous academic
70.5 	standards, student achievement goals and measures, assessments,
70.6 	and program evaluations.  Learning sites may expand upon
70.7 	district evaluations of instruction, curriculum, assessments, or
70.8 	programs.  Whenever possible, parents and other community
70.9 	residents shall comprise at least two-thirds of advisory
70.10 	committee members.

70.11 	Sec. 12. Minnesota Statutes 2004, section 120B.11,
70.12 	subdivision 4, is amended to read:
70.13 		Subd. 4.Building team.  A school may establish a
70.14 	building team to develop and implement an education
70.15 	effectiveness plan to improve instruction and ,curriculum, and
70.16 	student achievement.  The team shall advise the board and the
70.17 	advisory committee about developing an instruction and
70.18 	curriculum improvement plan that aligns curriculum, assessment
70.19 	of student progress in meeting state graduation and district
70.20 	academic standards, and instruction.

70.21 	Sec. 13. Minnesota Statutes 2004, section 120B.11,
70.22 	subdivision 5, is amended to read:
70.23 		Subd. 5.Report.  (a) By October 1 of each year, the
70.24 	school board shall use standard statewide reporting procedures
70.25 	the commissioner develops and adopt a report that includes the
70.26 	following:
70.27 	(1) student performance achievement goals for meeting state
70.28 	graduation academic standards adopted for that year;
70.29 	(2) results of local assessment data, and any additional
70.30 	test data;
70.31 	(3) the annual school district improvement plans including
70.32 	staff development goals under section 122A.60;
70.33 	(4) information about district and learning site progress
70.34 	in realizing previously adopted improvement plans; and
70.35 	(5) the amount and type of revenue attributed to each
70.36 	education site as defined in section 123B.04.
71.1 	(b) The school board shall publish the report in the local
71.2 	newspaper with the largest circulation in the district or ,by
71.3 	mail, or by electronic means such as the district Web site.  If
71.4 	electronic means are used, school districts must publish notice
71.5 	of the report in a periodical of general circulation in the
71.6 	district.  School districts must make copies of the report
71.7 	available to the public on request.  The board shall make a copy
71.8 	of the report available to the public for inspection.  The board
71.9 	shall send a copy of the report to the commissioner of education
71.10 	by October 15 of each year.
71.11 	(c) The title of the report shall contain the name and
71.12 	number of the school district and read "Annual Report on
71.13 	Curriculum, Instruction, and Student Performance Achievement."
71.14 	The report must include at least the following information about
71.15 	advisory committee membership:
71.16 	(1) the name of each committee member and the date when
71.17 	that member's term expires;
71.18 	(2) the method and criteria the school board uses to select
71.19 	committee members; and
71.20 	(3) the date by which a community resident must apply to
71.21 	next serve on the committee.

71.22 	Sec. 14. Minnesota Statutes 2004, section 120B.11,
71.23 	subdivision 8, is amended to read:
71.24 		Subd. 8.Biennial evaluation; assessment program.  At
71.25 	least once every two years, the district report shall include an
71.26 	evaluation of the district testing programs, according to the
71.27 	following:
71.28 	(1) written objectives of the assessment program;
71.29 	(2) names of tests and grade levels tested;
71.30 	(3) use of test results; and
71.31 	(4) implementation of an assurance of mastery program 
71.32 	student achievement results compared to previous years.

71.33 	Sec. 15. [120B.128] EDUCATIONAL PLANNING AND ASSESSMENT
71.34 	SYSTEM (EPAS) PROGRAM.
71.35 	(a) School districts and charter schools may elect to
71.36 	participate in the Educational Planning and Assessment System
72.1 	(EPAS) program offered by ACT, Inc. to provide a longitudinal,
72.2 	systematic approach to student educational and career planning,
72.3 	assessment, instructional support, and evaluation.  The EPAS
72.4 	achievement tests include English, reading, mathematics,
72.5 	science, and components on planning for high school and
72.6 	postsecondary education, interest inventory, needs assessments,
72.7 	and student education plans.  These tests are linked to the ACT
72.8 	assessment for college admission and allow students, parents,
72.9 	teachers, and schools to determine the student's college
72.10 	readiness before grades 11 and 12.
72.11 	(b) The commissioner of education shall provide ACT Explore
72.12 	tests for students in grade 8 and the ACT Plan test for students
72.13 	in grade 10 to assess individual student academic strengths and
72.14 	weaknesses, academic achievement and progress, higher order
72.15 	thinking skills, and college readiness.  The state shall pay the
72.16 	test costs for school districts and charter schools that choose
72.17 	to participate in the EPAS program.  The commissioner shall
72.18 	establish an application procedure and a process for state
72.19 	payment of costs.

72.20 	Sec. 16. Minnesota Statutes 2004, section 120B.13,
72.21 	subdivision 1, is amended to read:
72.22 		Subdivision 1.Program structure; training programs for
72.23 	teachers.  (a) The advanced placement and international
72.24 	baccalaureate programs are well-established academic programs
72.25 	for mature, academically directed high school students.  These
72.26 	programs, in addition to providing academic rigor, offer sound
72.27 	curricular design, accountability, comprehensive external
72.28 	assessment, feedback to students and teachers, and the
72.29 	opportunity for high school students to compete academically on
72.30 	a global level.  Advanced placement and international
72.31 	baccalaureate programs allow students to leave high school with
72.32 	the academic skills and self-confidence to succeed in college
72.33 	and beyond.  The advanced placement and international
72.34 	baccalaureate programs help provide Minnesota students with
72.35 	world-class educational opportunity.
72.36 	(b) Critical to schools' educational success is ongoing
73.1 	advanced placement/international baccalaureate-approved teacher
73.2 	training.  A secondary teacher assigned by a district to teach
73.3 	an advanced placement or international baccalaureate course or
73.4 	other interested educator may participate in a training program
73.5 	offered by The College Board or International Baccalaureate
73.6 	North America, Inc.  The state may pay a portion of the tuition,
73.7 	room, and board, and out-of-state travel costs a teacher or
73.8 	other interested educator incurs in participating in a training
73.9 	program.  The commissioner shall determine application
73.10 	procedures and deadlines, and select teachers and other
73.11 	interested educators to participate in the training program, and
73.12 	determine the payment process and amount of the subsidy.  The
73.13 	procedures determined by the commissioner shall, to the extent
73.14 	possible, ensure that advanced placement and international
73.15 	baccalaureate courses become available in all parts of the state
73.16 	and that a variety of course offerings are available in school
73.17 	districts.  This subdivision does not prevent teacher or other
73.18 	interested educator participation in training programs offered
73.19 	by The College Board or International Baccalaureate North
73.20 	America, Inc., when tuition is paid by a source other than the
73.21 	state.

73.22 	Sec. 17. Minnesota Statutes 2004, section 120B.13,
73.23 	subdivision 3, is amended to read:
73.24 		Subd. 3.Subsidy for examination fees.  The state may pay
73.25 	all or part of the fee for advanced placement or international
73.26 	baccalaureate examinations for pupils of low-income families in
73.27 	public and nonpublic schools.  The commissioner shall adopt a
73.28 	schedule for fee subsidies that may allow payment of the entire
73.29 	fee for pay all examination fees for all public and nonpublic
73.30 	students of low-income families, as defined by the commissioner,
73.31 	and to the limit of the available appropriation, shall also pay
73.32 	a portion or all of the examination fees for other public and
73.33 	nonpublic students sitting for an advanced placement
73.34 	examination, international baccalaureate examination, or both.
73.35 	The commissioner shall determine procedures for state payments
73.36 	of fees.

74.1 	Sec. 18. Minnesota Statutes 2004, section 120B.13, is
74.2 	amended by adding a subdivision to read:
74.3 		Subd. 3a.College credit. The colleges and universities
74.4 	of the Minnesota State Colleges and Universities system must
74.5 	award, and the University of Minnesota and private postsecondary
74.6 	institutions are encouraged to award, college credit to high
74.7 	school students who receive a score of three or higher on an
74.8 	advanced placement or four or higher on the international
74.9 	baccalaureate program examination.

74.10 	Sec. 19. [120B.131] COLLEGE-LEVEL EXAMINATION PROGRAM
74.11 	(CLEP).
74.12 		Subdivision 1.Program structure. The College-Level
74.13 	Examination Program (CLEP) offered by the College Board provides
74.14 	students with the opportunity to demonstrate college-level
74.15 	achievement and receive college credit or advanced standing
74.16 	through a program of examinations in undergraduate college
74.17 	courses.  Schools must provide information about CLEP and the
74.18 	opportunity to receive college credit from a Minnesota
74.19 	postsecondary institution to students successfully completing a
74.20 	college-level course.
74.21 		Subd. 2.Reimbursement for examination fees. The state
74.22 	may reimburse CLEP examination fees for a Minnesota public high
74.23 	school student who has successfully completed one or more
74.24 	college-level courses in high school and earned a satisfactory
74.25 	score on one or more CLEP examinations in the following subjects:
74.26 	composition and literature, mathematics and science, social
74.27 	sciences and history, foreign languages, and business and
74.28 	humanities.  The state may reimburse each successful student for
74.29 	up to six examination fees.  The commissioner shall establish
74.30 	application procedures and a process and schedule for fee
74.31 	reimbursements.  The commissioner must give priority to
74.32 	reimburse the CLEP examination fees of students of low-income
74.33 	families.
74.34 		Subd. 3.College credit. The colleges and universities
74.35 	of the Minnesota State Colleges and Universities system must
74.36 	award, and the University of Minnesota and private postsecondary
75.1 	institutions are encouraged to award, college credit to high
75.2 	school students who receive a satisfactory score on a CLEP
75.3 	examination under this section.  The commissioner, in
75.4 	consultation with the Minnesota State Colleges and Universities,
75.5 	shall set a passing score for college credits.

75.6 	Sec. 20. [120B.15] GIFTED AND TALENTED STUDENTS
75.7 	PROGRAMS.
75.8 	School districts may identify students, locally develop
75.9 	programs, provide staff development, and evaluate programs to
75.10 	provide gifted and talented students with challenging
75.11 	educational programs.

75.12 	EFFECTIVE DATE. This section is effective for the
75.13 	2005-2006 school year.

75.14 	Sec. 21. [120B.225] CHARACTER DEVELOPMENT EDUCATION.
75.15 		Subdivision 1.Character development education. The
75.16 	legislature encourages districts to integrate or offer
75.17 	instruction on character education including, but not limited
75.18 	to, character qualities such as attentiveness, truthfulness,
75.19 	respect for authority, diligence, gratefulness, self-discipline,
75.20 	patience, forgiveness, respect for others, peacemaking, and
75.21 	resourcefulness.  Districts are not limited to, but may use
75.22 	programs such as Character First and Character Counts.
75.23 	Instruction should be integrated into a district's existing
75.24 	programs, curriculum, or the general school environment.  The
75.25 	commissioner shall provide assistance at the request of a
75.26 	district to develop character education curriculum and programs.
75.27 		Subd. 2.Funding sources. The commissioner must first
75.28 	use federal funds for character development education programs
75.29 	to the extent available under United States Code, title 20,
75.30 	section 7247.  Districts may accept funds from private and other
75.31 	public sources for character development education programs
75.32 	developed and implemented under this section.
75.33 	
EFFECTIVE DATE. This section is effective the day
75.34 	following final enactment.

75.35 	Sec. 22. Minnesota Statutes 2004, section 120B.23, is
75.36 	amended to read:
76.1 	120B.23 VIOLENCE PREVENTION AND CHARACTER DEVELOPMENT 
76.2 	EDUCATION GRANTS.
76.3 		Subdivision 1.Grant program established. The
76.4 	commissioner of education, after consulting with the assistant
76.5 	commissioner of the Office of Drug Policy and Violence
76.6 	Prevention, shall establish a violence prevention and character
76.7 	development education grant program, consistent with section
76.8 	120B.255, subdivision 1,to enable a school district, an
76.9 	education district, or a group of districts that cooperate for a
76.10 	particular purpose to develop and implement or to continue a
76.11 	violence prevention and character development program for
76.12 	students in kindergarten through grade 12 that can be integrated
76.13 	into existing curriculum.  A district or group of districts that
76.14 	elects to develop and implement or to continue a violence
76.15 	prevention and character development program under section
76.16 	120B.22 is eligible to apply for a grant under this section.
76.17 		Subd. 2.Grant application. To be eligible to receive a
76.18 	grant, a school district, an education district, a service
76.19 	cooperative, or a group of districts that cooperate for a
76.20 	particular purpose must submit an application to the
76.21 	commissioner in the form and manner and according to the
76.22 	timeline established by the commissioner.  The application must
76.23 	describe how the applicant will:  (1) continue or integrate into
76.24 	its existing K-12 curriculum or into cocurricular or
76.25 	extracurricular activities a program for violence prevention
76.26 	that contains the program components listed in section
76.27 	120B.22 and character development; (2) collaborate with local
76.28 	organizations involved in violence prevention and
76.29 	intervention and character development; and (3) structure the
76.30 	program to reflect the characteristics of the children, their
76.31 	families and the community involved in the program.  The
76.32 	commissioner may require additional information from the
76.33 	applicant.  When reviewing the applications, the commissioner
76.34 	shall determine whether the applicant has met the requirements
76.35 	of this subdivision.
76.36 		Subd. 3.Grant awards. The commissioner may award grants
77.1 	for a violence prevention and character development education
77.2 	program to eligible applicants as defined in subdivision 2.
77.3 	Grant amounts may not exceed $3 per resident pupil unit in the
77.4 	district or group of districts in the prior school year.  Grant
77.5 	recipients should be geographically distributed throughout the
77.6 	state.
77.7 		Subd. 4.Grant proceeds. A successful applicant must use
77.8 	the grant money to develop and implement or to continue a
77.9 	violence prevention and character development program according
77.10 	to the terms of the grant application.
77.11 	
EFFECTIVE DATE. This section is effective the day
77.12 	following final enactment.

77.13 	Sec. 23. [120B.25] AMERICAN HERITAGE EDUCATION.
77.14 	(a) School districts shall permit grade-level instruction
77.15 	to ensure students have the opportunity to read and study
77.16 	America's founding documents that provide an understanding of
77.17 	the principles, character, and world view of America's founders;
77.18 	including documents that contributed to the foundation or
77.19 	maintenance of America's representative republican form of
77.20 	limited government, the Bill of Rights, our free-market economic
77.21 	system, and patriotism.  Districts shall permit a principal or
77.22 	teacher to appropriately use, read, or post in a public school
77.23 	building, classroom, or at any public school event any excerpts
77.24 	or portions of the original source documents, writings,
77.25 	speeches, proclamations, or records relating to the history,
77.26 	heritage, or foundation of the United States or the state of
77.27 	Minnesota, including, but not limited to:
77.28 	(1) the Mayflower Compact;
77.29 	(2) the Declaration of Independence;
77.30 	(3) the Constitutions of the United States and the state of
77.31 	Minnesota;
77.32 	(4) the Northwest Ordinance of 1787;
77.33 	(5) the Federalist Papers;
77.34 	(6) the Pledge of Allegiance;
77.35 	(7) the national anthem;
77.36 	(8) Washington's farewell address to the nation;
78.1 	(9) Lincoln's Gettysburg address;
78.2 	(10) the acts and published records of Congress; and 
78.3 	(11) the United States Supreme Court decisions and records.
78.4 	(b) Districts may not censor or restrain instruction in
78.5 	American or Minnesota state history or heritage based on
78.6 	religious references in original source documents, writings,
78.7 	speeches, proclamations, or records described under paragraph
78.8 	(a).  These and any other materials must be used for educational
78.9 	purposes and not to establish any religion.
78.10 	(c) Students may voluntarily choose to read, write, share,
78.11 	report, or otherwise study a topic which is religious in nature
78.12 	provided other students are provided with the same opportunity
78.13 	to freely choose a topic.

78.14 	Sec. 24. Minnesota Statutes 2004, section 120B.30,
78.15 	subdivision 1, is amended to read:
78.16 		Subdivision 1.Statewide testing.  (a) The commissioner,
78.17 	with advice from experts with appropriate technical
78.18 	qualifications and experience and stakeholders, consistent with
78.19 	subdivision 1a, shall include in the comprehensive assessment
78.20 	system, for each grade level to be tested, state-constructed
78.21 	tests developed from and aligned with the state's required
78.22 	academic standards under section 120B.021 and administered
78.23 	annually to all students in grades 3 through 8 and at the high
78.24 	school level.  A state-developed test in a subject other than
78.25 	writing, developed after the 2002-2003 school year, must include
78.26 	both multiple choice and constructed response questions.  The
78.27 	commissioner shall establish one or more months during which
78.28 	schools shall administer the tests to students each school
78.29 	year. For students enrolled in grade 8 before the 2005-2006
78.30 	school year,only Minnesota basic skills tests in reading,
78.31 	mathematics, and writing shall fulfill students' basic skills
78.32 	testing requirements for a passing state notation.  The passing
78.33 	scores of the state tests in reading and mathematics are the
78.34 	equivalent of:
78.35 	(1) 70 percent correct for students entering grade 9 in
78.36 	1996; and
79.1 	(2) 75 percent correct for students entering grade 9 in
79.2 	1997 and thereafter, as based on the first uniform test
79.3 	administration of February 1998.
79.4 	For students enrolled in grade 8 in the 2005-2006 school
79.5 	year and later, only the Minnesota Comprehensive Assessments
79.6 	Second Edition (MCA-IIs) in reading, mathematics, and writing
79.7 	shall fulfill students' academic standard requirements.
79.8 	(b) The third through 8th grade and high school level test
79.9 	results shall be available to districts for diagnostic purposes
79.10 	affecting student learning and district instruction and
79.11 	curriculum, and for establishing educational accountability.
79.12 	The commissioner must disseminate to the public the test results
79.13 	upon receiving those results.
79.14 	(c) State tests must be constructed and aligned with state
79.15 	academic standards.  The testing process and the order of
79.16 	administration shall be determined by the commissioner.  The
79.17 	statewide results shall be aggregated at the site and district
79.18 	level, consistent with subdivision 1a.
79.19 	(d) In addition to the testing and reporting requirements
79.20 	under this section, the commissioner shall include the following
79.21 	components in the statewide public reporting system:
79.22 	(1) uniform statewide testing of all students in grades 3
79.23 	through 8 and at the high school level that provides exemptions,
79.24 	only with parent or guardian approval, for those very few
79.25 	students for whom the student's individual education plan team
79.26 	under sections 125A.05 and 125A.06, determines that the student
79.27 	is incapable of taking a statewide test, or for a limited
79.28 	English proficiency student under section 124D.59, subdivision
79.29 	2, if the student has been in the United States for fewer than
79.30 	three years;
79.31 	(2) educational indicators that can be aggregated and
79.32 	compared across school districts and across time on a statewide
79.33 	basis, including average daily attendance, high school
79.34 	graduation rates, and high school drop-out rates by age and
79.35 	grade level;
79.36 	(3) students' scores on the American College Test; and
80.1 	(4) state results from participation in the National
80.2 	Assessment of Educational Progress so that the state can
80.3 	benchmark its performance against the nation and other states,
80.4 	and, where possible, against other countries, and contribute to
80.5 	the national effort to monitor achievement.
80.6 	(e) Districts must report exemptions under paragraph (d),
80.7 	clause (1), to the commissioner consistent with a format
80.8 	provided by the commissioner.

80.9 	Sec. 25. Minnesota Statutes 2004, section 120B.30,
80.10 	subdivision 1a, is amended to read:
80.11 		Subd. 1a.Statewide and local assessments; results.  (a)
80.12 	The commissioner must develop language arts reading,
80.13 	mathematics, and science assessments aligned with state academic
80.14 	standards that districts and sites must use to monitor student
80.15 	growth toward achieving those standards.  The commissioner must
80.16 	not develop statewide assessments for academic standards in
80.17 	social studies, health and physical education,and the arts.
80.18 	The commissioner must require:
80.19 	(1) annual language arts reading and mathematics
80.20 	assessments in grades 3 through 8 and at the high school level
80.21 	for the 2005-2006 school year and later; and
80.22 	(2) annual science assessments in one grade in the grades 3
80.23 	through 5 span, the grades 6 through 9 span, and a life sciences
80.24 	assessment in the grades 10 through 12 span for the 2007-2008
80.25 	school year and later.
80.26 	(b) The commissioner must ensure that all statewide tests
80.27 	administered to elementary and secondary students measure
80.28 	students' academic knowledge and skills and not students'
80.29 	values, attitudes, and beliefs.
80.30 	(c) Reporting of assessment results must:
80.31 	(1) provide timely, useful, and understandable information
80.32 	on the performance of individual students, schools, school
80.33 	districts, and the state;
80.34 	(2) include, by the 2006-2007 school year, a value-added
80.35 	component to measure student achievement growth over time; and
80.36 	(3) for students enrolled in grade 8 before the 2005-2006
81.1 	school year,determine whether students have met the state's
81.2 	basic skills requirements; and 
81.3 	(4) for students enrolled in grade 8 in the 2005-2006
81.4 	school year and later, determine whether students have met the
81.5 	state's academic standards.
81.6 	(d) Consistent with applicable federal law and subdivision
81.7 	1, paragraph (d), clause (1), the commissioner must include
81.8 	alternative assessments for the very few students with
81.9 	disabilities for whom statewide assessments are inappropriate
81.10 	and for students with limited English proficiency.
81.11 	(e) A school, school district, and charter school must
81.12 	administer statewide assessments under this section, as the
81.13 	assessments become available, to evaluate student progress in
81.14 	achieving the academic standards.  If a state assessment is not
81.15 	available, a school, school district, and charter school must
81.16 	determine locally if a student has met the required academic
81.17 	standards.  A school, school district, or charter school may use
81.18 	a student's performance on a statewide assessment as one of
81.19 	multiple criteria to determine grade promotion or retention.  A
81.20 	school, school district, or charter school may use a high school
81.21 	student's performance on a statewide assessment as a percentage
81.22 	of the student's final grade in a course, or place a student's
81.23 	assessment score on the student's transcript.

81.24 	Sec. 26. [120B.362] VALUE-ADDED ASSESSMENT PROGRAM.
81.25 	(a) The commissioner of education must implement a
81.26 	value-added assessment program to assist school districts,
81.27 	public schools, and charter schools in assessing and reporting
81.28 	individual students' growth in academic achievement under
81.29 	section 120B.30, subdivision 1a.  The program must use
81.30 	assessments of individual students' academic achievement to make
81.31 	longitudinal comparisons of each student's academic growth over
81.32 	time.  School districts, public schools, and charter schools may
81.33 	apply to the commissioner to participate in the initial trial
81.34 	program using a form and in the manner the commissioner
81.35 	prescribes.  The commissioner must select program participants
81.36 	from urban, suburban, and rural areas throughout the state.
82.1 	(b) The commissioner may issue a request for proposals to
82.2 	contract with an organization that provides a value-added
82.3 	assessment model that reliably estimates school and school
82.4 	district effects on students' academic achievement over time.
82.5 	The model the commissioner selects must accommodate diverse data
82.6 	and must use each student's test data across grades.  Data on
82.7 	individual teachers generated under the model are personnel data
82.8 	under section 13.43.
82.9 	(c) The contract under paragraph (b) must be consistent
82.10 	with the definition of "best value" under section 16C.02,
82.11 	subdivision 4.

82.12 	EFFECTIVE DATE. This section is effective the day
82.13 	following final enactment.

82.14 	Sec. 27. Minnesota Statutes 2004, section 121A.03,
82.15 	subdivision 1, is amended to read:
82.16 		Subdivision 1.Model policy.  The commissioner shall
82.17 	maintain and make available to school boards a model sexual,
82.18 	religious, and racial harassment and violence policy.  The model
82.19 	policy shall address the requirements of subdivision 2, and may
82.20 	encourage violence prevention and character development
82.21 	education programs, consistent with section 120B.225,
82.22 	subdivision 1, to prevent and reduce policy violations.
82.23 	
EFFECTIVE DATE. This section is effective the day
82.24 	following final enactment.

82.25 	Sec. 28. Minnesota Statutes 2004, section 121A.06,
82.26 	subdivision 2, is amended to read:
82.27 		Subd. 2.Reports; content. By January 1, 1994, the
82.28 	commissioner, in consultation with the criminal and juvenile
82.29 	information policy group, shall develop a standardized form to
82.30 	be used by schools to report incidents involving the use or
82.31 	possession of a dangerous weapon in school zones.School
82.32 	districts must electronically report to the commissioner of
82.33 	education incidents involving the use or possession of a
82.34 	dangerous weapon in school zones.The form shall must include
82.35 	the following information:
82.36 	(1) a description of each incident, including a description
83.1 	of the dangerous weapon involved in the incident;
83.2 	(2) where, at what time, and under what circumstances the
83.3 	incident occurred;
83.4 	(3) information about the offender, other than the
83.5 	offender's name, including the offender's age; whether the
83.6 	offender was a student and, if so, where the offender attended
83.7 	school; and whether the offender was under school expulsion or
83.8 	suspension at the time of the incident;
83.9 	(4) information about the victim other than the victim's
83.10 	name, if any, including the victim's age; whether the victim was
83.11 	a student and, if so, where the victim attended school; and if
83.12 	the victim was not a student, whether the victim was employed at
83.13 	the school;
83.14 	(5) the cost of the incident to the school and to the
83.15 	victim; and
83.16 	(6) the action taken by the school administration to
83.17 	respond to the incident.
83.18 	The commissioner also shall develop provide an alternative 
83.19 	electronic reporting format that allows school districts to
83.20 	provide aggregate data, with an option to use computer
83.21 	technology to report the data.

83.22 	Sec. 29. Minnesota Statutes 2004, section 121A.06,
83.23 	subdivision 3, is amended to read:
83.24 		Subd. 3.Reports; filing requirements.  By February 1 and 
83.25 	July 1 31 of each year, each public school shall report
83.26 	incidents involving the use or possession of a dangerous weapon
83.27 	in school zones to the commissioner.  The reports must be made
83.28 	on the standardized forms or using the alternative
83.29 	format submitted using the electronic reporting system developed
83.30 	by the commissioner under subdivision 2.  The commissioner shall
83.31 	compile the information it receives from the schools and report
83.32 	it annually to the commissioner of public safety, the criminal
83.33 	and juvenile information policy group,and the legislature.

83.34 	Sec. 30. [121A.24] NOTICE REQUIREMENTS FOR STUDENT
83.35 	SURVEYS AND SIMILAR INSTRUMENTS.
83.36 	(a) A school district must obtain prior written informed
84.1 	consent from a parent or guardian of a minor or dependent child
84.2 	before administering an academic or nonacademic student survey,
84.3 	assessment, analysis, evaluation, or similar instrument that
84.4 	solicits information about the student or the student's family
84.5 	concerning:
84.6 	(1) political affiliations or beliefs;
84.7 	(2) mental or psychological problems;
84.8 	(3) critical appraisals of another individual with whom a
84.9 	student has a close family relationship;
84.10 	(4) legally recognized privileged or analogous
84.11 	relationships, such as those with a lawyer, physician, or
84.12 	minister;
84.13 	(5) religious practices, affiliations, or beliefs; or 
84.14 	(6) income or other income-related information required by
84.15 	law to determine eligibility to participate in or receive
84.16 	financial assistance under a program.
84.17 	(b) When asking a parent or guardian to provide informed
84.18 	written consent, the school district must:
84.19 	(1) make a copy of the instrument readily accessible to the
84.20 	parent or guardian at a convenient location and reasonable time;
84.21 	and 
84.22 	(2) specifically identify the information in paragraph (a)
84.23 	that will be solicited through the instrument.
84.24 	The district must request the consent of the parent or guardian
84.25 	at least 14 days before administering the instrument.
84.26 	(c) A parent or guardian seeking to compel a school
84.27 	district to comply with this section has available the civil
84.28 	remedies under section 13.08, subdivision 4, in addition to
84.29 	other remedies provided by law.
84.30 	(d) A school district may administer an academic or
84.31 	nonacademic student survey, assessment, analysis, evaluation, or
84.32 	similar instrument that solicits information about the student
84.33 	or the student's family concerning sexual behavior or attitudes
84.34 	or illegal, antisocial, self-incriminating, or demeaning
84.35 	behavior without obtaining prior written informed consent from
84.36 	the parent or guardian of a minor or dependent child.  The
85.1 	instrument must not identify the student in any way and the
85.2 	district must give the student's parent or guardian the
85.3 	opportunity to refuse to have the instrument administered to the
85.4 	student.

85.5 	EFFECTIVE DATE. This section is effective the day
85.6 	following final enactment.

85.7 	Sec. 31. Minnesota Statutes 2004, section 121A.47,
85.8 	subdivision 14, is amended to read:
85.9 		Subd. 14.Admission or readmission plan. (a) A school
85.10 	administrator shall prepare and enforce an admission or
85.11 	readmission plan for any pupil who is excluded or expelled from
85.12 	school.  The plan may include measures to improve the pupil's
85.13 	behavior, including completing a character education program,
85.14 	consistent with section 120B.225, subdivision 1,and require
85.15 	parental involvement in the admission or readmission process,
85.16 	and may indicate the consequences to the pupil of not improving
85.17 	the pupil's behavior.
85.18 	(b) The definition of suspension under section 121A.41,
85.19 	subdivision 10, does not apply to a student's dismissal from
85.20 	school for one school day or less, except as provided under
85.21 	federal law for a student with a disability.  Each suspension
85.22 	action may include a readmission plan.  A readmission plan must
85.23 	provide, where appropriate, alternative education services,
85.24 	which must not be used to extend the student's current
85.25 	suspension period.  Consistent with section 125A.091,
85.26 	subdivision 5, a readmission plan must not obligate a parent or
85.27 	guardian to provide psychotropic drugs to their student as a
85.28 	condition of readmission.  School officials must not use the
85.29 	refusal of a parent or guardian to consent to the administration
85.30 	of psychotropic drugs to their student or to consent to a
85.31 	psychiatric evaluation, screening or examination of the student
85.32 	as a ground, by itself, to prohibit the student from attending
85.33 	class or participating in a school-related activity, or as a
85.34 	basis of a charge of child abuse, child neglect or medical or
85.35 	educational neglect.
85.36 	
EFFECTIVE DATE. This section is effective the day
86.1 	following final enactment.

86.2 	Sec. 32. Minnesota Statutes 2004, section 121A.53, is
86.3 	amended to read:
86.4 	121A.53 REPORT TO COMMISSIONER OF EDUCATION.
86.5 		Subdivision 1.Exclusions and expulsions. The school
86.6 	board shall must report through the department electronic
86.7 	reporting system each exclusion or expulsion within 30 days of
86.8 	the effective date of the action to the commissioner of
86.9 	education.  This report shall must include a statement of
86.10 	alternative educational services given the pupil and the reason
86.11 	for, the effective date, and the duration of the exclusion or
86.12 	expulsion. The report must also include the student's age,
86.13 	grade, gender, race, and special education status.
86.14 		Subd. 2.Report. The school board must include state
86.15 	student identification numbers of affected pupils on all
86.16 	dismissal reports required by the department.  The department
86.17 	must report annually to the commissioner summary data on the
86.18 	number of dismissals by age, grade, gender, race, and special
86.19 	education status of the affected pupils. All dismissal reports
86.20 	must be submitted through the department electronic reporting
86.21 	system.

86.22 	Sec. 33. Minnesota Statutes 2004, section 121A.55, is
86.23 	amended to read:
86.24 	121A.55 POLICIES TO BE ESTABLISHED.
86.25 	(a) The commissioner of education shall promulgate
86.26 	guidelines to assist each school board.  Each school board shall
86.27 	establish uniform criteria for dismissal and adopt written
86.28 	policies and rules to effectuate the purposes of sections
86.29 	121A.40 to 121A.56.  The policies shall emphasize preventing
86.30 	dismissals through early detection of problems, using character
86.31 	development or other programs, consistent with section 120B.225,
86.32 	subdivision 1,and shall be designed to address students'
86.33 	inappropriate behavior from recurring.  The policies shall
86.34 	recognize the continuing responsibility of the school for the
86.35 	education of the pupil during the dismissal period.  The
86.36 	alternative educational services, if the pupil wishes to take
87.1 	advantage of them, must be adequate to allow the pupil to make
87.2 	progress towards meeting the graduation standards adopted under
87.3 	section 120B.02 and help prepare the pupil for readmission.
87.4 	(b) An area learning center under section 123A.05 may not
87.5 	prohibit an expelled or excluded pupil from enrolling solely
87.6 	because a district expelled or excluded the pupil.  The board of
87.7 	the area learning center may use the provisions of the Pupil
87.8 	Fair Dismissal Act to exclude a pupil or to require an admission
87.9 	plan.
87.10 	(c) Each school district shall develop a policy and report
87.11 	it to the commissioner on the appropriate use of peace officers
87.12 	and crisis teams to remove students who have an individualized
87.13 	education plan from school grounds.

87.14 	EFFECTIVE DATE. This section is effective the day
87.15 	following final enactment.

87.16 	Sec. 34. [121A.575] ALTERNATIVES TO PUPIL SUSPENSION.
87.17 	Notwithstanding any law to the contrary and in accordance
87.18 	with sections 121A.40 to 121A.56, after a school administration
87.19 	notifies a pupil of the grounds for suspension, the school
87.20 	administration may, instead of imposing the suspension, do one
87.21 	or more of the following:
87.22 	(1) strongly encourage a parent or guardian of the pupil to
87.23 	attend school with the pupil for one day;
87.24 	(2) assign the pupil to attend school on Saturday as
87.25 	supervised by the principal or the principal's designee; and 
87.26 	(3) petition the juvenile court that the student is in need
87.27 	of services under chapter 260C.

87.28 	Sec. 35. [121A.655] SCHOOL ATTENDANCE REQUIREMENT;
87.29 	DRIVING PRIVILEGES.
87.30 	Students enrolled in a school district, charter school, or
87.31 	alternative education program that does not waive the school
87.32 	attendance requirement for driving privileges are subject to
87.33 	section 171.056, among other related sections.

87.34 	EFFECTIVE DATE. This section is effective July 1, 2005.

87.35 	Sec. 36. Minnesota Statutes 2004, section 122A.06,
87.36 	subdivision 4, is amended to read:
88.1 		Subd. 4.comprehensive, scientifically based effective 
88.2 	reading instruction. "Comprehensive, scientifically based
88.3 	reading instruction" includes instruction and practice in
88.4 	phonemic awareness, phonics and other word-recognition skills,
88.5 	and guided oral reading for beginning readers, as well as
88.6 	extensive silent reading, vocabulary instruction, instruction in
88.7 	comprehension, and instruction that fosters understanding and
88.8 	higher-order thinking for readers of all ages and proficiency
88.9 	levels."Effective reading instruction" includes a program or
88.10 	collection of instructional practices that is based on reliable
88.11 	evidence showing that when these programs or practices are used,
88.12 	students can be expected to achieve, at a minimum, satisfactory
88.13 	reading progress.  The program or collection of practices must
88.14 	include, at a minimum, instruction in five areas of reading:
88.15 	phonemic awareness, phonics, fluency, vocabulary, and text
88.16 	comprehension.
88.17 	Effective reading instruction also includes and integrates
88.18 	instructional strategies for continuously assessing, evaluating,
88.19 	and communicating the student's reading progress and needs in
88.20 	order to design and implement ongoing interventions so that
88.21 	students of all ages and proficiency levels can read and
88.22 	comprehend text and apply higher level thinking skills.

88.23 	Sec. 37. Minnesota Statutes 2004, section 122A.09,
88.24 	subdivision 4, is amended to read:
88.25 		Subd. 4.License and rules.  (a) The board must adopt
88.26 	rules to license public school teachers and interns subject to
88.27 	chapter 14.
88.28 	(b) The board must adopt rules requiring a person to
88.29 	successfully complete a skills examination in reading, writing,
88.30 	and mathematics as a requirement for initial teacher licensure.
88.31 	Such rules must require college and universities offering a
88.32 	board-approved teacher preparation program to provide remedial
88.33 	assistance to persons who did not achieve a qualifying score on
88.34 	the skills examination, including those for whom English is a
88.35 	second language.
88.36 	(c) The board must adopt rules to approve teacher
89.1 	preparation programs.  The board, upon the request of a
89.2 	postsecondary student preparing for teacher licensure or a
89.3 	licensed graduate of a teacher preparation program, shall assist
89.4 	in resolving a dispute between the person and a postsecondary
89.5 	institution providing a teacher preparation program when the
89.6 	dispute involves an institution's recommendation for licensure
89.7 	affecting the person or the person's credentials.  At the
89.8 	board's discretion, assistance may include the application of
89.9 	chapter 14.
89.10 	(d) The board must provide the leadership and shall adopt
89.11 	rules for the redesign of teacher education programs to
89.12 	implement a research based, results-oriented curriculum that
89.13 	focuses on the skills teachers need in order to be effective.
89.14 	The board shall implement new systems of teacher preparation
89.15 	program evaluation to assure program effectiveness based on
89.16 	proficiency of graduates in demonstrating attainment of program
89.17 	outcomes.
89.18 	(e) The board must adopt rules requiring successful
89.19 	completion of an examination of general pedagogical knowledge
89.20 	and examinations of licensure-specific teaching skills.  The
89.21 	rules shall be effective on the dates determined by the board
89.22 	but not later than September 1, 2001.
89.23 	(f) The board must adopt rules requiring teacher educators
89.24 	to work directly with elementary or secondary school teachers in
89.25 	elementary or secondary schools to obtain periodic exposure to
89.26 	the elementary or secondary teaching environment.
89.27 	(g) The board must grant licenses to interns and to
89.28 	candidates for initial licenses.
89.29 	(h) The board must design and implement an assessment
89.30 	system which requires a candidate for an initial license and
89.31 	first continuing license to demonstrate the abilities necessary
89.32 	to perform selected, representative teaching tasks at
89.33 	appropriate levels.
89.34 	(i) The board must receive recommendations from local
89.35 	committees as established by the board for the renewal of
89.36 	teaching licenses.
90.1 	(j) The board must grant life licenses to those who qualify
90.2 	according to requirements established by the board, and suspend
90.3 	or revoke licenses pursuant to sections 122A.20 and 214.10.  The
90.4 	board must not establish any expiration date for application for
90.5 	life licenses.
90.6 	(k) The board must adopt rules that require all licensed
90.7 	teachers who are renewing their continuing license to include in
90.8 	their renewal requirements further preparation in the areas of
90.9 	using positive behavior interventions and in accommodating,
90.10 	modifying, and adapting curricula, materials, and strategies to
90.11 	appropriately meet the needs of individual students and ensure
90.12 	adequate progress toward the state's graduation rule.
90.13 	(l) In adopting rules to license public school teachers who
90.14 	provide health-related services for disabled children, the board
90.15 	shall adopt rules consistent with license or registration
90.16 	requirements of the commissioner of health and the
90.17 	health-related boards who license personnel who perform similar
90.18 	services outside of the school.
90.19 	(m) The board must adopt rules that require all licensed
90.20 	teachers who are renewing their continuing license to include in
90.21 	their renewal requirements further reading preparation,
90.22 	consistent with section 122A.06, subdivision 4.  The rules do
90.23 	not take effect until they are approved by law.  Teachers who do
90.24 	not provide direct instruction including, at least, counselors,
90.25 	school psychologists, school nurses, school social workers,
90.26 	audiovisual directors and coordinators, and recreation personnel
90.27 	are exempt from this section.
90.28 	(n) The board must adopt rules that require all licensed
90.29 	teachers who are renewing their continuing license to include in
90.30 	their renewal requirements further preparation in understanding
90.31 	the key warning signs of early-onset mental illness in children
90.32 	and adolescents.
90.33 	(o) The board must:
90.34 	(1) adopt rules to license qualified candidates to teach
90.35 	chemistry, physics, biology, and earth and space science; and 
90.36 	(2) license a science teacher qualified to teach in grades
91.1 	7 through 12 to teach in a new science content area or level in
91.2 	grades 7 through 12 if the teacher holds a continuing license to
91.3 	teach science, has a continuing contract under section 122A.40,
91.4 	subdivision 7, or section 122A.41, subdivision 4, and receives a
91.5 	qualifying score on an appropriate Praxis II test in a science
91.6 	subject other than the teacher's currently licensed science
91.7 	field or level.  A qualifying score is the same test score used
91.8 	for initial licenses to teach science.  A science teacher who
91.9 	seeks licensure in a different science content area or level
91.10 	under this paragraph is responsible for the actual costs of the
91.11 	required testing.  The board's authority to license science
91.12 	teachers under this paragraph expires August 1, 2009.

91.13 	Sec. 38. Minnesota Statutes 2004, section 122A.12,
91.14 	subdivision 2, is amended to read:
91.15 		Subd. 2.Terms; compensation; removal; administration;
91.16 	reimbursement. (a) Membership terms, removal of members, and
91.17 	the filling of membership vacancies are as provided in section
91.18 	214.09.  The terms of the initial board members must be
91.19 	determined by lot as follows:
91.20 	(1) three members must be appointed for terms that expire
91.21 	August 1, 2002;
91.22 	(2) three members must be appointed for terms that expire
91.23 	August 1, 2003; and
91.24 	(3) four members must be appointed for terms that expire
91.25 	August 1, 2004.
91.26 	Members shall not receive the daily payment under section
91.27 	214.09, subdivision 3.  The public employer of a member shall
91.28 	not reduce the member's compensation or benefits for the
91.29 	member's absence from employment when engaging in the business
91.30 	of the board.  The provision of staff, administrative services,
91.31 	and office space; the review and processing of complaints; the
91.32 	setting of fees; the selection and duties of an executive
91.33 	secretary to serve the board; and other provisions relating to
91.34 	board operations are as provided in chapter 214.  Fiscal year
91.35 	and reporting requirements are as provided in sections 214.07
91.36 	and 214.08.
92.1 	(b) The board may reimburse local school districts for the
92.2 	cost of a substitute teacher employed when a regular teacher is
92.3 	providing professional assistance to the state by serving on the
92.4 	board or on a committee or task force appointed by the board.

92.5 	Sec. 39. Minnesota Statutes 2004, section 122A.18,
92.6 	subdivision 2a, is amended to read:
92.7 		Subd. 2a.Reading strategies.  (a) All colleges and
92.8 	universities approved by the Board of Teaching to prepare
92.9 	persons for classroom teacher licensure must include in their
92.10 	teacher preparation programs reading best practices that enable
92.11 	classroom teacher licensure candidates to know how to teach
92.12 	reading, such as phonics or other research-based best practices
92.13 	in reading, consistent with section 122A.06, subdivision 4, that
92.14 	enable the licensure candidate to know how to teach reading in
92.15 	the candidate's content areas.
92.16 	(b) Board-approved teacher preparation programs for
92.17 	teachers of elementary education must require instruction in the
92.18 	application of comprehensive, scientifically based, and balanced
92.19 	reading instruction programs.that:
92.20 	(1) teach students to read using foundational knowledge,
92.21 	practices, and strategies consistent with section 122A.06,
92.22 	subdivision 4, so that all students will achieve continuous
92.23 	progress in reading; and 
92.24 	(2) teach specialized instruction in reading strategies,
92.25 	interventions, and remediations that enable students of all ages
92.26 	and proficiency levels to become proficient readers.

92.27 	Sec. 40. Minnesota Statutes 2004, section 122A.41,
92.28 	subdivision 14, is amended to read:
92.29 		Subd. 14.Services terminated by discontinuance or lack
92.30 	of pupils; preference given.  (a) A teacher whose services are
92.31 	terminated on account of discontinuance of position or lack of
92.32 	pupils must receive first consideration for other positions in
92.33 	the district for which that teacher is qualified.  In the event
92.34 	it becomes necessary to discontinue one or more positions, in
92.35 	making such discontinuance, teachers must be discontinued in any
92.36 	department in the inverse order in which they were employed,
93.1 	unless a board and the exclusive representative of teachers in
93.2 	the district negotiate a plan providing otherwise.
93.3 	(b) Notwithstanding the provisions of clause (a), a teacher
93.4 	is not entitled to exercise any seniority when that exercise
93.5 	results in that teacher being retained by the district in a
93.6 	field for which the teacher holds only a provisional license, as
93.7 	defined by the Board of Teaching, unless that exercise of
93.8 	seniority results in the termination of services, on account of
93.9 	discontinuance of position or lack of pupils, of another teacher
93.10 	who also holds a provisional license in the same field.  The
93.11 	provisions of this clause do not apply to vocational education
93.12 	licenses.
93.13 	(c) Notwithstanding the provisions of clause (a), a teacher
93.14 	must not be reinstated to a position in a field in which the
93.15 	teacher holds only a provisional license, other than a
93.16 	vocational education license, while another teacher who holds a
93.17 	nonprovisional license in the same field is available for
93.18 	reinstatement.

93.19 	Sec. 41. Minnesota Statutes 2004, section 122A.414, is
93.20 	amended to read:
93.21 	122A.414 ALTERNATIVE TEACHER COMPENSATION PAY.
93.22 		Subdivision 1.Restructured pay system. A restructured
93.23 	teacher compensation professional pay system is established
93.24 	under subdivision 2 to provide incentives for teachers to
93.25 	improve their knowledge and skills and for school districts and
93.26 	charter schools to recruit and retain highly qualified teachers,
93.27 	and to support teachers' roles in improving students'
93.28 	educational achievement.
93.29 		Subd. 2.Alternative teacher professional pay system.
 93.30 	(a) To participate in this program, a school district, school
93.31 	site, or charter school must have an educational improvement
93.32 	plan as described in section 122A.413 and an alternative teacher
93.33 	professional pay system as described in paragraph (b).
93.34 	(b) The alternative teacher professional pay system must:
93.35 	(1) describe the conditions necessary for how teachers can
93.36 	achieve career advancement and additional compensation;
94.1 	(2) describe how the school district, school site, or
94.2 	charter school will provide teachers with career advancement
94.3 	options for teachers retaining , such as master or mentor teacher
94.4 	positions that allow teachers to retain primary roles in student
94.5 	instruction and facilitate job-embedded professional development
94.6 	that helps other teachers improve their skills;
94.7 	(3) use a professional pay system that replaces the step
94.8 	and lane salary schedule and is not based on years of service;
94.9 	(4) encourage teachers' continuous improvement in content
94.10 	knowledge, pedagogy, and use of best practices; and 
94.11 	(5) implement an objective evaluation system, including
94.12 	classroom observation, that is aligned with the district's or
94.13 	the site's educational improvement plan as described in section
94.14 	122A.413 eliminate the "steps and lanes" salary schedule and
94.15 	compensate teachers for performing satisfactory service,
94.16 	achieving professional teaching goals, and undergoing
94.17 	evaluations under clause (6);
94.18 	(4) compensate teachers for their performance based on, at
94.19 	a minimum:
94.20 	(i) schoolwide achievement gains under section 120B.35 or
94.21 	locally selected standardized assessment outcomes, or both;
94.22 	(ii) individual student achievement gains, where available,
94.23 	under section 120B.35 or locally selected standardized
94.24 	assessment outcomes, or both; and 
94.25 	(iii) results of individual teacher evaluations conducted
94.26 	by a locally selected and trained evaluation team under clause
94.27 	(6);
94.28 	(5) provide integrated ongoing site-based professional
94.29 	development activities that are aligned with student needs under
94.30 	sections 122A.413 and 122A.60, if enacted, and led during the
94.31 	school day by trained teacher leaders such as master or mentor
94.32 	teachers; and 
94.33 	(6) provide an objective and comprehensive teacher
94.34 	evaluation that is aligned with the educational improvement plan
94.35 	under section 122A.413 and the staff development plan under
94.36 	section 122A.601, if enacted, and that includes multiple
95.1 	evaluations of a teacher's performance during the school year
95.2 	conducted by the locally selected and trained evaluation team
95.3 	that are based on best practice teaching standards and
95.4 	instruction and on classroom observations.
95.5 		Subd. 3.Report. Participating districts and ,school
95.6 	sites, and charter schools must report on the implementation and
95.7 	effectiveness of the alternative teacher compensation
95.8 	plan professional pay system, particularly addressing each
95.9 	requirement under subdivision 2 and make biennial
95.10 	recommendations by January 1 to their school boards.  The school
95.11 	boards board shall transmit a copy of the report with a summary
95.12 	of the findings and recommendations of their the district,
95.13 	school site, or charter school to the commissioner.

95.14 	Sec. 42. Minnesota Statutes 2004, section 122A.415,
95.15 	subdivision 1, is amended to read:
95.16 		Subdivision 1.aid revenue amount.  (a) A school district
95.17 	, school site, or charter school that meets the conditions of
95.18 	section 122A.414 and submits an application approved by the
95.19 	commissioner is eligible for alternative compensation aid 
95.20 	revenue.
95.21 	(b) For school district applications,the commissioner must
95.22 	consider only those applications to participate that are 
95.23 	submitted jointly by a school district and the exclusive
95.24 	representative of the teachers for participation in the
95.25 	program.  The application must contain a formally adopted
95.26 	collective bargaining agreement, memorandum of understanding, or
95.27 	other binding agreement that:
95.28 	(1) implements an alternative teacher professional pay
95.29 	system consistent with section 122A.414;
95.30 	(2) complies with the Public Employment Labor Relations Act
95.31 	under chapter 179A, except that notwithstanding section 179A.20,
95.32 	subdivision 3, a district may enter into a contract for a term
95.33 	of between two and four years;and
95.34 	(3) includes all teachers in a district,or all teachers at
95.35 	a school site, or at least 25 percent of the teachers in a
95.36 	district.  The commissioner, in approving applications, may give
96.1 	preference to applications involving entire districts or sites
96.2 	or to applications that align measures of teacher performance
96.3 	with student academic achievement and progress under section
96.4 	120B.35, subdivision 1.
96.5 	Alternative teacher compensation aid revenue for a
96.6 	qualifying school district,or site, or portion of a district or
96.7 	school site is as follows:
96.8 	(1) for a school district in which the school board and the
96.9 	exclusive representative of the teachers agree to place all
96.10 	teachers in the district or at the site on the
96.11 	alternative compensation schedule, alternative compensation aid 
96.12 	teacher professional pay system equals $150 $260 times the
96.13 	district's or the site's number of pupils enrolled on October 1
96.14 	of the previous fiscal year; or 
96.15 	(2) for a district in which the school board and the
96.16 	exclusive representative of the teachers agree that at least 25
96.17 	percent of the district's licensed teachers will be paid on the
96.18 	alternative compensation schedule, alternative compensation aid
96.19 	equals $150 times the percentage of participating teachers times
96.20 	the district's number of pupils enrolled as of October 1 of the
96.21 	previous fiscal year.
96.22 	(c) For charter school applications, the board of directors
96.23 	of a charter school that satisfies the conditions under section
96.24 	122A.414 must submit to the commissioner an application that
96.25 	contains:
96.26 	(1) an agreement to implement an alternative teacher
96.27 	professional pay system under section 122A.414;
96.28 	(2) a resolution by the charter school board of directors
96.29 	adopting the agreement; and 
96.30 	(3) the record of a formal vote by the teachers employed at
96.31 	the charter school indicating that at least 70 percent of all
96.32 	teachers agree to implement the alternative teacher professional
96.33 	pay system, unless the charter school submits an alternative
96.34 	teacher professional pay system under section 122A.414 before
96.35 	the first year of operation.
96.36 	Alternative compensation revenue for a qualifying charter
97.1 	school must be calculated under section 126C.10, subdivision 34,
97.2 	paragraphs (a) and (b).
97.3 	(b) (d) The revenue is available only to school districts,
97.4 	school sites, and charter schools that implement an alternative
97.5 	teacher professional pay system before the school year begins.

97.6 	Sec. 43. Minnesota Statutes 2004, section 122A.415,
97.7 	subdivision 3, is amended to read:
97.8 		Subd. 3.aid revenue timing.  (a) Districts or , school 
97.9 	sites, or charter schools with approved applications must
97.10 	receive alternative compensation aid revenue for each school
97.11 	year that the district or , school site, or charter school 
97.12 	participates in the program as described in under this
97.13 	subdivision.  Districts or , school sites, or charter schools 
97.14 	with applications received approved by the commissioner before
97.15 	June 1 of the first year of a two-year contract shall receive
97.16 	alternative compensation aid revenue for both school years of
97.17 	the contract.  Districts or sites with applications received by
97.18 	the commissioner after June 1 of the first year of a two-year
97.19 	contract shall receive alternative compensation aid only for the
97.20 	second year of the contract in which the alternative teacher
97.21 	professional pay system is implemented for the full school
97.22 	year. For fiscal year 2007 and later,a qualifying district or ,
97.23 	school site, or charter school that received alternative
97.24 	compensation aid for the previous fiscal year must receive at
97.25 	least an amount of alternative teacher compensation revenue 
97.26 	equal to the lesser of the amount it received for the previous
97.27 	fiscal year or its proportionate share of the previous year's
97.28 	appropriation the amount it qualifies for under subdivision 1
97.29 	for the current fiscal year if the district or , school site, or
97.30 	charter school submits a timely application and the commissioner
97.31 	determines that the district or , school site, or charter school 
97.32 	continues to implement an alternative teacher professional pay
97.33 	system, consistent with its application under this section. The
97.34 	commissioner must approve initial applications for school
97.35 	districts qualifying under subdivision 1, paragraph (b), clause
97.36 	(1), by January 15 of each year.  If any money remains, the
98.1 	commissioner must approve aid amounts for school districts
98.2 	qualifying under subdivision 1, paragraph (b), clause (2), by
98.3 	February 15 of each year.
98.4 	(b) The commissioner may sort applications by geographic
98.5 	region and shall approve applications that comply with sections
98.6 	122A.414, subdivision 2, paragraph (b), and 122A.415,
98.7 	subdivision 1, in the order in which they are received from each
98.8 	region,select applicants that qualify for this program, notify
98.9 	school districts and ,school sites, and charter schools about
98.10 	the program, develop and disseminate application materials, and
98.11 	carry out other activities needed to implement this section.
98.12 	
EFFECTIVE DATE. This section is effective August 1, 2005.

98.13 	Sec. 44. Minnesota Statutes 2004, section 123A.06,
98.14 	subdivision 1, is amended to read:
98.15 		Subdivision 1.Program focus.  (a) The programs and
98.16 	services of a center must focus on academic and learning skills,
98.17 	applied learning opportunities, trade and vocational skills,
98.18 	work-based learning opportunities, work experience, youth
98.19 	service to the community, transition services, and English
98.20 	language and literacy programs for children whose primary
98.21 	language is a language other than English, and may focus on
98.22 	character development, consistent with section 120B.225,
98.23 	subdivision 1.  Applied learning, work-based learning, and
98.24 	service learning may best be developed in collaboration with a
98.25 	local education and transitions partnership, culturally based
98.26 	organizations, mutual assistance associations, or other
98.27 	community resources.  In addition to offering programs, the
98.28 	center shall coordinate the use of other available educational
98.29 	services, special education services, social services, health
98.30 	services, and postsecondary institutions in the community and
98.31 	services area.
98.32 	(b) Consistent with the requirements of sections 121A.40 to
98.33 	121A.56, a school district may provide an alternative education
98.34 	program for a student who is within the compulsory attendance
98.35 	age under section 120A.20, and who is involved in severe or
98.36 	repeated disciplinary action.
99.1 	
EFFECTIVE DATE. This section is effective the day
99.2 	following final enactment.

99.3 	Sec. 45. [123A.10] EDUCATION ADMINISTRATIVE DISTRICTS.
99.4 		Subdivision 1.Administrative efficiency. An education
99.5 	administrative district is intended to increase the efficiency
99.6 	of administrative services for kindergarten through grade 12
99.7 	public schools by combining the administrative functions of
99.8 	multiple school districts while preserving independent school
99.9 	district control of individual school sites.
99.10 		Subd. 2.Agreement to establish education administrative
99.11 	district. School boards that meet the requirements of
99.12 	subdivision 3 may enter into a written agreement to establish an
99.13 	education administrative district.  The agreement must include
99.14 	methods to improve the efficient delivery of administrative
99.15 	services.  A majority of the full board of each member district
99.16 	that is a party to the agreement must adopt the agreement and
99.17 	any subsequent modifications of the agreement.
99.18 		Subd. 3.Commissioner review and comment. Before
99.19 	entering into an agreement to establish an education
99.20 	administrative district, the school boards of the proposed
99.21 	member districts jointly must submit the proposed agreement to
99.22 	the commissioner for review and comment.  The commissioner must
99.23 	submit a review and comment on the educational and economic
99.24 	advisability of the proposed agreement to the affected school
99.25 	boards within 60 days of receiving the proposal.  If the
99.26 	commissioner submits a negative review and comment, the
99.27 	districts do not qualify for levy authority under section
99.28 	123A.12, subdivision 5.
99.29 		Subd. 4.Notice and public hearing on proposed
99.30 	agreement. Before entering into an agreement to establish an
99.31 	education administrative district, the school boards of the
99.32 	proposed member districts each must publish the commissioner's
99.33 	review and comment and a summary of the proposed agreement and
99.34 	its anticipated effect upon the district at least once in a
99.35 	newspaper of general circulation in the district.  The board
99.36 	must conduct a public hearing on the proposed agreement not more
100.1 	than ten days after the notice is published and at least 30 days
100.2 	before entering into the agreement.
100.3 	
EFFECTIVE DATE. This section is effective for the
100.4 	2005-2006 school year and later.

100.5 	Sec. 46. [123A.11] EDUCATION ADMINISTRATIVE DISTRICT
100.6 	BOARD.
100.7 		Subdivision 1.School district representation. The
100.8 	education administrative district board is composed of at least
100.9 	one representative appointed by the school board of each member
100.10 	district.  Each representative must be a member of the
100.11 	appointing school board.  Each representative serves at the
100.12 	pleasure of the appointing board and may be recalled by a
100.13 	majority vote of the appointing board.  Each representative
100.14 	serves for the term specified in the agreement.  The board must
100.15 	select its officers from among its members and determine the
100.16 	officers' terms.  The board must adopt bylaws for conducting
100.17 	business.  The board may conduct public meetings using
100.18 	interactive television if it complies with chapter 13 in each
100.19 	location where board members are present.
100.20 		Subd. 2.Providing administrative services. An education
100.21 	administrative district board must implement the agreement for
100.22 	efficiently delivering needed administrative services under
100.23 	section 123A.12 to the education administrative district.
100.24 		Subd. 3.Personnel. The board may employ personnel
100.25 	needed to provide administrative services to the education
100.26 	administrative district.  Personnel employed by the education
100.27 	administrative district are eligible to participate in
100.28 	retirement programs.  Notwithstanding section 123B.143,
100.29 	subdivision 1, a district member of an education administrative
100.30 	district must contract with the education administrative
100.31 	district to obtain superintendent services.  The person
100.32 	providing superintendent services need not be an employee of the
100.33 	education administrative district or a member district at the
100.34 	time the person contracts to provide superintendent services.
100.35 		Subd. 4.Contracts. The education administrative
100.36 	district board may contract with school districts and other
101.1 	public and private agencies to provide needed administrative
101.2 	services in the education administrative district.
101.3 		Subd. 5.General law. The education administrative
101.4 	district board is governed by section 471.59 unless specifically
101.5 	provided otherwise under sections 123A.10 to 123A.12.
101.6 		Subd. 6.Annual report. After each of its first five
101.7 	years of operation, the education administrative district board
101.8 	must submit an annual report to its member districts and the
101.9 	commissioner about the education administrative district's
101.10 	activities, including an analysis of its administrative costs
101.11 	and efficiencies.
101.12 	
EFFECTIVE DATE. This section is effective for the
101.13 	2005-2006 school year and later.

101.14 	Sec. 47. [123A.12] EDUCATION ADMINISTRATIVE DISTRICT
101.15 	AGREEMENT.
101.16 		Subdivision 1.Implementation; review. An education
101.17 	administrative district board must implement the agreement of
101.18 	its member districts under section 123A.10, subdivision 2, to
101.19 	provide efficient administrative services to the education
101.20 	administrative district.  The board must review the agreement
101.21 	annually and propose needed modifications to its member
101.22 	districts.
101.23 		Subd. 2.Administrative services. (a) Consistent with
101.24 	section 123B.143, subdivision 1, the agreement must allow the
101.25 	education administrative district board within 24 months of
101.26 	implementing the agreement to select one superintendent to serve
101.27 	the education administrative district for a specified term.
101.28 	(b) The agreement must specify other administrative
101.29 	efficiencies the education administrative district intends to
101.30 	provide to member districts, including, among other
101.31 	efficiencies, administrative functions related to, business
101.32 	management, human resources, payroll, food service, buildings
101.33 	and ground maintenance, pupil transportation, technology
101.34 	coordination, curriculum coordination, community education,
101.35 	nursing services, student records, student administrative
101.36 	services, and school building administration.  All
102.1 	administrative efficiencies implemented by the education
102.2 	administrative district under the agreement in this section must
102.3 	be in compliance with employee collective bargaining agreements
102.4 	in effect in each member school district.
102.5 		Subd. 3.Timing and duration. (a) The initial agreement
102.6 	must contain a timeline for implementing the agreement.
102.7 	(b) The initial agreement must be for a period of at least
102.8 	three years.  After completing the first two years, the
102.9 	agreement may be extended by a majority vote of the full board
102.10 	of each member district.
102.11 		Subd. 4.Finances. The initial agreement must:
102.12 	(1) include a three-year budget projection comparing
102.13 	existing administrative services and costs with proposed
102.14 	administrative services and costs for each year;
102.15 	(2) specify the retirement and severance incentives,
102.16 	consistent with section 123A.48, subdivision 23, that may be
102.17 	offered to licensed and nonlicensed staff, and how these costs
102.18 	will be apportioned among member districts;
102.19 	(3) specify other start-up costs for the education
102.20 	administrative district and how these costs will be apportioned
102.21 	among member districts;
102.22 	(4) specify the estimated amounts each member district will
102.23 	levy under subdivision 5 for the specified costs in clauses (2)
102.24 	and (3); and 
102.25 	(5) specify an equitable distribution formula for the
102.26 	education administrative district board to assess and certify a
102.27 	proportionate share of expenses to member districts, which must
102.28 	remit their assessment to the education administrative district
102.29 	board within 30 days of receiving the certified assessment.
102.30 		Subd. 5.Levy. A school district that is a member of an
102.31 	education administrative district may levy an amount equal to
102.32 	the member district's share of costs approved by the
102.33 	commissioner for retirement and severance incentives and other
102.34 	start-up costs included in the initial agreement under
102.35 	subdivision 4, clauses (2) and (3), over a term of not more than
102.36 	36 months.
103.1 		Subd. 6.Reports to education department. Member school
103.2 	districts jointly may submit reports and provide required
103.3 	information to the department.  The joint reports clearly must
103.4 	attribute information, including expenditures for the education
103.5 	administrative district, to individual member districts.
103.6 		Subd. 7.Additional and withdrawing districts. (a) Upon
103.7 	approval by a majority vote of a district school board and the
103.8 	education administrative district board, an adjoining school
103.9 	district may become a member of an education administrative
103.10 	district and is governed by this section and the education
103.11 	administrative district agreement in effect.  A noncontiguous
103.12 	district may become a member with the commissioner's approval
103.13 	based on the criteria under section 123A.10, subdivision 3.  A
103.14 	new member added to an education administrative district may
103.15 	levy for approved retirement and severance incentive costs under
103.16 	subdivision 5.
103.17 	(b) After three consecutive years of membership, a member
103.18 	district, by majority vote of its full board and after complying
103.19 	with the applicable terms in the education administrative
103.20 	district agreement, may withdraw from the education
103.21 	administrative district and the agreement at the end of the
103.22 	subsequent fiscal year.
103.23 		Subd. 8.Dissolution. After the first three years of the
103.24 	education administrative district, the boards of each member
103.25 	district may agree to dissolve the education administrative
103.26 	district at the end of any fiscal year or at an earlier,
103.27 	mutually agreeable time.  Member districts must dissolve the
103.28 	education administrative district according to the applicable
103.29 	provisions in the agreement establishing the education
103.30 	administrative district.  The dissolution must not affect the
103.31 	continuing liability of any district formerly a member of the
103.32 	education administrative district for continuing obligations,
103.33 	including employment benefits.
103.34 	
EFFECTIVE DATE. This section is effective for the
103.35 	2005-2006 school year and later.

103.36 	Sec. 48. Minnesota Statutes 2004, section 123A.24,
104.1 	subdivision 2, is amended to read:
104.2 		Subd. 2.Cooperative unit defined.  For the purposes of
104.3 	this section, a cooperative unit is:
104.4 	(1) an education district organized under sections 123A.15
104.5 	to 123A.19;
104.6 	(2) a cooperative vocational center organized under section
104.7 	123A.22;
104.8 	(3) an intermediate district organized under chapter 136D;
104.9 	(4) an education administrative district organized under
104.10 	sections 123A.10 to 123A.12;
104.11 	(5) a service cooperative organized under section 123A.21;
104.12 	or
104.13 	(5) (6) a regional management information center organized
104.14 	under section 123A.23 or as a joint powers district according to
104.15 	section 471.59.

104.16 	Sec. 49. Minnesota Statutes 2004, section 123B.02, is
104.17 	amended by adding a subdivision to read:
104.18 		Subd. 22.Reward. A school board, after formally
104.19 	adopting a policy consistent with this subdivision, may offer a
104.20 	reward to a person who provides accurate and reliable
104.21 	information leading to the conviction of a person who has
104.22 	committed, attempted to commit, or conspired to commit a crime
104.23 	against students or school employees, volunteers or board
104.24 	members as a result of their affiliation with the school
104.25 	district, or against school district property.
104.26 	
EFFECTIVE DATE. This section is effective the day
104.27 	following final enactment.

104.28 	Sec. 50. [123B.022] PROHIBITING SCHOOL EMPLOYEES FROM
104.29 	USING PUBLIC RESOURCES FOR ADVOCACY; ENDORSING TIMELY AND
104.30 	CURRENT FACTUAL INFORMATION.
104.31 	(a) A school board must adopt and implement a districtwide
104.32 	policy that prohibits district employees from using district
104.33 	funds or other publicly funded district resources, including
104.34 	time, materials, equipment, facilities, and communication
104.35 	technologies, among other resources, to advocate for electing or
104.36 	defeating a candidate, passing or defeating a ballot question,
105.1 	or passing or defeating pending legislation.  The policy must
105.2 	apply when the employee performs the duties assigned to the
105.3 	employee under the employee's employment contract with the
105.4 	district, and includes the periods when the employee represents
105.5 	the district in an official capacity, among other duties.  The
105.6 	policy must not apply when an employee disseminates factual
105.7 	information consistent with the employee's contractual duties.
105.8 	(b) The school board must provide the district's electorate
105.9 	with timely factual information about a pending ballot question.

105.10 	EFFECTIVE DATE. This section is effective January 1, 2006.

105.11 	Sec. 51. [123B.042] SCHOOL SITE GOVERNANCE PROGRAM.
105.12 		Subdivision 1.Establishment. A school site governance
105.13 	program is established to provide schools with more authority
105.14 	and flexibility to teach and provide services to students at the
105.15 	school site.  Nothing in this section affects a school
105.16 	district's ability to enter into a school site decision-making
105.17 	agreement under section 123B.04.
105.18 		Subd. 2.Site decision-making team. (a) To participate
105.19 	in the program, a school must form a site decision-making team
105.20 	that includes a school principal or other persons having general
105.21 	control and supervision of the school, at least one teacher in
105.22 	the school, one noninstructional staff person in the school, and
105.23 	at least one parent of a student enrolled in the school or other
105.24 	community member.  By October 1 of the school year before
105.25 	participating in the program, the school site decision-making
105.26 	team must:
105.27 	(1) be approved by a 60 percent vote of employees in the
105.28 	school;
105.29 	(2) adopt a policy describing how it will delegate
105.30 	authority and responsibilities among its members; and 
105.31 	(3) notify the school board of its intent to participate in
105.32 	the program.
105.33 	(b) After notifying the school board under paragraph (a),
105.34 	clause (3), the school site decision-making team shall publish a
105.35 	notice in a newspaper of general circulation in the district of
105.36 	its intent to participate in the program and the date it will
106.1 	hold a public hearing about its intended participation.  In
106.2 	addition to holding the public hearing, the decision-making
106.3 	team, for a period of 30 days, must also solicit parent and
106.4 	community input regarding its intended participation.
106.5 	(c) By January 15, the decision-making team shall
106.6 	demonstrate to the school board how the team's plan responds to
106.7 	public comment.
106.8 		Subd. 3.Responsibilities; revenue. (a) A school site
106.9 	decision-making team participating in this program:
106.10 	(1) has the control and responsibilities of the school
106.11 	board for operating and managing the site after the agreement
106.12 	under paragraph (b) is signed, including such responsibilities
106.13 	as instructional practices, personnel selection from within the
106.14 	district, and staffing assignments for the school; and 
106.15 	(2) retains control of the revenue and determines its use
106.16 	as necessary to operate the school for the school years it
106.17 	participates in the program under this section.
106.18 	(b) By January 15 of the school year before participating
106.19 	in the program, the school site decision-making team must enter
106.20 	into a written agreement with the local school board describing
106.21 	the control and responsibilities of the decision-making team and
106.22 	of the school board.  Revenue for a fiscal year received or
106.23 	receivable by the district and that the district would expend
106.24 	for the particular school site participating in the program is
106.25 	allocated to that school site.  All other district revenue not
106.26 	reserved for other purposes must be proportionately allocated to
106.27 	the site based on the site's pupil count.  The agreement must
106.28 	include provisions describing how the decision-making team and
106.29 	school board will resolve disputes over assigned authority and
106.30 	responsibilities.  The school board members must vote whether to
106.31 	authorize the agreement under this paragraph according to
106.32 	section 123B.09, subdivision 6.  The decision of the school
106.33 	board is final.  If the school board does not authorize the
106.34 	agreement, the school board must publish its decision and
106.35 	reasons in a newspaper of general circulation in the district.
106.36 	(c) The district must maintain an account for each school
107.1 	site participating in the program.
107.2 	(d) The school site decision-making team must comply with
107.3 	section 13D.04, subdivision 1.
107.4 		Subd. 4.Employees. The employees of the school site
107.5 	remain employees of the school district for salary, benefits,
107.6 	seniority, retirement, and other personnel issues.  Consistent
107.7 	with current law and the collective bargaining agreement in
107.8 	effect, the school site decision-making team selects employees
107.9 	from within the district into licensed and nonlicensed positions
107.10 	at the school site, including the position of principal or other
107.11 	person having general control and supervision of the school.
107.12 	When negotiating a new contract under chapter 179A, an exclusive
107.13 	representative and school board must provide for the employees
107.14 	of a school site participating in the program under this section.
107.15 		Subd. 5.Performance agreements. By March 15 of the
107.16 	school year before participating in the program, the school site
107.17 	decision-making team shall enter into a performance agreement
107.18 	with the school board.  The agreement shall include:
107.19 	(1) the previous year's baseline information at the site
107.20 	regarding student achievement based on:
107.21 	(i) aggregated and disaggregated statewide testing data;
107.22 	(ii) other nationally normed standardized tests;
107.23 	(iii) student attendance; and 
107.24 	(iv) dropout rates and graduation rates, where applicable;
107.25 	(2) the expected levels of improvement in selected areas of
107.26 	student performance during the next year;
107.27 	(3) how student performance will be measured, including
107.28 	assessment procedures required by law and rule;
107.29 	(4) status of the school's revenues and expenditures;
107.30 	(5) other performance expectations and measures agreed upon
107.31 	by the school site and school board;
107.32 	(6) the frequency of reporting by the school site to the
107.33 	school board; and 
107.34 	(7) how the performance results will be made available to
107.35 	parents and the public.
107.36 	The term of an agreement shall be for no more than two
108.1 	years.
108.2 	The performance agreement must include provisions
108.3 	describing how the school board and school site decision-making
108.4 	team will resolve disputes over the school's compliance with
108.5 	provisions of the agreement.
108.6 	If the school site decision-making team and school board
108.7 	cannot agree on the provisions of a performance agreement as
108.8 	required under this subdivision, either party may request
108.9 	assistance from the commissioner of education.  The commissioner
108.10 	shall provide assistance to the parties to ensure they reach an
108.11 	agreement.
108.12 		Subd. 6.Termination of site-based program authority. If
108.13 	a school site fails to meet the agreed upon expectations as
108.14 	specified in the performance agreement with the school board for
108.15 	two consecutive school years, its authority to participate in
108.16 	the program is terminated.
108.17 	School sites that have had their authority to participate
108.18 	in this program terminated under this subdivision may not
108.19 	participate in this program for three years after termination.
108.20 		Subd. 7.Reports. A school site decision-making team
108.21 	shall, and its respective school board may, make an annual
108.22 	report to the commissioner of education by September 1.  The
108.23 	reports shall be consistent with the requirements of section
108.24 	120B.11, subdivision 5, paragraph (a).
108.25 	Subd. 8.[COMMISSIONER'S DUTY.] The commissioner of
108.26 	education shall evaluate the effectiveness of the program by
108.27 	January 1, 2010.

108.28 	Sec. 52. Minnesota Statutes 2004, section 123B.09,
108.29 	subdivision 8, is amended to read:
108.30 		Subd. 8.Duties.  The board must superintend and manage
108.31 	the schools of the district; adopt rules for their organization,
108.32 	government, and instruction; keep registers; and prescribe
108.33 	textbooks and courses of study.  The board may enter into an
108.34 	agreement with a postsecondary institution for secondary or
108.35 	postsecondary nonsectarian courses to be taught at a secondary
108.36 	school, nonsectarian postsecondary institution, or another
109.1 	location. The board must not enter into an agreement that
109.2 	limits its authority to assign and reassign teachers or
109.3 	administrators to the schools in which the teachers will teach
109.4 	or the administrators will administer.
109.5 	
EFFECTIVE DATE. This section is effective for agreements
109.6 	entered into on or after July 1, 2005.

109.7 	Sec. 53. Minnesota Statutes 2004, section 123B.143,
109.8 	subdivision 1, is amended to read:
109.9 		Subdivision 1.Contract; duties.  All districts
109.10 	maintaining a classified secondary school must employ a
109.11 	superintendent who shall be an ex officio nonvoting member of
109.12 	the school board.  The authority for selection and employment of
109.13 	a superintendent must be vested in the board in all cases.  An
109.14 	individual employed by a board as a superintendent shall have an
109.15 	initial employment contract for a period of time no longer than
109.16 	three years from the date of employment.  Any subsequent
109.17 	employment contract must not exceed a period of three years.  A
109.18 	board, at its discretion, may or may not renew an employment
109.19 	contract.  A board must not, by action or inaction, extend the
109.20 	duration of an existing employment contract.  Beginning 365 days
109.21 	prior to the expiration date of an existing employment contract,
109.22 	a board may negotiate and enter into a subsequent employment
109.23 	contract to take effect upon the expiration of the existing
109.24 	contract.  A subsequent contract must be contingent upon the
109.25 	employee completing the terms of an existing contract.  If a
109.26 	contract between a board and a superintendent is terminated
109.27 	prior to the date specified in the contract, the board may not
109.28 	enter into another superintendent contract with that same
109.29 	individual that has a term that extends beyond the date
109.30 	specified in the terminated contract.  A board may terminate a
109.31 	superintendent during the term of an employment contract for any
109.32 	of the grounds specified in section 122A.40, subdivision 9 or 13.
109.33 	A superintendent shall not rely upon an employment contract with
109.34 	a board to assert any other continuing contract rights in the
109.35 	position of superintendent under section 122A.40.
109.36 	Notwithstanding the provisions of sections 122A.40, subdivision
110.1 	10 or 11, 123A.32, 123A.75, or any other law to the contrary, no
110.2 	individual shall have a right to employment as a superintendent
110.3 	based on order of employment in any district.  If two or more
110.4 	districts enter into an agreement for the purchase or sharing of
110.5 	the services of a superintendent, the contracting districts have
110.6 	the absolute right to select one of the individuals employed to
110.7 	serve as superintendent in one of the contracting districts and
110.8 	no individual has a right to employment as the superintendent to
110.9 	provide all or part of the services based on order of employment
110.10 	in a contracting district. The superintendent of a district
110.11 	shall perform the following:
110.12 	(1) visit and supervise the schools in the district, report
110.13 	and make recommendations about their condition when advisable or
110.14 	on request by the board;
110.15 	(2) recommend to the board employment and dismissal of
110.16 	teachers;
110.17 	(3) superintend school grading practices and examinations
110.18 	for promotions;
110.19 	(4) make reports required by the commissioner; and 
110.20 	(5) by January 10, submit an annual report to the
110.21 	commissioner in a manner prescribed by the commissioner, in
110.22 	consultation with school districts, identifying the expenditures
110.23 	that the district requires to ensure an 80 percent student
110.24 	passage rate on the basic standards test taken in the eighth
110.25 	grade, identifying the highest student passage rate the district
110.26 	expects it will be able to attain on the basic standards test by
110.27 	grade 12, the amount of expenditures that the district requires
110.28 	to attain the targeted student passage rate, and how much the
110.29 	district is cross-subsidizing programs with special education,
110.30 	basic skills, and general education revenue; and 
110.31 	(6) perform other duties prescribed by the board.

110.32 	Sec. 54. Minnesota Statutes 2004, section 123B.36,
110.33 	subdivision 1, is amended to read:
110.34 		Subdivision 1.School boards may require fees.  (a) For
110.35 	purposes of this subdivision, "home school" means a home school
110.36 	as defined in sections 120A.22 and 120A.24 with five or fewer
111.1 	students receiving instruction.
111.2 	(b) A school board is authorized to require payment of fees
111.3 	in the following areas:
111.4 	(1) in any program where the resultant product, in excess
111.5 	of minimum requirements and at the pupil's option, becomes the
111.6 	personal property of the pupil;
111.7 	(2) admission fees or charges for extracurricular
111.8 	activities, where attendance is optional and where the admission
111.9 	fees or charges a student must pay to attend or participate in
111.10 	an extracurricular activity is the same for all students,
111.11 	regardless of whether the student is enrolled in a public or a
111.12 	home school;
111.13 	(3) a security deposit for the return of materials,
111.14 	supplies, or equipment;
111.15 	(4) personal physical education and athletic equipment and
111.16 	apparel, although any pupil may personally provide it if it
111.17 	meets reasonable requirements and standards relating to health
111.18 	and safety established by the board;
111.19 	(5) items of personal use or products that a student has an
111.20 	option to purchase such as student publications, class rings,
111.21 	annuals, and graduation announcements;
111.22 	(6) fees specifically permitted by any other statute,
111.23 	including but not limited to section 171.05, subdivision 2;
111.24 	provided (i) driver education fees do not exceed the actual cost
111.25 	to the school and school district of providing driver education,
111.26 	and (ii) the driver education courses are open to enrollment to
111.27 	persons between the ages of 15 and 18 who reside or attend
111.28 	school in the school district;
111.29 	(7) field trips considered supplementary to a district
111.30 	educational program;
111.31 	(8) any authorized voluntary student health and accident
111.32 	benefit plan;
111.33 	(9) for the use of musical instruments owned or rented by
111.34 	the district, a reasonable rental fee not to exceed either the
111.35 	rental cost to the district or the annual depreciation plus the
111.36 	actual annual maintenance cost for each instrument;
112.1 	(10) transportation of pupils to and from extracurricular
112.2 	activities conducted at locations other than school, where
112.3 	attendance is optional, and transportation of charter school
112.4 	students participating in extracurricular activities in their
112.5 	resident district under section 123B.49, subdivision 4,
112.6 	paragraph (a), which must be charged to the charter school;
112.7 	(11) transportation to and from school of pupils living
112.8 	within two miles from school and all other transportation
112.9 	services not required by law.  If a district charges fees for
112.10 	transportation of pupils, it must establish guidelines for that
112.11 	transportation to ensure that no pupil is denied transportation
112.12 	solely because of inability to pay;
112.13 	(12) motorcycle classroom education courses conducted
112.14 	outside of regular school hours; provided the charge must not
112.15 	exceed the actual cost of these courses to the school district;
112.16 	(13) transportation to and from postsecondary institutions
112.17 	for pupils enrolled under the postsecondary enrollment options
112.18 	program under section 123B.88, subdivision 22.  Fees collected
112.19 	for this service must be reasonable and must be used to reduce
112.20 	the cost of operating the route.  Families who qualify for
112.21 	mileage reimbursement under section 124D.09, subdivision 22, may
112.22 	use their state mileage reimbursement to pay this fee.  If no
112.23 	fee is charged, districts must allocate costs based on the
112.24 	number of pupils riding the route.
112.25 	
EFFECTIVE DATE. This section is effective for the
112.26 	2005-2006 school year and later.

112.27 	Sec. 55. Minnesota Statutes 2004, section 123B.49,
112.28 	subdivision 4, is amended to read:
112.29 		Subd. 4.Board control of extracurricular activities.
 112.30 	(a) The board may take charge of and control all extracurricular
112.31 	activities of the teachers and children of the public schools in
112.32 	the district.  Extracurricular activities means all direct and
112.33 	personal services for pupils for their enjoyment that are
112.34 	managed and operated under the guidance of an adult or staff
112.35 	member.  The board shall allow all resident pupils receiving
112.36 	instruction in a home school as defined in section 123B.36,
113.1 	subdivision 1, paragraph (a), and all resident pupils receiving
113.2 	instruction in a charter school as defined in section 124D.10to
113.3 	be eligible to fully participate in extracurricular activities
113.4 	on the same basis as public school students.enrolled in the
113.5 	district's schools.  A charter school student must give the
113.6 	enrolling charter school and the resident school district at
113.7 	least a 30-day notice of the student's intent to participate in
113.8 	an extracurricular activity in the resident district.  Before a
113.9 	charter school student begins participating in an
113.10 	extracurricular activity in the resident district, the charter
113.11 	school must agree in writing to pay the direct and indirect
113.12 	costs attributable to that student that the district may charge
113.13 	to the charter school under paragraph (f).  A charter school
113.14 	student is not eligible to participate in an extracurricular
113.15 	activity in the resident district if that extracurricular
113.16 	activity is offered by the enrolling charter school or the
113.17 	extracurricular activity is not controlled by the high school
113.18 	league under chapter 128C.  Charter school students
113.19 	participating in extracurricular activities must meet the
113.20 	academic and student conduct requirements of the resident
113.21 	district.  The charter school must:
113.22 	(1) collect the same information that a district collects
113.23 	on a student's eligibility to participate in an extracurricular
113.24 	activity;
113.25 	(2) transmit that information to the district at least ten
113.26 	days before a student begins to participate in the
113.27 	extracurricular activity; and 
113.28 	(3) immediately transmit to the district any additional
113.29 	information affecting the student's eligibility.
113.30 	(b) Extracurricular activities have all of the following
113.31 	characteristics:
113.32 	(1) they are not offered for school credit nor required for
113.33 	graduation;
113.34 	(2) they are generally conducted outside school hours, or
113.35 	if partly during school hours, at times agreed by the
113.36 	participants, and approved by school authorities;
114.1 	(3) the content of the activities is determined primarily
114.2 	by the pupil participants under the guidance of a staff member
114.3 	or other adult.
114.4 	(c) If the board does not take charge of and control
114.5 	extracurricular activities, these activities shall be
114.6 	self-sustaining with all expenses, except direct salary costs
114.7 	and indirect costs of the use of school facilities, met by dues,
114.8 	admissions, or other student fund-raising events.  The general
114.9 	fund must reflect only those salaries directly related to and
114.10 	readily identified with the activity and paid by public funds.
114.11 	Other revenues and expenditures for extracurricular activities
114.12 	must be recorded according to the "Manual of Instruction for
114.13 	Uniform Student Activities Activity Fund Accounting for
114.14 	Minnesota School Districts and Area Vocational-Technical
114.15 	Colleges."  Extracurricular activities not under board control
114.16 	must have an annual financial audit and must also be audited
114.17 	annually for compliance with this section.
114.18 	(d) If the board takes charge of and controls
114.19 	extracurricular activities, any or all costs of these activities
114.20 	may be provided from school revenues and all revenues and
114.21 	expenditures for these activities shall be recorded in the same
114.22 	manner as other revenues and expenditures of the district.
114.23 	(e) If the board takes charge of and controls
114.24 	extracurricular activities, the teachers or pupils in the
114.25 	district must not participate in such activity, nor shall the
114.26 	school name or any allied name be used in connection therewith,
114.27 	except by consent and direction of the board.
114.28 	(f) School districts may charge charter schools their
114.29 	proportional share of the direct and indirect costs of the
114.30 	extracurricular activities that are not covered by student fees
114.31 	under section 123B.36, subdivision 1, ticket revenues,
114.32 	fund-raising efforts, sponsorships, or other income generated
114.33 	for those activities for which the charter school is charged.  A
114.34 	district may charge charter school students the same fees it
114.35 	charges enrolled students to participate in an extracurricular
114.36 	activity.  All charges to a charter school and charter school
115.1 	students must be paid when the charter school students are
115.2 	selected to participate in the activity.  A district is not
115.3 	required to provide transportation from the charter school to
115.4 	the resident district for a charter school student who
115.5 	participates in an extracurricular activity in the resident
115.6 	district.
115.7 	
EFFECTIVE DATE. This section is effective for the
115.8 	2005-2006 school year and later.

115.9 	Sec. 56. Minnesota Statutes 2004, section 124D.095,
115.10 	subdivision 8, is amended to read:
115.11 		Subd. 8.Financial arrangements.  (a) For a student
115.12 	enrolled in an on-line learning course, the department must
115.13 	calculate average daily membership and make payments according
115.14 	to this subdivision.
115.15 	(b) The initial on-line learning average daily membership
115.16 	equals 1/12 for each semester course or a proportionate amount
115.17 	for courses of different lengths.  The adjusted on-line learning
115.18 	average daily membership equals the initial on-line learning
115.19 	average daily membership times .88.
115.20 	(c) No on-line learning average daily membership shall be
115.21 	generated if:  (1) the student does not complete the on-line
115.22 	learning course, or (2) the student is enrolled in on-line
115.23 	learning provided by the enrolling district and the student was
115.24 	enrolled in a Minnesota public school for the school year before
115.25 	the school year in which the student first enrolled in on-line
115.26 	learning.
115.27 	(d) On-line learning average daily membership under this
115.28 	subdivision for a student currently enrolled in a Minnesota
115.29 	public school and who was enrolled in a Minnesota public school
115.30 	for the school year before the school year in which the student
115.31 	first enrolled in on-line learning shall be used only for
115.32 	computing average daily membership according to section 126C.05,
115.33 	subdivision 19, paragraph (a), clause (ii), and for computing
115.34 	on-line learning aid according to section 126C.24 124D.096.
115.35 	(e) On-line learning average daily membership under this
115.36 	subdivision for students not included in paragraph (c) or (d)
116.1 	shall be used only for computing average daily membership
116.2 	according to section 126C.05, subdivision 19, paragraph (a),
116.3 	clause (ii), and for computing payments under paragraphs (f) and
116.4 	(g).
116.5 	(f) Subject to the limitations in this subdivision, the
116.6 	department must pay an on-line learning provider an amount equal
116.7 	to the product of the adjusted on-line learning average daily
116.8 	membership for students under paragraph (e) times the student
116.9 	grade level weighting under section 126C.05, subdivision 1,
116.10 	times the formula allowance.
116.11 	(g) The department must pay each on-line learning provider
116.12 	100 percent of the amount in paragraph (f) within 45 days of
116.13 	receiving final enrollment and course completion information
116.14 	each quarter or semester.
116.15 	
EFFECTIVE DATE. This section is effective for revenue for
116.16 	fiscal year 2006.

116.17 	Sec. 57. Minnesota Statutes 2004, section 124D.10,
116.18 	subdivision 3, is amended to read:
116.19 		Subd. 3.Sponsor.  (a) A school board; intermediate
116.20 	school district school board; education district organized under
116.21 	sections 123A.15 to 123A.19; charitable organization under
116.22 	section 501(c)(3) of the Internal Revenue Code of 1986 that is a
116.23 	member of the Minnesota Council of Nonprofits or the Minnesota
116.24 	Council on Foundations, registered with the attorney general's
116.25 	office, and reports an end-of-year fund balance of at least
116.26 	$2,000,000; Minnesota private college that grants two- or
116.27 	four-year degrees and is registered with the Higher Education
116.28 	Services Office under chapter 136A; community college, state
116.29 	university, or technical college, governed by the Board of
116.30 	Trustees of the Minnesota State Colleges and Universities; or
116.31 	the University of Minnesota may sponsor one or more charter
116.32 	schools.
116.33 	(b) A nonprofit corporation subject to chapter 317A,
116.34 	described in section 317A.905, and exempt from federal income
116.35 	tax under section 501(c)(6) of the Internal Revenue Code of
116.36 	1986, may sponsor one or more charter schools if the charter
117.1 	school has operated for at least three years under a different
117.2 	sponsor and if the nonprofit corporation has existed for at
117.3 	least 25 years.
117.4 	(c) The commissioner of education may approve up to five
117.5 	charitable organizations under section 501(c)(3) of the Internal
117.6 	Revenue Code of 1986 that sponsor charter schools as their sole
117.7 	charitable purpose.  Eligible charitable organizations
117.8 	interested in being approved as a sponsor under this paragraph
117.9 	must submit a proposal to the commissioner that includes:
117.10 	(1) the articles, bylaws, and initial membership of the
117.11 	charitable organization's board of directors;
117.12 	(2) financial information consistent with section 309.53,
117.13 	subdivision 3;
117.14 	(3) a description of how the charitable organization plans
117.15 	to realize its principle charitable purpose; and 
117.16 	(4) other information requested by the commissioner.
117.17 	A charitable organization that is approved as a sponsor
117.18 	under this paragraph annually must report to the commissioner in
117.19 	the form and manner the commissioner determines.  The report
117.20 	must describe the charter schools authorized by the charitable
117.21 	organization, the effectiveness of those charter schools in
117.22 	promoting student achievement, and the governance structure of
117.23 	those charter schools, and also must include other information
117.24 	requested by the commissioner.  An approved charitable
117.25 	organization may sponsor one or more charter schools.  The
117.26 	commissioner may withdraw the approval of a charitable
117.27 	organization to sponsor a charter school under this paragraph if
117.28 	the commissioner determines that the charitable organization
117.29 	fails to meet generally accepted standards of fiscal management,
117.30 	violates the law, or shows other good cause.  The commissioner's
117.31 	determination is final.  When the commissioner withdraws the
117.32 	approval of a charitable organization to sponsor a charter
117.33 	school, the commissioner may approve the decision of a different
117.34 	eligible sponsor to authorize the charter school or may apply
117.35 	subdivision 24 governing student enrollment when a charter
117.36 	school contract is not renewed or terminated.
118.1 	
EFFECTIVE DATE. This section is effective the day
118.2 	following final enactment.

118.3 	Sec. 58. Minnesota Statutes 2004, section 124D.10,
118.4 	subdivision 4, is amended to read:
118.5 		Subd. 4.Formation of school.  (a) A sponsor may
118.6 	authorize one or more licensed teachers under section 122A.18,
118.7 	subdivision 1, to operate a charter school subject to approval
118.8 	by the commissioner.  A board must vote on charter school
118.9 	application for sponsorship no later than 90 days after
118.10 	receiving the application.  After 90 days, the applicant may
118.11 	apply to the commissioner.  If a board elects not to sponsor a
118.12 	charter school, the applicant may appeal the board's decision to
118.13 	the commissioner.  The commissioner who may elect to sponsor the
118.14 	charter school or assist the applicant in finding an eligible
118.15 	sponsor.  The school must be organized and operated as a
118.16 	cooperative under chapter 308A or nonprofit corporation under
118.17 	chapter 317A and the provisions under the applicable chapter
118.18 	shall apply to the school except as provided in this section.
118.19 	Notwithstanding sections 465.717 and 465.719, a school district
118.20 	may create a corporation for the purpose of creating a charter
118.21 	school.
118.22 	(b) Before the operators may form and operate a school, the
118.23 	sponsor must file an affidavit with the commissioner stating its
118.24 	intent to authorize a charter school.  The affidavit must state
118.25 	the terms and conditions under which the sponsor would authorize
118.26 	a charter school and how the sponsor intends to oversee the
118.27 	fiscal and student performance of the charter school and to
118.28 	comply with the terms of the written contract between the
118.29 	sponsor and the charter school board of directors under
118.30 	subdivision 6.  The commissioner must approve or disapprove the
118.31 	sponsor's proposed authorization within 60 90 days of receipt of
118.32 	the affidavit.  Failure to obtain commissioner approval
118.33 	precludes a sponsor from authorizing the charter school that was
118.34 	the subject of the affidavit.
118.35 	(c) The operators authorized to organize and operate a
118.36 	school, before entering into a contract or other agreement for
119.1 	professional or other services, goods, or facilities, must
119.2 	incorporate as a cooperative under chapter 308A or as a
119.3 	nonprofit corporation under chapter 317A and must establish a
119.4 	board of directors composed of at least five members until a
119.5 	timely election for members of the charter school board of
119.6 	directors is held according to the school's articles and
119.7 	bylaws.  A charter school board of directors must be composed of
119.8 	at least five members.  Any staff members who are employed at
119.9 	the school, including teachers providing instruction under a
119.10 	contract with a cooperative, and all parents of children
119.11 	enrolled in the school may participate in the election for
119.12 	members of the school's board of directors.  Licensed teachers
119.13 	employed at the school, including teachers providing instruction
119.14 	under a contract with a cooperative, must be a majority of the
119.15 	members of the board of directors before the school completes
119.16 	its third year of operation, unless the commissioner waives the
119.17 	requirement for a majority of licensed teachers on the board.
119.18 	Board of director meetings must comply with chapter 13D.
119.19 	(d) The granting or renewal of a charter by a sponsoring
119.20 	entity must not be conditioned upon the bargaining unit status
119.21 	of the employees of the school.
119.22 	(e) A sponsor may authorize the operators of a charter
119.23 	school to expand the operation of the charter school to
119.24 	additional sites or to add additional grades at the school
119.25 	beyond those described in the sponsor's application as approved
119.26 	by the commissioner only after submitting a supplemental
119.27 	application to the commissioner in a form and manner prescribed
119.28 	by the commissioner.  The supplemental application must provide
119.29 	evidence that:
119.30 	(1) the expansion of the charter school is supported by
119.31 	need and projected enrollment;
119.32 	(2) the charter school is fiscally sound;
119.33 	(3) the sponsor supports the expansion; and
119.34 	(4) the building of the additional site meets all health
119.35 	and safety requirements to be eligible for lease aid.
119.36 	(f) The commissioner annually must provide timely financial
120.1 	management training to newly elected members of a charter school
120.2 	board of directors and ongoing training to other members of a
120.3 	charter school board of directors.  Training must address ways
120.4 	to:
120.5 	(1) proactively assess opportunities for a charter school
120.6 	to maximize all available revenue sources;
120.7 	(2) establish and maintain complete, auditable records for
120.8 	the charter school;
120.9 	(3) establish proper filing techniques;
120.10 	(4) document formal actions of the charter school,
120.11 	including meetings of the charter school board of directors;
120.12 	(5) properly manage and retain charter school and student
120.13 	records;
120.14 	(6) comply with state and federal payroll record-keeping
120.15 	requirements; and
120.16 	(7) address other similar factors that facilitate
120.17 	establishing and maintaining complete records on the charter
120.18 	school's operations.
120.19 	
EFFECTIVE DATE. This section is effective for the
120.20 	2005-2006 school year and later.

120.21 	Sec. 59. Minnesota Statutes 2004, section 124D.10,
120.22 	subdivision 6, is amended to read:
120.23 		Subd. 6.Contract.  The sponsor's authorization for a
120.24 	charter school must be in the form of a written contract signed
120.25 	by the sponsor and the board of directors of the charter
120.26 	school.  The contract must be completed within 90 days of the
120.27 	commissioner's approval of the sponsor's proposed authorization.
120.28 	The contract for a charter school must be in writing and contain
120.29 	at least the following:
120.30 	(1) a description of a program that carries out one or more
120.31 	of the purposes in subdivision 1;
120.32 	(2) specific outcomes pupils are to achieve under
120.33 	subdivision 10;
120.34 	(3) admission policies and procedures;
120.35 	(4) management and administration of the school;
120.36 	(5) requirements and procedures for program and financial
121.1 	audits;
121.2 	(6) how the school will comply with subdivisions 8, 13, 16,
121.3 	and 23;
121.4 	(7) assumption of liability by the charter school;
121.5 	(8) types and amounts of insurance coverage to be obtained
121.6 	by the charter school;
121.7 	(9) the term of the contract, which may be up to three
121.8 	years; and 
121.9 	(10) if the board of directors or the operators of the
121.10 	charter school provide special instruction and services for
121.11 	children with a disability under sections 125A.03 to 125A.24,
121.12 	and 125A.65, a description of the financial parameters within
121.13 	which the charter school will operate to provide the special
121.14 	instruction and services to children with a disability; and 
121.15 	(11) the process and criteria the sponsor intends to use to
121.16 	monitor and evaluate the fiscal and student performance of the
121.17 	charter school, consistent with subdivision 15.
121.18 	
EFFECTIVE DATE. This section is effective for the
121.19 	2005-2006 school year and later.

121.20 	Sec. 60. Minnesota Statutes 2004, section 124D.10,
121.21 	subdivision 8, is amended to read:
121.22 		Subd. 8.State and local requirements.  (a) A charter
121.23 	school shall meet all applicable state and local health and
121.24 	safety requirements.
121.25 	(b) A school sponsored by a school board may be located in
121.26 	any district, unless the school board of the district of the
121.27 	proposed location disapproves by written resolution.
121.28 	(c) A charter school must be nonsectarian in its programs,
121.29 	admission policies, employment practices, and all other
121.30 	operations.  A sponsor may not authorize a charter school or
121.31 	program that is affiliated with a nonpublic sectarian school or
121.32 	a religious institution.
121.33 	(d) Charter schools must not be used as a method of
121.34 	providing education or generating revenue for students who are
121.35 	being homeschooled.
121.36 	(e) The primary focus of a charter school must be to
122.1 	provide a comprehensive program of instruction for at least one
122.2 	grade or age group from five through 18 years of age.
122.3 	Instruction may be provided to people younger than five years
122.4 	and older than 18 years of age.
122.5 	(f) A charter school may not charge tuition.
122.6 	(g) A charter school is subject to and must comply with
122.7 	chapter 363A and section 121A.04.
122.8 	(h) A charter school is subject to and must comply with the
122.9 	Pupil Fair Dismissal Act, sections 121A.40 to 121A.56, and the
122.10 	Minnesota Public School Fee Law, sections 123B.34 to 123B.39.
122.11 	(i) A charter school is subject to the same financial
122.12 	audits, audit procedures, and audit requirements as a district.
122.13 	Audits must be conducted in compliance with generally accepted
122.14 	governmental auditing standards, the Federal Single Audit Act,
122.15 	if applicable, and section 6.65.  A charter school is subject to
122.16 	and must comply with sections 15.054; 118A.01; 118A.02; 118A.03;
122.17 	118A.04; 118A.05; 118A.06; 123B.52, subdivision 5; 471.38;
122.18 	471.391; 471.392; 471.425; 471.87; 471.88, subdivisions 1, 2, 3,
122.19 	4, 5, 6, 12, 13, and 15; 471.881; and 471.89.  The audit must
122.20 	comply with the requirements of sections 123B.75 to 123B.83,
122.21 	except to the extent deviations are necessary because of the
122.22 	program at the school.  Deviations must be approved by the
122.23 	commissioner.  The Department of Education, state auditor, or
122.24 	legislative auditor may conduct financial, program, or
122.25 	compliance audits.  A charter school determined to be in
122.26 	statutory operating debt under sections 123B.81 to 123B.83 must
122.27 	submit a plan under section 123B.81, subdivision 4.
122.28 	(j) A charter school is a district for the purposes of tort
122.29 	liability under chapter 466.
122.30 	(k) A charter school must comply with sections 13.32;
122.31 	120A.22, subdivision 7; 121A.75; and 260B.171, subdivisions 3
122.32 	and 5.
122.33 	(l) A charter school is subject to the Pledge of Allegiance
122.34 	requirement under section 121A.11, subdivision 3.
122.35 	(m) A charter school is subject to sections 123B.36,
122.36 	subdivision 1, paragraph (b), clause (10), and 123B.49,
123.1 	subdivision 4, paragraphs (a) and (f), when its students
123.2 	participate in extracurricular activities in their resident
123.3 	district.
123.4 	(n) Charter school board of director open meeting
123.5 	requirements are governed according to subdivision 4.
123.6 	
EFFECTIVE DATE. This section is effective for the
123.7 	2005-2006 school year and later.

123.8 	Sec. 61. Minnesota Statutes 2004, section 124D.10,
123.9 	subdivision 15, is amended to read:
123.10 		Subd. 15.Review and comment. (a) The department must
123.11 	review and comment on the evaluation, by the sponsor, of the
123.12 	performance of a charter school before the charter school's
123.13 	contract is renewed for another contract term.  The sponsor must
123.14 	submit to the commissioner timely information for the review and
123.15 	comment.
123.16 	(b) A sponsor shall monitor and evaluate the fiscal and
123.17 	student performance of the school, and may for this purpose
123.18 	annually assess a charter school:  (1) in its first, second, or
123.19 	third year of operation up to $30 per student up to a maximum of
123.20 	$10,000; and (2) in its fourth or a subsequent year of operation
123.21 	up to $10 per student up to a maximum of $3,500. The
123.22 	information for the review and comment shall be reported by the
123.23 	sponsor to the commissioner of education in a timely manner.
123.24 	
EFFECTIVE DATE. This section is effective for the
123.25 	2005-2006 school year and later.

123.26 	Sec. 62. Minnesota Statutes 2004, section 124D.10,
123.27 	subdivision 23, is amended to read:
123.28 		Subd. 23.Causes for nonrenewal or termination of charter
123.29 	school contract.  (a) The duration of the contract with a
123.30 	sponsor must be for the term contained in the contract according
123.31 	to subdivision 6.  The sponsor may or may not renew a contract
123.32 	at the end of the term for any ground listed in paragraph (b).
123.33 	A sponsor may unilaterally terminate a contract during the term
123.34 	of the contract for any ground listed in paragraph (b).  At
123.35 	least 60 days before not renewing or terminating a contract, the
123.36 	sponsor shall notify the board of directors of the charter
124.1 	school of the proposed action in writing.  The notice shall
124.2 	state the grounds for the proposed action in reasonable detail
124.3 	and that the charter school's board of directors may request in
124.4 	writing an informal hearing before the sponsor within 14 days of
124.5 	receiving notice of nonrenewal or termination of the contract.
124.6 	Failure by the board of directors to make a written request for
124.7 	a hearing within the 14-day period shall be treated as
124.8 	acquiescence to the proposed action.  Upon receiving a timely
124.9 	written request for a hearing, the sponsor shall give reasonable
124.10 	notice to the charter school's board of directors of the hearing
124.11 	date.  The sponsor shall conduct an informal hearing before
124.12 	taking final action.  The sponsor shall take final action to
124.13 	renew or not renew a contract by the last day of classes in the
124.14 	school year.  If the sponsor is a local board, the school's
124.15 	board of directors may appeal the sponsor's decision to the
124.16 	commissioner.
124.17 	(b) A contract may be terminated or not renewed upon any of
124.18 	the following grounds:
124.19 	(1) failure to meet the requirements for pupil performance
124.20 	contained in the contract;
124.21 	(2) failure to meet generally accepted standards of fiscal
124.22 	management;
124.23 	(3) violations of law; or
124.24 	(4) other good cause shown.
124.25 	If a contract is terminated or not renewed under this
124.26 	paragraph, the school must be dissolved according to the
124.27 	applicable provisions of chapter 308A or 317A, except when the
124.28 	commissioner approves the decision of a different eligible
124.29 	sponsor to authorize the charter school.
124.30 	(c) If at the end of a contract term, either the sponsor or
124.31 	the charter school board of directors wants to voluntarily
124.32 	terminate the contract, a change in sponsors is allowed if the
124.33 	commissioner approves the decision of a different eligible
124.34 	sponsor to authorize the charter school.  The party intending to
124.35 	terminate the contract must notify the other party and the
124.36 	commissioner of its intent at least 90 days before the date on
125.1 	which the contract ends.  The sponsor that is a party to the
125.2 	existing contract at least must inform the approved different
125.3 	eligible sponsor about the fiscal and student performance of the
125.4 	school.  If no different eligible sponsor is approved, the
125.5 	school must be dissolved according to applicable law and the
125.6 	terms of the contract.
125.7 	(d) The commissioner, after providing reasonable notice to
125.8 	the board of directors of a charter school and the existing
125.9 	sponsor, and after providing an opportunity for a public
125.10 	hearing, may terminate the existing sponsorial relationship if
125.11 	the charter school has a history of:
125.12 	(1) financial mismanagement; or
125.13 	(2) repeated violations of the law.
125.14 	
EFFECTIVE DATE. This section is effective for the
125.15 	2005-2006 school year and later.

125.16 	Sec. 63. Minnesota Statutes 2004, section 124D.11,
125.17 	subdivision 1, is amended to read:
125.18 		Subdivision 1.General education revenue.  (a) General
125.19 	education revenue must be paid to a charter school as though it
125.20 	were a district.  The general education revenue for each
125.21 	adjusted marginal cost pupil unit is the state average general
125.22 	education revenue per pupil unit, plus the referendum
125.23 	equalization aid allowance in the pupil's district of residence,
125.24 	minus an amount equal to the product of the formula allowance
125.25 	according to section 126C.10, subdivision 2, times .0485,
125.26 	calculated without basic skills revenue, extended time revenue,
125.27 	alternative compensation revenue, transition revenue,and
125.28 	transportation sparsity revenue, plus basic skills revenue,
125.29 	extended time revenue, basic alternative compensation aid
125.30 	according to section 126C.10, subdivision 34,and transition
125.31 	revenue as though the school were a school district. The
125.32 	general education revenue for each extended time marginal cost
125.33 	pupil unit equals $4,378.
125.34 	(b) Notwithstanding paragraph (a), for charter schools in
125.35 	the first year of operation, general education revenue shall be
125.36 	computed using the number of adjusted pupil units in the current
126.1 	fiscal year.

126.2 	Sec. 64. Minnesota Statutes 2004, section 124D.11,
126.3 	subdivision 2, is amended to read:
126.4 		Subd. 2.Transportation revenue.  Transportation revenue
126.5 	must be paid to a charter school that provides transportation
126.6 	services according to section 124D.10, subdivision 16, according
126.7 	to this subdivision.  Transportation aid shall equal
126.8 	transportation revenue.
126.9 	In addition to the revenue under subdivision 1, a charter
126.10 	school providing transportation services must receive general
126.11 	education aid for each pupil unit equal to the sum of the
126.12 	product of (i) an amount equal to the product of the formula
126.13 	allowance according to section 126C.10, subdivision 2, times
126.14 	.0485, plus the transportation sparsity allowance for the school
126.15 	district in which the charter school is located times (ii) the
126.16 	adjusted marginal cost pupil units, plus the product of $223
126.17 	times the extended time marginal cost pupil units.

126.18 	Sec. 65. Minnesota Statutes 2004, section 124D.11,
126.19 	subdivision 6, is amended to read:
126.20 		Subd. 6.Other aid, grants, revenue.  (a) A charter
126.21 	school is eligible to receive other aids, grants, and revenue
126.22 	according to chapters 120A to 129C, as though it were a district.
126.23 	(b) Notwithstanding paragraph (a), a charter school may not
126.24 	receive aid, a grant, or revenue if a levy, other than a levy
126.25 	required by sections 125A.76 or 126C.10,is required to obtain
126.26 	the money, or if the aid, grant, or revenue is a replacement of
126.27 	levy revenue,except as otherwise provided in this section.
126.28 	(c) Federal aid received by the state must be paid to the
126.29 	school, if it qualifies for the aid as though it were a school
126.30 	district.
126.31 	(d) A charter school may receive money from any source for
126.32 	capital facilities needs.  In the year-end report to the
126.33 	commissioner of education, the charter school shall report the
126.34 	total amount of funds received from grants and other outside
126.35 	sources.

126.36 	Sec. 66. [124D.4531] CAREER AND TECHNICAL LEVY.
127.1 		Subdivision 1.Career and technical levy. (a) A district
127.2 	with a career and technical program approved under this section
127.3 	for the fiscal year in which the levy is certified may levy an
127.4 	amount equal to the lesser of:
127.5 	(1) $80 times the district's average daily membership in
127.6 	grades 10 through 12 for the fiscal year in which the levy is
127.7 	certified; or 
127.8 	(2) 25 percent of approved expenditures in the fiscal year
127.9 	in which the levy is certified for the following:
127.10 	(i) salaries paid to essential, licensed personnel
127.11 	providing direct instructional services to students in that
127.12 	fiscal year for services rendered in the district's approved
127.13 	career and technical education programs;
127.14 	(ii) contracted services provided by a public or private
127.15 	agency other than a Minnesota school district or cooperative
127.16 	center under subdivision 7;
127.17 	(iii) necessary travel between instructional sites by
127.18 	licensed career and technical education personnel;
127.19 	(iv) necessary travel by licensed career and technical
127.20 	education personnel for vocational student organization
127.21 	activities held within the state for instructional purposes;
127.22 	(v) curriculum development activities that are part of a
127.23 	five-year plan for improvement based on program assessment;
127.24 	(vi) necessary travel by licensed career and technical
127.25 	education personnel for noncollegiate credit-bearing
127.26 	professional development; and 
127.27 	(vii) specialized vocational instructional supplies.
127.28 	(b) Up to ten percent of a district's career and technical
127.29 	levy may be spent on equipment purchases.  Districts using the
127.30 	career and technical levy for equipment purchases must report to
127.31 	the department on the improved learning opportunities for
127.32 	students that result from the investment in equipment.
127.33 	(c) The district must recognize the full amount of this
127.34 	levy as revenue for the fiscal year in which it is certified.
127.35 		Subd. 2.Allocation from cooperative centers and
127.36 	intermediate districts. For purposes of this section, a
128.1 	cooperative center or an intermediate district must allocate its
128.2 	approved expenditures for career and technical education
128.3 	programs among participating districts.
128.4 		Subd. 3.Levy guarantee. Notwithstanding subdivision 1,
128.5 	the career and technical education levy for a district is not
128.6 	less than the lesser of:
128.7 	(1) the district's career and technical education levy
128.8 	authority for the previous fiscal year; or 
128.9 	(2) 100 percent of the approved expenditures for career and
128.10 	technical programs included in subdivision 1, paragraph (b), for
128.11 	the fiscal year in which the levy is certified.
128.12 		Subd. 4.Compliance with rules. (a) Levy authority must
128.13 	be granted under this section only for services rendered or for
128.14 	costs incurred in career and technical education programs
128.15 	approved by the commissioner and operated in accordance with
128.16 	rules adopted by the commissioner.  The rules must not require
128.17 	any minimum number of administrative staff, any minimum period
128.18 	of coordination time or extended employment for career and
128.19 	technical education personnel, or the availability of vocational
128.20 	student activities or organizations for a career and technical
128.21 	education program to qualify for this levy.  Levy authority
128.22 	shall be granted only for services rendered and for costs
128.23 	incurred by essential, licensed personnel, or approved
128.24 	paraprofessionals who meet the requirements for licensure
128.25 	pursuant to the rules of the Minnesota Board of Teaching.
128.26 	For the purposes of this paragraph, "licensed personnel"
128.27 	means persons holding a valid career and technical license
128.28 	issued by the commissioner.  If an average of five or fewer
128.29 	secondary full-time equivalent students are enrolled per teacher
128.30 	in an approved postsecondary program at Intermediate District
128.31 	No. 287, 916, or 917, "licensed personnel" means persons holding
128.32 	a valid vocational license issued by the commissioner or the
128.33 	Board of Trustees of the Minnesota State Colleges and
128.34 	Universities.
128.35 	(b) Notwithstanding section 127A.42, the commissioner may
128.36 	modify or withdraw the program or levy authority under this
129.1 	section without proceeding under section 127A.42, at any time.
129.2 	To do so, the commissioner must determine that the program does
129.3 	not comply with rules of the Department of Education or that any
129.4 	facts concerning the program or its budget differ from the facts
129.5 	in the district's approved application.
129.6 		Subd. 5.Limit. The commissioner may reduce the levy
129.7 	under this section for a career and technical education program
129.8 	that receives funds from any other source.  A district or center
129.9 	must not receive a total amount of levy authority pursuant to
129.10 	this section which, when added to funds from other sources, will
129.11 	provide the program an amount for salaries and travel which
129.12 	exceeds 100 percent of the amount of its expenditures for
129.13 	salaries and travel in the program.
129.14 		Subd. 6.Levy for contracted services. In addition to
129.15 	the provisions of subdivisions 4 and 5, a school district or
129.16 	cooperative center may contract with a public or private agency
129.17 	other than a Minnesota school district or cooperative center for
129.18 	the provision of career and technical education services.  The
129.19 	commissioner must adopt rules relating to program approval
129.20 	procedures and criteria for these contracts and levy authority
129.21 	must be granted only for contracts approved by the
129.22 	commissioner.  The district or cooperative center contracting
129.23 	for these services must be construed to be providing the
129.24 	services.
129.25 		Subd. 7.District reports. Each district or cooperative
129.26 	center must report data to the department for all career and
129.27 	technical education programs as required by the department to
129.28 	implement the career and technical levy formula.
129.29 	
EFFECTIVE DATE. This section is effective for taxes
129.30 	payable in 2008.

129.31 	Sec. 67. Minnesota Statutes 2004, section 124D.66,
129.32 	subdivision 3, is amended to read:
129.33 		Subd. 3.Eligible services.  (a) Assurance of mastery
129.34 	programs may provide direct instructional services to an
129.35 	eligible pupil, or a group of eligible pupils, under the
129.36 	following conditions in paragraphs (b) to (d).
130.1 	(b) Instruction may be provided at one or more grade levels
130.2 	from kindergarten to grade 8 and for students in grades 9
130.3 	through 12 who were enrolled in grade 8 before the 2005-2006
130.4 	school year and have failed the basic skills tests, or who were
130.5 	enrolled in grade 8 in the 2005-2006 school year and later and
130.6 	have failed the Minnesota Comprehensive Assessments (MCA-IIs) in
130.7 	reading, mathematics, or writing as required for high school
130.8 	graduation under section 120B.02.  If an assessment of pupils'
130.9 	needs within a district demonstrates that the eligible pupils in
130.10 	grades kindergarten to grade 8 are being appropriately served, a
130.11 	district may serve eligible pupils in grades 9 to 12.
130.12 	(c) Instruction must be provided under the supervision of
130.13 	the eligible pupil's regular classroom teacher.  Instruction may
130.14 	be provided by the eligible pupil's classroom teacher, by
130.15 	another teacher, by a team of teachers, or by an education
130.16 	assistant or aide.  A special education teacher may provide
130.17 	instruction, but instruction that is provided under this section
130.18 	is not eligible for aid under section 125A.76.
130.19 	(d) The instruction that is provided must differ from the
130.20 	initial instruction the pupil received in the regular classroom
130.21 	setting.  The instruction may differ by presenting different
130.22 	curriculum than was initially presented in the regular classroom
130.23 	or by presenting the same curriculum:
130.24 	(1) at a different rate or in a different sequence than it
130.25 	was initially presented;
130.26 	(2) using different teaching methods or techniques than
130.27 	were used initially; or
130.28 	(3) using different instructional materials than were used
130.29 	initially.

130.30 	Sec. 68. Minnesota Statutes 2004, section 124D.74,
130.31 	subdivision 1, is amended to read:
130.32 		Subdivision 1.Program described.  American Indian
130.33 	education programs are programs in public elementary and
130.34 	secondary schools, nonsectarian nonpublic, community,
130.35 	tribal, charter,or alternative schools enrolling American
130.36 	Indian children designed to:
131.1 	(1) support postsecondary preparation for pupils;
131.2 	(2) support the academic achievement of American Indian
131.3 	students with identified focus to improve reading and mathematic
131.4 	skills;
131.5 	(3) make the curriculum more relevant to the needs,
131.6 	interests, and cultural heritage of American Indian pupils;
131.7 	(4) provide positive reinforcement of the self-image of
131.8 	American Indian pupils;
131.9 	(5) develop intercultural awareness among pupils, parents,
131.10 	and staff; and
131.11 	(6) supplement, not supplant, state and federal educational
131.12 	and cocurricular programs.
131.13 	Program components may include:  development of support
131.14 	components for students in the areas of academic achievement,
131.15 	retention, and attendance; development of support components for
131.16 	staff, including in-service training and technical assistance in
131.17 	methods of teaching American Indian pupils; research projects,
131.18 	including experimentation with and evaluation of methods of
131.19 	relating to American Indian pupils; provision of personal and
131.20 	vocational counseling to American Indian pupils; modification of
131.21 	curriculum, instructional methods, and administrative procedures
131.22 	to meet the needs of American Indian pupils; and supplemental
131.23 	instruction in American Indian language, literature, history,
131.24 	and culture.  Districts offering programs may make contracts for
131.25 	the provision of program components by establishing cooperative
131.26 	liaisons with tribal programs and American Indian social service
131.27 	agencies.  These programs may also be provided as components of
131.28 	early childhood and family education programs.

131.29 	Sec. 69. Minnesota Statutes 2004, section 124D.81,
131.30 	subdivision 1, is amended to read:
131.31 		Subdivision 1.Grants; procedures.  Each fiscal year the
131.32 	commissioner of education must make grants to no fewer than six
131.33 	American Indian education programs.  At least three programs
131.34 	must be in urban areas and at least three must be on or near
131.35 	reservations.  The board of a local district, a participating
131.36 	school or a group of boards may develop a proposal for grants in
132.1 	support of American Indian education programs.  Proposals may
132.2 	provide for contracts for the provision of program components by
132.3 	nonsectarian nonpublic, community, tribal, charter,or
132.4 	alternative schools.  The commissioner shall prescribe the form
132.5 	and manner of application for grants, and no grant shall be made
132.6 	for a proposal not complying with the requirements of sections
132.7 	124D.71 to 124D.82. The commissioner must submit all proposals
132.8 	to the state Advisory Committee on American Indian Education
132.9 	Programs for its recommendations concerning approval,
132.10 	modification, or disapproval and the amounts of grants to
132.11 	approved programs.

132.12 	Sec. 70. Minnesota Statutes 2004, section 124D.84,
132.13 	subdivision 1, is amended to read:
132.14 		Subdivision 1.Awards.  The commissioner, with the advice
132.15 	and counsel of the Minnesota Indian Education Committee,may
132.16 	award scholarships to any Minnesota resident student who is of
132.17 	one-fourth or more Indian ancestry, who has applied for other
132.18 	existing state and federal scholarship and grant programs, and
132.19 	who, in the opinion of the commissioner, has the capabilities to
132.20 	benefit from further education.  Scholarships must be for
132.21 	accredited degree programs in accredited Minnesota colleges or
132.22 	universities or for courses in accredited Minnesota business,
132.23 	technical, or vocational schools.  Scholarships may also be
132.24 	given to students attending Minnesota colleges that are in
132.25 	candidacy status for obtaining full accreditation, and are
132.26 	eligible for and receiving federal financial aid programs.
132.27 	Students are also eligible for scholarships when enrolled as
132.28 	students in Minnesota higher education institutions that have
132.29 	joint programs with other accredited higher education
132.30 	institutions.  Scholarships shall be used to defray the total
132.31 	cost of education including tuition, incidental fees, books,
132.32 	supplies, transportation, other related school costs and the
132.33 	cost of board and room and shall be paid directly to the college
132.34 	or school concerned where the student receives federal financial
132.35 	aid.  The total cost of education includes all tuition and fees
132.36 	for each student enrolling in a public institution and the
133.1 	portion of tuition and fees for each student enrolling in a
133.2 	private institution that does not exceed the tuition and fees at
133.3 	a comparable public institution.  Each student shall be awarded
133.4 	a scholarship based on the total cost of the student's education
133.5 	and a federal standardized need analysis.  Applicants are
133.6 	encouraged to apply for all other sources of financial aid. The
133.7 	amount and type of each scholarship shall be determined through
133.8 	the advice and counsel of the Minnesota Indian education
133.9 	committee.
133.10 	When an Indian student satisfactorily completes the work
133.11 	required by a certain college or school in a school year the
133.12 	student is eligible for additional scholarships, if additional
133.13 	training is necessary to reach the student's educational and
133.14 	vocational objective.  Scholarships may not be given to any
133.15 	Indian student for more than five years of study without special
133.16 	recommendation of the Minnesota Indian Education Committee.

133.17 	Sec. 71. Minnesota Statutes 2004, section 126C.457, is
133.18 	amended to read:
133.19 	126C.457 CAREER AND TECHNICAL LEVY.
133.20 	For taxes payable in 2006 and 2007,a school district may
133.21 	levy an amount equal to the greater of (1) $10,000, or (2) the
133.22 	district's fiscal year 2001 entitlement for career and technical
133.23 	aid under Minnesota Statutes 2000, section 124D.453.  The
133.24 	district must recognize the full amount of this levy as revenue
133.25 	for the fiscal year in which it is certified.  Revenue received
133.26 	under this section must be reserved and used only for career and
133.27 	technical programs.

133.28 	Sec. 72. Minnesota Statutes 2004, section 127A.47,
133.29 	subdivision 8, is amended to read:
133.30 		Subd. 8.Charter schools.  (a) The general education aid
133.31 	for districts must be adjusted for each pupil attending a
133.32 	charter school under section 124D.10.  The adjustments must be
133.33 	made according to this subdivision.
133.34 	(b) General education aid paid to a district in which a
133.35 	charter school not providing transportation according to section
133.36 	124D.10, subdivision 16, is located must be increased by an
134.1 	amount equal to the sum of:
134.2 	(1) the product of: (1) (i) the sum of an amount equal to
134.3 	the product of the formula allowance according to section
134.4 	126C.10, subdivision 2, times .0485, plus the transportation
134.5 	sparsity allowance for the district; times (2) (ii) the adjusted
134.6 	marginal cost pupil units attributable to the pupil; plus 
134.7 	(2) the product of $223 times the extended time marginal
134.8 	cost pupil units attributable to the pupil.

134.9 	Sec. 73. Minnesota Statutes 2004, section 128C.12,
134.10 	subdivision 1, is amended to read:
134.11 		Subdivision 1.Dues and events revenue. (a) The state
134.12 	auditor annually must examine the accounts of, and audit all
134.13 	money paid to, the State High School League by its members.  The
134.14 	audit must include financial and compliance issues.  The state
134.15 	auditor audit must also audit include all money derived from any
134.16 	event sponsored by the league. League audits must include
134.17 	audits of administrative regions of the league.  The league and
134.18 	its administrative regions may not contract with private
134.19 	auditors.  The scope of the state auditor's examinations of the
134.20 	league must be agreed upon by the board and the state auditor,
134.21 	provided that all requirements of this section must be met.
134.22 	(b) The administrative regions of the league may contract
134.23 	with the state auditor or with a private certified public
134.24 	accountant for the audit required by this section.  If a private
134.25 	certified public accountant performs the audit, the state
134.26 	auditor may require additional information from the private
134.27 	certified public accountant as the state auditor deems in the
134.28 	public interest.  The state auditor may accept the audit or make
134.29 	additional examinations as the state auditor deems to be in the
134.30 	public interest.
134.31 	
EFFECTIVE DATE. This section is effective the day
134.32 	following final enactment.

134.33 	Sec. 74. Minnesota Statutes 2004, section 128C.12,
134.34 	subdivision 3, is amended to read:
134.35 		Subd. 3.Copies.  The state auditor board must file
134.36 	copies of the financial and compliance audit report with the
135.1 	commissioner of education and the director of the Legislative
135.2 	Reference Library.
135.3 	
EFFECTIVE DATE. This section is effective the day
135.4 	following final enactment.

135.5 	Sec. 75. [129C.105] BOARD MEETINGS BY TELEPHONE OR OTHER
135.6 	ELECTRONIC MEANS.
135.7 	(a) Notwithstanding section 13D.01 and if complying with
135.8 	section 13D.02 is impractical, the board for the Perpich Center
135.9 	for Arts Education may conduct a meeting of its members by
135.10 	telephone or other electronic means so long as the following
135.11 	conditions are met:
135.12 	(1) all members of the board participating in the meeting,
135.13 	wherever their physical location, can hear one another and all
135.14 	discussion and testimony;
135.15 	(2) members of the public present at the regular meeting
135.16 	location of the board can hear all discussion and testimony and
135.17 	all votes of members of the board;
135.18 	(3) at least one member of the board is physically present
135.19 	at the regular meeting location; and 
135.20 	(4) all votes are conducted by roll call, so each member's
135.21 	vote on each issue can be identified and recorded.
135.22 	(b) Each member of the board participating in a meeting by
135.23 	telephone or other electronic means is considered present at the
135.24 	meeting for purposes of determining a quorum and participating
135.25 	in all proceedings.
135.26 	(c) If telephone or other electronic means is used to
135.27 	conduct a meeting, the board, to the extent practical, shall
135.28 	allow a person to monitor the meeting electronically from a
135.29 	remote location.  The board may require the person making such a
135.30 	connection to pay for documented marginal costs that the board
135.31 	incurs as a result of the additional connection.
135.32 	(d) If telephone or other electronic means is used to
135.33 	conduct a regular, special, or emergency meeting, the board
135.34 	shall provide notice of the regular meeting location, of the
135.35 	fact that some members may participate by telephone or other
135.36 	electronic means, and of the provisions of paragraph (c).  The
136.1 	timing and method of providing notice is governed by section
136.2 	13D.04.

136.3 	EFFECTIVE DATE. This section is effective the day
136.4 	following final enactment.

136.5 	Sec. 76. Minnesota Statutes 2004, section 171.04,
136.6 	subdivision 1, is amended to read:
136.7 		Subdivision 1.Persons not eligible.  The department
136.8 	shall not issue a driver's license:
136.9 	(1) to any person under 18 years unless:
136.10 	(i) the applicant is 16 or 17 years of age and has a
136.11 	previously issued valid license from another state or country or
136.12 	the applicant has, for the 12 consecutive months preceding
136.13 	application, held a provisional license and during that time has
136.14 	incurred (A) no conviction for a violation of section 169A.20,
136.15 	169A.33, 169A.35, or sections 169A.50 to 169A.53, (B) no
136.16 	conviction for a crash-related moving violation, and (C) not
136.17 	more than one conviction for a moving violation that is not
136.18 	crash related.  "Moving violation" means a violation of a
136.19 	traffic regulation but does not include a parking violation,
136.20 	vehicle equipment violation, or warning citation;
136.21 	(ii) the application for a license is approved by (A)
136.22 	either parent when both reside in the same household as the
136.23 	minor applicant or, if otherwise, then (B) the parent or spouse
136.24 	of the parent having custody or, in the event there is no court
136.25 	order for custody, then (C) the parent or spouse of the parent
136.26 	with whom the minor is living or, if subitems (A) to (C) do not
136.27 	apply, then (D) the guardian having custody of the minor or, in
136.28 	the event a person under the age of 18 has no living father,
136.29 	mother, or guardian, or is married or otherwise legally
136.30 	emancipated, then (E) the minor's adult spouse, adult close
136.31 	family member, or adult employer; provided, that the approval
136.32 	required by this item contains a verification of the age of the
136.33 	applicant and the identity of the parent, guardian, adult
136.34 	spouse, adult close family member, or adult employer; and 
136.35 	(iii) the applicant presents a certification by the person
136.36 	who approves the application under item (ii), stating that the
137.1 	applicant has driven a motor vehicle accompanied by and under
137.2 	supervision of a licensed driver at least 21 years of age for at
137.3 	least ten hours during the period of provisional licensure; and 
137.4 	(iv) the applicant certifies either (A) the applicant's
137.5 	school attendance under section 171.056 and the district,
137.6 	charter school, or alternative education program in which the
137.7 	applicant is currently enrolled, or (B) that the enrolling
137.8 	district, charter school, or alternative education program board
137.9 	waived the attendance requirement under section 120A.23;
137.10 	(2) to any person who is 18 years of age or younger, unless
137.11 	the person has applied for, been issued, and possessed the
137.12 	appropriate instruction permit for a minimum of six months, and,
137.13 	with respect to a person under 18 years of age, a provisional
137.14 	license for a minimum of 12 months;
137.15 	(3) to any person who is 19 years of age or older, unless
137.16 	that person has applied for, been issued, and possessed the
137.17 	appropriate instruction permit for a minimum of three months;
137.18 	(4) to any person whose license has been suspended during
137.19 	the period of suspension except that a suspended license may be
137.20 	reinstated during the period of suspension upon the licensee
137.21 	furnishing proof of financial responsibility in the same manner
137.22 	as provided in the Minnesota No-Fault Automobile Insurance Act;
137.23 	(5) to any person whose license has been revoked except
137.24 	upon furnishing proof of financial responsibility in the same
137.25 	manner as provided in the Minnesota No-Fault Automobile
137.26 	Insurance Act and if otherwise qualified;
137.27 	(6) to any drug-dependent person, as defined in section
137.28 	254A.02, subdivision 5;
137.29 	(7) to any person who has been adjudged legally incompetent
137.30 	by reason of mental illness, mental deficiency, or inebriation,
137.31 	and has not been restored to capacity, unless the department is
137.32 	satisfied that the person is competent to operate a motor
137.33 	vehicle with safety to persons or property;
137.34 	(8) to any person who is required by this chapter to take a
137.35 	vision, knowledge, or road examination, unless the person has
137.36 	successfully passed the examination.  An applicant who fails
138.1 	four road tests must complete a minimum of six hours of
138.2 	behind-the-wheel instruction with an approved instructor before
138.3 	taking the road test again;
138.4 	(9) to any person who is required under the Minnesota
138.5 	No-Fault Automobile Insurance Act to deposit proof of financial
138.6 	responsibility and who has not deposited the proof;
138.7 	(10) to any person when the commissioner has good cause to
138.8 	believe that the operation of a motor vehicle on the highways by
138.9 	the person would be inimical to public safety or welfare;
138.10 	(11) to any person when, in the opinion of the
138.11 	commissioner, the person is afflicted with or suffering from a
138.12 	physical or mental disability or disease that will affect the
138.13 	person in a manner as to prevent the person from exercising
138.14 	reasonable and ordinary control over a motor vehicle while
138.15 	operating it upon the highways;
138.16 	(12) to a person who is unable to read and understand
138.17 	official signs regulating, warning, and directing traffic;
138.18 	(13) to a child for whom a court has ordered denial of
138.19 	driving privileges under section 260C.201, subdivision 1, or
138.20 	260B.235, subdivision 5, until the period of denial is
138.21 	completed; or
138.22 	(14) to any person whose license has been canceled, during
138.23 	the period of cancellation.
138.24 	
EFFECTIVE DATE. This section is effective September 1,
138.25 	2005, and applies to all persons under age 18 possessing or
138.26 	applying for a driver's instruction permit or provisional
138.27 	license on or after that date.

138.28 	Sec. 77. Minnesota Statutes 2004, section 171.05,
138.29 	subdivision 2, is amended to read:
138.30 		Subd. 2.Person less than 18 years of age.  (a)
138.31 	Notwithstanding any provision in subdivision 1 to the contrary,
138.32 	the department may issue an instruction permit to an applicant
138.33 	who is 15, 16, or 17 years of age and who:
138.34 	(1) has completed a course of driver education in another
138.35 	state, has a previously issued valid license from another state,
138.36 	or is enrolled in either:
139.1 	(i) a public, private, or commercial driver education
139.2 	program that is approved by the commissioner of public safety
139.3 	and that includes classroom and behind-the-wheel training; or
139.4 	(ii) an approved behind-the-wheel driver education program
139.5 	when the student is receiving full-time instruction in a home
139.6 	school within the meaning of sections 120A.22 and 120A.24, the
139.7 	student is working toward a homeschool diploma, the student's
139.8 	status as a homeschool student has been certified by the
139.9 	superintendent of the school district in which the student
139.10 	resides, and the student is taking home-classroom driver
139.11 	training with classroom materials approved by the commissioner
139.12 	of public safety;
139.13 	(2) has completed the classroom phase of instruction in the
139.14 	driver education program;
139.15 	(3) has passed a test of the applicant's eyesight;
139.16 	(4) has passed a department-administered test of the
139.17 	applicant's knowledge of traffic laws;
139.18 	(5) has completed the required application, which must be
139.19 	approved by (i) either parent when both reside in the same
139.20 	household as the minor applicant or, if otherwise, then (ii) the
139.21 	parent or spouse of the parent having custody or, in the event
139.22 	there is no court order for custody, then (iii) the parent or
139.23 	spouse of the parent with whom the minor is living or, if items
139.24 	(i) to (iii) do not apply, then (iv) the guardian having custody
139.25 	of the minor or, in the event a person under the age of 18 has
139.26 	no living father, mother, or guardian, or is married or
139.27 	otherwise legally emancipated, then (v) the applicant's adult
139.28 	spouse, adult close family member, or adult employer; provided,
139.29 	that the approval required by this clause contains a
139.30 	verification of the age of the applicant and the identity of the
139.31 	parent, guardian, adult spouse, adult close family member, or
139.32 	adult employer; and 
139.33 	(6) certifies either (i) the applicant's school attendance
139.34 	under section 171.056 and the district, charter school, or
139.35 	alternative education program in which the applicant is
139.36 	currently enrolled, or (ii) that the enrolling district, charter
140.1 	school, or alternative education program board waived the
140.2 	attendance requirement under section 120A.23; and 
140.3 	(7) has paid the fee required in section 171.06,
140.4 	subdivision 2.
140.5 	(b) The instruction permit is valid for one year from the
140.6 	date of application and may be renewed upon payment of a fee
140.7 	equal to the fee for issuance of an instruction permit under
140.8 	section 171.06, subdivision 2.
140.9 	
EFFECTIVE DATE. This section is effective September 1,
140.10 	2005, and applies to all persons under age 18 possessing or
140.11 	applying for a driver's instruction permit on or after that date.

140.12 	Sec. 78. Minnesota Statutes 2004, section 171.05,
140.13 	subdivision 2b, is amended to read:
140.14 		Subd. 2b.Instruction permit use by person under age 18.
 140.15 	(a) This subdivision applies to persons who have applied for and
140.16 	received an instruction permit under subdivision 2.
140.17 	(b) The permit holder may, with the permit in possession,
140.18 	operate a motor vehicle, but must be accompanied by and be under
140.19 	the supervision of a certified driver education instructor, the
140.20 	permit holder's parent or guardian, or another licensed driver
140.21 	age 21 or older.  The supervisor must occupy the seat beside the
140.22 	permit holder.
140.23 	(c) The permit holder may operate a motor vehicle only when
140.24 	every occupant under the age of 18 has a seat belt or child
140.25 	passenger restraint system properly fastened.  A person who
140.26 	violates this paragraph is subject to a fine of $25.  A peace
140.27 	officer may not issue a citation for a violation of this
140.28 	paragraph unless the officer lawfully stopped or detained the
140.29 	driver of the motor vehicle for a moving violation as defined in
140.30 	section 171.04, subdivision 1.  The commissioner shall not
140.31 	record a violation of this paragraph on a person's driving
140.32 	record.
140.33 	(d) The permit holder must maintain a driving record free
140.34 	of convictions for moving violations, as defined in section
140.35 	171.04, subdivision 1, and free of convictions for violation of
140.36 	section 169A.20, 169A.33, 169A.35, or sections 169A.50 to
141.1 	169A.53.  If the permit holder drives a motor vehicle in
141.2 	violation of the law, the commissioner shall suspend, cancel, or
141.3 	revoke the permit in accordance with the statutory section
141.4 	violated.
141.5 	(e) The permit holder must comply with the school
141.6 	attendance requirement under section 171.056, except when the
141.7 	attendance requirement is waived under section 120A.23.  If the
141.8 	permit holder does not attend school as required, the
141.9 	commissioner must cancel the permit under section 171.056.
141.10 	
EFFECTIVE DATE. This section is effective September 1,
141.11 	2005, and applies to all persons under age 18 possessing or
141.12 	applying for a driver's instruction permit on or after that date.

141.13 	Sec. 79. Minnesota Statutes 2004, section 171.05,
141.14 	subdivision 3, is amended to read:
141.15 		Subd. 3.Motorized bicycle.  Notwithstanding any
141.16 	provision in subdivision 1 to the contrary, the department, upon
141.17 	application and payment of the fee prescribed in section 171.02,
141.18 	subdivision 3, may issue a motorized bicycle instruction permit
141.19 	to an applicant who is 15 years of age and ,who has successfully
141.20 	completed the written portion of the examination prescribed by
141.21 	the commissioner, and who certifies either (1) the applicant's
141.22 	school attendance under section 171.056 and the district,
141.23 	charter school, or alternative education program in which the
141.24 	applicant is currently enrolled, or (2) that the enrolling
141.25 	district, charter school, or alternative education program board
141.26 	waived the attendance requirement under section 120A.23.  The
141.27 	holder of this instruction permit who has the permit in
141.28 	possession may operate a motorized bicycle within one mile of
141.29 	the holder's residence for the purpose of practicing to take the
141.30 	operator portion of the examination prescribed by the
141.31 	commissioner.
141.32 	
EFFECTIVE DATE. This section is effective September 1,
141.33 	2005, and applies to all persons under age 18 possessing or
141.34 	applying for a motorized bicycle instruction permit on or after
141.35 	that date.

141.36 	Sec. 80. [171.056] SCHOOL ATTENDANCE REQUIREMENT FOR
142.1 	DRIVER'S INSTRUCTION PERMIT, MOTORIZED BICYCLE PERMIT, AND
142.2 	PROVISIONAL LICENSE.
142.3 		Subdivision 1.Definitions. (a) As used in this section
142.4 	the terms defined in this subdivision have the meanings given
142.5 	them.
142.6 	(b) "Continuing truant" means a student under section
142.7 	260A.02, subdivision 3, who is absent without valid excuse from
142.8 	instruction in a school.
142.9 	(c) "Habitual truant" means a person under section
142.10 	260C.007, subdivision 19, who is absent without lawful excuse
142.11 	from attendance at school.
142.12 	(d) "High school diploma" means an official record or
142.13 	document indicating that the student has satisfied the
142.14 	graduation requirements of that school as defined under section
142.15 	120A.22, subdivision 4.
142.16 	(e) "Public school" means a public school, state approved
142.17 	alternative program (SAAP), or charter school.
142.18 	(f) "School board" means a public school district school
142.19 	board, SAAP board, or charter school board of directors.
142.20 	(g) "School principal" means a principal or chief
142.21 	administrative officer of a public school.
142.22 	Subd. 2.[ISSUANCE OR RENEWAL OF DRIVER'S INSTRUCTION
142.23 	PERMIT, MOTORIZED BICYCLE PERMIT, OR PROVISIONAL LICENSE.] (a)
142.24 	Notwithstanding any law to the contrary, except when the
142.25 	attendance requirement is waived under section 120A.23, school
142.26 	attendance is a requirement for issuing a new driver's
142.27 	instruction permit, motorized bicycle permit, or provisional
142.28 	license or renewing the permit of a person under age 18.  The
142.29 	person meets the school attendance requirement when the person:
142.30 	(1) has a high school diploma or general education
142.31 	development certificate (GED);
142.32 	(2) has withdrawn from school under section 120A.22,
142.33 	subdivision 8; or 
142.34 	(3) is enrolled and attending a public school and is not a
142.35 	continuing truant or habitually truant, is enrolled and
142.36 	attending a nonpublic school, or is homeschooled.
143.1 	(b) A person under age 18 who applies for a motorized
143.2 	bicycle permit, instruction permit, or provisional license must
143.3 	submit information to the Department of Public Safety in the
143.4 	manner and format it prescribes documenting that the person has
143.5 	met the requirements of paragraph (a).
143.6 		Subd. 3.Expungement of record. Upon receiving the
143.7 	written or electronic request of a student who is age 18 or
143.8 	older, the Department of Public Safety must expunge from the
143.9 	department's motor vehicle records all the student's truancy
143.10 	data related to the department refusing to issue or canceling
143.11 	the student's permit or license under this section.
143.12 	
EFFECTIVE DATE. This section is effective September 1,
143.13 	2005, and applies to all persons under age 18 possessing or
143.14 	applying for a motorized bicycle permit, driver's instruction
143.15 	permit, or provisional license on or after that date.

143.16 	Sec. 81. Minnesota Statutes 2004, section 260C.007,
143.17 	subdivision 6, is amended to read:
143.18 		Subd. 6.Child in need of protection or services.  "Child
143.19 	in need of protection or services" means a child who is in need
143.20 	of protection or services because the child:
143.21 	(1) is abandoned or without parent, guardian, or custodian;
143.22 	(2)(i) has been a victim of physical or sexual abuse, (ii)
143.23 	resides with or has resided with a victim of domestic child
143.24 	abuse as defined in subdivision 5, (iii) resides with or would
143.25 	reside with a perpetrator of domestic child abuse or child abuse
143.26 	as defined in subdivision 5, or (iv) is a victim of emotional
143.27 	maltreatment as defined in subdivision 8;
143.28 	(3) is without necessary food, clothing, shelter,
143.29 	education, or other required care for the child's physical or
143.30 	mental health or morals because the child's parent, guardian, or
143.31 	custodian is unable or unwilling to provide that care;
143.32 	(4) is without the special care made necessary by a
143.33 	physical, mental, or emotional condition because the child's
143.34 	parent, guardian, or custodian is unable or unwilling to provide
143.35 	that care, including a child in voluntary placement due solely
143.36 	to the child's developmental disability or emotional
144.1 	disturbance;
144.2 	(5) is medically neglected, which includes, but is not
144.3 	limited to, the withholding of medically indicated treatment
144.4 	from a disabled infant with a life-threatening condition.  The
144.5 	term "withholding of medically indicated treatment" means the
144.6 	failure to respond to the infant's life-threatening conditions
144.7 	by providing treatment, including appropriate nutrition,
144.8 	hydration, and medication which, in the treating physician's or
144.9 	physicians' reasonable medical judgment, will be most likely to
144.10 	be effective in ameliorating or correcting all conditions,
144.11 	except that the term does not include the failure to provide
144.12 	treatment other than appropriate nutrition, hydration, or
144.13 	medication to an infant when, in the treating physician's or
144.14 	physicians' reasonable medical judgment:
144.15 	(i) the infant is chronically and irreversibly comatose;
144.16 	(ii) the provision of the treatment would merely prolong
144.17 	dying, not be effective in ameliorating or correcting all of the
144.18 	infant's life-threatening conditions, or otherwise be futile in
144.19 	terms of the survival of the infant; or
144.20 	(iii) the provision of the treatment would be virtually
144.21 	futile in terms of the survival of the infant and the treatment
144.22 	itself under the circumstances would be inhumane;
144.23 	(6) is one whose parent, guardian, or other custodian for
144.24 	good cause desires to be relieved of the child's care and
144.25 	custody, including a child in placement according to voluntary
144.26 	release by the parent under section 260C.212, subdivision 8;
144.27 	(7) has been placed for adoption or care in violation of
144.28 	law;
144.29 	(8) is without proper parental care because of the
144.30 	emotional, mental, or physical disability, or state of
144.31 	immaturity of the child's parent, guardian, or other custodian;
144.32 	(9) is one whose behavior, condition, or environment is
144.33 	such as to be injurious or dangerous to the child or others.  An
144.34 	injurious or dangerous environment may include, but is not
144.35 	limited to, the exposure of a child to criminal activity in the
144.36 	child's home;
145.1 	(10) is experiencing growth delays, which may be referred
145.2 	to as failure to thrive, that have been diagnosed by a physician
145.3 	and are due to parental neglect;
145.4 	(11) has engaged in prostitution as defined in section
145.5 	609.321, subdivision 9;
145.6 	(12) has committed a delinquent act or a juvenile petty
145.7 	offense before becoming ten years old;
145.8 	(13) is a runaway;
145.9 	(14) is a continuing or habitual truant;
145.10 	(15) has been found incompetent to proceed or has been
145.11 	found not guilty by reason of mental illness or mental
145.12 	deficiency in connection with a delinquency proceeding, a
145.13 	certification under section 260B.125, an extended jurisdiction
145.14 	juvenile prosecution, or a proceeding involving a juvenile petty
145.15 	offense; or
145.16 	(16) has been found by the court to have committed domestic
145.17 	abuse perpetrated by a minor under Laws 1997, chapter 239,
145.18 	article 10, sections 2 to 26, has been ordered excluded from the
145.19 	child's parent's home by an order for protection/minor
145.20 	respondent, and the parent or guardian is either unwilling or
145.21 	unable to provide an alternative safe living arrangement for the
145.22 	child.
145.23 	
EFFECTIVE DATE. This section is effective July 1, 2005.

145.24 	Sec. 82. Minnesota Statutes 2004, section 260C.007, is
145.25 	amended by adding a subdivision to read:
145.26 		Subd. 8a.Continuing truant. "Continuing truant" means a
145.27 	student under section 260A.02, subdivision 3, who is absent
145.28 	without valid excuse from instruction in a school.
145.29 	
EFFECTIVE DATE. This section is effective July 1, 2005.

145.30 	Sec. 83. Minnesota Statutes 2004, section 260C.201,
145.31 	subdivision 1, is amended to read:
145.32 		Subdivision 1.Dispositions.  (a) If the court finds that
145.33 	the child is in need of protection or services or neglected and
145.34 	in foster care, it shall enter an order making any of the
145.35 	following dispositions of the case:
145.36 	(1) place the child under the protective supervision of the
146.1 	responsible social services agency or child-placing agency in
146.2 	the home of a parent of the child under conditions prescribed by
146.3 	the court directed to the correction of the child's need for
146.4 	protection or services:
146.5 	(i) the court may order the child into the home of a parent
146.6 	who does not otherwise have legal custody of the child, however,
146.7 	an order under this section does not confer legal custody on
146.8 	that parent;
146.9 	(ii) if the court orders the child into the home of a
146.10 	father who is not adjudicated, he must cooperate with paternity
146.11 	establishment proceedings regarding the child in the appropriate
146.12 	jurisdiction as one of the conditions prescribed by the court
146.13 	for the child to continue in his home;
146.14 	(iii) the court may order the child into the home of a
146.15 	noncustodial parent with conditions and may also order both the
146.16 	noncustodial and the custodial parent to comply with the
146.17 	requirements of a case plan under subdivision 2; or
146.18 	(2) transfer legal custody to one of the following:
146.19 	(i) a child-placing agency; or
146.20 	(ii) the responsible social services agency.  In placing a
146.21 	child whose custody has been transferred under this paragraph,
146.22 	the agencies shall make an individualized determination of how
146.23 	the placement is in the child's best interests using the
146.24 	consideration for relatives and the best interest factors in
146.25 	section 260C.212, subdivision 2, paragraph (b); or
146.26 	(3) if the child has been adjudicated as a child in need of
146.27 	protection or services because the child is in need of special
146.28 	services or care to treat or ameliorate a physical or mental
146.29 	disability, the court may order the child's parent, guardian, or
146.30 	custodian to provide it.  The court may order the child's health
146.31 	plan company to provide mental health services to the child.
146.32 	Section 62Q.535 applies to an order for mental health services
146.33 	directed to the child's health plan company.  If the health
146.34 	plan, parent, guardian, or custodian fails or is unable to
146.35 	provide this treatment or care, the court may order it
146.36 	provided.  Absent specific written findings by the court that
147.1 	the child's disability is the result of abuse or neglect by the
147.2 	child's parent or guardian, the court shall not transfer legal
147.3 	custody of the child for the purpose of obtaining special
147.4 	treatment or care solely because the parent is unable to provide
147.5 	the treatment or care.  If the court's order for mental health
147.6 	treatment is based on a diagnosis made by a treatment
147.7 	professional, the court may order that the diagnosing
147.8 	professional not provide the treatment to the child if it finds
147.9 	that such an order is in the child's best interests; or
147.10 	(4) if the court believes that the child has sufficient
147.11 	maturity and judgment and that it is in the best interests of
147.12 	the child, the court may order a child 16 years old or older to
147.13 	be allowed to live independently, either alone or with others as
147.14 	approved by the court under supervision the court considers
147.15 	appropriate, if the county board, after consultation with the
147.16 	court, has specifically authorized this dispositional
147.17 	alternative for a child.
147.18 	(b) If the child was adjudicated in need of protection or
147.19 	services because the child is a runaway, or is a continuing or
147.20 	habitual truant, the court may order any of the following
147.21 	dispositions in addition to or as alternatives to the
147.22 	dispositions authorized under paragraph (a):
147.23 	(1) counsel the child or the child's parents, guardian, or
147.24 	custodian;
147.25 	(2) place the child under the supervision of a probation
147.26 	officer or other suitable person in the child's own home under
147.27 	conditions prescribed by the court, including reasonable rules
147.28 	for the child's conduct and the conduct of the parents,
147.29 	guardian, or custodian, designed for the physical, mental, and
147.30 	moral well-being and behavior of the child; or with the consent
147.31 	of the commissioner of corrections, place the child in a group
147.32 	foster care facility which is under the commissioner's
147.33 	management and supervision;
147.34 	(3) subject to the court's supervision, transfer legal
147.35 	custody of the child to one of the following:
147.36 	(i) a reputable person of good moral character.  No person
148.1 	may receive custody of two or more unrelated children unless
148.2 	licensed to operate a residential program under sections 245A.01
148.3 	to 245A.16; or
148.4 	(ii) a county probation officer for placement in a group
148.5 	foster home established under the direction of the juvenile
148.6 	court and licensed pursuant to section 241.021;
148.7 	(4) require the child to pay a fine of up to $100.  The
148.8 	court shall order payment of the fine in a manner that will not
148.9 	impose undue financial hardship upon the child;
148.10 	(5) require the child to participate in a community service
148.11 	project;
148.12 	(6) order the child to undergo a chemical dependency
148.13 	evaluation and, if warranted by the evaluation, order
148.14 	participation by the child in a drug awareness program or an
148.15 	inpatient or outpatient chemical dependency treatment program;
148.16 	(7) if the court believes that it is in the best interests
148.17 	of the child and or of public safety that the child's driver's
148.18 	license or instruction permit be canceled, the court may order
148.19 	the commissioner of public safety to cancel the child's license
148.20 	or permit for any period up to the child's 18th birthday.  If
148.21 	the child does not have a driver's license or permit, the court
148.22 	may order a denial of driving privileges for any period up to
148.23 	the child's 18th birthday. If the child is a continuing or
148.24 	habitual truant, the court must cancel the child's driving
148.25 	privileges.The court shall forward an order issued under this
148.26 	clause to the commissioner, who shall cancel the license or
148.27 	permit or deny driving privileges without a hearing for the
148.28 	period specified by the court.  At any time before the
148.29 	expiration of the period of cancellation or denial, the court
148.30 	may, for good cause, order the commissioner of public safety to
148.31 	allow the child to apply for a license or permit, and the
148.32 	commissioner shall so authorize;
148.33 	(8) order that the child's parent or legal guardian deliver
148.34 	the child to school at the beginning of each school day for a
148.35 	period of time specified by the court; or
148.36 	(9) require the child to perform any other activities or
149.1 	participate in any other treatment programs deemed appropriate
149.2 	by the court.
149.3 	To the extent practicable, the court shall enter a
149.4 	disposition order the same day it makes a finding that a child
149.5 	is in need of protection or services or neglected and in foster
149.6 	care, but in no event more than 15 days after the finding unless
149.7 	the court finds that the best interests of the child will be
149.8 	served by granting a delay.  If the child was under eight years
149.9 	of age at the time the petition was filed, the disposition order
149.10 	must be entered within ten days of the finding and the court may
149.11 	not grant a delay unless good cause is shown and the court finds
149.12 	the best interests of the child will be served by the delay.
149.13 	(c) If a child who is 14 years of age or older is
149.14 	adjudicated in need of protection or services because the child
149.15 	is a habitual truant and truancy procedures involving the child
149.16 	were previously dealt with by a school attendance review board
149.17 	or county attorney mediation program under section 260A.06 or
149.18 	260A.07, the court shall order a cancellation or denial of
149.19 	driving privileges under paragraph (b), clause (7), for any
149.20 	period up to the child's 18th birthday.
149.21 	(d) In the case of a child adjudicated in need of
149.22 	protection or services because the child has committed domestic
149.23 	abuse and been ordered excluded from the child's parent's home,
149.24 	the court shall dismiss jurisdiction if the court, at any time,
149.25 	finds the parent is able or willing to provide an alternative
149.26 	safe living arrangement for the child, as defined in Laws 1997,
149.27 	chapter 239, article 10, section 2.
149.28 	(e) When a parent has complied with a case plan ordered
149.29 	under subdivision 6 and the child is in the care of the parent,
149.30 	the court may order the responsible social services agency to
149.31 	monitor the parent's continued ability to maintain the child
149.32 	safely in the home under such terms and conditions as the court
149.33 	determines appropriate under the circumstances.
149.34 	
EFFECTIVE DATE. This section is effective July 1, 2005.

149.35 	Sec. 84. BOARD OF SCHOOL ADMINISTRATORS; RULEMAKING
149.36 	AUTHORITY.
 150.1 	On or before June 30, 2007, the Board of School
150.2 	Administrators may adopt expedited rules under Minnesota
150.3 	Statutes, section 14.389, to make technical revisions and
150.4 	clarifications to Minnesota Rules, chapter 3512.

150.5 	Sec. 85. CAREER AND TECHNICAL EDUCATION PROGRAM RULES.
 150.6 	By January 1, 2007, the commissioner of education must
150.7 	adopt rules for approval of career and technical education
150.8 	programs consistent with Minnesota Statutes, section 124D.4531,
150.9 	subdivisions 4 and 6, that emphasize emerging workforce skills.
150.10 	Program approval for fiscal year 2008 and later must be based on
150.11 	the rules.

150.12 	Sec. 86. MINNESOTA COMPREHENSIVE ASSESSMENTS; RULES.
 150.13 	The commissioner of education shall adopt rules on or
150.14 	before January 1, 2006, to implement the Minnesota Comprehensive
150.15 	Assessments Second Edition (MCA-IIs) in reading, mathematics,
150.16 	and writing.  For purposes of state and local high school
150.17 	graduation requirements, and consistent with applicable federal
150.18 	and state law, the rules must include criteria and an
150.19 	alternative assessment process to enable school districts to
150.20 	accommodate students, including at least students with
150.21 	disabilities, English language learners, and students performing
150.22 	below their grade level, who do not receive a passing score on
150.23 	the Minnesota Comprehensive Assessments Second Edition.

150.24 	Sec. 87. TITLE.
 150.25 	Minnesota Statutes, section 120B.25, shall be known as the
150.26 	American Heritage Education in Minnesota Public Schools Act.

150.27 	EFFECTIVE DATE. This section is effective the day
150.28 	following final enactment.

150.29 	Sec. 88. STUDY; SPONSOR EVALUATION AND CHARGES.
 150.30 	The Department of Education by December 31, 2005, after
150.31 	consulting with representatives of charter schools and charter
150.32 	school sponsors, must submit to the legislature recommendations
150.33 	on how a charter school sponsor effectively evaluates the
150.34 	performance of a charter school under Minnesota Statutes,
150.35 	section 124D.10, subdivision 15, and what annual fees a sponsor
150.36 	may charge for that evaluation.

151.1 	Sec. 89. MODEL POLICY.
 151.2 	The commissioner of education, after consulting with
151.3 	representatives of teachers, school administrators, parents,
151.4 	students, student support service providers, law enforcement
151.5 	officials, community service providers, and the juvenile justice
151.6 	and district court systems, must develop and make available upon
151.7 	request to interested school boards a model policy to effect a
151.8 	reward for information about persons committing crimes against
151.9 	students, school employees, school volunteers, school board
151.10 	members, or school property, consistent with section 123B.02,
151.11 	subdivision 22.

151.12 	EFFECTIVE DATE. This section is effective the day
151.13 	following final enactment.

151.14 	Sec. 90. SUPPLEMENTAL AGREEMENTS; ALTERNATIVE TEACHER
151.15 	PAY.
 151.16 	Notwithstanding Minnesota Statutes, section 179A.20, or
151.17 	other law to the contrary, a school board and the exclusive
151.18 	representative of the teachers that enter into a collective
151.19 	bargaining agreement for the period July 1, 2005, to June 30,
151.20 	2007, before the effective date of this act may enter into a
151.21 	supplemental agreement solely for the purpose of complying with
151.22 	the alternative teacher pay provisions under Minnesota Statutes,
151.23 	sections 122A.414 and 122A.415.

151.24 	EFFECTIVE DATE. This section is effective the day
151.25 	following final enactment.

151.26 	Sec. 91. APPROPRIATIONS.
 151.27 		Subdivision 1.Department. The sums indicated in this
151.28 	section are appropriated from the general fund to the Department
151.29 	of Education for the fiscal years designated.
151.30 		Subd. 2.Charter school building lease aid. For building
151.31 	lease aid under Minnesota Statutes, section 124D.11, subdivision
151.32 	4:
151.33 	$25,465,000 .....2006 
151.34 	$30,929,000 .....2007 
151.35 	The 2006 appropriation includes $3,324,000 for 2005 and
151.36 	$22,141,000 for 2006.
152.1 	The 2007 appropriation includes $4,123,000 for 2006 and
152.2 	$26,806,000 for 2007.
152.3 		Subd. 3.Charter school startup aid. For charter school
152.4 	startup cost aid under Minnesota Statutes, section 124D.11:
152.5 	$1,393,000 .....2006 
152.6 	$3,185,000 .....2007 
152.7 	The 2006 appropriation includes $0 for 2005 and $1,393,000
152.8 	for 2006.
152.9 	The 2007 appropriation includes $259,000 for 2006 and
152.10 	$2,926,000 for 2007.
152.11 		Subd. 4.Integration aid. For integration aid under
152.12 	Minnesota Statutes, section 124D.86, subdivision 5:
152.13 	$57,812,000 .....2006 
152.14 	$57,556,000 .....2007 
152.15 	The 2006 appropriation includes $8,545,000 for 2005 and
152.16 	$49,267,000 for 2006.
152.17 	The 2007 appropriation includes $9,174,000 for 2006 and
152.18 	$48,382,000 for 2007.
152.19 		Subd. 5.Magnet school grants. For magnet school and
152.20 	program grants:
152.21 	$  750,000 .....2006 
152.22 	$  750,000 .....2007 
152.23 	These amounts may be used for magnet school programs under
152.24 	Minnesota Statutes, section 124D.88.
152.25 		Subd. 6.Interdistrict desegregation or integration
152.26 	transportation grants. For interdistrict desegregation or
152.27 	integration transportation grants under Minnesota Statutes,
152.28 	section 124D.87:
152.29 	$7,768,000 .....2006 
152.30 	$9,908,000 .....2007 
152.31 		Subd. 7.Success for the future. For American Indian
152.32 	success for the future grants under Minnesota Statutes, section
152.33 	124D.81:
152.34 	$2,137,000 .....2006 
152.35 	$2,137,000 .....2007 
152.36 	The 2006 appropriation includes $335,000 for 2005 and
153.1 	$1,802,000 for 2006.
153.2 	The 2007 appropriation includes $335,000 for 2006 and
153.3 	$1,802,000 for 2007.
153.4 		Subd. 8.American indian scholarships. For American
153.5 	Indian scholarships under Minnesota Statutes, section 124D.84:
153.6 	$1,875,000 .....2006 
153.7 	$1,875,000 .....2007 
153.8 		Subd. 9.American indian teacher preparation grants. For
153.9 	joint grants to assist American Indian people to become teachers
153.10 	under Minnesota Statutes, section 122A.63:
153.11 	$  190,000 .....2006 
153.12 	$  190,000 .....2007 
153.13 		Subd. 10.Tribal contract schools. For tribal contract
153.14 	school aid under Minnesota Statutes, section 124D.83:
153.15 	$2,372,000 .....2006 
153.16 	$2,559,000 .....2007 
153.17 	The 2006 appropriation includes $348,000 for 2005 and
153.18 	$2,024,000 for 2006.
153.19 	The 2007 appropriation includes $376,000 for 2006 and
153.20 	$2,183,000 for 2007.
153.21 		Subd. 11.Early childhood programs at tribal
153.22 	schools. For early childhood family education programs at
153.23 	tribal contract schools under Minnesota Statutes, section
153.24 	124D.83, subdivision 4:
153.25 	$   68,000 .....2006 
153.26 	$   68,000 .....2007 
153.27 		Subd. 12.Statewide testing. For statewide testing
153.28 	support under Minnesota Statutes, section 120B.30:
153.29 	$10,200,000 .....2006 
153.30 	$10,200,000 .....2007 
153.31 	Of this appropriation, $1,200,000 each year is for
153.32 	development of interactive science assessments.
153.33 		Subd. 13.Examination fees; teacher training and support
153.34 	programs. For student examination fees and training and related
153.35 	costs for teachers and other interested educators under
153.36 	Minnesota Statutes, section 120B.13:
154.1 	$2,500,000 .....2006 
154.2 	$2,500,000 .....2007 
154.3 	The advanced placement program shall receive 90 percent of
154.4 	the appropriation each year and the international baccalaureate
154.5 	program shall receive ten percent of the appropriation each
154.6 	year.  The department, in consultation with representatives of
154.7 	the advanced placement and international baccalaureate programs
154.8 	selected by the Advanced Placement Advisory Council and IBMN,
154.9 	respectively, shall determine the amounts of the expenditures
154.10 	each year for examination fees and training and support programs.
154.11 	Any balance in the first year does not cancel but is
154.12 	available in the second year.
154.13 		Subd. 14.First grade preparedness. For first grade
154.14 	preparedness grants under Minnesota Statutes, section 124D.081:
154.15 	$7,250,000 .....2006 
154.16 	$7,250,000 .....2007 
154.17 		Subd. 15.Collaborative urban educator. For the
154.18 	collaborative urban educator program:
154.19 	$  528,000 .....2006 
154.20 	$  528,000 .....2007 
154.21 		Subd. 16.Youth works program. For funding youth works
154.22 	programs under Minnesota Statutes, sections 124D.37 to 124D.45:
154.23 	$  900,000 .....2006 
154.24 	$  900,000 .....2007 
154.25 	A grantee organization may provide health and child care
154.26 	coverage to the dependents of each participant enrolled in a
154.27 	full-time youth works program to the extent such coverage is not
154.28 	otherwise available.
154.29 		Subd. 17.Student organizations. For student
154.30 	organizations:
154.31 	$  625,000 .....2006 
154.32 	$  625,000 .....2007 
154.33 		Subd. 18.Education planning and assessment program. For
154.34 	the Educational Planning and Assessment (EPAS) program under
154.35 	Minnesota Statutes, section 120B.128:
154.36 	$  829,000 .....2006 
155.1 	$  829,000 .....2007 
155.2 	Subd. 19.[COLLEGE LEVEL EXAMINATION PROGRAM (CLEP).] For
155.3 	the College Level Examination program (CLEP) under Minnesota
155.4 	Statutes, section 120B.131:
155.5 	$  825,000 .....2006 
155.6 	$1,650,000 .....2007 
155.7 		Subd. 20.Career and technical education grants. For
155.8 	career and technical education grants:
155.9 	$1,000,000 .....2006 
155.10 	$1,000,000 .....2007 
155.11 	This appropriation is for grants to school districts to
155.12 	establish emerging technology demonstration programs for
155.13 	students in grades 7 through 9.  The commissioner shall
155.14 	prescribe the form and manner of grant applications, and shall
155.15 	make up to 20 grant awards each year of the biennium.  The grant
155.16 	award process must take into consideration regional
155.17 	distribution, district instructional history with emerging
155.18 	technologies, plans to link the program with high school
155.19 	emerging technology programs, ability to provide local matching
155.20 	funds, and plans to serve as a demonstration program.
155.21 	Any balance in the first year does not cancel but is
155.22 	available in the second year.  This is a onetime appropriation.
155.23 		Subd. 21.Minnesota learning resource center. For a
155.24 	grant to A Chance to Grow/New Visions for the Minnesota Learning
155.25 	Resource Center's comprehensive training program for education
155.26 	professionals charged with helping children acquire basic
155.27 	reading and math skills:
155.28 	$125,000 .....2006 
155.29 	$125,000 .....2007 
155.30 	This is a onetime appropriation.
155.31 		Subd. 22.Teacher professional development. For a grant
155.32 	to the Minnesota Humanities Commission to provide content-based
155.33 	professional development for teachers:
155.34 	$500,000 .....2006 
155.35 	$500,000 .....2007 
155.36 	This is a onetime appropriation.
156.1 		Subd. 23.Minnesota historical society. For a grant to
156.2 	the Minnesota Historical Society to provide teacher professional
156.3 	development:
156.4 	$100,000 .....2006 
156.5 	$100,000 .....2007 
156.6 	This is a onetime appropriation.

156.7 	Sec. 92. REPEALER.
 156.8 	(a) Minnesota Statutes 2004, section 124D.095, subdivision
156.9 	9, is repealed.
156.10 	(b) Minnesota Statutes 2004, section 128C.12, subdivision
156.11 	4, is repealed.

156.12 	EFFECTIVE DATE. This section, paragraph (a), is effective
156.13 	for revenue for fiscal year 2006.  This section, paragraph (b),
156.14 	is effective the day following final enactment.

156.15 	ARTICLE 3
156.16 	SPECIAL PROGRAMS

156.17 	Section 1. Minnesota Statutes 2004, section 124D.11,
156.18 	subdivision 5, is amended to read:
156.19 		Subd. 5.Special education aid. (a) Except as provided
156.20 	in subdivision 2, special education aid must be paid to a
156.21 	charter school according to section 125A.76, as though it were a
156.22 	school district.
156.23 	(b) For fiscal year 2006,the charter school may charge
156.24 	tuition to the district of residence as follows:
156.25 	(1) if the charter school does not receive general
156.26 	education revenue on behalf of the student according to
156.27 	subdivision 1, tuition shall be charged as provided in section
156.28 	125A.11; or 
156.29 	(2) if the charter school receives general education
156.30 	revenue on behalf of the student according to subdivision 1,
156.31 	tuition shall be charged as provided in section 127A.47,
156.32 	subdivision 7, paragraph (d).
156.33 	(c) For fiscal year 2007 and later, the special education
156.34 	aid paid to the charter school shall be adjusted as follows:
156.35 	(1) if the charter school does not receive general
156.36 	education revenue on behalf of the student according to
157.1 	subdivision 1, the aid shall be adjusted as provided in section
157.2 	125A.11; or 
157.3 	(2) if the charter school receives general education
157.4 	revenue on behalf of the student according to subdivision 1, the
157.5 	aid shall be adjusted as provided in section 127A.47,
157.6 	subdivision 7, paragraph (d).

157.7 	Sec. 2. Minnesota Statutes 2004, section 125A.091,
157.8 	subdivision 5, is amended to read:
157.9 		Subd. 5.Initial action; parent consent.  (a) The
157.10 	district must not proceed with the initial evaluation of a
157.11 	child, the initial placement of a child in a special education
157.12 	program, or the initial provision of special education services
157.13 	for a child without the prior written consent of the child's
157.14 	parent.  A district may not override the written refusal of a
157.15 	parent to consent to an initial evaluation or reevaluation. If
157.16 	a parent refuses to consent to the initial evaluation of a
157.17 	child, a school district may apply to the child in any
157.18 	subsequent disciplinary action those provisions of the Pupil
157.19 	Fair Dismissal Act under sections 121A.40 to 121A.56 applicable
157.20 	to students without disabilities.  A parent's refusal to consent
157.21 	to an initial evaluation or reevaluation under this paragraph is
157.22 	not a ground for disciplinary action under sections 121A.40 to
157.23 	121A.56.
157.24 	(b) A parent, after consulting with health care, education,
157.25 	or other professional providers, may agree or disagree to
157.26 	provide the parent's child with sympathomimetic medications 
157.27 	psychotropic drugs unless section 144.344 applies.
157.28 	"Psychotropic drug" means a substance used in the diagnosis,
157.29 	treatment or prevention of a disease or as a component of a
157.30 	medication, and intended to have an altering effect on
157.31 	perception, emotion, or behavior.  School officials must not use
157.32 	the refusal of a parent or guardian to consent to the
157.33 	administration of a psychotropic drug to their student or to
157.34 	consent to a psychiatric evaluation, screening or examination of
157.35 	the student as a ground, by itself, to prohibit the student from
157.36 	attending class or participating in a school-related activity,
158.1 	or as a basis of a charge of child abuse, child neglect, or
158.2 	medical or educational neglect.
158.3 	
EFFECTIVE DATE. This section is effective for the
158.4 	2005-2006 school year and later.

158.5 	Sec. 3. Minnesota Statutes 2004, section 125A.11,
158.6 	subdivision 1, is amended to read:
158.7 		Subdivision 1.Nonresident tuition rate; other costs.
 158.8 	(a) For fiscal year 2006,when a school district provides
158.9 	instruction and services outside the district of residence,
158.10 	board and lodging, and any tuition to be paid, shall be paid by
158.11 	the district of residence.  The tuition rate to be charged for
158.12 	any child with a disability, excluding a pupil for whom tuition
158.13 	is calculated according to section 127A.47, subdivision 7,
158.14 	paragraph (d),must be the sum of (1) the actual cost of
158.15 	providing special instruction and services to the child
158.16 	including a proportionate amount for capital outlay and debt
158.17 	service but not including any amount for special transportation
158.18 	and unreimbursed building lease and debt service costs for
158.19 	facilities used primarily for special education, plus (2) the
158.20 	amount of general education revenue and referendum aid
158.21 	attributable to the pupil, minus (3) the amount of special
158.22 	education aid for children with a disability received on behalf
158.23 	of that child, minus (4) if the pupil receives special
158.24 	instruction and services outside the regular classroom for more
158.25 	than 60 percent of the school day, the amount of general
158.26 	education revenue and referendum aid, excluding portions
158.27 	attributable to district and school administration, district
158.28 	support services, operations and maintenance, capital
158.29 	expenditures, and pupil transportation, attributable to that
158.30 	pupil for the portion of time the pupil receives instruction in
158.31 	the regular classroom.  If the boards involved do not agree upon
158.32 	the tuition rate, either board may apply to the commissioner to
158.33 	fix the rate. Notwithstanding chapter 14,the commissioner must
158.34 	then set a date for a hearing or request a written statement
158.35 	from each board, giving each board at least ten days' notice,
158.36 	and after the hearing or review of the written statements the
159.1 	commissioner must make an order fixing the tuition rate, which
159.2 	is binding on both school districts. General education revenue
159.3 	and referendum aid attributable to a pupil must be calculated
159.4 	using the resident district's average general education and
159.5 	referendum revenue per adjusted pupil unit.
159.6 	(b) For fiscal year 2007 and later, when a school district
159.7 	provides special instruction and services for a pupil with a
159.8 	disability as defined in section 125A.02 outside the district of
159.9 	residence, excluding a pupil for whom an adjustment to special
159.10 	education aid is calculated according to section 127A.47,
159.11 	subdivision 7, paragraph (e), special education aid paid to the
159.12 	resident district must be reduced by an amount equal to (1) the
159.13 	actual cost of providing special instruction and services to the
159.14 	pupil, including a proportionate amount for special
159.15 	transportation and unreimbursed building lease and debt service
159.16 	costs for facilities used primarily for special education, plus
159.17 	(2) the amount of general education revenue and referendum aid
159.18 	attributable to that pupil, minus (3) the amount of special
159.19 	education aid for children with a disability received on behalf
159.20 	of that child, minus (4) if the pupil receives special
159.21 	instruction and services outside the regular classroom for more
159.22 	than 60 percent of the school day, the amount of general
159.23 	education revenue and referendum aid, excluding portions
159.24 	attributable to district and school administration, district
159.25 	support services, operations and maintenance, capital
159.26 	expenditures, and pupil transportation, attributable to that
159.27 	pupil for the portion of time the pupil receives instruction in
159.28 	the regular classroom.  General education revenue and referendum
159.29 	aid attributable to a pupil must be calculated using the
159.30 	resident district's average general education revenue and
159.31 	referendum aid per adjusted pupil unit.  Special education aid
159.32 	paid to the district or cooperative providing special
159.33 	instruction and services for the pupil must be increased by the
159.34 	amount of the reduction in the aid paid to the resident
159.35 	district.  Amounts paid to cooperatives under this subdivision
159.36 	and section 127A.47, subdivision 7, shall be recognized and
160.1 	reported as revenues and expenditures on the resident school
160.2 	district's books of account under sections 123B.75 and 123B.76.
160.3 	If the resident district's special education aid is insufficient
160.4 	to make the full adjustment, the remaining adjustment shall be
160.5 	made to other state aid due to the district.
160.6 	(c) Notwithstanding paragraphs (a) and (b) and section
160.7 	127A.47, subdivision 7, paragraphs (d) and (e), a charter school
160.8 	where more than 30 percent of enrolled students receive special
160.9 	education and related services, an intermediate district, or a
160.10 	special education cooperative may apply to the commissioner for
160.11 	authority to charge the resident district an additional amount
160.12 	to recover any remaining unreimbursed costs of serving pupils
160.13 	with a disability.  The application must include a description
160.14 	of the costs and the calculations used to determine the
160.15 	unreimbursed portion to be charged to the resident district.
160.16 	Amounts approved by the commissioner under this paragraph must
160.17 	be included in the tuition billings or aid adjustments under
160.18 	paragraph (a) or (b), or section 127A.47, subdivision 7,
160.19 	paragraph (d) or (e), as applicable.

160.20 	Sec. 4. Minnesota Statutes 2004, section 125A.24, is
160.21 	amended to read:
160.22 	125A.24 PARENT ADVISORY COUNCILS.
160.23 	In order to increase the involvement of parents of children
160.24 	with disabilities in district policy making and decision making,
160.25 	school districts must have a special education advisory council
160.26 	that is incorporated into the district's special education
160.27 	system plan.
160.28 	(1) This advisory council may be established either for
160.29 	individual districts or in cooperation with other districts who
160.30 	are members of the same special education cooperative.
160.31 	(2) A district may set up this council as a subgroup of an
160.32 	existing board, council, or committee.
160.33 	(3) At least half of the designated council members must be
160.34 	parents of students with a disability. The council must include
160.35 	at least one member who is a parent of a nonpublic school
160.36 	student with a disability if a nonpublic school is located in
161.1 	the district.  Each local council must meet no less than once
161.2 	each year.The number of members, frequency of meetings, and
161.3 	operational procedures are to be locally determined.

161.4 	Sec. 5. Minnesota Statutes 2004, section 125A.28, is
161.5 	amended to read:
161.6 	125A.28 STATE INTERAGENCY COORDINATING COUNCIL.
161.7 	An Interagency Coordinating Council of at least 17, but not
161.8 	more than 25 members is established, in compliance with Public
161.9 	Law 102-119, section 682.  The members must be appointed by the
161.10 	governor.  Council members must elect the council chair.  The
161.11 	representative of the commissioner may not serve as the chair.
161.12 	The council must be composed of at least five parents, including
161.13 	persons of color, of children with disabilities under age 12,
161.14 	including at least three parents of a child with a disability
161.15 	under age seven, five representatives of public or private
161.16 	providers of services for children with disabilities under age
161.17 	five, including a special education director, county social
161.18 	service director, local Head Start director, and a community
161.19 	health services or public health nursing administrator, one
161.20 	member of the senate, one member of the house of
161.21 	representatives, one representative of teacher preparation
161.22 	programs in early childhood-special education or other
161.23 	preparation programs in early childhood intervention, at least
161.24 	one representative of advocacy organizations for children with
161.25 	disabilities under age five, one physician who cares for young
161.26 	children with special health care needs, one representative each
161.27 	from the commissioners of commerce, education, health, human
161.28 	services, a representative from the state agency responsible for
161.29 	child care, and a representative from Indian health services or
161.30 	a tribal council.  Section 15.059, subdivisions 2 to 5, apply to
161.31 	the council.  The council must meet at least quarterly.
161.32 	The council must address methods of implementing the state
161.33 	policy of developing and implementing comprehensive,
161.34 	coordinated, multidisciplinary interagency programs of early
161.35 	intervention services for children with disabilities and their
161.36 	families.
162.1 	The duties of the council include recommending policies to
162.2 	ensure a comprehensive and coordinated system of all state and
162.3 	local agency services for children under age five with
162.4 	disabilities and their families.  The policies must address how
162.5 	to incorporate each agency's services into a unified state and
162.6 	local system of multidisciplinary assessment practices,
162.7 	individual intervention plans, comprehensive systems to find
162.8 	children in need of services, methods to improve public
162.9 	awareness, and assistance in determining the role of interagency
162.10 	early intervention committees.
162.11 	By September 1 On the date that Minnesota Part C Annual
162.12 	Performance Report is submitted to the federal Office of Special
162.13 	Education, the council must recommend to the governor and the
162.14 	commissioners of education, health, human services, commerce,
162.15 	and employment and economic development policies for a
162.16 	comprehensive and coordinated system.
162.17 	Notwithstanding any other law to the contrary, the State
162.18 	Interagency Coordinating Council expires on June 30, 2005 2009.

162.19 	Sec. 6. Minnesota Statutes 2004, section 125A.76,
162.20 	subdivision 1, is amended to read:
162.21 		Subdivision 1.Definitions.  For the purposes of this
162.22 	section, the definitions in this subdivision apply.
162.23 	(a) "Base year" for fiscal year 1998 and later fiscal years
162.24 	means the second fiscal year preceding the fiscal year for which
162.25 	aid will be paid.
162.26 	(b) "Basic revenue" has the meaning given it in section
162.27 	126C.10, subdivision 2.  For the purposes of computing basic
162.28 	revenue pursuant to this section, each child with a disability
162.29 	shall be counted as prescribed in section 126C.05, subdivision 1.
162.30 	(c) "Essential personnel" means teachers, cultural
162.31 	liaisons, related services, and support services staff providing
162.32 	direct services to students.  Essential personnel may also
162.33 	include special education paraprofessionals or clericals
162.34 	providing support to teachers and students by preparing
162.35 	paperwork and making arrangements related to special education
162.36 	compliance requirements, including parent meetings and
163.1 	individual education plans.
163.2 	(d) "Average daily membership" has the meaning given it in
163.3 	section 126C.05.
163.4 	(e) "Program growth factor" means 1.046 1.04 for fiscal
163.5 	year 2003 years 2007 and 2008, and 1.0 for fiscal year 2004 2009 
163.6 	and later.

163.7 	Sec. 7. Minnesota Statutes 2004, section 125A.76,
163.8 	subdivision 4, is amended to read:
163.9 		Subd. 4.State total special education aid. The state
163.10 	total special education aid for fiscal year 2004 equals
163.11 	$530,642,000.The state total special education aid for fiscal
163.12 	year 2005 equals $529,164,000.  The state total special
163.13 	education aid for later fiscal years equals:
163.14 	(1) the state total special education aid for the preceding
163.15 	fiscal year; times
163.16 	(2) the program growth factor; times 
163.17 	(3) the ratio of the state total average daily membership
163.18 	for the current fiscal year to the state total average daily
163.19 	membership for the preceding fiscal year.

163.20 	Sec. 8. Minnesota Statutes 2004, section 125A.76, is
163.21 	amended by adding a subdivision to read:
163.22 		Subd. 5a.Special education levy revenue. (a) For fiscal
163.23 	year 2007, the state total special education revenue equals the
163.24 	state total special education aid times the program growth
163.25 	factor.  For fiscal year 2008 and later, the state total special
163.26 	education revenue equals:
163.27 	(1) the state total special education revenue for the
163.28 	preceding fiscal year, times 
163.29 	(2) the program growth factor, times 
163.30 	(3) the ratio of the state total average daily membership
163.31 	for the current fiscal year to the state total average daily
163.32 	membership for the preceding fiscal year.
163.33 	(b) For fiscal year 2007 and later, the state total special
163.34 	education levy revenue equals the difference between the state
163.35 	total special education revenue and the state total special
163.36 	education aid.
164.1 	(c) For fiscal year 2007 and later, the special education
164.2 	levy revenue for a school district, charter school, or state
164.3 	academy equals the product of the state total special education
164.4 	levy revenue times the ratio of the school district, charter
164.5 	school, or state academy's special education aid to the state
164.6 	total special education aid.

164.7 	Sec. 9. Minnesota Statutes 2004, section 125A.76, is
164.8 	amended by adding a subdivision to read:
164.9 		Subd. 5b.Special education levy. To obtain special
164.10 	education levy revenue for fiscal year 2007 and later, a
164.11 	district may levy an amount not more than the product of its
164.12 	special education levy revenue for the fiscal year times the
164.13 	lesser of one or the ratio of its adjusted net tax capacity per
164.14 	adjusted pupil unit to $5,913.

164.15 	Sec. 10. Minnesota Statutes 2004, section 125A.76, is
164.16 	amended by adding a subdivision to read:
164.17 		Subd. 5c.Special education levy equalization aid. (a)
164.18 	For fiscal year 2007 and later, a school district's special
164.19 	education levy equalization aid equals its special education
164.20 	levy equalization revenue minus its special education levy times
164.21 	the ratio of the actual amount levied to the permitted levy.
164.22 	(b) The special education levy equalization aid for a
164.23 	charter school or a state academy equals the charter school or
164.24 	state academy's special education levy revenue.

164.25 	Sec. 11. Minnesota Statutes 2004, section 125A.79,
164.26 	subdivision 1, is amended to read:
164.27 		Subdivision 1.Definitions.  For the purposes of this
164.28 	section, the definitions in this subdivision apply.
164.29 	(a) "Unreimbursed special education cost" means the sum of
164.30 	the following:
164.31 	(1) expenditures for teachers' salaries, contracted
164.32 	services, supplies, equipment, and transportation services
164.33 	eligible for revenue under section 125A.76; plus
164.34 	(2) expenditures for tuition bills received under sections
164.35 	125A.03 to 125A.24 and 125A.65 for services eligible for revenue
164.36 	under section 125A.76, subdivision 2; minus
165.1 	(3) revenue for teachers' salaries, contracted services,
165.2 	supplies, and equipment under section 125A.76; minus
165.3 	(4) tuition receipts under sections 125A.03 to 125A.24 and
165.4 	125A.65 for services eligible for revenue under section 125A.76,
165.5 	subdivision 2.
165.6 	(b) "General revenue" means for fiscal year 1996, the sum
165.7 	of the general education revenue according to section 126C.10,
165.8 	subdivision 1, as adjusted according to section 127A.47,
165.9 	subdivision 7, plus the total referendum revenue according to
165.10 	section 126C.17, subdivision 4.  For fiscal years 1997 and
165.11 	later,"General revenue" means the sum of the general education
165.12 	revenue according to section 126C.10, subdivision 1, as adjusted
165.13 	according to section 127A.47, subdivisions 7 and 8, plus the
165.14 	total referendum revenue minus transportation sparsity revenue
165.15 	minus total operating capital revenue.
165.16 	(c) "Average daily membership" has the meaning given it in
165.17 	section 126C.05.
165.18 	(d) "Program growth factor" means 1.02 for fiscal year
165.19 	2003, and 1.0 for fiscal year 2004 and later.

165.20 	Sec. 12. Minnesota Statutes 2004, section 125A.79,
165.21 	subdivision 5, is amended to read:
165.22 		Subd. 5.Initial excess cost aid; fiscal years 2004 and
165.23 	2005.  For fiscal years 2002 2004 and later 2005, a district's
165.24 	initial excess cost aid equals the greatest of:
165.25 	(1) 75 percent of the difference between (i) the district's
165.26 	unreimbursed special education cost and (ii) 4.36 percent of the
165.27 	district's general revenue;
165.28 	(2) 70 percent of the difference between (i) the increase
165.29 	in the district's unreimbursed special education cost between
165.30 	the base year as defined in section 125A.76, subdivision 1, and
165.31 	the current year and (ii) 1.6 percent of the district's general
165.32 	revenue; or
165.33 	(3) zero.

165.34 	Sec. 13. Minnesota Statutes 2004, section 125A.79, is
165.35 	amended by adding a subdivision to read:
165.36 		Subd. 5a.Initial excess cost aid. For fiscal years 2006
166.1 	and later, a district's initial excess cost aid equals the
166.2 	greater of:
166.3 	(1) 75 percent of the difference between (i) the district's
166.4 	unreimbursed special education cost for the previous fiscal
166.5 	year, and (ii) 4.36 percent of the district's general revenue
166.6 	for the previous fiscal year; or 
166.7 	(2) zero.

166.8 	Sec. 14. Minnesota Statutes 2004, section 125A.79, is
166.9 	amended by adding a subdivision to read:
166.10 		Subd. 5b.Supplemental excess cost aid. (a) For fiscal
166.11 	years 2006 and later, a district's supplemental excess cost aid
166.12 	equals the greater of:
166.13 	(1) 75 percent of the difference between (i) the increase
166.14 	in the district's unreimbursed special education excess cost
166.15 	between the previous fiscal year and the current fiscal year,
166.16 	and (ii) $80 times the district's adjusted marginal cost pupil
166.17 	units for the current fiscal year; or 
166.18 	(2) zero.
166.19 	(b) The state total supplemental excess cost aid for any
166.20 	fiscal year must not exceed $2,000,000.  If the state total
166.21 	supplemental excess cost aid according to paragraph (a) exceeds
166.22 	$2,000,000, the supplemental excess cost aid for each district
166.23 	shall be reduced proportionately so that the state total equals
166.24 	$2,000,000.

166.25 	Sec. 15. Minnesota Statutes 2004, section 125A.79,
166.26 	subdivision 6, is amended to read:
166.27 		Subd. 6.State total special education excess cost aid.
 166.28 	The state total special education excess cost aid for fiscal
166.29 	year 2004 equals $92,067,000.The state total special education
166.30 	excess cost aid for fiscal year 2005 equals $91,811,000. The
166.31 	state total special education excess cost aid for fiscal year
166.32 	2006 equals $102,746,000.The state total special education
166.33 	excess cost aid for fiscal year 2006 2007 and later fiscal years
166.34 	equals:
166.35 	(1) the state total special education excess cost aid for
166.36 	the preceding fiscal year; times
167.1 	(2) the program growth factor; times
167.2 	(3) the ratio of the state total average daily membership
167.3 	for the current fiscal year to the state total average daily
167.4 	membership for the preceding fiscal year.

167.5 	Sec. 16. Minnesota Statutes 2004, section 125A.79,
167.6 	subdivision 7, is amended to read:
167.7 		Subd. 7.District special education excess cost aid. (a) 
167.8 	A district's special education excess cost aid for fiscal year
167.9 	2002 and later years 2004 and 2005 equals the state total
167.10 	special education excess cost aid times the ratio of the
167.11 	district's initial excess cost aid to the state total initial
167.12 	excess cost aid.
167.13 	(b) A district's special education excess cost aid for
167.14 	fiscal year 2006 and later equals the sum of:
167.15 	(1) the product of the difference between the state total
167.16 	special education excess cost aid and the state total
167.17 	supplemental excess cost aid times the ratio of the district's
167.18 	initial excess cost aid to the state total initial excess cost
167.19 	aid; and 
167.20 	(2) the district's supplemental excess cost aid according
167.21 	to subdivision 5b.

167.22 	Sec. 17. Minnesota Statutes 2004, section 127A.45,
167.23 	subdivision 13, is amended to read:
167.24 		Subd. 13.Aid payment percentage.  Except as provided in
167.25 	subdivisions 11, 12, 12a, and 14, each fiscal year, all
167.26 	education aids and credits in this chapter and chapters 120A,
167.27 	120B, 121A, 122A, 123A, 123B, 124D, 125A, 125B, 126C, 134, and
167.28 	section 273.1392, shall be paid at 80 percent the current year
167.29 	aid payment percentage of the estimated entitlement during the
167.30 	fiscal year of the entitlement.  For the purposes of this
167.31 	subdivision, a district's estimated entitlement for special
167.32 	education excess cost aid under section 125A.79for fiscal year
167.33 	2005 equals 70 percent of the district's entitlement for the
167.34 	second prior fiscal year. For the purposes of this subdivision,
167.35 	a district's estimated entitlement for special education excess
167.36 	cost aid under section 125A.79 for fiscal year 2006 and later
168.1 	equals 75.5 percent of the district's entitlement for the
168.2 	current fiscal year.The final adjustment payment, according to
168.3 	subdivision 9, must be the amount of the actual entitlement,
168.4 	after adjustment for actual data, minus the payments made during
168.5 	the fiscal year of the entitlement.
168.6 	
EFFECTIVE DATE. This section is effective the day
168.7 	following final enactment and applies to aid payments for fiscal
168.8 	year 2005 and later.

168.9 	Sec. 18. Minnesota Statutes 2004, section 127A.47,
168.10 	subdivision 7, is amended to read:
168.11 		Subd. 7.Alternative attendance programs.  The general
168.12 	education aid and special education aid for districts must be
168.13 	adjusted for each pupil attending a nonresident district under
168.14 	sections 123A.05 to 123A.08, 124D.03, 124D.06, 124D.08, and
168.15 	124D.68.  The adjustments must be made according to this
168.16 	subdivision.
168.17 	(a) General education aid paid to a resident district must
168.18 	be reduced by an amount equal to the referendum equalization aid
168.19 	attributable to the pupil in the resident district.
168.20 	(b) General education aid paid to a district serving a
168.21 	pupil in programs listed in this subdivision must be increased
168.22 	by an amount equal to the referendum equalization aid
168.23 	attributable to the pupil in the nonresident district.
168.24 	(c) If the amount of the reduction to be made from the
168.25 	general education aid of the resident district is greater than
168.26 	the amount of general education aid otherwise due the district,
168.27 	the excess reduction must be made from other state aids due the
168.28 	district.
168.29 	(d) For fiscal year 2006,the district of residence must
168.30 	pay tuition to a district or an area learning center, operated
168.31 	according to paragraph (e) (f), providing special instruction
168.32 	and services to a pupil with a disability, as defined in section
168.33 	125A.02, or a pupil, as defined in section 125A.51, who is
168.34 	enrolled in a program listed in this subdivision.  The tuition
168.35 	must be equal to (1) the actual cost of providing special
168.36 	instruction and services to the pupil, including a proportionate
169.1 	amount for debt service and for capital expenditure facilities
169.2 	and equipment, and debt service but not including any amount for 
169.3 	special transportation and unreimbursed building lease and debt
169.4 	service costs for facilities used primarily for special
169.5 	education, minus (2) if the pupil receives special instruction
169.6 	and services outside the regular classroom for more than 60
169.7 	percent of the school day,the amount of general education
169.8 	revenue and referendum aid attributable to that pupil for the
169.9 	portion of time the pupil receives special instruction and
169.10 	services outside of the regular classroom, excluding portions
169.11 	attributable to district and school administration, district
169.12 	support services, operations and maintenance, capital
169.13 	expenditures, and pupil transportation, minus (3) special
169.14 	education aid but not including any amount for transportation,
169.15 	attributable to that pupil, that is received by the district
169.16 	providing special instruction and services. For purposes of
169.17 	this paragraph, general education revenue and referendum aid
169.18 	attributable to a pupil must be calculated using the serving
169.19 	district's average general education revenue and referendum aid
169.20 	per adjusted pupil unit.
169.21 	(e) For fiscal year 2007 and later, special education aid
169.22 	paid to a resident district must be reduced by an amount equal
169.23 	to (1) the actual cost of providing special instruction and
169.24 	services, including special transportation and unreimbursed
169.25 	building lease and debt service costs for facilities used
169.26 	primarily for special education, for a pupil with a disability,
169.27 	as defined in section 125A.02, or a pupil, as defined in section
169.28 	125A.51, who is enrolled in a program listed in this
169.29 	subdivision, minus (2) if the pupil receives special instruction
169.30 	and services outside the regular classroom for more than 60
169.31 	percent of the school day, the amount of general education
169.32 	revenue and referendum aid attributable to that pupil for the
169.33 	portion of time the pupil receives special instruction and
169.34 	services outside of the regular classroom, excluding portions
169.35 	attributable to district and school administration, district
169.36 	support services, operations and maintenance, capital
170.1 	expenditures, and pupil transportation, minus (3) special
170.2 	education aid attributable to that pupil, that is received by
170.3 	the district providing special instruction and services.  For
170.4 	purposes of this paragraph, general education revenue and
170.5 	referendum aid attributable to a pupil must be calculated using
170.6 	the serving district's average general education revenue and
170.7 	referendum aid per adjusted pupil unit.  Special education aid
170.8 	paid to the district or cooperative providing special
170.9 	instruction and services for the pupil must be increased by the
170.10 	amount of the reduction in the aid paid to the resident
170.11 	district.  If the resident district's special education aid is
170.12 	insufficient to make the full adjustment, the remaining
170.13 	adjustment shall be made to other state aids due to the district.
170.14 	(f) An area learning center operated by a service
170.15 	cooperative, intermediate district, education district, or a
170.16 	joint powers cooperative may elect through the action of the
170.17 	constituent boards to charge the resident district tuition for
170.18 	pupils rather than to have the general education revenue paid to
170.19 	a fiscal agent school district.  Except as provided in paragraph
170.20 	(d) or (e), the district of residence must pay tuition equal to
170.21 	at least 90 percent of the district average general education
170.22 	revenue per pupil unit minus an amount equal to the product of
170.23 	the formula allowance according to section 126C.10, subdivision
170.24 	2, times .0485, calculated without basic skills revenue and
170.25 	transportation sparsity revenue, times the number of pupil units
170.26 	for pupils attending the area learning center, plus the amount
170.27 	of compensatory revenue generated by pupils attending the area
170.28 	learning center.

170.29 	Sec. 19. Minnesota Statutes 2004, section 134.31, is
170.30 	amended by adding a subdivision to read:
170.31 		Subd. 5a.Advisory committee. The commissioner shall
170.32 	appoint an advisory committee of five members to advise the
170.33 	staff of the Minnesota Library for the Blind and Physically
170.34 	Handicapped on long-range plans and library services.  Members
170.35 	shall be people who use the library.  Section 15.059 governs
170.36 	this committee except that the committee shall not expire.

171.1 	Sec. 20. Laws 2003, First Special Session chapter 9,
171.2 	article 3, section 20, subdivision 6, as amended by Laws 2004,
171.3 	chapter 272, article 1, section 16, is amended to read:
171.4 		Subd. 6.Special education; excess costs. For excess
171.5 	cost aid under Minnesota Statutes, section 125A.79, subdivision
171.6 	7:
171.7 	$92,605,000     .....     2004
171.8 	$92,799,000 $95,572,000.....     2005
171.9 	The 2004 appropriation includes $41,754,000 for 2003 and
171.10 	$50,851,000 for 2004.
171.11 	The 2005 appropriation includes $41,216,000 for 2004 and
171.12 	$51,583,000 $54,356,000 for 2005.
171.13 	Of the state total excess cost aid for fiscal year 2005,
171.14 	$150,000 shall be paid to Independent School District No. 2580,
171.15 	East Central, for unfunded special education costs that would
171.16 	otherwise be cross-subsidized with general education aid.  For
171.17 	purposes of Minnesota Statutes, section 125A.79, subdivision 7,
171.18 	the state total excess cost aid used in calculating district
171.19 	special education excess cost aid must be reduced by the amount
171.20 	paid to Independent School District No. 2580, East Central.
171.21 	
EFFECTIVE DATE. This section is effective the day
171.22 	following final enactment.

171.23 	Sec. 21. TASK FORCE ON DELIVERY OF SPECIAL EDUCATION TO
171.24 	NONPUBLIC SCHOOL STUDENTS BY PUBLIC SCHOOL DISTRICTS.
 171.25 		Subdivision 1.Purpose; establishment. A task force on
171.26 	the delivery of special education services to nonpublic school
171.27 	students by public school districts shall be established to
171.28 	compare and evaluate how the individual needs of each child are
171.29 	being met, if services are provided in the least restrictive
171.30 	environment, and whether best practices and program efficiencies
171.31 	are being used in the specific areas of transportation, location
171.32 	of services, and shared time aid.
171.33 		Subd. 2.Members. The governor shall appoint the members
171.34 	of the task force from each of the following:
171.35 	(1) two members from the Department of Education, one
171.36 	representing special education programs and policy and one
172.1 	representing district finances;
172.2 	(2) two special education teachers with one member from a
172.3 	public school and one member from a nonpublic school;
172.4 	(3) two special education administrators with one member
172.5 	from a public school and one member from a nonpublic school;
172.6 	(4) two members with one from each of two special education
172.7 	advocacy organizations;
172.8 	(5) two parents of children receiving special education
172.9 	services with one member from a public school and one member
172.10 	from a nonpublic school;
172.11 	(6) two elementary school principals with one member from a
172.12 	public school and one member from a nonpublic school;
172.13 	(7) two superintendents with one member from a public
172.14 	school district and one member from a nonpublic school district;
172.15 	(8) two school business officials with one from a public
172.16 	school and one from a nonpublic school; and 
172.17 	(9) two school board officials with one from a public
172.18 	school and one from a nonpublic school.
172.19 	The task force may select additional members to work on the
172.20 	task force.  The commissioner of education shall provide
172.21 	necessary materials and assistance.
172.22 		Subd. 3.Report. The task force shall submit a report by
172.23 	January 15, 2006, to the house of representatives and senate
172.24 	committees having jurisdiction over education on the delivery of
172.25 	special education services to nonpublic school students by
172.26 	public school districts, to compare and evaluate how the
172.27 	individual needs of each child are being met in the least
172.28 	restrictive environment, and whether best practices and program
172.29 	efficiencies are being used.
172.30 		Subd. 4.Expiration. This section expires January 31,
172.31 	2006.
172.32 	
EFFECTIVE DATE. This section is effective the day
172.33 	following final enactment.

172.34 	Sec. 22. APPROPRIATIONS.
 172.35 		Subdivision 1.Department of education. The sums
172.36 	indicated in this section are appropriated from the general fund
173.1 	to the Department of Education for the fiscal years designated.
173.2 		Subd. 2.Special education; regular. For special
173.3 	education aid under Minnesota Statutes, section 125A.75:
173.4 	$528,846,000 .....2006 
173.5 	$527,446,000 .....2007 
173.6 	The 2006 appropriation includes $83,078,000 for 2005 and
173.7 	$445,768,000 for 2006.
173.8 	The 2007 appropriation includes $83,019,000 for 2006 and
173.9 	$444,427,000 for 2007.
173.10 		Subd. 3.Special education; regular equalization
173.11 	aid. For special education regular equalization aid:
173.12 	$2,176,000 .....2007 
173.13 	The 2007 appropriation includes $0 for 2006 and $2,176,000
173.14 	for 2007.
173.15 		Subd. 4.Aid for children with disabilities. For aid
173.16 	under Minnesota Statutes, section 125A.75, subdivision 3, for
173.17 	children with disabilities placed in residential facilities
173.18 	within the district boundaries for whom no district of residence
173.19 	can be determined:
173.20 	$2,212,000 .....2006 
173.21 	$2,615,000 .....2007 
173.22 	If the appropriation for either year is insufficient, the
173.23 	appropriation for the other year is available.
173.24 		Subd. 5.Travel for home-based services. For aid for
173.25 	teacher travel for home-based services under Minnesota Statutes,
173.26 	section 125A.75, subdivision 1:
173.27 	$  187,000 .....2006 
173.28 	$  195,000 .....2007 
173.29 	The 2006 appropriation includes $28,000 for 2005 and
173.30 	$159,000 for 2006.
173.31 	The 2007 appropriation includes $29,000 for 2006 and
173.32 	$166,000 for 2007.
173.33 		Subd. 6.Special education; excess costs. For excess
173.34 	cost aid under Minnesota Statutes, section 125A.79, subdivision
173.35 	7:
173.36 	$102,782,000 .....2006 
174.1 	$102,483,000 .....2007 
174.2 	The 2006 appropriation includes $37,455,000 for 2005 and
174.3 	$65,327,000 for 2006.
174.4 	The 2007 appropriation includes $37,339,000 for 2006 and
174.5 	$65,144,000 for 2007.
174.6 		Subd. 7.Litigation costs for special education. For
174.7 	paying the costs a district incurs under Minnesota Statutes,
174.8 	section 125A.75, subdivision 8:
174.9 	$   17,000 .....2006 
174.10 	$   17,000 .....2007 
174.11 		Subd. 8.Transition for disabled students. For aid for
174.12 	transition programs for children with disabilities under
174.13 	Minnesota Statutes, section 124D.454:
174.14 	$8,788,000 .....2006 
174.15 	$8,765,000 .....2007 
174.16 	The 2006 appropriation includes $1,380,000 for 2005 and
174.17 	$7,408,000 for 2006.
174.18 	The 2007 appropriation includes $1,379,000 for 2006 and
174.19 	$7,386,000 for 2007.
174.20 		Subd. 9.Court-placed special education revenue. For
174.21 	reimbursing serving school districts for unreimbursed eligible
174.22 	expenditures attributable to children placed in the serving
174.23 	school district by court action under Minnesota Statutes,
174.24 	section 125A.79, subdivision 4:
174.25 	$   65,000 .....2006 
174.26 	$   70,000 .....2007 
174.27 		Subd. 10.Out-of-state tuition special education. For
174.28 	special education out-of-state tuition according to Minnesota
174.29 	Statutes, section 125A.79, subdivision 8:
174.30 	$  250,000 .....2006 
174.31 	$  250,000 .....2007 

174.32 	ARTICLE 4
174.33 	FACILITIES AND TECHNOLOGY

174.34 	Section 1. Minnesota Statutes 2004, section 123B.53,
174.35 	subdivision 1, is amended to read:
174.36 		Subdivision 1.Definitions.  (a) For purposes of this
175.1 	section, the eligible debt service revenue of a district is
175.2 	defined as follows:
175.3 	(1) the amount needed to produce between five and six
175.4 	percent in excess of the amount needed to meet when due the
175.5 	principal and interest payments on the obligations of the
175.6 	district for eligible projects according to subdivision 2,
175.7 	including the amounts necessary for repayment of energy loans
175.8 	according to section 216C.37 or sections 298.292 to 298.298,
175.9 	debt service loans and capital loans, lease purchase payments
175.10 	under section 126C.40, subdivision 2, alternative facilities
175.11 	levies under section 123B.59, subdivision 5, minus
175.12 	(2) the amount of debt service excess levy reduction for
175.13 	that school year calculated according to the procedure
175.14 	established by the commissioner.
175.15 	(b) The obligations in this paragraph are excluded from
175.16 	eligible debt service revenue:
175.17 	(1) obligations under section 123B.61;
175.18 	(2) the part of debt service principal and interest paid
175.19 	from the taconite environmental protection fund or northeast
175.20 	Minnesota economic protection trust;
175.21 	(3) obligations issued under Laws 1991, chapter 265,
175.22 	article 5, section 18, as amended by Laws 1992, chapter 499,
175.23 	article 5, section 24; and
175.24 	(4) obligations under section 123B.62.
175.25 	(c) For purposes of this section, if a preexisting school
175.26 	district reorganized under sections 123A.35 to 123A.43, 123A.46,
175.27 	and 123A.48 is solely responsible for retirement of the
175.28 	preexisting district's bonded indebtedness, capital loans or
175.29 	debt service loans, debt service equalization aid must be
175.30 	computed separately for each of the preexisting districts.
175.31 	(d) For purposes of this section, the adjusted net tax
175.32 	capacity determined according to section 127A.48 shall be
175.33 	adjusted to include a portion of the tax capacity of property
175.34 	generally exempted from ad valorem taxes under section 272.02,
175.35 	subdivisions 64 and 65, equal to the product of that tax
175.36 	capacity times the ratio of the eligible debt service revenue
176.1 	attributed to general obligation bonds to the total eligible
176.2 	debt service revenue of the district.

176.3 	Sec. 2. Minnesota Statutes 2004, section 123B.54, is
176.4 	amended to read:
176.5 	123B.54 DEBT SERVICE APPROPRIATION.
176.6 	(a) $28,367,000 $21,624,000 in fiscal year 2006 2008 and
176.7 	$25,560,000 $20,403,000 in fiscal year 2007 2009 and later are
176.8 	appropriated from the general fund to the commissioner of
176.9 	education for payment of debt service equalization aid under
176.10 	section 123B.53.
176.11 	(b) The appropriations in paragraph (a) must be reduced by
176.12 	the amount of any money specifically appropriated for the same
176.13 	purpose in any year from any state fund.

176.14 	Sec. 3. Minnesota Statutes 2004, section 123B.59,
176.15 	subdivision 3, is amended to read:
176.16 		Subd. 3.Bond authorization.  (a) A school district may
176.17 	issue general obligation bonds under this section to finance
176.18 	facilities plans approved by its board and the commissioner.
176.19 	Chapter 475, except sections 475.58 and 475.59, must be complied
176.20 	with.  The district may levy under subdivision 5 for the debt
176.21 	service revenue.  The authority to issue bonds under this
176.22 	section is in addition to any bonding authority authorized by
176.23 	this chapter, or other law.  The amount of bonding authority
176.24 	authorized under this section must be disregarded in calculating
176.25 	the bonding or net debt limits of this chapter, or any other law
176.26 	other than section 475.53, subdivision 4.
176.27 	(b) At least 20 days before a district issues bonds the
176.28 	earliest of solicitation of bids, the issuance of bonds, or the
176.29 	final certification of levies under this subdivision 5, it the
176.30 	district must publish notice of the intended projects, the
176.31 	amount of the bond issue, and the total amount of district
176.32 	indebtedness, and the commissioner's review and comment, if
176.33 	applicable.

176.34 	Sec. 4. Minnesota Statutes 2004, section 123B.59,
176.35 	subdivision 3a, is amended to read:
176.36 		Subd. 3a.Levy authorization.  (a) A school district may
177.1 	levy under this section to finance the portion of facilities
177.2 	plans approved by its board and the commissioner that are not
177.3 	financed through bond issues according to subdivision 3.
177.4 	(b) At least 20 days before a final district certification
177.5 	of levies under this subdivision 5, it the district must
177.6 	publish notice of the intended projects, including the total
177.7 	estimated project cost, and the commissioner's review and
177.8 	comment, if applicable.

177.9 	Sec. 5. Minnesota Statutes 2004, section 123B.63,
177.10 	subdivision 2, is amended to read:
177.11 		Subd. 2.Uses of the account.  Money in the capital
177.12 	project referendum account must be used only for the purposes
177.13 	specified in section 126C.10, subdivision 14, for operating
177.14 	capital revenue, including the costs of acquisition and
177.15 	betterment for a project that has been reviewed under section
177.16 	123B.71 and has been approved according to subdivision 3.

177.17 	Sec. 6. [123B.591] DEFERRED MAINTENANCE REVENUE.
177.18 		Subdivision 1.Eligibility. (a) An independent or
177.19 	special school district that does not qualify to participate in
177.20 	the alternative facilities bonding and levy under section
177.21 	123B.59, subdivision 1, paragraph (a), is eligible to receive
177.22 	deferred maintenance revenue.
177.23 	(b) Deferred maintenance revenue is subject to reverse
177.24 	referendum according to section 126C.48, subdivision 9.
177.25 		Subd. 2.Deferred maintenance revenue. The deferred
177.26 	maintenance revenue for an eligible school district equals the
177.27 	product of $45 times the adjusted marginal cost pupil units for
177.28 	the school year times the lesser of one or the ratio of the
177.29 	district's average age of building space to 35 years.
177.30 		Subd. 3.Deferred maintenance levy. To obtain deferred
177.31 	maintenance revenue for fiscal year 2007 and later, a district
177.32 	may levy an amount not more than the product of its deferred
177.33 	maintenance revenue for the fiscal year times the lesser of one
177.34 	or the ratio of its adjusted net tax capacity per adjusted
177.35 	marginal cost pupil unit to $5,913.
177.36 		Subd. 4.Deferred maintenance aid. For fiscal year 2007
178.1 	and later, a district's deferred maintenance aid equals its
178.2 	deferred maintenance revenue minus its deferred maintenance levy
178.3 	times the ratio of the actual amount levied to the permitted
178.4 	levy.
178.5 		Subd. 5.Reserve account. Deferred maintenance revenue
178.6 	must be maintained in a reserve account within the general fund.
178.7 	Deferred maintenance revenue may be used only for expenditures
178.8 	that would be eligible for alternative facilities bonding and
178.9 	levy revenue under section 123B.59, subdivision 2, paragraph
178.10 	(a), if the district qualified for that revenue under section
178.11 	123B.59, subdivision 1, paragraph (a).
178.12 	
EFFECTIVE DATE. This section is effective for revenue for
178.13 	fiscal year 2007.

178.14 	Sec. 7. Minnesota Statutes 2004, section 123B.71,
178.15 	subdivision 8, is amended to read:
178.16 		Subd. 8.Review and comment.  A school district, a
178.17 	special education cooperative, or a cooperative unit of
178.18 	government, as defined in section 123A.24, subdivision 2, must
178.19 	not initiate an installment contract for purchase or a lease
178.20 	agreement, hold a referendum for bonds, nor solicit bids for new
178.21 	construction, expansion, or remodeling of an educational
178.22 	facility that requires an expenditure in excess of $500,000 per
178.23 	school site prior to review and comment by the commissioner.
178.24 	The commissioner may exempt a facility maintenance project
178.25 	funded with general education aid and levy, alternative
178.26 	facilities bonding and levy program,or health and safety
178.27 	revenue from this provision after reviewing a written request
178.28 	from a school district describing the scope of work.  A school
178.29 	board shall not separate portions of a single project into
178.30 	components to avoid the requirements of this subdivision.

178.31 	Sec. 8. Minnesota Statutes 2004, section 123B.71,
178.32 	subdivision 9, is amended to read:
178.33 		Subd. 9.Information required.  A school board proposing
178.34 	to construct a facility described in subdivision 8 shall submit
178.35 	to the commissioner a proposal containing information including
178.36 	at least the following:
179.1 	(1) the geographic area and population to be served,
179.2 	preschool through grade 12 student enrollments for the past five
179.3 	years, and student enrollment projections for the next five
179.4 	years;
179.5 	(2) a list of existing facilities by year constructed,
179.6 	their uses, and an assessment of the extent to which alternate
179.7 	facilities are available within the school district boundaries
179.8 	and in adjacent school districts;
179.9 	(3) a list of the specific deficiencies of the facility
179.10 	that demonstrate the need for a new or renovated facility to be
179.11 	provided, and a list of the specific benefits that the new or
179.12 	renovated facility will provide to the students, teachers, and
179.13 	community users served by the facility;
179.14 	(4) the relationship of the project to any priorities
179.15 	established by the school district, educational cooperatives
179.16 	that provide support services, or other public bodies in the
179.17 	service area;
179.18 	(5) a specification of how the project will increase
179.19 	community use of the facility and whether and how the project
179.20 	will increase collaboration with other governmental or nonprofit
179.21 	entities;
179.22 	(6) a description of the project, including the
179.23 	specification of site and outdoor space acreage and square
179.24 	footage allocations for classrooms, laboratories, and support
179.25 	spaces; estimated expenditures for the major portions of the
179.26 	project; and the dates the project will begin and be completed;
179.27 	(7) a specification of the source of financing the project;
179.28 	the scheduled date for a bond issue or school board action; a
179.29 	schedule of payments, including debt service equalization aid;
179.30 	and the effect of a bond issue on local property taxes by the
179.31 	property class and valuation;
179.32 	(8) an analysis of how the proposed new or remodeled
179.33 	facility will affect school district operational or
179.34 	administrative staffing costs, and how the district's operating
179.35 	budget will cover any increased operational or administrative
179.36 	staffing costs;
180.1 	(9) a description of the consultation with local or state
180.2 	road and transportation officials on school site access and
180.3 	safety issues, and the ways that the project will address those
180.4 	issues;
180.5 	(10) a description of how indoor air quality issues have
180.6 	been considered and a certification that the architects and
180.7 	engineers designing the facility will have professional
180.8 	liability insurance;
180.9 	(11) as required under section 123B.72, for buildings
180.10 	coming into service after July 1, 2002, a certification that the
180.11 	plans and designs for the extensively renovated or new
180.12 	facility's heating, ventilation, and air conditioning systems
180.13 	will meet or exceed code standards; will provide for the
180.14 	monitoring of outdoor airflow and total airflow of ventilation
180.15 	systems; and will provide an indoor air quality filtration
180.16 	system that meets ASHRAE standard 52.1;
180.17 	(12) a specification of any desegregation requirements that
180.18 	cannot be met by any other reasonable means; and 
180.19 	(13) a specification, if applicable, of how the facility
180.20 	will utilize environmentally sustainable school facility design
180.21 	concepts; and 
180.22 	(14) a description of how the architects and engineers have
180.23 	considered the American National Standards Institute Acoustical
180.24 	Performance Criteria, Design Requirements and Guidelines for
180.25 	Schools of the maximum background noise level and reverberation
180.26 	times.
180.27 	
EFFECTIVE DATE. This section is effective July 1, 2006.

180.28 	Sec. 9. Minnesota Statutes 2004, section 123B.71,
180.29 	subdivision 12, is amended to read:
180.30 		Subd. 12.Publication. (a) At least 20 days but not more
180.31 	than 60 days before a referendum for bonds or solicitation of
180.32 	bids for a project that has received a positive or unfavorable
180.33 	review and comment under section 123B.70, the school board shall
180.34 	publish the commissioner's review and comment of that project in
180.35 	the legal newspaper of the district.  Supplementary information
180.36 	shall be available to the public.
181.1 	(b) The publication requirement in paragraph (a) does not
181.2 	apply to alternative facilities projects approved under section
181.3 	123B.59.  Publication for alternative facilities projects shall
181.4 	be as specified in section 123B.59, subdivisions 3 and 3a.

181.5 	Sec. 10. [125B.26] TELECOMMUNICATIONS/INTERNET ACCESS
181.6 	EQUITY AID.
181.7 		Subdivision 1.Costs to be submitted. (a) A district or
181.8 	charter school shall submit its actual
181.9 	telecommunications/Internet access costs for the previous fiscal
181.10 	year, adjusted for any e-rate revenue received, to the
181.11 	department by August 15 of each year as prescribed by the
181.12 	commissioner.  Costs eligible for reimbursement under this
181.13 	program are limited to the following:
181.14 	(1) ongoing or recurring telecommunications/Internet access
181.15 	costs associated with Internet access, data lines, and video
181.16 	links providing:
181.17 	(i) the equivalent of one data line, video link, or
181.18 	integrated data/video link that relies on a transport medium
181.19 	that operates at a minimum speed of 1.544 megabytes per second
181.20 	(T1) for each elementary school, middle school, or high school
181.21 	under section 120A.05, subdivisions 9, 11, and 13, including the
181.22 	recurring telecommunications line lease costs and ongoing
181.23 	Internet access service fees; or 
181.24 	(ii) the equivalent of one data line or video circuit, or
181.25 	integrated data/video link that relies on a transport medium
181.26 	that operates at a minimum speed of 1.544 megabytes per second
181.27 	(T1) for each district, including recurring telecommunications
181.28 	line lease costs and ongoing Internet access service fees;
181.29 	(2) recurring costs of contractual or vendor-provided
181.30 	maintenance on the school district's wide area network to the
181.31 	point of presence at the school building up to the router,
181.32 	codec, or other service delivery equipment located at the point
181.33 	of presence termination at the school or school district;
181.34 	(3) recurring costs of cooperative, shared arrangements for
181.35 	regional delivery of telecommunications/Internet access between
181.36 	school districts, postsecondary institutions, and public
182.1 	libraries including network gateways, peering points, regional
182.2 	network infrastructure, Internet2 access, and network support,
182.3 	maintenance, and coordination; and 
182.4 	(4) service provider installation fees for installation of
182.5 	new telecommunications lines or increased bandwidth.
182.6 	(b) Costs not eligible for reimbursement under this program
182.7 	include:
182.8 	(1) recurring costs of school district staff providing
182.9 	network infrastructure support;
182.10 	(2) recurring costs associated with voice and standard
182.11 	telephone service;
182.12 	(3) costs associated with purchase of network hardware,
182.13 	telephones, computers, or other peripheral equipment needed to
182.14 	deliver telecommunications access to the school or school
182.15 	district;
182.16 	(4) costs associated with laying fiber for
182.17 	telecommunications access;
182.18 	(5) costs associated with wiring school or school district
182.19 	buildings;
182.20 	(6) costs associated with purchase, installation, or
182.21 	purchase and installation of Internet filtering; and 
182.22 	(7) costs associated with digital content, including
182.23 	on-line learning or distance learning programming, and
182.24 	information databases.
182.25 		Subd. 2.E-rates. To be eligible for aid under this
182.26 	section, a district or charter school is required to file an
182.27 	e-rate application either separately or through its
182.28 	telecommunications access cluster and have a current technology
182.29 	plan on file with the department.  Discounts received on
182.30 	telecommunications expenditures shall be reflected in the costs
182.31 	submitted to the department for aid under this section.
182.32 		Subd. 3.Reimbursement criteria. The commissioner shall
182.33 	develop criteria for approving costs submitted by school
182.34 	districts and charter schools under subdivision 1.
182.35 		Subd. 4.District aid. A district or charter school's
182.36 	Internet access equity aid equals 90 percent of the district or
183.1 	charter school's approved cost for the previous fiscal year
183.2 	according to subdivision 1 exceeding $15 times the district's
183.3 	adjusted marginal cost pupil units for the previous fiscal year.
183.4 		Subd. 5.Telecommunications/internet access services for
183.5 	nonpublic schools. (a) Districts shall provide each year upon
183.6 	formal request by or on behalf of a nonpublic school, not
183.7 	including home schools, located in that district or area,
183.8 	ongoing or recurring telecommunications access services to the
183.9 	nonpublic school either through existing district providers or
183.10 	through separate providers.
183.11 	(b) The amount of district aid for telecommunications
183.12 	access services for each nonpublic school under this subdivision
183.13 	equals the lesser of:
183.14 	(1) 90 percent of the nonpublic school's approved cost for
183.15 	the previous fiscal year according to subdivision 1 exceeding
183.16 	$10 times the number of weighted pupils enrolled at the
183.17 	nonpublic school as of October 1 of the previous school year; or 
183.18 	(2) the product of the district's aid per pupil unit
183.19 	according to subdivision 4 times the number of weighted pupils
183.20 	enrolled at the nonpublic school as of October 1 of the previous
183.21 	school year.
183.22 	(c) For purposes of this subdivision, nonpublic school
183.23 	pupils shall be weighted by grade level using the weighting
183.24 	factors defined in section 126C.05, subdivision 1.
183.25 	(d) Each year, a district providing services under
183.26 	paragraph (a) may claim up to five percent of the aid determined
183.27 	in paragraph (b) for costs of administering this subdivision.
183.28 	No district may expend an amount for these telecommunications
183.29 	access services which exceeds the amount allocated under this
183.30 	subdivision.  The nonpublic school is responsible for the
183.31 	Internet access costs not covered by this section.
183.32 	(e) At the request of a nonpublic school, districts may
183.33 	allocate the amount determined in paragraph (b) directly to the
183.34 	nonpublic school to pay for or offset the nonpublic school's
183.35 	costs for telecommunications access services, however, the
183.36 	amount allocated directly to the nonpublic school may not exceed
184.1 	the actual amount of the school's ongoing or recurring
184.2 	telecommunications access costs.
184.3 		Subd. 6.Severability. If any portion of this section is
184.4 	found by a court to be unconstitutional, the remaining portions
184.5 	of the section shall remain in effect.
184.6 	
EFFECTIVE DATE. This section is effective for revenue for
184.7 	fiscal year 2006.

184.8 	Sec. 11. Minnesota Statutes 2004, section 126C.63,
184.9 	subdivision 5, is amended to read:
184.10 		Subd. 5.Levy.  "Levy" means a district's net debt
184.11 	service levy after the reduction of debt service equalization
184.12 	aid under section 123B.53, subdivision 6.  For taxes payable in
184.13 	2003 and later, each district's maximum effort debt service levy
184.14 	for purposes of subdivision 8, must be reduced by an equal
184.15 	number of percentage points if the commissioner of finance
184.16 	determines that the levy reduction will not result in a payment
184.17 	from the general fund in the state treasury according to section
184.18 	16A.641, as would be required under section 126C.72, subdivision
184.19 	3.  A district's levy that is adjusted under this section must
184.20 	not be reduced below 30.1 25 percent of the district's adjusted
184.21 	net tax capacity.

184.22 	Sec. 12. Minnesota Statutes 2004, section 126C.63,
184.23 	subdivision 8, is amended to read:
184.24 		Subd. 8.Maximum effort debt service levy.  (a) "Maximum
184.25 	effort debt service levy" means the lesser of:
184.26 	(1) a levy in whichever of the following amounts is
184.27 	applicable:
184.28 	(i) in any district receiving a debt service loan for a
184.29 	debt service levy payable in 2002 and thereafter, or granted a
184.30 	capital loan after January 1, 2002, a levy in total dollar
184.31 	amount computed at a rate of 40 32 percent of adjusted net tax
184.32 	capacity for taxes payable in 2002 and thereafter;
184.33 	(ii) in any district receiving a debt service loan for a
184.34 	debt service levy payable in 2001 or earlier, or granted a
184.35 	capital loan before January 2, 2001 2002, a levy in a total
184.36 	dollar amount computed at a rate of 32 28 percent of adjusted
185.1 	net tax capacity for taxes payable in 2002 and thereafter; or
185.2 	(2) a levy in any district for which a capital loan was
185.3 	approved prior to August 1, 1981, a levy in a total dollar
185.4 	amount equal to the sum of the amount of the required debt
185.5 	service levy and an amount which when levied annually will in
185.6 	the opinion of the commissioner be sufficient to retire the
185.7 	remaining interest and principal on any outstanding loans from
185.8 	the state within 30 years of the original date when the capital
185.9 	loan was granted.
185.10 	(b) The board in any district affected by the provisions of
185.11 	paragraph (a), clause (2), may elect instead to determine the
185.12 	amount of its levy according to the provisions of paragraph (a),
185.13 	clause (1).  If a district's capital loan is not paid within 30
185.14 	years because it elects to determine the amount of its levy
185.15 	according to the provisions of paragraph (a), clause (2), the
185.16 	liability of the district for the amount of the difference
185.17 	between the amount it levied under paragraph (a), clause (2),
185.18 	and the amount it would have levied under paragraph (a), clause
185.19 	(1), and for interest on the amount of that difference, must not
185.20 	be satisfied and discharged pursuant to Minnesota Statutes 1988,
185.21 	or an earlier edition of Minnesota Statutes if applicable,
185.22 	section 124.43, subdivision 4.

185.23 	Sec. 13. Laws 1996, chapter 412, article 5, section 24, is
185.24 	amended to read:

185.25 	Sec. 24. BONDS PAID FROM TACONITE PRODUCTION TAX
185.26 	REVENUES.
 185.27 		Subdivision 1.Refunding bonds. The appropriation of
185.28 	funds from the distribution of taconite production tax revenues
185.29 	to the taconite environmental protection tax fund and the
185.30 	northeast Minnesota economic protection fund made by Laws 1988,
185.31 	chapter 718, article 7, sections 62 and 63, Laws 1989, chapter
185.32 	329, article 5, section 20, Laws 1990, chapter 604, article 8,
185.33 	section 13, Laws 1992, chapter 499, article 5, section 29, and
185.34 	by sections 18 to 20 Laws 1996, chapter 412, article 5, sections
185.35 	20 to 22, and Laws 2000, chapter 489, article 5, sections 24 to
185.36 	26, shall continue to apply to bonds issued under Minnesota
186.1 	Statutes, chapter 475, to refund bonds originally issued
186.2 	pursuant to those chapters.
186.3 		Subd. 2.Local payments. School districts that are
186.4 	required in Laws 1988, chapter 718, article 7, sections 62 and
186.5 	63, Laws 1989, chapter 329, article 5, section 20, Laws 1990,
186.6 	chapter 604, article 8, section 13, Laws 1992, chapter 499,
186.7 	article 5, section 29, and by sections 18 to 20 Laws 1996,
186.8 	chapter 412, article 5, sections 20 to 22, and Laws 2000,
186.9 	chapter 489, article 5, sections 24 to 26, to impose levies to
186.10 	pay debt service on the bonds issued under those provisions to
186.11 	the extent the principal and interest on the bonds is not paid
186.12 	by distributions from the taconite environmental protection fund
186.13 	and the northeast Minnesota economic protection trust, may pay
186.14 	their portion of the principal and interest from any funds
186.15 	available to them.  To the extent a school district uses funds
186.16 	other than the proceeds of a property tax levy to pay its share
186.17 	of the principal and interest on the bonds, the requirement to
186.18 	impose a property tax to pay the local share does not apply to
186.19 	the school district.
186.20 	
EFFECTIVE DATE. This section is effective the day
186.21 	following final enactment.

186.22 	Sec. 14. LEVY; GLENCOE-SILVER LAKE.
 186.23 	For taxes payable in 2006 only, Independent School District
186.24 	No. 2859, Glencoe-Silver Lake, may levy an amount up to $81,276.
186.25 	Of that amount, $63,850 is for recovering the cost of replacing
186.26 	a gymnasium floor at Lakeside Elementary School resulting from
186.27 	storm damage and $17,426 is for recovering the cost of the
186.28 	Lincoln Junior High School water service line and associated
186.29 	work.

186.30 	EFFECTIVE DATE. This section is effective for taxes
186.31 	payable in 2006.

186.32 	Sec. 15. LEVY; RED WING.
 186.33 	For taxes payable in 2006 only, Independent School District
186.34 	No. 256, Red Wing, may levy an amount up to $158,000 for the
186.35 	construction deficit for building the community ice arena.

186.36 	EFFECTIVE DATE. This section is effective for revenue for
187.1 	fiscal year 2006.

187.2 	Sec. 16. RESIDENTIAL PROGRAM FACILITIES; WORTHINGTON.
 187.3 	Subject to Minnesota Statutes, section 16A.695, Independent
187.4 	School District No. 518, Worthington, may use the facilities
187.5 	provided under Laws 1994, chapter 643, section 14, subdivision
187.6 	8, as amended by Laws 1995, chapter 76, section 1, to provide
187.7 	adult foster care or child foster care services licensed by the
187.8 	commissioner of human services or for other special education
187.9 	purposes.

187.10 	EFFECTIVE DATE. This section is effective the day
187.11 	following final enactment.

187.12 	Sec. 17. APPROPRIATIONS.
 187.13 		Subdivision 1.Department of education. The sums
187.14 	indicated in this section are appropriated from the general fund
187.15 	to the Department of Education for the fiscal years designated.
187.16 		Subd. 2.Health and safety revenue. For health and
187.17 	safety aid according to Minnesota Statutes, section 123B.57,
187.18 	subdivision 5:
187.19 	$  802,000 .....2006 
187.20 	$  578,000 .....2007 
187.21 	The 2006 appropriation includes $211,000 for 2005 and
187.22 	$591,000 for 2006.
187.23 	The 2007 appropriation includes $109,000 for 2006 and
187.24 	$469,000 for 2007.
187.25 		Subd. 3.Debt service equalization. For debt service aid
187.26 	according to Minnesota Statutes, section 123B.53, subdivision 6:
187.27 	$25,654,000 .....2006 
187.28 	$24,134,000 .....2007 
187.29 	The 2006 appropriation includes $4,654,000 for 2005 and
187.30 	$21,000,000 for 2006.
187.31 	The 2007 appropriation includes $3,911,000 for 2006 and
187.32 	$20,223,000 for 2007.
187.33 		Subd. 4.Alternative facilities bonding aid. For
187.34 	alternative facilities bonding aid, according to Minnesota
187.35 	Statutes, section 123B.59, subdivision 1:
187.36 	$19,287,000 .....2006 
188.1 	$19,287,000 .....2007 
188.2 	The 2006 appropriation includes $3,028,000 for 2005 and
188.3 	$16,259,000 for 2006.
188.4 	The 2007 appropriation includes $3,028,000 for 2006 and
188.5 	$16,259,000 for 2007.
188.6 		Subd. 5.Telecommunications internet access aid. For
188.7 	telecommunications Internet access aid:
188.8 	$4,500,000 .....2006 
188.9 	$4,600,000 .....2007 
188.10 		Subd. 6.Deferred maintenance aid. For deferred
188.11 	maintenance aid under Minnesota Statutes, section 123B.591:
188.12 	$2,684,000 .....2007 
188.13 	The 2007 appropriation includes $0 for 2006 and $2,684,000
188.14 	for 2007.

188.15 	ARTICLE 5
188.16 	NUTRITION AND ACCOUNTING

188.17 	Section 1. [123B.748] REGULAR CLASSROOM EXPENDITURES.
188.18 		Subdivision 1.Definitions. "Direct classroom
188.19 	expenditures" means instructional expenditures as defined in the
188.20 	uniform financial accounting and reporting standards, excluding
188.21 	tuition payments to other Minnesota school districts, capital
188.22 	expenditures, and expenditures for athletics, other cocurricular
188.23 	activities and extracurricular activities.  "Total K-12
188.24 	operating expenditures" means the total expenditures in the
188.25 	general and food service funds, as defined in the uniform
188.26 	financial accounting and reporting standards, excluding tuition
188.27 	payments to other Minnesota school districts and capital
188.28 	expenditures.
188.29 		Subd. 2.Expected expenditure level. A school district
188.30 	must spend at least 65 percent of its total K-12 operating
188.31 	expenditures on direct classroom expenditures.  If a school
188.32 	district's direct classroom expenditures in fiscal year 2005 are
188.33 	less than 65 percent of its total K-12 operating expenditures,
188.34 	the district must increase its direct classroom expenditures by
188.35 	at least two percentage points per year beginning in fiscal year
188.36 	2006.
189.1 		Subd. 3.Superintendent verification. A superintendent
189.2 	must include in the audited financial statements submitted to
189.3 	the commissioner under section 123B.77 a letter signed by the
189.4 	superintendent certifying the percent of the district's total
189.5 	K-12 operating expenditures that were actually spent on direct
189.6 	classroom expenditures for that school year.
189.7 		Subd. 4.Waiver. A school district that is unable to
189.8 	meet the expenditure standards established under subdivision 2
189.9 	may apply to the commissioner for a waiver.  The waiver request
189.10 	must list the reasons why the district's direct classroom
189.11 	expenditures cannot meet the requirements of subdivision 2 and
189.12 	describe the changes the district intends to meet in the
189.13 	subsequent year in order to meet the direct classroom
189.14 	instruction requirements.  The commissioner must grant or deny a
189.15 	waiver request within 60 days of receiving the request.
189.16 	
EFFECTIVE DATE. This section is effective July 1, 2005,
189.17 	for the 2005-2006 school year.

189.18 	Sec. 2. Minnesota Statutes 2004, section 123B.749, is
189.19 	amended to read:
189.20 	123B.749 STRUCTURALLY BALANCED SCHOOL DISTRICT BUDGETS.
189.21 	(a) Prior to approving a collective bargaining agreement
189.22 	that does not result from an interest arbitration decision, a
189.23 	school board must determine by board resolution that the
189.24 	proposed agreement will not cause structural imbalance in the
189.25 	district's budget during the period of the agreement.
189.26 	(b) A school board may only determine that an agreement
189.27 	will not cause structural imbalance if expenditures will not
189.28 	exceed available funds, taking into account:
189.29 	(1) current state aid formulas; and
189.30 	(2) reasonable and comprehensive projections of ongoing
189.31 	revenues and expenditures for the period of the agreement. It
189.32 	is expected that Onetime revenue may not be used for ongoing
189.33 	expenditures. Any amount in excess of the board's guideline for
189.34 	the district's general fund balance is not onetime revenue for
189.35 	the purposes of this section.The school board must make
189.36 	available with the resolution a summary of the projections and
190.1 	calculations supporting the determination.  The projections and
190.2 	calculations must include state aid formulas, pupil units, and
190.3 	employee costs, including the terms of labor agreements,
190.4 	including the agreement under consideration, fringe benefits,
190.5 	severance pay, and staff changes.
190.6 	(c) In addition to the determination required in paragraph
190.7 	(a), the school board must project revenues, expenditures, and
190.8 	fund balances for one year two years following the period of the
190.9 	agreement.  The projections must include the categories of
190.10 	information described in paragraph (b), be reasonable and
190.11 	comprehensive, and reference current state aid formulas.
190.12 	(d) All projections and calculations required by this
190.13 	section and estimated district employee terminations must be
190.14 	made available to the public prior to and ,at, and after the
190.15 	meeting where the resolution is adopted in a manner consistent
190.16 	with state law on public notice and access to public data.
190.17 	(e) In an interest arbitration, the district must submit,
190.18 	and the exclusive bargaining representative may submit, proposed
190.19 	determinations with supporting projections and calculations
190.20 	consistent with paragraph (b) of the effect of the potential
190.21 	decision on the structural balance of the district's budget.
190.22 	The arbitrator must consider the potential effect of a decision
190.23 	on the structural balance of the district's budget for the term
190.24 	of the agreement.  The arbitrator's decision must describe the
190.25 	effect of the decision on the structural balance of the
190.26 	district's budget in a manner consistent with paragraph (b).
190.27 	The arbitrator's decision must also show the effect of the
190.28 	decision on the school budget for one year following the term of
190.29 	the contract at issue.  Within 30 days of receipt of the
190.30 	decision or when the board acts on the decision, whichever is
190.31 	earlier, the school board must by resolution determine the
190.32 	effect of the decision on the structural balance of its budget
190.33 	for the term of the agreement consistent with paragraph (b).
190.34 	(f) A copy of the resolution with the supporting
190.35 	projections and calculations must be submitted to the
190.36 	commissioner of education with the uniform collective bargaining
191.1 	agreement settlement document within 30 days of adoption of the
191.2 	resolution.  The commissioner must develop a model form for use
191.3 	by districts in reporting projections and calculations. The
191.4 	commissioner must not accept any reports that fail to comply
191.5 	with this section.The commissioner must make all resolutions,
191.6 	projections, and calculations available to the public.
191.7 	(g) Compliance with this section by itself is not an unfair
191.8 	labor practice under section 179A.13, subdivision 2.

191.9 	Sec. 3. Minnesota Statutes 2004, section 123B.75,
191.10 	subdivision 5, is amended to read:
191.11 		Subd. 5.Levy recognition.  (a) "School district tax
191.12 	settlement revenue" means the current, delinquent, and
191.13 	manufactured home property tax receipts collected by the county
191.14 	and distributed to the school district.
191.15 	(b) In June of 2003, the school district must recognize as
191.16 	revenue, in the fund for which the levy was made, the lesser of:
191.17 	(1) the sum of May, June, and July school district tax
191.18 	settlement revenue received in that calendar year, plus general
191.19 	education aid according to section 126C.13, subdivision 4,
191.20 	received in July and August of that calendar year; or 
191.21 	(2) the sum of:
191.22 	(i) 31 percent of the referendum levy certified according
191.23 	to section 126C.17, in calendar year 2000; plus 
191.24 	(ii) the entire amount of the levy certified in the prior
191.25 	calendar year according to section 124D.86, subdivision 4, for
191.26 	school districts receiving revenue under sections 124D.86,
191.27 	subdivision 3, clauses (1), (2), and (3); 126C.41, subdivisions
191.28 	1, 2, and 3, paragraphs (b), (c), and (d); 126C.43, subdivision
191.29 	2; 126C.457; and 126C.48, subdivision 6.
191.30 	(c) For fiscal year 2004 and later years, in June of each
191.31 	year, the school district must recognize as revenue, in the fund
191.32 	for which the levy was made, the lesser of:
191.33 	(1) the sum of May, June, and July school district tax
191.34 	settlement revenue received in that calendar year, plus general
191.35 	education aid according to section 126C.13, subdivision 4,
191.36 	received in July and August of that calendar year; or
192.1 	(2) the sum of:
192.2 	(i) the greater of 45 48.6 percent of the referendum levy
192.3 	certified according to section 126C.17, in the prior calendar
192.4 	year or 31 percent of the referendum levy certified according to
192.5 	section 126C.17, in calendar year 2000; plus
192.6 	(ii) the entire amount of the levy certified in the prior
192.7 	calendar year according to section 124D.86, subdivision 4, for
192.8 	school districts receiving revenue under sections 124D.86,
192.9 	subdivision 3, clauses (1), (2), and (3); 126C.41, subdivisions
192.10 	1, 2, and 3, paragraphs (b), (c), and (d); 126C.43, subdivision
192.11 	2; 126C.457; and 126C.48, subdivision 6; plus
192.12 	(iii) 45 48.6 percent of the amount of the levy certified
192.13 	in the prior calendar year for the school district's general and
192.14 	community service funds, plus or minus auditor's adjustments,
192.15 	not including levy portions that are assumed by the state, that
192.16 	remains after subtracting the referendum levy certified
192.17 	according to section 126C.17 and the amount recognized according
192.18 	to clause (ii).

192.19 	Sec. 4. Minnesota Statutes 2004, section 124D.111,
192.20 	subdivision 1, is amended to read:
192.21 		Subdivision 1.School lunch aid computation.  Each school
192.22 	year, the state must pay districts participating participants in
192.23 	the national school lunch program the amount of eight cents for
192.24 	each full paid, reduced, and free student lunch served to
192.25 	students in the district.
192.26 	
EFFECTIVE DATE. This section is effective for fiscal year
192.27 	2006.

192.28 	Sec. 5. Minnesota Statutes 2004, section 124D.111,
192.29 	subdivision 2, is amended to read:
192.30 		Subd. 2.Application. A school districts district,
192.31 	charter school, nonpublic school, or other participant in the
192.32 	national school lunch program shall apply to the department for
192.33 	this payment on forms provided by the department.
192.34 	
EFFECTIVE DATE. This section is effective for fiscal year
192.35 	2006.

192.36 	Sec. 6. Minnesota Statutes 2004, section 124D.118,
193.1 	subdivision 4, is amended to read:
193.2 		Subd. 4.Reimbursement.  In accordance with program
193.3 	guidelines, the commissioner shall reimburse each participating
193.4 	public or nonpublic school nine 14 cents for each half-pint of
193.5 	milk that is served to kindergarten students and is not part of
193.6 	a school lunch or breakfast reimbursed under section 124D.111 or
193.7 	124D.1158.
193.8 	
EFFECTIVE DATE. This section is effective for fiscal year
193.9 	2006.

193.10 	Sec. 7. Minnesota Statutes 2004, section 127A.42,
193.11 	subdivision 2, is amended to read:
193.12 		Subd. 2.Violations of law.  The commissioner may reduce
193.13 	or withhold the district's state aid for any school year
193.14 	whenever the board of the district authorizes or permits
193.15 	violations of law within the district by:
193.16 	(1) employing a teacher who does not hold a valid teaching
193.17 	license or permit in a public school;
193.18 	(2) noncompliance with a mandatory rule of general
193.19 	application promulgated by the commissioner in accordance with
193.20 	statute, unless special circumstances make enforcement
193.21 	inequitable, impose an extraordinary hardship on the district,
193.22 	or the rule is contrary to the district's best interests;
193.23 	(3) the district's continued performance of a contract made
193.24 	for the rental of rooms or buildings for school purposes or for
193.25 	the rental of any facility owned or operated by or under the
193.26 	direction of any private organization, if the contract has been
193.27 	disapproved, the time for review of the determination of
193.28 	disapproval has expired, and no proceeding for review is
193.29 	pending;
193.30 	(4) any practice which is a violation of sections 1 and 2
193.31 	of article 13 of the Constitution of the state of Minnesota;
193.32 	(5) failure to reasonably provide for a resident pupil's
193.33 	school attendance under Minnesota Statutes;
193.34 	(6) noncompliance with state laws prohibiting
193.35 	discrimination because of race, color, creed, religion, national
193.36 	origin, sex, age, marital status, status with regard to public
194.1 	assistance or disability, as defined in sections 363A.08 to
194.2 	363A.19 and 363A.28, subdivision 10; or 
194.3 	(7) using funds contrary to the statutory purpose of the
194.4 	funds; or 
194.5 	(8) failing to submit a report under section 123B.749,
194.6 	paragraph (f).
194.7 	The reduction or withholding must be made in the amount and upon
194.8 	the procedure provided in this section.

194.9 	Sec. 8. Minnesota Statutes 2004, section 127A.45,
194.10 	subdivision 2, is amended to read:
194.11 		Subd. 2.Definitions.  (a) The term "other district
194.12 	receipts" means payments by county treasurers pursuant to
194.13 	section 276.10, apportionments from the school endowment fund
194.14 	pursuant to section 127A.33, apportionments by the county
194.15 	auditor pursuant to section 127A.34, subdivision 2, and payments
194.16 	to school districts by the commissioner of revenue pursuant to
194.17 	chapter 298.
194.18 	(b) The term "cumulative amount guaranteed" means the
194.19 	product of
194.20 	(1) the cumulative disbursement percentage shown in
194.21 	subdivision 3; times
194.22 	(2) the sum of
194.23 	(i) 80 percent the current year aid payment percentage of
194.24 	the estimated aid and credit entitlements paid according to
194.25 	subdivision 13; plus
194.26 	(ii) 100 percent of the entitlements paid according to
194.27 	subdivisions 11 and 12; plus
194.28 	(iii) the other district receipts.
194.29 	(c) The term "payment date" means the date on which state
194.30 	payments to districts are made by the electronic funds transfer
194.31 	method.  If a payment date falls on a Saturday, a Sunday, or a
194.32 	weekday which is a legal holiday, the payment shall be made on
194.33 	the immediately preceding business day.  The commissioner may
194.34 	make payments on dates other than those listed in subdivision 3,
194.35 	but only for portions of payments from any preceding payment
194.36 	dates which could not be processed by the electronic funds
195.1 	transfer method due to documented extenuating circumstances.
195.2 	(d) "Current year payment percentage" means 84.3 percent.
195.3 	For fiscal year 2006 only, the commissioner of education must
195.4 	reduce the current year payment percentage by the amount
195.5 	necessary to save $4,000,000.
195.6 	
EFFECTIVE DATE. This section is effective for state aid
195.7 	payments for fiscal year 2006.

195.8 	Sec. 9. Minnesota Statutes 2004, section 127A.45,
195.9 	subdivision 10, is amended to read:
195.10 		Subd. 10.Payments to school nonoperating funds.  Each
195.11 	fiscal year state general fund payments for a district
195.12 	nonoperating fund must be made at 80 percent the current year
195.13 	aid payment percentage of the estimated entitlement during the
195.14 	fiscal year of the entitlement.  This amount shall be paid in 12
195.15 	equal monthly installments.  The amount of the actual
195.16 	entitlement, after adjustment for actual data, minus the
195.17 	payments made during the fiscal year of the entitlement must be
195.18 	paid prior to October 31 of the following school year.  The
195.19 	commissioner may make advance payments of debt service
195.20 	equalization aid for a district's debt service fund earlier than
195.21 	would occur under the preceding schedule if the district submits
195.22 	evidence showing a serious cash flow problem in the fund.  The
195.23 	commissioner may make earlier payments during the year and, if
195.24 	necessary, increase the percent of the entitlement paid to
195.25 	reduce the cash flow problem.
195.26 	
EFFECTIVE DATE. This section is effective for state aid
195.27 	payments for fiscal year 2006.

195.28 	Sec. 10. Minnesota Statutes 2004, section 127A.45,
195.29 	subdivision 14, is amended to read:
195.30 		Subd. 14.Nonpublic aids.  The state shall pay aid
195.31 	according to sections 123B.40 to 123B.48 for pupils attending
195.32 	nonpublic schools as follows:
195.33 	(1) an advance payment by November 30 equal to 80 percent 
195.34 	the current year aid payment percentage of the estimated
195.35 	entitlement for the current fiscal year; and
195.36 	(2) a final payment by October 31 of the following fiscal
196.1 	year, adjusted for actual data.
196.2 	If a payment advance to meet cash flow needs is requested
196.3 	by a district and approved by the commissioner, the state shall
196.4 	pay nonpublic pupil transportation aid according to section
196.5 	123B.92 by October 31.
196.6 	
EFFECTIVE DATE. This section is effective for state aid
196.7 	payments for fiscal year 2006.

196.8 	Sec. 11. Minnesota Statutes 2004, section 127A.45,
196.9 	subdivision 16, is amended to read:
196.10 		Subd. 16.Payments to third parties.  Notwithstanding
196.11 	subdivision 3, 80 percent the current year aid payment
196.12 	percentage of the amounts under section 123A.26, subdivision 3,
196.13 	shall be paid in equal installments on August 30, December 30,
196.14 	and March 30, with a 20 percent final adjustment payment on
196.15 	October 30 of the next fiscal year of the remaining amount.
196.16 	
EFFECTIVE DATE. This section is effective for state aid
196.17 	payments for fiscal year 2006.

196.18 	Sec. 12. FUND TRANSFERS.
 196.19 		Subdivision 1.Lake crystal-wellcome memorial. (a)
196.20 	Notwithstanding Minnesota Statutes, section 123B.79 or 123B.80,
196.21 	on June 30, 2005, upon approval of the commissioner of
196.22 	education, Independent School District No. 2071, Lake
196.23 	Crystal-Wellcome Memorial, may permanently transfer up to
196.24 	$132,754 from its reserved account for handicapped access to its
196.25 	undesignated general fund balance.
196.26 	(b) Prior to making the fund transfer, Independent School
196.27 	District No. 2071, Lake Crystal-Wellcome Memorial, must
196.28 	demonstrate to the commissioner's satisfaction that the
196.29 	district's school buildings are accessible to students or
196.30 	employees with disabilities.
196.31 	(c) Notwithstanding Minnesota Statutes, section 123B.79 or
196.32 	123B.80, on June 30 of 2005, 2006, and 2007, Independent School
196.33 	District No. 2071, Lake Crystal-Wellcome Memorial, may
196.34 	permanently transfer any balance in its reserved for operating
196.35 	capital account resulting from the sale of school property to
196.36 	its undesignated general fund balance.
197.1 		Subd. 2.Rockford. Notwithstanding Minnesota Statutes,
197.2 	sections 123B.79, 123B.80, and 475.61, subdivision 4,
197.3 	Independent School District No. 883, Rockford, on June 30, 2005,
197.4 	may permanently transfer up to $660,000 from its debt redemption
197.5 	fund to the undesignated balance of its general fund without
197.6 	making a levy reduction.
197.7 		Subd. 3.Russell. Notwithstanding Minnesota Statutes,
197.8 	section 123B.79 or 123B.80, on June 30, 2005, Independent School
197.9 	District No. 418, Russell, may transfer up to $50,000 from its
197.10 	reserved capital accounts in its general fund to its
197.11 	undesignated fund balance.
197.12 		Subd. 4.Ruthton. Notwithstanding Minnesota Statutes,
197.13 	section 123B.79 or 123B.80, on June 30, 2005, Independent School
197.14 	District No. 584, Ruthton, may permanently transfer up to
197.15 	$140,000 from its reserved for operating capital account to the
197.16 	undesignated general fund balance.
197.17 		Subd. 5.Windom. Notwithstanding Minnesota Statutes,
197.18 	section 123B.79 or 123B.80, Independent School District No. 177,
197.19 	Windom, on June 30, 2005, may permanently transfer up to
197.20 	$270,000 from its reserved for operating capital account to the
197.21 	undesignated balance in its general fund.
197.22 		Subd. 6.Fund transfer; chokio-alberta. Notwithstanding
197.23 	Minnesota Statutes, section 123B.79 or 123B.80, on June 30,
197.24 	2005, Independent School District No. 771, Chokio-Alberta, may
197.25 	permanently transfer up to $150,000 from its reserved operating
197.26 	capital account to the undesignated general fund balance.
197.27 	
EFFECTIVE DATE. This section is effective the day
197.28 	following final enactment.

197.29 	Sec. 13. DISABLED ACCESS LEVY AUTHORITY; EAST GRAND
197.30 	FORKS.
 197.31 	Notwithstanding the time limits established in Minnesota
197.32 	Statutes, section 123B.58, subdivision 3, Independent School
197.33 	District No. 595, East Grand Forks, may levy its remaining
197.34 	disabled access levy authority over five or fewer years.

197.35 	EFFECTIVE DATE. This section is effective the day
197.36 	following final enactment.

198.1 	Sec. 14. TAX BASE ADJUSTMENTS, FERTILE-BELTRAMI.
 198.2 	(a) The commissioner of education, when making offsetting
198.3 	levy adjustments between levy categories to ensure that each
198.4 	levy category is positive for Independent School District No.
198.5 	599, Fertile-Beltrami, shall make such adjustments first between
198.6 	levy categories that are imposed on identical tax bases before
198.7 	making such adjustments between levy categories that are imposed
198.8 	on different tax bases.  The commissioner may make offsetting
198.9 	levy adjustments between the general fund and the debt service
198.10 	fund, if necessary.
198.11 	(b) The commissioner of education must make the offsetting
198.12 	levy adjustments according to the process in paragraph (a) until
198.13 	Independent School District No. 599, Fertile-Beltrami's current
198.14 	referendum authority, under Minnesota Statutes, section 126C.17,
198.15 	expires.

198.16 	Sec. 15. FUNDING REDUCTION.
 198.17 	If House File 1664 or a similarly styled bill does not pass
198.18 	the house of representatives, the commissioner of education must
198.19 	adjust the current year aid payment percentage under Minnesota
198.20 	Statutes, section 127A.45, subdivision 3, to reduce spending by
198.21 	$134,000,000 during the 2006-2007 biennium.

198.22 	Sec. 16. APPROPRIATIONS.
 198.23 		Subdivision 1.Department of education. The sums
198.24 	indicated in this section are appropriated from the general fund
198.25 	to the Department of Education for the fiscal years designated.
198.26 		Subd. 2.School lunch. For school lunch aid according to
198.27 	Minnesota Statutes, section 124D.111, and Code of Federal
198.28 	Regulations, title 7, section 210.17:
198.29 	$7,748,000 .....2006 
198.30 	$7,826,000 .....2007 
198.31 		Subd. 3.Traditional school breakfast; kindergarten
198.32 	milk. For traditional school breakfast aid and kindergarten
198.33 	milk under Minnesota Statutes, sections 124D.1158 and 124D.118:
198.34 	$4,934,000 .....2006 
198.35 	$5,023,000 .....2007 
198.36 		Subd. 4.Summer school service replacement aid. For
199.1 	summer food service replacement aid under Minnesota Statutes,
199.2 	section 124D.119:
199.3 	$  150,000 .....2006 
199.4 	$  150,000 .....2007 

199.5 	ARTICLE 6
199.6 	LIBRARIES

199.7 	Section 1. DEPARTMENT OF EDUCATION; LIBRARY
199.8 	APPROPRIATIONS.
 199.9 		Subdivision 1.Department of education. The sums
199.10 	indicated in this section are appropriated from the general fund
199.11 	to the Department of Education for the fiscal years designated.
199.12 		Subd. 2.Basic system support. For basic system support
199.13 	grants under Minnesota Statutes, section 134.355:
199.14 	$ 8,570,000 .....2006 
199.15 	$ 8,570,000 .....2007 
199.16 	The 2006 appropriation includes $1,345,000 for 2005 and
199.17 	$7,225,000 for 2006.
199.18 	The 2007 appropriation includes $1,345,000 for 2006 and
199.19 	$7,225,000 for 2007.
199.20 		Subd. 3.Multicounty, multitype library systems. For
199.21 	grants under Minnesota Statutes, sections 134.353 and 134.354,
199.22 	to multicounty, multitype library systems:
199.23 	$  903,000 .....2006 
199.24 	$  903,000 .....2007 
199.25 	The 2006 appropriation includes $141,000 for 2005 and
199.26 	$762,000 for 2006.
199.27 	The 2007 appropriation includes $141,000 for 2006 and
199.28 	$762,000 for 2007.
199.29 		Subd. 4.Electronic library for minnesota. For statewide
199.30 	licenses to online databases selected in cooperation with the
199.31 	Higher Education Services Office for school media centers,
199.32 	public libraries, state government agency libraries, and public
199.33 	or private college or university libraries:
199.34 	$1,039,000 .....2006 
199.35 	$1,091,000 .....2007 
199.36 	Any balance in the first year does not cancel but is
200.1 	available in the second year.
200.2 		Subd. 5.Regional library telecommunications aid. For
200.3 	regional library telecommunications aid under Minnesota
200.4 	Statutes, section 134.355:
200.5 	$1,200,000 .....2006 
200.6 	$1,200,000 .....2007 
200.7 	The 2006 appropriation includes $188,000 for 2005 and
200.8 	$1,012,000 for 2006.
200.9 	The 2007 appropriation includes $188,000 for 2006 and
200.10 	$1,012,000 for 2007.
200.11 		Subd. 6.Mnlink. To support school media center and
200.12 	public library participation in MnLink:
200.13 	$  250,000 .....2006 
200.14 	$  250,000 .....2007 

200.15 	ARTICLE 7
200.16 	EARLY EDUCATION

200.17 	Section 1. Minnesota Statutes 2004, section 121A.17,
200.18 	subdivision 1, is amended to read:
200.19 		Subdivision 1.Early childhood developmental screening.
 200.20 	Every school board must provide for a mandatory program of early
200.21 	childhood developmental screening for children once before
200.22 	school entrance, targeting children who are between 3-1/2 three 
200.23 	and four years old.  This screening program must be established
200.24 	either by one board, by two or more boards acting in
200.25 	cooperation, by service cooperatives, by early childhood family
200.26 	education programs, or by other existing programs.  This
200.27 	screening examination is a mandatory requirement for a student
200.28 	to continue attending kindergarten or first grade in a public
200.29 	school.  A child need not submit to developmental screening
200.30 	provided by a board if the child's health records indicate to
200.31 	the board that the child has received comparable developmental
200.32 	screening from a public or private health care organization or
200.33 	individual health care provider. A public school must assign a
200.34 	child a student identification number, as defined by the
200.35 	commissioner, at the time the child receives a developmental
200.36 	screening or the child's parent or guardian provides the public
201.1 	school with the child's health records indicating that the child
201.2 	received a comparable developmental screening.  A school
201.3 	district must transmit essential data under section 125B.07,
201.4 	subdivision 6, to the department.Districts are encouraged to
201.5 	reduce the costs of preschool developmental screening programs
201.6 	by utilizing using volunteers in implementing the program.
201.7 	
EFFECTIVE DATE. This section is effective the day
201.8 	following final enactment.

201.9 	Sec. 2. Minnesota Statutes 2004, section 121A.17,
201.10 	subdivision 3, is amended to read:
201.11 		Subd. 3.Screening program.  (a) A screening program must
201.12 	include at least the following components:  developmental
201.13 	assessments that measure the child's cognitive development,
201.14 	hearing and vision screening or referral, immunization review
201.15 	and referral, the child's height and weight, identification of
201.16 	risk factors that may influence learning, an interview with the
201.17 	parent about the child, and referral for assessment, diagnosis,
201.18 	and treatment when potential needs are identified.  The district
201.19 	and the person performing or supervising the screening must
201.20 	provide a parent or guardian with clear written notice that the
201.21 	parent or guardian may decline to answer questions or provide
201.22 	information about family circumstances that might affect
201.23 	development and identification of risk factors that may
201.24 	influence learning.  The notice must clearly state that
201.25 	declining to answer questions or provide information does not
201.26 	prevent the child from being enrolled in kindergarten or first
201.27 	grade if all other screening components are met.  If a parent or
201.28 	guardian is not able to read and comprehend the written notice,
201.29 	the district and the person performing or supervising the
201.30 	screening must convey the information in another manner.  The
201.31 	notice must also inform the parent or guardian that a child need
201.32 	not submit to the district screening program if the child's
201.33 	health records indicate to the school that the child has
201.34 	received comparable developmental screening performed within the
201.35 	preceding 365 days by a public or private health care
201.36 	organization or individual health care provider.  The notice
202.1 	must be given to a parent or guardian at the time the district
202.2 	initially provides information to the parent or guardian about
202.3 	screening and must be given again at the screening location.
202.4 	(b) All screening components shall be consistent with the
202.5 	standards of the state commissioner of health for early
202.6 	developmental screening programs.  A developmental screening
202.7 	program must not provide laboratory tests or a physical
202.8 	examination to any child.  The district must request from the
202.9 	public or private health care organization or the individual
202.10 	health care provider the results of any laboratory test or
202.11 	physical examination within the 12 months preceding a child's
202.12 	scheduled screening.
202.13 	(c) If a child is without health coverage, the school
202.14 	district must refer the child to an appropriate health care
202.15 	provider.
202.16 	(d) A board may offer additional components such as
202.17 	nutritional, physical and dental assessments, review of family
202.18 	circumstances that might affect development, blood pressure,
202.19 	laboratory tests, and health history.
202.20 	(e) If a statement signed by the child's parent or guardian
202.21 	is submitted to the administrator or other person having general
202.22 	control and supervision of the school that the child has not
202.23 	been screened because of conscientiously held beliefs of the
202.24 	parent or guardian, the screening is not required.

202.25 	Sec. 3. Minnesota Statutes 2004, section 121A.17,
202.26 	subdivision 5, is amended to read:
202.27 		Subd. 5.Developmental screening program information.
 202.28 	The board must inform each resident family with a child eligible
202.29 	to participate in the developmental screening program about the
202.30 	availability of the program and the state's requirement that a
202.31 	child receive a developmental screening or provide health
202.32 	records indicating that the child received a comparable
202.33 	developmental screening from a public or private health care
202.34 	organization or individual health care provider not later than
202.35 	30 days after the first day of attending kindergarten in a
202.36 	public school. A school district must inform all resident
203.1 	families with eligible children under age seven that their
203.2 	children may receive a developmental screening conducted either
203.3 	by the school district or by a public or private health care
203.4 	organization or individual health care provider.
203.5 	
EFFECTIVE DATE. This section is effective the day
203.6 	following final enactment.

203.7 	Sec. 4. Minnesota Statutes 2004, section 121A.19, is
203.8 	amended to read:
203.9 	121A.19 DEVELOPMENTAL SCREENING AID.
203.10 	Each school year, the state must pay a district $40 $50 for
203.11 	each three-year-old child screened; $40 for each four-year-old
203.12 	child screened; and $30 for each five-year-old child screened
203.13 	prior to kindergarten according to the requirements of section
203.14 	121A.17.  If this amount of aid is insufficient, the district
203.15 	may permanently transfer from the general fund an amount that,
203.16 	when added to the aid, is sufficient.

203.17 	Sec. 5. Minnesota Statutes 2004, section 124D.135,
203.18 	subdivision 1, is amended to read:
203.19 		Subdivision 1.Revenue.  The revenue for early childhood
203.20 	family education programs for a school district equals $120 for
203.21 	fiscal years 2003 and 2004 and $96 for fiscal year 2005, $115
203.22 	for fiscal year 2006, and $125 for fiscal year 2007 and later,
203.23 	times the greater of:
203.24 	(1) 150; or
203.25 	(2) the number of people under five years of age residing
203.26 	in the district on October 1 of the previous school year.
203.27 	
EFFECTIVE DATE. This section is effective for revenue for
203.28 	fiscal year 2006.

203.29 	Sec. 6. Minnesota Statutes 2004, section 124D.135,
203.30 	subdivision 5, is amended to read:
203.31 		Subd. 5.Use of revenue restricted.  Early childhood
203.32 	family education revenue may be used only for early childhood
203.33 	family education programs.  Not more than five percent of early
203.34 	childhood family education revenue, as defined in subdivision 7,
203.35 	may be used to administer early childhood family education
203.36 	programs.

204.1 	Sec. 7. Minnesota Statutes 2004, section 124D.15,
204.2 	subdivision 1, is amended to read:
204.3 		Subdivision 1.Establishment; purpose.  A district or a
204.4 	group of districts may establish a school readiness program
204.5 	for eligible children age three to entering kindergarten.  The
204.6 	purpose of a school readiness program is to provide all eligible
204.7 	children adequate opportunities to participate in child
204.8 	development programs that enable the children to enter school
204.9 	with the necessary skills and behavior and family stability and
204.10 	support to progress and flourish prepare children cognitively
204.11 	and physically and teach the self-discipline necessary to enter
204.12 	kindergarten.

204.13 	Sec. 8. Minnesota Statutes 2004, section 124D.15,
204.14 	subdivision 3, is amended to read:
204.15 		Subd. 3.Program eligibility requirements. (a) A school
204.16 	readiness program provider must include the following:
204.17 	(1) a comprehensive plan to anticipate and meet the needs
204.18 	of participating families by coordinating existing social
204.19 	services programs and by fostering collaboration among agencies
204.20 	or other community-based organizations and programs that provide
204.21 	a full range of flexible, family-focused services to families
204.22 	with young children assess each child's cognitive skills when
204.23 	the child enters and again before the child leaves the program
204.24 	to inform program planning and promote kindergarten readiness;
204.25 	(2) a development and learning component to help children
204.26 	develop appropriate social, cognitive, and physical skills, and
204.27 	emotional well-being;
204.28 	(3) health referral services to address children's medical,
204.29 	dental, mental health, and nutritional needs provide
204.30 	comprehensive program content based on early childhood research
204.31 	and professional practice that is focused on children's
204.32 	cognitive skills and development and prepares children for the
204.33 	transition to kindergarten;
204.34 	(4) (3) a nutrition component to meet children's daily
204.35 	nutritional needs arrange for early childhood screening and
204.36 	appropriate referral;
205.1 	(5) (4) parents' involvement in meeting children's
205.2 	educational, health, social service, and other needs involve
205.3 	parents in program planning and decision making;
205.4 	(6) (5) community outreach to ensure participation by
205.5 	families who represent the racial, cultural, and economic
205.6 	diversity of the community;coordinate with relevant
205.7 	community-based services; and 
205.8 	(7) (6) community-based staff and program resources,
205.9 	including interpreters, that reflect the racial and ethnic
205.10 	characteristics of the children participating in the program;
205.11 	and 
205.12 	(8) a literacy component to ensure that the literacy needs
205.13 	of parents are addressed through referral to and cooperation 
205.14 	cooperate with adult basic education programs and other adult
205.15 	literacy programs.
205.16 	(b) A district that establishes a school readiness program
205.17 	under this section must monitor the school performance of those
205.18 	students who participate in the program and subsequently attend
205.19 	a district school in grades kindergarten through grade 3,
205.20 	compare the school performance of those students with other
205.21 	students in the same grade in the district who did not
205.22 	participate in a school readiness program, and report the
205.23 	performance comparisons annually by May 1 to the school board
205.24 	and the department.

205.25 	Sec. 9. Minnesota Statutes 2004, section 124D.15, is
205.26 	amended by adding a subdivision to read:
205.27 		Subd. 3a.Application and reporting requirements. (a) A
205.28 	school readiness program provider must submit a biennial plan
205.29 	for approval by the commissioner before receiving aid under
205.30 	section 124D.16.  The plan must describe how the program meets
205.31 	the program requirements under subdivision 3.  A school district
205.32 	by April 1 must submit the plan for approval by the commissioner
205.33 	in the form and manner prescribed by the commissioner.  One-half
205.34 	the districts must first submit the plan by April 1, 2006, and
205.35 	one-half the districts must first submit the plan by April 1,
205.36 	2007, as determined by the commissioner.
206.1 	(b) Programs receiving school readiness funds annually must
206.2 	submit a report to the department.

206.3 	Sec. 10. Minnesota Statutes 2004, section 124D.15,
206.4 	subdivision 5, is amended to read:
206.5 		Subd. 5.Services with new or existing providers.  A
206.6 	district is encouraged to may contract with a public charter
206.7 	school or nonprofit community-based organization to provide
206.8 	eligible children developmentally appropriate services that meet
206.9 	the program requirements in subdivision 3.  In the alternative,
206.10 	a district may pay tuition or fees to place an eligible child in
206.11 	an existing program.  A district may establish a new program
206.12 	where no existing, reasonably accessible program meets the
206.13 	program requirements in subdivision 3. Districts must submit a
206.14 	copy of each contract to the commissioner with the biennial plan.
206.15 	Services may be provided in a site-based program or in the home
206.16 	of the child or a combination of both.  The district may not
206.17 	restrict participation to district residents.

206.18 	Sec. 11. Minnesota Statutes 2004, section 124D.15,
206.19 	subdivision 10, is amended to read:
206.20 		Subd. 10.Supervision.  A program provided by a board
206.21 	must be supervised by a licensed early childhood teacher, a
206.22 	certified early childhood educator, or a licensed parent
206.23 	educator. A program provided according to a contract between a
206.24 	district and a nonprofit organization or another private
206.25 	organization must be supervised and staffed according to the
206.26 	terms of the contract.

206.27 	Sec. 12. Minnesota Statutes 2004, section 124D.15,
206.28 	subdivision 12, is amended to read:
206.29 		Subd. 12.Program fees.  A district may must adopt a
206.30 	sliding fee schedule based on a family's income but must waive a
206.31 	fee for a participant unable to pay. The fees charged must be
206.32 	designed to enable eligible children of all socioeconomic levels
206.33 	to participate in the program.

206.34 	Sec. 13. Minnesota Statutes 2004, section 124D.15, is
206.35 	amended by adding a subdivision to read:
206.36 		Subd. 14.Assistance. The department must assist
207.1 	districts, upon request, with programs under this section.

207.2 	Sec. 14. Minnesota Statutes 2004, section 124D.16,
207.3 	subdivision 2, is amended to read:
207.4 		Subd. 2.Amount of aid.  (a) A district is eligible to
207.5 	receive school readiness aid for eligible prekindergarten pupils
207.6 	enrolled in a school readiness program under section 124D.15if
207.7 	the program biennial plan required by subdivision 1 section
207.8 	124D.15, subdivision 3a,has been approved by the commissioner.
207.9 	(b) For fiscal year 2002 and thereafter, a district must
207.10 	receive school readiness aid equal to:
207.11 	(1) the number of eligible four-year-old children in the
207.12 	district on October 1 for the previous school year times the
207.13 	ratio of 50 percent of the total school readiness aid for that
207.14 	year to the total number of eligible four-year-old children
207.15 	reported to the commissioner for the previous school year; plus
207.16 	(2) the number of pupils enrolled in the school district
207.17 	from families eligible for the free or reduced school lunch
207.18 	program for the second previous school year times the ratio of
207.19 	50 percent of the total school readiness aid for that year to
207.20 	the total number of pupils in the state from families eligible
207.21 	for the free or reduced school lunch program for the second 
207.22 	previous school year.

207.23 	Sec. 15. Minnesota Statutes 2004, section 124D.16,
207.24 	subdivision 3, is amended to read:
207.25 		Subd. 3.Use of aid.  School readiness aid shall be used
207.26 	only to provide a school readiness program and may be used to
207.27 	provide transportation.  Not more than five percent of the
207.28 	aid program revenue, as defined in subdivision 5,may be used
207.29 	for the cost of administering the program.  Aid must be used to
207.30 	supplement and not supplant local, state, and federal funding.
207.31 	Aid may not be used for instruction and services required under
207.32 	sections 125A.03 to 125A.24 and 125A.65. Aid may not be used to
207.33 	purchase land or construct buildings, but may be used to lease
207.34 	or renovate existing buildings.

207.35 	Sec. 16. [124D.175] MINNESOTA EARLY LEARNING FOUNDATION
207.36 	PROPOSAL.
208.1 	(a) To the extent revenue is available for the purposes of
208.2 	this section, the commissioner must implement paragraphs (b) and
208.3 	(c).
208.4 	(b) The commissioner must implement an early childhood
208.5 	development grant program for low-income and other families that
208.6 	increases the effectiveness of early childhood development
208.7 	programs, which may include child care programs, and leads to
208.8 	improved early childhood parent education and children's
208.9 	kindergarten readiness.  Children eligible to participate under
208.10 	this section must demonstrate two or more of the following
208.11 	characteristics:
208.12 	(1) are members of a household with an income less than 75
208.13 	percent of the statewide median family income;
208.14 	(2) live in divorced or separated households headed by a
208.15 	single parent;
208.16 	(3) have experienced residential instability, homelessness,
208.17 	or have parents who have been unemployed in the past 12 months;
208.18 	(4) have a parent who has not received a high school
208.19 	diploma or its equivalent;
208.20 	(5) speak a primary language other than English;
208.21 	(6) are determined by a qualified early childhood or other
208.22 	professional to require additional developmental screening,
208.23 	diagnosis, or treatment;
208.24 	(7) have been placed in three or more child care settings
208.25 	in the past 12 months or are determined by a qualified early
208.26 	childhood or other professional to have been a victim of
208.27 	bullying;
208.28 	(8) have a parent who has undergone treatment for chemical
208.29 	abuse or mental illness; or 
208.30 	(9) other criteria determined by the commissioner in
208.31 	consultation with qualified early childhood or other
208.32 	professionals.
208.33 	(c) The program must include:
208.34 	(1) grant awards to existing early childhood development
208.35 	program providers that also provide parent education programs
208.36 	and to qualified providers proposing to implement pilot programs
209.1 	for this same purpose;
209.2 	(2) grant awards to enable low-income families to
209.3 	participate in these programs;
209.4 	(3) grant awards to improve overall academic quality; and 
209.5 	(4) an evaluation of the academic and financial efficacy of
209.6 	all these programs.
209.7 	This grant program must not supplant existing early childhood
209.8 	development programs or child care funds.
209.9 	(d) The commissioner must contract with a private
209.10 	nonprofit, section 501(c)(3) organization to implement the
209.11 	requirements of paragraph (b).  The private nonprofit
209.12 	organization must be governed by a board of directors composed
209.13 	of members from the public and nonpublic sectors, where the
209.14 	nonpublic sector members compose a simple majority of board
209.15 	members and where the public sector members are state and local
209.16 	government officials and kindergarten through grade 12 or
209.17 	postsecondary educators appointed by the governor.  The board of
209.18 	directors must appoint an executive director and must seek
209.19 	advice from geographically and ethnically diverse parents of
209.20 	young children and representatives of early childhood
209.21 	development providers, kindergarten through grade 12 and
209.22 	postsecondary educators, public libraries and the business
209.23 	sector.  All other terms and conditions under which board
209.24 	members serve and operate must be described in the articles and
209.25 	bylaws of the organization.  The private nonprofit organization
209.26 	is not a state agency and is not subject to any laws governing
209.27 	public agencies.
209.28 	(e) This section expires June 30, 2011.

209.29 	Sec. 17. Minnesota Statutes 2004, section 126C.15, is
209.30 	amended by adding a subdivision to read:
209.31 		Subd. 2a.Prekindergarten programs. Revenue allocated
209.32 	under subdivision 2, paragraph (c), must be reserved and used
209.33 	for programs and activities that prepare children ages 3-1/2
209.34 	from families eligible for the free or reduced-price school
209.35 	lunch program to enter kindergarten.  Programs may serve
209.36 	resident and nonresident children.  Districts may contract with
210.1 	private preschools and other providers of prekindergarten
210.2 	programs.

210.3 	Sec. 18. Minnesota Statutes 2004, section 179A.03,
210.4 	subdivision 14, is amended to read:
210.5 		Subd. 14.Public employee or employee.  "Public employee"
210.6 	or "employee" means any person appointed or employed by a public
210.7 	employer except:
210.8 	(a) elected public officials;
210.9 	(b) election officers;
210.10 	(c) commissioned or enlisted personnel of the Minnesota
210.11 	National Guard;
210.12 	(d) emergency employees who are employed for emergency work
210.13 	caused by natural disaster;
210.14 	(e) part-time employees whose service does not exceed the
210.15 	lesser of 14 hours per week or 35 percent of the normal work
210.16 	week in the employee's appropriate unit;
210.17 	(f) employees whose positions are basically temporary or
210.18 	seasonal in character and:  (1) are not for more than 67 working
210.19 	days in any calendar year; or (2) are not for more than 100
210.20 	working days in any calendar year and the employees are under
210.21 	the age of 22, are full-time students enrolled in a nonprofit or
210.22 	public educational institution prior to being hired by the
210.23 	employer, and have indicated, either in an application for
210.24 	employment or by being enrolled at an educational institution
210.25 	for the next academic year or term, an intention to continue as
210.26 	students during or after their temporary employment;
210.27 	(g) employees providing services for not more than two
210.28 	consecutive quarters to the Board of Trustees of the Minnesota
210.29 	State Colleges and Universities under the terms of a
210.30 	professional or technical services contract as defined in
210.31 	section 16C.08, subdivision 1;
210.32 	(h) employees of charitable hospitals as defined by section
210.33 	179.35, subdivision 3;
210.34 	(i) full-time undergraduate students employed by the school
210.35 	which they attend under a work-study program or in connection
210.36 	with the receipt of financial aid, irrespective of number of
211.1 	hours of service per week;
211.2 	(j) an individual who is employed for less than 300 hours
211.3 	in a fiscal year as an instructor in an adult vocational
211.4 	education program;
211.5 	(k) an individual hired by the Board of Trustees of the
211.6 	Minnesota State Colleges and Universities to teach one course
211.7 	for three or fewer credits for one semester in a year;
211.8 	(l) with respect to court employees:
211.9 	(1) personal secretaries to judges;
211.10 	(2) law clerks;
211.11 	(3) managerial employees;
211.12 	(4) confidential employees; and
211.13 	(5) supervisory employees.
211.14 	The following individuals are public employees regardless
211.15 	of the exclusions of clauses (e) and (f):
211.16 	(i) an employee hired by a school district or the Board of
211.17 	Trustees of the Minnesota State Colleges and Universities except
211.18 	at the university established in section 136F.13 or for
211.19 	community services or community education instruction offered on
211.20 	a noncredit basis:  (A) to replace an absent teacher or faculty
211.21 	member who is a public employee, where the replacement employee
211.22 	is employed more than 30 working days as a replacement for that
211.23 	teacher or faculty member; or (B) to take a teaching position
211.24 	created due to increased enrollment, curriculum expansion,
211.25 	courses which are a part of the curriculum whether offered
211.26 	annually or not, or other appropriate reasons; and 
211.27 	(ii) an employee hired for a position under clause (f)(1)
211.28 	if that same position has already been filled under clause
211.29 	(f)(1) in the same calendar year and the cumulative number of
211.30 	days worked in that same position by all employees exceeds 67
211.31 	calendar days in that year.  For the purpose of this paragraph,
211.32 	"same position" includes a substantially equivalent position if
211.33 	it is not the same position solely due to a change in the
211.34 	classification or title of the position; and 
211.35 	(iii) an early childhood family education teacher employed
211.36 	by a school district.
212.1 	
EFFECTIVE DATE. This section is effective July 1, 2005.

212.2 	Sec. 19. PILOT PROGRAM FOR AT-RISK PREKINDERGARTEN
212.3 	CHILDREN.
 212.4 		Subdivision 1.Establishment; eligibility; application
212.5 	process. (a) An early childhood education pilot program for
212.6 	at-risk children between the age of three and entering
212.7 	kindergarten is established to develop or expand developmentally
212.8 	appropriate and cost-effective programs for children who
212.9 	demonstrate two or more of the following characteristics:
212.10 	(1) are members of a household with an income less than 75
212.11 	percent of the statewide median family income;
212.12 	(2) live in divorced or separated households headed by a
212.13 	single parent;
212.14 	(3) have experienced residential instability, homelessness,
212.15 	or have parents who have been unemployed in the past 12 months;
212.16 	(4) have a parent who has not received a high school
212.17 	diploma or its equivalent;
212.18 	(5) speak a primary language other than English;
212.19 	(6) are determined by a qualified early childhood or other
212.20 	professional to require additional developmental screening,
212.21 	diagnosis, or treatment;
212.22 	(7) have been placed in three or more child care settings
212.23 	in the past 12 months or are determined by a qualified early
212.24 	childhood or other professional to have been a victim of
212.25 	bullying;
212.26 	(8) have a parent who has undergone treatment for chemical
212.27 	abuse or mental illness; or 
212.28 	(9) other criteria determined by the commissioner in
212.29 	consultation with qualified early childhood or other
212.30 	professionals.
212.31 	(b) An applicant for a grant must be a qualified provider
212.32 	of care, education, and social services for young children and
212.33 	their families.  The applicant must demonstrate to the
212.34 	satisfaction of the commissioner of education that, at a
212.35 	minimum, the applicant:
212.36 	(1) has successfully operated an early childhood program
213.1 	for two or more calendar years that includes a parent
213.2 	involvement and education component;
213.3 	(2) addresses the physical and educational needs of young
213.4 	children and their families; and 
213.5 	(3) measures its success in meeting the needs of the young
213.6 	children and families it serves.
213.7 	(c) To obtain a grant under this section, a qualified
213.8 	provider must submit an application to the commissioner of
213.9 	education in the form and manner the commissioner prescribes.
213.10 	The application must demonstrate the applicant's qualifications,
213.11 	consistent with paragraph (b), and describe how the applicant
213.12 	proposes to develop or expand a developmentally appropriate and
213.13 	cost-effective program for at-risk young children and their
213.14 	families.  The commissioner may require an applicant to submit
213.15 	additional information.
213.16 		Subd. 2.Grant awards. The commissioner may award up to
213.17 	five grants to qualified providers throughout the state.  The
213.18 	amount of the grant shall be based on the number of children and
213.19 	families expected to participate in the provider's program.
213.20 	Grant recipients must use the grant award to provide a
213.21 	developmentally appropriate and cost-effective program for
213.22 	at-risk young children and their families.
213.23 		Subd. 3.Evaluation. The commissioner, after evaluating
213.24 	the programmatic and cost-effectiveness of the grant recipients'
213.25 	programs and identifying the elements of developmentally
213.26 	appropriate and cost-effective programs for at-risk young
213.27 	children and their families, must submit by January 15, 2008, a
213.28 	written report of the commissioner's findings to the early
213.29 	childhood committees in the legislature.  The commissioner must
213.30 	submit by January 15, 2014, a subsequent written report to the
213.31 	early childhood education committees of the legislature
213.32 	evaluating the long-term effect of children's participation in
213.33 	early childhood education programs under this section.
213.34 	
EFFECTIVE DATE. This section is effective July 1, 2005.

213.35 	Sec. 20. MELF PROGRESS REPORT.
 213.36 	Consistent with Minnesota Statutes, section 124D.175, the
214.1 	private nonprofit organization under contract with the
214.2 	commissioner of education must submit to the education policy
214.3 	and finance committees of the legislature by February 1, 2008,
214.4 	an interim progress report evaluating the programmatic and
214.5 	financial efficacy of the programs receiving grant awards.

214.6 	Sec. 21. APPROPRIATIONS.
 214.7 		Subdivision 1.Department of education. The sums
214.8 	indicated in this section are appropriated from the general fund
214.9 	to the Department of Education for the fiscal years designated.
214.10 		Subd. 2.School readiness. For revenue for school
214.11 	readiness programs under Minnesota Statutes, sections 124D.15
214.12 	and 124D.16:
214.13 	$9,020,000 .....2006 
214.14 	$9,042,000 .....2007 
214.15 	The 2006 appropriation includes $1,417,000 for 2005 and
214.16 	$7,603,000 for 2006.
214.17 	The 2007 appropriation includes $1,415,000 for 2006 and
214.18 	$7,627,000 for 2007.
214.19 		Subd. 3.Early childhood family education aid. For early
214.20 	childhood family education aid under Minnesota Statutes, section
214.21 	124D.135:
214.22 	$17,652,000 .....2006 
214.23 	$22,133,000 .....2007 
214.24 	The 2006 appropriation includes $1,861,000 for 2005 and
214.25 	$15,791,000 for 2006.
214.26 	The 2007 appropriation includes $2,940,000 for 2006 and
214.27 	$19,193,000 for 2007.
214.28 		Subd. 4.Health and developmental screening aid. For
214.29 	health and developmental screening aid under Minnesota Statutes,
214.30 	sections 121A.17 and 121A.19:
214.31 	$3,076,000 .....2006 
214.32 	$3,511,000 .....2007 
214.33 	The 2006 appropriation includes $417,000 for 2005 and
214.34 	$2,659,000 for 2006.
214.35 	The 2007 appropriation includes $494,000 for 2006 and
214.36 	$3,017,000 for 2007.
215.1 		Subd. 5.Head start program. For Head Start programs
215.2 	under Minnesota Statutes, section 119A.52:
215.3 	$17,100,000 .....2006 
215.4 	$17,100,000 .....2007 
215.5 		Subd. 6.Minnesota early learning foundation. For the
215.6 	purposes of Minnesota Statutes, section 124D.175:
215.7 	$ 1,500,000 .....2006 
215.8 	The private nonprofit, section 501(c)(3) organization
215.9 	contracting with the commissioner may accept nonpublic funds for
215.10 	the purposes of Minnesota Statutes, section 124D.175.
215.11 	Of this appropriation, $500,000 is for a pilot program to
215.12 	develop or expand developmentally appropriate and cost-effective
215.13 	programs for at-risk young children and their families under
215.14 	section 19.
215.15 	This is a onetime appropriation.

215.16 	Sec. 22. REPEALER.
 215.17 	(a) Minnesota Statutes 2004, sections 124D.15, subdivisions
215.18 	2, 4, 6, 7, 8, 9, 11, and 13; and 124D.16, subdivision 4, are
215.19 	repealed.
215.20 	(b) Minnesota Statutes 2004, section 124D.16, subdivision
215.21 	1, is repealed effective July 1, 2006.

215.22 	ARTICLE 8
215.23 	PREVENTION

215.24 	Section 1. Minnesota Statutes 2004, section 119A.46,
215.25 	subdivision 1, is amended to read:
215.26 		Subdivision 1.Definitions.  (a) The definitions in
215.27 	section 144.9501 and in this subdivision apply to this section.
215.28 	(b) "Eligible organization" means a lead contractor, city,
215.29 	board of health, community health department, community action
215.30 	agency as defined in section 119A.374, or community development
215.31 	corporation.
215.32 	(c) "Commissioner" means the commissioner of education 
215.33 	health, or the commissioner of the Minnesota Housing Finance
215.34 	Agency as authorized by section 462A.05, subdivision 15c.

215.35 	Sec. 2. Minnesota Statutes 2004, section 119A.46,
215.36 	subdivision 2, is amended to read:
216.1 		Subd. 2.Grants; administration.  Within the limits of
216.2 	the available appropriation, the commissioner must develop a
216.3 	swab team services program which may make demonstration and
216.4 	training grants to eligible organizations to train workers to
216.5 	provide swab team services and swab team services for
216.6 	residential property.  Grants may be awarded to nonprofit
216.7 	organizations to provide technical assistance and training to
216.8 	ensure quality and consistency within the statewide program.
216.9 	Grants must be awarded to help ensure full-time employment to
216.10 	workers providing swab team services and must be awarded for a
216.11 	two-year period.
216.12 	Grants awarded under this section must be made in
216.13 	consultation with the commissioners of the Department of Health
216.14 	and commissioner of the Housing Finance Agency,and
216.15 	representatives of neighborhood groups from areas at high risk
216.16 	for toxic lead exposure, a labor organization, the lead
216.17 	coalition, community action agencies, and the legal aid
216.18 	society.  The consulting team must review grant applications and
216.19 	recommend awards to eligible organizations that meet
216.20 	requirements for receiving a grant under this section.

216.21 	Sec. 3. Minnesota Statutes 2004, section 119A.46,
216.22 	subdivision 3, is amended to read:
216.23 		Subd. 3.Applicants.  (a) Interested eligible
216.24 	organizations may apply to the commissioner for grants under
216.25 	this section.  Two or more eligible organizations may jointly
216.26 	apply for a grant.  Priority shall be given to community action
216.27 	agencies in greater Minnesota and to either community action
216.28 	agencies or neighborhood based nonprofit organizations in cities
216.29 	of the first class.  Of the total annual appropriation, 12.5
216.30 	percent may be used for administrative purposes.  The
216.31 	commissioner may deviate from this percentage if a grantee can
216.32 	justify the need for a larger administrative allowance.  Of this
216.33 	amount, up to five percent may be used by the commissioner for
216.34 	state administrative purposes.  Applications must provide
216.35 	information requested by the commissioner, including at least
216.36 	the information required to assess the factors listed in
217.1 	paragraph (d).
217.2 	(b) The commissioner must coordinate with the commissioner
217.3 	of health who must consult with boards of health to provide swab
217.4 	team services for purposes of secondary prevention.  The
217.5 	priority for swab teams created by grants to eligible
217.6 	organizations under this section must be work assigned by the
217.7 	commissioner of health, or by a board of health if so designated
217.8 	by the commissioner of health, to provide secondary prevention
217.9 	swab team services to fulfill the requirements of section
217.10 	144.9504, subdivision 6, in response to a lead order.  Swab
217.11 	teams assigned work under this section by the commissioner, that
217.12 	are not engaged daily in fulfilling the requirements of section
217.13 	144.9504, subdivision 6, must deliver swab team services in
217.14 	response to elevated blood lead levels as defined in section
217.15 	144.9501, subdivision 9, where lead orders were not issued, and
217.16 	for purposes of primary prevention in census tracts known to be
217.17 	in areas at high risk for toxic lead exposure as described in
217.18 	section 144.9503, subdivision 2.
217.19 	(c) Any additional money must be used for grants to
217.20 	establish swab teams for primary prevention under section
217.21 	144.9503, in census tracts in areas at high risk for toxic lead
217.22 	exposure as determined under section 144.9503, subdivision 2.
217.23 	(d) In evaluating grant applications, the commissioner must
217.24 	consider the following criteria:
217.25 	(1) the use of lead contractors and lead workers for
217.26 	residential swab team services;
217.27 	(2) the participation of neighborhood groups and
217.28 	individuals, as swab team workers, in areas at high risk for
217.29 	toxic lead exposure;
217.30 	(3) plans for the provision of swab team services for
217.31 	primary and secondary prevention as required under subdivision
217.32 	4;
217.33 	(4) plans for supervision, training, career development,
217.34 	and postprogram placement of swab team members;
217.35 	(5) plans for resident and property owner education on lead
217.36 	safety;
218.1 	(6) plans for distributing cleaning supplies to area
218.2 	residents and educating residents and property owners on
218.3 	cleaning techniques;
218.4 	(7) sources of other funding and cost estimates for
218.5 	training, lead inspections, swab team services, equipment,
218.6 	monitoring, testing, and administration;
218.7 	(8) measures of program effectiveness;
218.8 	(9) coordination of program activities with other federal,
218.9 	state, and local public health, job training, apprenticeship,
218.10 	and housing renovation programs including programs under
218.11 	sections 116L.86 to 116L.881; and
218.12 	(10) prior experience in providing swab team services.

218.13 	Sec. 4. Minnesota Statutes 2004, section 119A.46,
218.14 	subdivision 8, is amended to read:
218.15 		Subd. 8.Testing and evaluation.  (a) Testing of the
218.16 	environment is not necessary by swab teams whose work is
218.17 	assigned by the commissioner of health or a designated board of
218.18 	health under section 144.9504.  The commissioner of health or
218.19 	designated board of health must share the analytical testing
218.20 	data collected on each residence for purposes of secondary
218.21 	prevention under section 144.9504 with the swab team workers in
218.22 	order to provide constructive feedback on their work and to the
218.23 	commissioner for the purposes set forth in paragraph (c).
218.24 	(b) For purposes of primary prevention evaluation, the
218.25 	following samples must be collected:  pretesting and posttesting
218.26 	of one noncarpeted floor dust lead sample and a notation of the
218.27 	extent and location of bare soil and of deteriorated lead-based
218.28 	paint.  The analytical testing data collected on each residence
218.29 	for purposes of primary prevention under section 144.9503 must
218.30 	be shared with the swab team workers in order to provide
218.31 	constructive feedback on their work and to the commissioner for
218.32 	the purposes set forth in paragraph (c).
218.33 	(c) The commissioner of health must establish a program in
218.34 	cooperation with the commissioner to collect appropriate data as
218.35 	required under paragraphs (a) and (b), in order to conduct an
218.36 	ongoing evaluation of swab team services for primary and
219.1 	secondary prevention.  Within the limits of available
219.2 	appropriations, the commissioner of health must conduct or
219.3 	contract with the commissioner,on up to 1,000 residences which
219.4 	have received primary or secondary prevention swab team
219.5 	services, a postremediation evaluation, on at least a quarterly
219.6 	basis for a period of at least two years for each residence.
219.7 	The evaluation must note the condition of the paint within the
219.8 	residence, the extent of bare soil on the grounds, and collect
219.9 	and analyze one noncarpeted floor dust lead sample.  The data
219.10 	collected must be evaluated to determine the efficacy of
219.11 	providing swab team services as a method of reducing lead
219.12 	exposure in young children.  In evaluating this data, the
219.13 	commissioner of health must consider city size, community
219.14 	location, historic traffic flow, soil lead level of the property
219.15 	by area or census tract, distance to industrial point sources
219.16 	that emit lead, season of the year, age of the housing, age and
219.17 	number of children living at the residence, the presence of pets
219.18 	that move in and out of the residence, and other relevant
219.19 	factors as the commissioner of health may determine.

219.20 	Sec. 5. Minnesota Statutes 2004, section 124D.20,
219.21 	subdivision 3, is amended to read:
219.22 		Subd. 3.General community education revenue.  The
219.23 	general community education revenue for a district equals $5.95
219.24 	for fiscal year 2003 and 2004 and $5.23 for fiscal year years 
219.25 	2005 and 2006 and $6.00 for fiscal year 2007 and later, times
219.26 	the greater of 1,335 or the population of the district.  The
219.27 	population of the district is determined according to section
219.28 	275.14.
219.29 	
EFFECTIVE DATE. This section is effective for revenue for
219.30 	fiscal year 2007.

219.31 	Sec. 6. APPROPRIATION.
 219.32 		Subdivision 1.Department of education. The sums
219.33 	indicated in this section are appropriated from the general fund
219.34 	to the Department of Education for the fiscal years designated.
219.35 		Subd. 2.Community education aid. For community
219.36 	education aid under Minnesota Statutes, section 124D.20:
220.1 	$1,918,000 .....2006 
220.2 	$1,837,000 .....2007 
220.3 	The 2006 appropriation includes $390,000 for 2005 and
220.4 	$1,528,000 for 2006.
220.5 	The 2007 appropriation includes $284,000 for 2006 and
220.6 	$1,553,000 for 2007.
220.7 		Subd. 3.Adults with disabilities program aid. For
220.8 	adults with disabilities programs under Minnesota Statutes,
220.9 	section 124D.56:
220.10 	$  710,000 .....2006 
220.11 	$  710,000 .....2007 
220.12 	The 2006 appropriation includes $111,000 for 2005 and
220.13 	$599,000 for 2006.
220.14 	The 2007 appropriation includes $111,000 for 2006 and
220.15 	$599,000 for 2007.
220.16 		Subd. 4.Hearing-impaired adults. For programs for
220.17 	hearing-impaired adults under Minnesota Statutes, section
220.18 	124D.57:
220.19 	$   70,000 .....2006 
220.20 	$   70,000 .....2007 
220.21 		Subd. 5.School-age care revenue. For extended day aid
220.22 	under Minnesota Statutes, section 124D.22:
220.23 	$   17,000 .....2006 
220.24 	$    7,000 .....2007 
220.25 	The 2006 appropriation includes $4,000 for 2005 and $13,000
220.26 	for 2006.
220.27 	The 2007 appropriation includes $2,000 for 2006 and $5,000
220.28 	for 2007.

220.29 	ARTICLE 9
220.30 	SELF-SUFFICIENCY AND LIFELONG LEARNING

220.31 	Section 1. Minnesota Statutes 2004, section 124D.52,
220.32 	subdivision 3, is amended to read:
220.33 		Subd. 3.Accounts; revenue; aid.  (a) Each district,
220.34 	group of districts, or private nonprofit organization providing
220.35 	adult basic education programs must establish and maintain a
220.36 	reserve account within the community service fund for the
221.1 	receipt and disbursement of all funds related to these
221.2 	programs.  All revenue received pursuant to this section must be
221.3 	utilized solely for the purposes of adult basic education
221.4 	programs.  State aid must not equal more than 100 percent of the
221.5 	unreimbursed expenses of providing these programs, excluding
221.6 	in-kind costs.
221.7 	(b) For purposes of paragraph (a), an adult basic education
221.8 	program may include as valid expenditures for the previous
221.9 	fiscal year program spending that occurs from July 1 to
221.10 	September 30 of the following year.  Program spending may only
221.11 	be counted for one fiscal year.
221.12 	(c) Notwithstanding section 123A.26 or any other law to the
221.13 	contrary, an adult basic education consortium providing an
221.14 	approved adult basic education program may be its own fiscal
221.15 	agent and is eligible to receive state-aid payments directly
221.16 	from the commissioner.
221.17 	
EFFECTIVE DATE. This section is effective the day
221.18 	following final enactment.

221.19 	Sec. 2. Minnesota Statutes 2004, section 124D.531,
221.20 	subdivision 1, is amended to read:
221.21 		Subdivision 1.State total adult basic education aid.
 221.22 	(a) The state total adult basic education aid for fiscal year
221.23 	2004 equals $34,388,000.  The state total adult basic education
221.24 	aid for fiscal year 2005 and later is $36,509,000. The state
221.25 	total adult basic education aid for fiscal year 2006 and later
221.26 	is $36,518,000 plus any amount that is not paid for during the
221.27 	previous fiscal year, as a result of adjustments under
221.28 	subdivision 4, paragraph (a), or section 124D.52, subdivision
221.29 	3.Beginning in fiscal year 2002, two percent of the state
221.30 	total adult basic education aid must be set aside for adult
221.31 	basic education supplemental service grants under section
221.32 	124D.522.
221.33 	(b) The state total adult basic education aid, excluding
221.34 	basic population aid, equals the difference between the amount
221.35 	computed in paragraph (a), and the state total basic population
221.36 	aid under subdivision 2.
222.1 	
EFFECTIVE DATE. This section is effective the day
222.2 	following final enactment and applies to revenue distributions
222.3 	for fiscal year 2006.

222.4 	Sec. 3. Minnesota Statutes 2004, section 124D.531,
222.5 	subdivision 4, is amended to read:
222.6 		Subd. 4.Adult basic education program aid limit.  (a)
222.7 	Notwithstanding subdivisions 2 and 3, the total adult basic
222.8 	education aid for a program per prior year contact hour must not
222.9 	exceed $21 per prior year contact hour computed under
222.10 	subdivision 3, clause (2).
222.11 	(b) For fiscal year 2004, the aid for a program under
222.12 	subdivision 3, clause (2), adjusted for changes in program
222.13 	membership, must not exceed the aid for that program under
222.14 	subdivision 3, clause (2), for fiscal year 2003 by more than the
222.15 	greater of eight percent or $10,000.
222.16 	(c) For fiscal year 2005, the aid for a program under
222.17 	subdivision 3, clause (2), adjusted for changes in program
222.18 	membership, must not exceed the sum of the aid for that program
222.19 	under subdivision 3, clause (2), and Laws 2003, First Special
222.20 	Session chapter 9, article 9, section 8, paragraph (a), for the
222.21 	preceding fiscal year by more than the greater of eight percent
222.22 	or $10,000.
222.23 	(d) For fiscal year 2006 and later, the aid for a program
222.24 	under subdivision 3, clause (2), adjusted for changes in program
222.25 	membership, must not exceed the aid for that program under
222.26 	subdivision 3, clause (2), for the first preceding fiscal year
222.27 	by more than the greater of eight percent or $10,000.
222.28 	(e) Adult basic education aid is payable to a program for
222.29 	unreimbursed costs occurring in the program year as defined in
222.30 	section 124D.52, subdivision 3.
222.31 	(f) Any adult basic education aid that is not paid to a
222.32 	program because of the program aid limitation under paragraph
222.33 	(a) must be added to the state total adult basic education aid
222.34 	for the next fiscal year under subdivision 1.  Any adult basic
222.35 	education aid that is not paid to a program because of the
222.36 	program aid limitations under paragraph (b), (c), or (d), must
223.1 	be reallocated among programs by adjusting the rate per contact
223.2 	hour under subdivision 3, clause (2).
223.3 	
EFFECTIVE DATE. This section is effective the day
223.4 	following final enactment and applies to revenue distributions
223.5 	for fiscal year 2006.

223.6 	Sec. 4. GRANTS FOR INTENSIVE ENGLISH INSTRUCTION FOR NEW
223.7 	ADULT REFUGEES.
 223.8 	The commissioner of education shall establish a
223.9 	reimbursement grant program to fund intensive English as a
223.10 	second language (ESL) programs for adult refugees.  Intensive
223.11 	ESL programming must provide intensive instruction for adult
223.12 	refugees who are making inadequate literacy progress as measured
223.13 	by a standard assessment test.  The intensive instruction must
223.14 	be focused on participants gaining sufficient literacy to
223.15 	achieve self-sufficiency through employment.
223.16 	Organizations eligible for grants under this section
223.17 	include adult basic education programs, school districts,
223.18 	postsecondary institutions, and nonprofit or community-based
223.19 	organizations or other private organizations with experience in
223.20 	providing English language instruction to non-English speaking
223.21 	immigrants and refugees.  Grant applications must contain
223.22 	information required by the commissioner in the form prescribed
223.23 	by the commissioner.  At a minimum, the application must
223.24 	document experience in literacy programs serving immigrants and
223.25 	refugees, describe fiscal accounting systems and reporting
223.26 	capacity, ensure that administrative expenses are limited to
223.27 	five percent of grant funds, and provide a description of the
223.28 	proposed instructional services and training plans.  Funds must
223.29 	be paid to programs on a reimbursement basis.  The grant program
223.30 	expires on June 30, 2007.

223.31 	Sec. 5. REVISOR'S INSTRUCTION.
 223.32 	In the next edition of Minnesota Statutes, the revisor of
223.33 	statutes shall renumber Minnesota Statutes, section 119A.46, as
223.34 	section 144.9512 and make necessary cross-reference changes.

223.35 	Sec. 6. APPROPRIATIONS.
 223.36 		Subdivision 1.Department of education. The sums
224.1 	indicated in this section are appropriated from the general fund
224.2 	to the Department of Education for the fiscal years designated.
224.3 		Subd. 2.Adult basic education aid. For adult basic
224.4 	education aid under Minnesota Statutes:
224.5 	$36,518,000 .....2006 
224.6 	$36,540,000 .....2007 
224.7 	The 2006 appropriation includes $5,707,000 for 2005 and
224.8 	$30,811,000 for 2006.
224.9 	The 2007 appropriation includes $5,737,000 for 2006 and
224.10 	$30,803,000 for 2007.
224.11 		Subd. 3.Ged tests. For payment of 60 percent of the
224.12 	costs of GED tests under Laws 1993, chapter 224, article 4,
224.13 	section 44, subdivision 10:
224.14 	$  125,000 .....2006 
224.15 	$  125,000 .....2007 
224.16 		Subd. 4.Lead hazard reduction. For lead hazard
224.17 	reduction under Minnesota Statutes, section 119A.46:
224.18 	$  100,000 .....2006 
224.19 	$  100,000 .....2007 
224.20 	Any balance in the first year does not cancel but is
224.21 	available in the second year.  The commissioner of education may
224.22 	transfer this appropriation to the commissioner of health.
224.23 		Subd. 5.Intensive english instruction. For grants for
224.24 	intensive English instruction for adult refugees under section 4:
224.25 	$1,000,000 .....2006 
224.26 	$1,000,000 .....2007 

224.27 	ARTICLE 10
224.28 	STATE AGENCIES

224.29 	Section 1. Minnesota Statutes 2004, section 122A.09,
224.30 	subdivision 4, is amended to read:
224.31 		Subd. 4.License and rules.  (a) The board must adopt
224.32 	rules to license public school teachers and interns subject to
224.33 	chapter 14.
224.34 	(b) The board must adopt rules requiring a person to
224.35 	successfully complete a skills examination in reading, writing,
224.36 	and mathematics as a requirement for initial teacher licensure.
225.1 	Such rules must require college and universities offering a
225.2 	board-approved teacher preparation program to provide remedial
225.3 	assistance to persons who did not achieve a qualifying score on
225.4 	the skills examination, including those for whom English is a
225.5 	second language.
225.6 	(c) The board must adopt rules to approve teacher
225.7 	preparation programs.  The board, upon the request of a
225.8 	postsecondary student preparing for teacher licensure or a
225.9 	licensed graduate of a teacher preparation program, shall assist
225.10 	in resolving a dispute between the person and a postsecondary
225.11 	institution providing a teacher preparation program when the
225.12 	dispute involves an institution's recommendation for licensure
225.13 	affecting the person or the person's credentials.  At the
225.14 	board's discretion, assistance may include the application of
225.15 	chapter 14.
225.16 	(d) The board must provide the leadership and shall adopt
225.17 	rules for the redesign of teacher education programs to
225.18 	implement a research based, results-oriented curriculum that
225.19 	focuses on the skills teachers need in order to be effective.
225.20 	The board shall implement new systems of teacher preparation
225.21 	program evaluation to assure program effectiveness based on
225.22 	proficiency of graduates in demonstrating attainment of program
225.23 	outcomes.
225.24 	(e) The board must adopt rules requiring successful
225.25 	completion of an examination of general pedagogical knowledge
225.26 	and examinations of licensure-specific teaching skills.  The
225.27 	rules shall be effective on the dates determined by the board
225.28 	but not later than September 1, 2001.
225.29 	(f) The board must adopt rules requiring teacher educators
225.30 	to work directly with elementary or secondary school teachers in
225.31 	elementary or secondary schools to obtain periodic exposure to
225.32 	the elementary or secondary teaching environment.
225.33 	(g) The board must grant licenses to interns and to
225.34 	candidates for initial licenses.
225.35 	(h) The board must design and implement an assessment
225.36 	system which requires a candidate for an initial license and
226.1 	first continuing license to demonstrate the abilities necessary
226.2 	to perform selected, representative teaching tasks at
226.3 	appropriate levels.
226.4 	(i) The board must receive recommendations from local
226.5 	committees as established by the board for the renewal of
226.6 	teaching licenses.
226.7 	(j) The board must grant life licenses to those who qualify
226.8 	according to requirements established by the board, and suspend
226.9 	or revoke licenses pursuant to sections 122A.20 and 214.10.  The
226.10 	board must not establish any expiration date for application for
226.11 	life licenses.
226.12 	(k) The board must adopt rules that require all licensed
226.13 	teachers who are renewing their continuing license to include in
226.14 	their renewal requirements further preparation in the areas of
226.15 	using positive behavior interventions and in accommodating,
226.16 	modifying, and adapting curricula, materials, and strategies to
226.17 	appropriately meet the needs of individual students and ensure
226.18 	adequate progress toward the state's graduation rule.
226.19 	(l) In adopting rules to license public school teachers who
226.20 	provide health-related services for disabled children, the board
226.21 	shall adopt rules consistent with license or registration
226.22 	requirements of the commissioner of health and the
226.23 	health-related boards who license personnel who perform similar
226.24 	services outside of the school.
226.25 	(m) The board must adopt rules that require all licensed
226.26 	teachers who are renewing their continuing license to include in
226.27 	their renewal requirements further reading preparation,
226.28 	consistent with section 122A.06, subdivision 4.  The rules do
226.29 	not take effect until they are approved by law.  Teachers who do
226.30 	not provide direct instruction including, at least, counselors,
226.31 	school psychologists, school nurses, school social workers,
226.32 	audiovisual directors and coordinators, and recreation personnel
226.33 	are exempt from this section.
226.34 	(n) The board must adopt rules that require all licensed
226.35 	teachers who are renewing their continuing license to include in
226.36 	their renewal requirements further preparation in understanding
227.1 	the key warning signs of early-onset mental illness in children
227.2 	and adolescents.
227.3 	(o) The board, in consultation with the department,
227.4 	representatives of innovative schools and programs as determined
227.5 	by the board, and representatives of charter schools,
227.6 	alternative schools, small schools, and rural schools, must
227.7 	adopt rules to create an interdisciplinary teaching license.

227.8 	Sec. 2. Minnesota Statutes 2004, section 122A.09,
227.9 	subdivision 10, is amended to read:
227.10 		Subd. 10.Variances.  (a) Notwithstanding subdivision 9
227.11 	and section 14.05, subdivision 4, the Board of Teaching may
227.12 	grant a variance to its rules upon application by a school
227.13 	district for purposes of implementing experimental programs in
227.14 	learning or management.
227.15 	(b) To enable a school district to meet the needs of
227.16 	students enrolled in an alternative education program and to
227.17 	enable licensed teachers instructing those students to satisfy
227.18 	content area licensure requirements, the Board of Teaching
227.19 	annually may permit a licensed teacher teaching in an
227.20 	alternative education program to instruct students in a content
227.21 	area for which the teacher is not licensed, consistent with
227.22 	paragraph (a).
227.23 	(c) A special education license variance issued by the
227.24 	Board of Teaching for a primary employer's low-incidence region
227.25 	shall be valid in all low-incidence regions.

227.26 	Sec. 3. [122A.245] TEACHER TRAINING PROGRAM FOR QUALIFIED
227.27 	PROFESSIONALS.
227.28 		Subdivision 1.Scope and requirements. (a) As an
227.29 	alternative to postsecondary teacher preparation programs, a
227.30 	teacher training program is established for qualified
227.31 	professionals to acquire an entrance license.  Program
227.32 	providers, approved by the Board of Teaching under subdivision
227.33 	3, may offer the program in the instructional fields of science,
227.34 	mathematics, world languages, English as a second language, and
227.35 	special education.
227.36 	(b) To participate in the teacher training program, the
228.1 	teacher applicant must:
228.2 	(1) have, at a minimum, a bachelor's degree from an
228.3 	accredited four-year postsecondary institution;
228.4 	(2) have an undergraduate major or postbaccalaureate degree
228.5 	in the subject to be taught or in an equivalent or related
228.6 	subject area in which the applicant is seeking licensure;
228.7 	(3) pass a skills examination in reading, writing, and
228.8 	mathematics required under section 122A.18;
228.9 	(4) pass the Praxis II subject assessment for each subject
228.10 	area to be taught;
228.11 	(5) have a cumulative grade point average of 2.75 or higher
228.12 	on a 4.0 scale for a bachelor's degree;
228.13 	(6) show employment related to the subject to be taught;
228.14 	and 
228.15 	(7) show a district offer for employment as a teacher
228.16 	contingent on participating in an approved program described in
228.17 	subdivision 2.
228.18 		Subd. 2.Program. A teacher training program under this
228.19 	section is one year in duration and must include:
228.20 	(1) a nine-credit summer or preinduction preparation
228.21 	program that includes classroom management techniques and
228.22 	on-site classroom observation that are completed before the
228.23 	candidate is employed in the classroom;
228.24 	(2) 200 clock hours of instruction in standards of
228.25 	effective practice and essential skills that include curriculum,
228.26 	instructional strategies, and classroom management presented
228.27 	after school or on Saturdays throughout the year leading to a
228.28 	teaching license and up to 15 graduate credits toward a master's
228.29 	degree in education;
228.30 	(3) on-the-job mentoring, supervision, and evaluation
228.31 	arranged by the employing district that includes mentoring
228.32 	provided by an experienced teacher licensed in the subject
228.33 	taught by the applicant, and three evaluations by an evaluation
228.34 	team composed of the mentor, the principal, and a training
228.35 	program member that include at least three classroom
228.36 	observations where the third evaluation contains the team's
229.1 	recommendation for licensure and where a written report of each
229.2 	evaluation is prepared; and 
229.3 	(4) a one-week intensive workshop that includes analysis
229.4 	and reflection of the first year of teaching after completing
229.5 	the school year, which may be counted as part of 200 clock hours
229.6 	required in clause (2).
229.7 		Subd. 3.Program approval. An interested Minnesota
229.8 	public or private postsecondary institution must submit program
229.9 	proposals to the Board of Teaching for approval.
229.10 	Notwithstanding any law to the contrary, the Board of
229.11 	Teaching must develop criteria for approving teacher training
229.12 	programs under this section after considering the
229.13 	recommendations of an advisory group appointed by the Board of
229.14 	Teaching composed of, at a minimum, the commissioner of
229.15 	education or designee, and representatives of school
229.16 	superintendents, principals, teachers, and postsecondary
229.17 	institutions, including those offering degrees in teaching
229.18 	preparation.
229.19 		Subd. 4.Eligibility license. Notwithstanding any law to
229.20 	the contrary, the Board of Teaching must issue to an applicant
229.21 	who successfully meets the criteria under subdivision 1,
229.22 	paragraph (b), a one-year eligibility license to teach at the
229.23 	employing district under subdivision 1, paragraph (b), clause
229.24 	(7).  During the one-year eligibility period, the employing
229.25 	district must assign a mentor under subdivision 2, clause (3).
229.26 	The applicant teacher and teacher mentor must meet at least
229.27 	weekly throughout the school year on classroom and instructional
229.28 	issues.
229.29 	The hiring district may deduct from the participant's
229.30 	salary the cost of providing the mentor for the participant
229.31 	during the training year.
229.32 		Subd. 5.Standard entrance license. Notwithstanding any
229.33 	law to the contrary, the Board of Teaching must issue a standard
229.34 	entrance license to a training program licensee who successfully
229.35 	completes the program under subdivision 2, successfully teaches
229.36 	in a classroom for one complete school year, successfully passes
230.1 	the Praxis II principles of learning and teaching, and receives
230.2 	a positive recommendation from the applicant's evaluation team.
230.3 		Subd. 6.Qualified teacher. A person with a valid
230.4 	eligibility license under subdivision 5 is a qualified teacher
230.5 	under section 122A.16.

230.6 	Sec. 4. Minnesota Statutes 2004, section 122A.40,
230.7 	subdivision 5, is amended to read:
230.8 		Subd. 5.Probationary period.  (a) The first three
230.9 	consecutive years of a teacher's first teaching experience in
230.10 	Minnesota in a single district is deemed to be a probationary
230.11 	period of employment, and after completion thereof, the
230.12 	probationary period in each district in which the teacher is
230.13 	thereafter employed shall be one year.  The school board must
230.14 	adopt a plan for written evaluation of teachers during the
230.15 	probationary period.  Evaluation must occur at least three times
230.16 	each year for a teacher performing services on 120 or more
230.17 	school days, at least two times each year for a teacher
230.18 	performing services on 60 to 119 school days, and at least one
230.19 	time each year for a teacher performing services on fewer than
230.20 	60 school days.  Days devoted to parent-teacher conferences,
230.21 	teachers' workshops, and other staff development opportunities
230.22 	and days on which a teacher is absent from school must not be
230.23 	included in determining the number of school days on which a
230.24 	teacher performs services.  Except as otherwise provided in
230.25 	paragraph (b), during the probationary period any annual
230.26 	contract with any teacher may or may not be renewed as the
230.27 	school board shall see fit.  However, the board must give any
230.28 	such teacher whose contract it declines to renew for the
230.29 	following school year written notice to that effect before July
230.30 	1.  If the teacher requests reasons for any nonrenewal of a
230.31 	teaching contract, the board must give the teacher its reason in
230.32 	writing, including a statement that appropriate supervision was
230.33 	furnished describing the nature and the extent of such
230.34 	supervision furnished the teacher during the employment by the
230.35 	board, within ten days after receiving such request.  The school
230.36 	board may, after a hearing held upon due notice, discharge a
231.1 	teacher during the probationary period for cause, effective
231.2 	immediately, under section 122A.44.
231.3 	(b) A board must discharge a probationary teacher,
231.4 	effective immediately, upon receipt of notice under section
231.5 	122A.20, subdivision 1, paragraph (b), that the teacher's
231.6 	license has been revoked due to a conviction for child abuse or
231.7 	sexual abuse.
231.8 	(c) A probationary teacher must complete at least 60 days
231.9 	of teaching service each year during the probationary period.
231.10 	Days devoted to parent-teacher conferences, teachers' workshops,
231.11 	and other staff development opportunities and days on which a
231.12 	teacher is absent from school do not count as days of teaching
231.13 	service under this paragraph.
231.14 	
EFFECTIVE DATE. This section is effective July 1, 2005.

231.15 	Sec. 5. Minnesota Statutes 2004, section 122A.41,
231.16 	subdivision 2, is amended to read:
231.17 		Subd. 2.Probationary period; discharge or demotion. (a) 
231.18 	All teachers in the public schools in cities of the first class
231.19 	during the first three years of consecutive employment shall be
231.20 	deemed to be in a probationary period of employment during which
231.21 	period any annual contract with any teacher may, or may not, be
231.22 	renewed as the school board, after consulting with the peer
231.23 	review committee charged with evaluating the probationary
231.24 	teachers under subdivision 3, shall see fit.  The school site
231.25 	management team or the school board if there is no school site
231.26 	management team, shall adopt a plan for a written evaluation of
231.27 	teachers during the probationary period according to subdivision
231.28 	3.  Evaluation by the peer review committee charged with
231.29 	evaluating probationary teachers under subdivision 3 shall occur
231.30 	at least three times each year for a teacher performing services
231.31 	on 120 or more school days, at least two times each year for a
231.32 	teacher performing services on 60 to 119 school days, and at
231.33 	least one time each year for a teacher performing services on
231.34 	fewer than 60 school days.  Days devoted to parent-teacher
231.35 	conferences, teachers' workshops, and other staff development
231.36 	opportunities and days on which a teacher is absent from school
232.1 	shall not be included in determining the number of school days
232.2 	on which a teacher performs services.  The school board may,
232.3 	during such probationary period, discharge or demote a teacher
232.4 	for any of the causes as specified in this code.  A written
232.5 	statement of the cause of such discharge or demotion shall be
232.6 	given to the teacher by the school board at least 30 days before
232.7 	such removal or demotion shall become effective, and the teacher
232.8 	so notified shall have no right of appeal therefrom.
232.9 	(b) A probationary teacher must complete at least 60 days
232.10 	of teaching service each year during the probationary period.
232.11 	Days devoted to parent-teacher conferences, teachers' workshops,
232.12 	and other staff development opportunities and days on which a
232.13 	teacher is absent from school do not count as days of teaching
232.14 	service under this paragraph.
232.15 	
EFFECTIVE DATE. This section is effective July 1, 2005.

232.16 	Sec. 6. REPORT.
 232.17 	The Board of Teaching, in consultation with approved
232.18 	alternative teacher training program providers and the
232.19 	Department of Education, must evaluate the efficacy of the
232.20 	alternative teacher training program under Minnesota Statutes,
232.21 	section 122A.245, through the 2013-2014 school year and by
232.22 	February 15, 2015, submit a written report to the kindergarten
232.23 	through grade 12 education policy committees of the legislature
232.24 	that includes, among other content, recommendations about
232.25 	whether to extend or expand the alternative teacher training
232.26 	program.

232.27 	Sec. 7. LICENSED STUDENT SUPPORT SERVICES.
 232.28 		Subdivision 1.Access to services. School districts and
232.29 	the Department of Education shall work to provide for students'
232.30 	educational achievement, to provide for student safety, and to
232.31 	enhance student physical, emotional, and social well-being by
232.32 	providing access to licensed student support services, such as
232.33 	licensed school nurses, licensed school counselors, licensed
232.34 	school social workers, and licensed school psychologists.
232.35 		Subd. 2.Funding. Districts and the department shall
232.36 	explore opportunities for obtaining additional funds to improve
233.1 	students' access to needed licensed student support services
233.2 	including, but not limited to, medical assistance
233.3 	reimbursements, local collaborative time study funds, federal
233.4 	funds, public health funds, and specifically designated funds.
233.5 		Subd. 3.Improving access. Districts and the department
233.6 	must consider nationally recommended licensed staff-to-student
233.7 	ratios, work loads, and best practices when working to improve
233.8 	student access to needed licensed student support services.

233.9 	Sec. 8. STATEWIDE STUDENT INFORMATION AND REPORTING
233.10 	SYSTEM.
 233.11 		Subdivision 1.Working group convened. (a) The
233.12 	commissioner of education must convene a working group composed
233.13 	of:
233.14 	(1) representatives from school districts, charter schools,
233.15 	and area learning centers of diverse size and location chosen by
233.16 	the commissioner;
233.17 	(2) officials from the Department of Administration
233.18 	Materials Management Division; and 
233.19 	(3) at least three citizens with a demonstrated expertise
233.20 	in Web-based student information systems.
233.21 	The working group must develop a plan to improve the quality and
233.22 	decrease the cost of Minnesota's student information systems.
233.23 	(b) When developing its plan under paragraph (a), the group
233.24 	at least must determine whether the student information system:
233.25 	(1) best operates as a single integrated management system
233.26 	or a system with a specified number of vendors that seamlessly
233.27 	transfer student data between school districts;
233.28 	(2) includes a software license, technical support, and
233.29 	also hardware on which the software runs;
233.30 	(3) is run in each school district or at a central data
233.31 	center; and 
233.32 	(4) can be run by private sector companies having access to
233.33 	students' educational records.
233.34 		Subd. 2.Request for proposals. The working group,
233.35 	consistent with its determinations in subdivision 1, paragraph
233.36 	(b), shall develop the framework for a request for proposal or
234.1 	"RFP" for the student information and reporting system.  The RFP
234.2 	must require a vendor to implement a system that:
234.3 	(1) meets all of the data collection and reporting
234.4 	requirements of the Minnesota Automated Reporting Student
234.5 	System;
234.6 	(2) enhances state and federal student data collection;
234.7 	(3) facilitates value-added assessment systems;
234.8 	(4) ensures that the system has secure Web-based
234.9 	capabilities for entering and editing data; and 
234.10 	(5) provides robust data management tools including
234.11 	reporting features.
234.12 	
EFFECTIVE DATE. This section is effective the day
234.13 	following final enactment.

234.14 	Sec. 9. APPROPRIATIONS; DEPARTMENT OF EDUCATION.
 234.15 		Subdivision 1.Department of education. Unless otherwise
234.16 	indicated, the sums indicated in this section are appropriated
234.17 	from the general fund to the Department of Education for the
234.18 	fiscal years designated.
234.19 		Subd. 2.Department. (a) For the Department of Education:
234.20 	$22,057,000 .....2006 
234.21 	$23,887,000 .....2007 
234.22 	Any balance in the first year does not cancel but is
234.23 	available in the second year.
234.24 	(b) $260,000 each year is for the Minnesota Children's
234.25 	Museum.
234.26 	(c) $41,000 each year is for the Minnesota Academy of
234.27 	Science.
234.28 	(d) $605,000 each year is for the Board of Teaching.  In
234.29 	addition, the commissioner must provide necessary resources to
234.30 	complete rulemaking under Minnesota Statutes, section 122A.09,
234.31 	subdivision 4.
234.32 	(e) $160,000 each year is for the Board of School
234.33 	Administrators.
234.34 	(f) $10,000 in fiscal year 2006 and $15,000 in fiscal year
234.35 	2007 are for administration of single purpose charter school
234.36 	sponsors.
235.1 	(g) $500,000 in fiscal year 2007 is for alternative teacher
235.2 	licensure programs.
235.3 	(h) $300,000 in fiscal year 2006 and $1,600,000 in fiscal
235.4 	year 2007 are for value-added index assessment model.
235.5 	(i) $50,000 in fiscal year 2006 and $75,000 in fiscal year
235.6 	2007 are for the development and distribution to school
235.7 	districts of materials addressing the dangers of methamphetamine.
235.8 	(j) The expenditures of federal grants and aids as shown in
235.9 	the biennial budget document and its supplements are approved
235.10 	and appropriated and shall be spent as indicated.

235.11 	Sec. 10. APPROPRIATIONS; MINNESOTA STATE ACADEMIES.
 235.12 	The sums indicated in this section are appropriated from
235.13 	the general fund to the Minnesota State Academies for the Deaf
235.14 	and the Blind for the fiscal years designated:
235.15 	$11,078,000 .....2006 
235.16 	$11,153,000 .....2007 
235.17 	Any balance in the first year does not cancel but is
235.18 	available in the second year.

235.19 	Sec. 11. APPROPRIATIONS; PERPICH CENTER FOR ARTS
235.20 	EDUCATION.
 235.21 	The sums indicated in this section are appropriated from
235.22 	the general fund to the Perpich Center for Arts Education for
235.23 	the fiscal years designated:
235.24 	$6,255,000 .....2006 
235.25 	$6,255,000 .....2007 
235.26 	Any balance in the first year does not cancel but is
235.27 	available in the second year.

235.28 	Sec. 12. REPEALER.
 235.29 	Minnesota Statutes 2004, section 122A.24, is repealed.

235.30 	ARTICLE 11
235.31 	FORECAST DEFICIENCIES
235.32 	A.  GENERAL EDUCATION

235.33 	Section 1. Laws 2003, First Special Session chapter 9,
235.34 	article 1, section 53, subdivision 2, as amended by Laws 2004,
235.35 	chapter 272, article 1, section 1, is amended to read:
235.36 		Subd. 2.General education aid. For general education
236.1 	aid under Minnesota Statutes, section 126C.13, subdivision 4:
236.2 	$4,726,466,000    .....     2004
236.3 	$5,026,983,000 $5,281,781,000.....     2005
236.4 	The 2004 appropriation includes $860,552,000 for 2003 and
236.5 	$3,865,914,000 for 2004.
236.6 	The 2005 appropriation includes
236.7 	$1,009,822,000 $1,009,526,000 for 2004
236.8 	and $4,017,161,000 $4,272,255,000 for 2005.

236.9 	Sec. 2. Laws 2003, First Special Session chapter 9,
236.10 	article 1, section 53, subdivision 3, as amended by Laws 2004,
236.11 	chapter 272, article 1, section 2, is amended to read:
236.12 		Subd. 3.Referendum tax base replacement aid. For
236.13 	referendum tax base replacement aid under Minnesota Statutes,
236.14 	section 126C.17, subdivision 7a:
236.15 	$8,096,000    .....     2004
236.16 	$8,596,000 $9,007,000.....     2005
236.17 	The 2004 appropriation includes $1,419,000 for 2003 and
236.18 	$6,677,000 for 2004.
236.19 	The 2005 appropriation includes $1,669,000 for 2004 and
236.20 	$6,927,000 $7,338,000 for 2005.

236.21 	Sec. 3. Laws 2003, First Special Session chapter 9,
236.22 	article 1, section 53, subdivision 11, as amended by Laws 2004,
236.23 	chapter 272, article 1, section 5, is amended to read:
236.24 		Subd. 11.Nonpublic pupil aid. For nonpublic pupil
236.25 	education aid under Minnesota Statutes, sections 123B.40 to
236.26 	123B.43 and 123B.87:
236.27 	$14,411,000    .....     2004
236.28 	$15,072,000 $15,304,000.....     2005
236.29 	The 2004 appropriation includes $2,715,000 for 2003 and
236.30 	$11,696,000 for 2004.
236.31 	The 2005 appropriation includes $2,923,000 for 2004 and
236.32 	$12,149,000 $12,381,000 for 2005.

236.33 	Sec. 4. Laws 2003, First Special Session chapter 9,
236.34 	article 1, section 53, subdivision 12, as amended by Laws 2004,
236.35 	chapter 272, article 1, section 6, is amended to read:
236.36 		Subd. 12.Nonpublic pupil transportation. For nonpublic
237.1 	pupil transportation aid under Minnesota Statutes, section
237.2 	123B.92, subdivision 9:
237.3 	$20,471,000    .....     2004
237.4 	$21,421,000 $21,703,000.....     2005
237.5 	The 2004 appropriation includes $3,990,000 for 2003 and
237.6 	$16,481,000 for 2004.
237.7 	The 2005 appropriation includes $4,120,000 for 2004 and
237.8 	$17,301,000 $17,583,000 for 2005.
237.9 	B.  EDUCATION EXCELLENCE

237.10 	Sec. 5. Laws 2003, First Special Session chapter 9,
237.11 	article 2, section 55, subdivision 2, as amended by Laws 2004,
237.12 	chapter 272, article 1, section 7, is amended to read:
237.13 		Subd. 2.Charter school building lease aid. For building
237.14 	lease aid under Minnesota Statutes, section 124D.11, subdivision
237.15 	4:
237.16 	$16,753,000    .....     2004
237.17 	$21,347,000 $21,410,000.....     2005
237.18 	The 2004 appropriation includes $2,524,000 for 2003 and
237.19 	$14,229,000 for 2004.
237.20 	The 2005 appropriation includes $3,557,000 for 2004 and
237.21 	$17,790,000 $17,853,000 for 2005.

237.22 	Sec. 6. Laws 2003, First Special Session chapter 9,
237.23 	article 2, section 55, subdivision 5, as amended by Laws 2004,
237.24 	chapter 272, article 1, section 10, is amended to read:
237.25 		Subd. 5.Integration aid. For integration aid under
237.26 	Minnesota Statutes, section 124D.86, subdivision 5:
237.27 	$55,911,000    .....     2004
237.28 	$55,893,000 $57,756,000.....     2005
237.29 	The 2004 appropriation includes $8,428,000 for 2003 and
237.30 	$47,483,000 for 2004.
237.31 	The 2005 appropriation includes $11,870,000 for 2004 and
237.32 	$44,023,000 $45,886,000 for 2005.

237.33 	Sec. 7. Laws 2003, First Special Session chapter 9,
237.34 	article 2, section 55, subdivision 9, as amended by Laws 2004,
237.35 	chapter 272, article 1, section 12, is amended to read:
237.36 		Subd. 9.Success for the future. For American Indian
238.1 	success for the future grants under Minnesota Statutes, section
238.2 	124D.81:
238.3 	$2,061,000    .....     2004
238.4 	$2,137,000 $2,229,000.....     2005
238.5 	The 2004 appropriation includes $351,000 for 2003 and
238.6 	$1,710,000 for 2004.
238.7 	The 2005 appropriation includes $427,000 for 2004 and
238.8 	$1,710,000 $1,802,000 for 2005.

238.9 	Sec. 8. Laws 2003, First Special Session chapter 9,
238.10 	article 2, section 55, subdivision 12, as amended by Laws 2004,
238.11 	chapter 272, article 1, section 13, is amended to read:
238.12 		Subd. 12.Tribal contract schools. For tribal contract
238.13 	school aid under Minnesota Statutes, section 124D.83:
238.14 	$1,617,000    .....     2004
238.15 	$2,185,000 $2,203,000.....     2005
238.16 	The 2004 appropriation includes $285,000 for 2003 and
238.17 	$1,332,000 for 2004.
238.18 	The 2005 appropriation includes $333,000 for 2004 and
238.19 	$1,852,000 $1,870,000 for 2005.
238.20 	C.  SPECIAL PROGRAMS

238.21 	Sec. 9. Laws 2003, First Special Session chapter 9,
238.22 	article 3, section 20, subdivision 2, is amended to read:
238.23 		Subd. 2.Special education; regular. For special
238.24 	education aid under Minnesota Statutes, section 125A.75:
238.25 	$515,091,000  .....     2004
238.26 	$529,460,000 $552,214,000.....     2005
238.27 	The 2004 appropriation includes $90,577,000 for 2003 and
238.28 	$424,514,000 for 2004.
238.29 	The 2005 appropriation includes $106,128,000 for 2004 and
238.30 	$423,332,000 $446,086,000 for 2005.

238.31 	Sec. 10. Laws 2003, First Special Session chapter 9,
238.32 	article 3, section 20, subdivision 4, as amended by Laws 2004,
238.33 	chapter 272, article 1, section 14, is amended to read:
238.34 		Subd. 4.Aid for children with disabilities. For aid
238.35 	under Minnesota Statutes, section 125A.75, subdivision 3, for
238.36 	children with disabilities placed in residential facilities
239.1 	within the district boundaries for whom no district of residence
239.2 	can be determined:
239.3 	$2,311,000     .....     2004
239.4 	$2,550,000 $3,155,000.....     2005
239.5 	If the appropriation for either year is insufficient, the
239.6 	appropriation for the other year is available.

239.7 	Sec. 11. Laws 2003, First Special Session chapter 9,
239.8 	article 3, section 20, subdivision 5, as amended by Laws 2004,
239.9 	chapter 272, article 1, section 15, is amended to read:
239.10 		Subd. 5.Travel for home-based services. For aid for
239.11 	teacher travel for home-based services under Minnesota Statutes,
239.12 	section 125A.75, subdivision 1:
239.13 	$173,000    .....     2004
239.14 	$178,000 $187,000.....     2005
239.15 	The 2004 appropriation includes $34,000 for 2003 and
239.16 	$139,000 for 2004.
239.17 	The 2005 appropriation includes $34,000 for 2004 and
239.18 	$144,000 $153,000 for 2005.

239.19 	Sec. 12. Laws 2003, First Special Session chapter 9,
239.20 	article 3, section 20, subdivision 8, as amended by Laws 2004,
239.21 	chapter 272, article 1, section 18, is amended to read:
239.22 		Subd. 8.Transition for disabled students. For aid for
239.23 	transition programs for children with disabilities under
239.24 	Minnesota Statutes, section 124D.454:
239.25 	$8,570,000     .....     2004
239.26 	$8,760,000 $9,176,000.....     2005
239.27 	The 2004 appropriation includes $1,516,000 for 2003 and
239.28 	$7,054,000 for 2004.
239.29 	The 2005 appropriation includes $1,763,000 for 2004 and
239.30 	$6,997,000 $7,413,000 for 2005.

239.31 	Sec. 13. Laws 2003, First Special Session chapter 9,
239.32 	article 3, section 20, subdivision 9, as amended by Laws 2004,
239.33 	chapter 272, article 1, section 19, is amended to read:
239.34 		Subd. 9.Court-placed special education revenue. For
239.35 	reimbursing serving school districts for unreimbursed eligible
239.36 	expenditures attributable to children placed in the serving
240.1 	school district by court action under Minnesota Statutes,
240.2 	section 125A.79, subdivision 4:
240.3 	$36,000     .....     2004
240.4 	$61,000 $62,000.....     2005
240.5 	D.  FACILITIES AND TECHNOLOGY

240.6 	Sec. 14. Laws 2003, First Special Session chapter 9,
240.7 	article 4, section 31, subdivision 2, as amended by Laws 2004,
240.8 	chapter 272, article 1, section 21, is amended to read:
240.9 		Subd. 2.Health and safety revenue. For health and
240.10 	safety aid according to Minnesota Statutes, section 123B.57,
240.11 	subdivision 5:
240.12 	$5,356,000    .....     2004
240.13 	$1,920,000 $2,099,000.....     2005
240.14 	The 2004 appropriation includes $1,516,000 for 2003 and
240.15 	$3,840,000 for 2004.
240.16 	The 2005 appropriation includes $960,000 for 2004 and
240.17 	$960,000 $1,139,000 for 2005.

240.18 	Sec. 15. Laws 2003, First Special Session chapter 9,
240.19 	article 4, section 31, subdivision 3, as amended by Laws 2004,
240.20 	chapter 272, article 1, section 22, is amended to read:
240.21 		Subd. 3.Debt service equalization. For debt service aid
240.22 	according to Minnesota Statutes, section 123B.53, subdivision 6:
240.23 	$35,598,000     .....     2004
240.24 	$31,220,000 $32,495,000.....     2005
240.25 	The 2004 appropriation includes $5,586,000 for 2003 and
240.26 	$30,012,000 for 2004.
240.27 	The 2005 appropriation includes $7,503,000 for 2004 and
240.28 	$23,717,000 $24,992,000 for 2005.

240.29 	Sec. 16. Laws 2003, First Special Session chapter 9,
240.30 	article 4, section 31, subdivision 4, is amended to read:
240.31 		Subd. 4.Alternative facilities bonding aid. For
240.32 	alternative facilities bonding aid, according to Minnesota
240.33 	Statutes, section 123B.59, subdivision 1:
240.34 	$18,708,000    .....     2004
240.35 	$19,287,000 $20,116,000.....     2005
240.36 	The 2004 appropriation includes $3,278,000 for 2003 and
241.1 	$15,430,000 for 2004.
241.2 	The 2005 appropriation includes $3,857,000 for 2004 and
241.3 	$15,430,000 $16,259,000 for 2005.
241.4 	E.  NUTRITION, SCHOOL ACCOUNTING, OTHER PROGRAMS

241.5 	Sec. 17. Laws 2003, First Special Session chapter 9,
241.6 	article 5, section 35, subdivision 3, as amended by Laws 2004,
241.7 	chapter 272, article 1, section 24, is amended to read:
241.8 		Subd. 3.Traditional school breakfast; kindergarten
241.9 	milk. For traditional school breakfast aid and kindergarten
241.10 	milk under Minnesota Statutes, sections 124D.1158 and 124D.118:
241.11 	$4,382,000    .....     2004
241.12 	$4,460,000 $4,548,000.....     2005
241.13 	F.  LIBRARIES

241.14 	Sec. 18. Laws 2003, First Special Session chapter 9,
241.15 	article 6, section 4, as amended by Laws 2004, chapter 272,
241.16 	article 1, section 25, and Laws 2004, chapter 286, section 3, is
241.17 	amended to read:

241.18 	Sec. 4. APPROPRIATIONS.
 241.19 		Subdivision 1.Department of education. The sums
241.20 	indicated in this section are appropriated from the general fund
241.21 	to the department of education for the fiscal years designated.
241.22 		Subd. 2.Basic system support. For basic system support
241.23 	grants under Minnesota Statutes, section 134.355:
241.24 	$8,312,000     .....     2004
241.25 	$8,570,000 $8,939,000.....     2005
241.26 	The 2004 appropriation includes $1,456,000 for 2003 and
241.27 	$6,856,000 for 2004.
241.28 	The 2005 appropriation includes $1,714,000 for 2004 and
241.29 	$6,856,000 $7,225,000 for 2005.
241.30 		Subd. 3.Regional library telecommunications aid. For
241.31 	regional library telecommunications aid under Minnesota
241.32 	Statutes, section 134.355:
241.33 	$960,000     .....     2004
241.34 	$1,200,000 $1,252,000.....     2005
241.35 	The 2004 appropriation includes $960,000 for 2004.
241.36 	The 2005 appropriation includes $240,000 for 2004 and
242.1 	$960,000 $1,012,000 for 2005.
242.2 		Subd. 4.Multicounty, multitype library systems. For
242.3 	grants according to Minnesota Statutes, sections 134.353 and
242.4 	134.354, to multicounty, multitype library systems:
242.5 	$876,000       .....     2004
242.6 	$903,000 $942,000.....     2005
242.7 	The 2004 appropriation includes $153,000 for 2003 and
242.8 	$723,000 for 2004.
242.9 	The 2005 appropriation includes $180,000 for 2004 and
242.10 	$723,000 $762,000 for 2005.
242.11 		Subd. 5.Electronic library for minnesota. For statewide
242.12 	licenses to on-line databases selected in cooperation with the
242.13 	higher education services office for school media centers,
242.14 	public libraries, state government agency libraries, and public
242.15 	or private college or university libraries:
242.16 	$400,000     .....     2004
242.17 	$400,000     .....     2005
242.18 	Any balance in the first year does not cancel but is
242.19 	available in the second year.
242.20 	G.  EARLY CHILDHOOD FAMILY SUPPORT

242.21 	Sec. 19. Laws 2003, First Special Session chapter 9,
242.22 	article 7, section 11, subdivision 2, is amended to read:
242.23 		Subd. 2.School readiness. For revenue for school
242.24 	readiness programs under Minnesota Statutes, sections 124D.15
242.25 	and 124D.16:
242.26 	$ 9,536,000    .....     2004
242.27 	$ 9,258,000 $9,594,000.....     2005
242.28 	The 2004 appropriation includes $1,605,000 for 2003 and
242.29 	$7,931,000 for 2004.
242.30 	The 2005 appropriation includes $1,982,000 for 2004 and
242.31 	$7,276,000 $7,612,000 for 2005.

242.32 	Sec. 20. Laws 2003, First Special Session chapter 9,
242.33 	article 7, section 11, subdivision 4, is amended to read:
242.34 		Subd. 4.Health and developmental screening aid. For
242.35 	health and developmental screening aid under Minnesota Statutes,
242.36 	sections 121A.17 and 121A.19:
243.1 	$2,581,000    .....     2004
243.2 	$2,661,000 $2,776,000.....     2005
243.3 	The 2004 appropriation includes $452,000 for 2003 and
243.4 	$2,129,000 for 2004.
243.5 	The 2005 appropriation includes $532,000 for 2004 and
243.6 	$2,129,000 $2,244,000 for 2005.
243.7 	H.  PREVENTION

243.8 	Sec. 21. Laws 2003, First Special Session chapter 9,
243.9 	article 8, section 7, subdivision 2, as amended by Laws 2004,
243.10 	chapter 272, article 1, section 27, is amended to read:
243.11 		Subd. 2.Community education aid. For community
243.12 	education aid under Minnesota Statutes, section 124D.20:
243.13 	$5,351,000    .....     2004
243.14 	$3,137,000 $3,198,000.....     2005
243.15 	The 2004 appropriation includes $956,000 for 2003 and
243.16 	$4,395,000 for 2004.
243.17 	The 2005 appropriation includes $1,098,000 for 2004 and
243.18 	$2,039,000 $2,100,000 for 2005.

243.19 	Sec. 22. Laws 2003, First Special Session chapter 9,
243.20 	article 8, section 7, subdivision 3, is amended to read:
243.21 		Subd. 3.Adults with disabilities program aid. For
243.22 	adults with disabilities programs under Minnesota Statutes,
243.23 	section 124D.56:
243.24 	$688,000       .....     2004
243.25 	$710,000 $741,000.....     2005
243.26 	The 2004 appropriation includes $120,000 for 2003 and
243.27 	$568,000 for 2004.
243.28 	The 2005 appropriation includes $142,000 for 2004 and
243.29 	$568,000 $599,000 for 2005.

243.30 	Sec. 23. Laws 2003, First Special Session chapter 9,
243.31 	article 8, section 7, subdivision 5, as amended by Laws 2004,
243.32 	chapter 272, article 1, section 28, is amended to read:
243.33 		Subd. 5.School-age care revenue. For extended day care
243.34 	aid under Minnesota Statutes, section 124D.22:
243.35 	$40,000    .....     2004
243.36 	$24,000 $30,000.....     2005
244.1 	The 2004 appropriation includes $14,000 for 2003 and
244.2 	$26,000 for 2004.
244.3 	The 2005 appropriation includes $6,000 for 2004 and
244.4 	$18,000 $24,000 for 2005.
244.5 	I.  SELF-SUFFICIENCY AND LIFELONG LEARNING

244.6 	Sec. 24. Laws 2003, First Special Session chapter 9,
244.7 	article 9, section 9, subdivision 2, as amended by Laws 2004,
244.8 	chapter 272, article 1, section 29, is amended to read:
244.9 		Subd. 2.Adult basic education aid. For adult basic
244.10 	education aid under Minnesota Statutes, section 124D.52, in
244.11 	fiscal year 2004 and Minnesota Statutes, section 124D.531, in
244.12 	fiscal year 2005:
244.13 	$33,014,000    .....     2004
244.14 	$35,808,000 $37,444,000.....     2005
244.15 	The 2004 appropriation includes $5,827,000 for 2003 and
244.16 	$27,187,000 for 2004.
244.17 	The 2005 appropriation includes $6,796,000 for 2004 and
244.18 	$29,012,000 $30,648,000 for 2005.

244.19 	Sec. 25. EFFECTIVE DATE.
 244.20 	Sections 1 to 24 are effective the day following final
244.21 	enactment.

244.22 	ARTICLE 12
244.23 	TECHNICAL AND CONFORMING AMENDMENTS

244.24 	Section 1. Minnesota Statutes 2004, section 120B.31,
244.25 	subdivision 4, is amended to read:
244.26 		Subd. 4.Statistical adjustments.  In developing policies
244.27 	and assessment processes to hold schools and districts
244.28 	accountable for high levels of academic standards, including the
244.29 	profile of learning under section 120B.021, the commissioner
244.30 	shall aggregate student data over time to report student
244.31 	performance levels measured at the school district, regional, or
244.32 	statewide level.  When collecting and reporting the data, the
244.33 	commissioner shall:  (1) acknowledge the impact of significant
244.34 	demographic factors such as residential instability, the number
244.35 	of single parent families, parents' level of education, and
244.36 	parents' income level on school outcomes; and (2) organize and
245.1 	report the data so that state and local policy makers can
245.2 	understand the educational implications of changes in districts'
245.3 	demographic profiles over time.  Any report the commissioner
245.4 	disseminates containing summary data on student performance must
245.5 	integrate student performance and the demographic factors that
245.6 	strongly correlate with that performance.

245.7 	Sec. 2. Minnesota Statutes 2004, section 121A.41,
245.8 	subdivision 10, is amended to read:
245.9 		Subd. 10.Suspension.  "Suspension" means an action by
245.10 	the school administration, under rules promulgated by the school
245.11 	board, prohibiting a pupil from attending school for a period of
245.12 	no more than ten school days.  If a suspension is longer than
245.13 	five days, the suspending administrator must provide the
245.14 	superintendent with a reason for the longer suspension.  This
245.15 	definition does not apply to dismissal from school for one
245.16 	school day or less, except as provided in federal law for a
245.17 	student with a disability.  Each suspension action may include a
245.18 	readmission plan.  The readmission plan shall include, where
245.19 	appropriate, a provision for implementing alternative
245.20 	educational services upon readmission and may not be used to
245.21 	extend the current suspension.  Consistent with section
245.22 	125A.09 125A.091, subdivision 3 5, the readmission plan must not
245.23 	obligate a parent to provide a sympathomimetic medication for
245.24 	the parent's child as a condition of readmission.  The school
245.25 	administration may not impose consecutive suspensions against
245.26 	the same pupil for the same course of conduct, or incident of
245.27 	misconduct, except where the pupil will create an immediate and
245.28 	substantial danger to self or to surrounding persons or
245.29 	property, or where the district is in the process of initiating
245.30 	an expulsion, in which case the school administration may extend
245.31 	the suspension to a total of 15 days.  In the case of a student
245.32 	with a disability, the student's individual education plan team
245.33 	must meet immediately but not more than ten school days after
245.34 	the date on which the decision to remove the student from the
245.35 	student's current education placement is made.  The individual
245.36 	education plan team and other qualified personnel shall at that
246.1 	meeting:  conduct a review of the relationship between the
246.2 	child's disability and the behavior subject to disciplinary
246.3 	action; and determine the appropriateness of the child's
246.4 	education plan.
246.5 	The requirements of the individual education plan team
246.6 	meeting apply when:
246.7 	(1) the parent requests a meeting;
246.8 	(2) the student is removed from the student's current
246.9 	placement for five or more consecutive days; or
246.10 	(3) the student's total days of removal from the student's
246.11 	placement during the school year exceed ten cumulative days in a
246.12 	school year.  The school administration shall implement
246.13 	alternative educational services when the suspension exceeds
246.14 	five days.  A separate administrative conference is required for
246.15 	each period of suspension.

246.16 	Sec. 3. Minnesota Statutes 2004, section 124D.40, is
246.17 	amended to read:
246.18 	124D.40 YOUTH WORKS GRANTS.
246.19 		Subdivision 1.Application. An eligible organization
246.20 	interested in receiving a grant under sections 124D.39 to
246.21 	124D.44 may prepare and submit an application to the commission
246.22 	an application that complies with section 124D.41.
246.23 		Subd. 2.Grant authority. The commission must use any
246.24 	state appropriation and any available federal funds, including
246.25 	any grant received under federal law, to award grants to
246.26 	establish programs for youth works meeting the requirements of
246.27 	section 124D.41.  At least one grant each must be available for
246.28 	a metropolitan proposal, a rural proposal, and a statewide
246.29 	proposal.  If a portion of the suburban metropolitan area is not
246.30 	included in the metropolitan grant proposal, the statewide grant
246.31 	proposal must incorporate at least one suburban metropolitan
246.32 	area.  In awarding grants, the commission may select at least
246.33 	one residential proposal and one nonresidential proposal,
246.34 	provided the proposals meet or exceed the criteria in section
246.35 	124D.41.

246.36 	Sec. 4. Minnesota Statutes 2004, section 127A.41,
247.1 	subdivision 8, is amended to read:
247.2 		Subd. 8.Appropriation transfers.  (a) If a direct
247.3 	appropriation from the general fund to the department for any
247.4 	education aid or grant authorized in this chapter and chapters
247.5 	122A, 123A, 123B, 124D, 125A, 126C, and 134, excluding
247.6 	appropriations under sections 124D.135, 124D.16, 124D.20,
247.7 	124D.21,124D.22, 124D.52, 124D.531, 124D.54,124D.55, and
247.8 	124D.56, exceeds the amount required, the commissioner may
247.9 	transfer the excess to any education aid or grant appropriation
247.10 	that is insufficient.  However, section 126C.20 applies to a
247.11 	deficiency in the direct appropriation for general education
247.12 	aid.  Excess appropriations must be allocated proportionately
247.13 	among aids or grants that have insufficient appropriations.  The
247.14 	commissioner of finance shall make the necessary transfers among
247.15 	appropriations according to the determinations of the
247.16 	commissioner.  If the amount of the direct appropriation for the
247.17 	aid or grant plus the amount transferred according to this
247.18 	subdivision is insufficient, the commissioner shall prorate the
247.19 	available amount among eligible districts.  The state is not
247.20 	obligated for any additional amounts.
247.21 	(b) Transfers for aids paid under section 127A.45,
247.22 	subdivisions 12, paragraph (a), 12a, paragraph (a), and 13,
247.23 	shall be made during the fiscal year after the fiscal year of
247.24 	the entitlement.  Transfers for aids paid under section 127A.45,
247.25 	subdivisions 11, 12, paragraph (b), and 12a, paragraph (b),
247.26 	shall be made during the fiscal year of the appropriation.

247.27 	Sec. 5. Minnesota Statutes 2004, section 127A.45,
247.28 	subdivision 12, is amended to read:
247.29 		Subd. 12.Payment percentage for certain aids.  (a) One
247.30 	hundred percent of the aid for the current fiscal year must be
247.31 	paid for the following aids:  reimbursement for enrollment
247.32 	options transportation, according to sections 124D.03,
247.33 	subdivision 8, 124D.09, subdivision 22, and 124D.10; school
247.34 	lunch aid, according to section 124D.111; hearing impaired
247.35 	support services aid, according to section 124D.57; and Indian
247.36 	postsecondary preparation grants according to section
248.1 	124D.80 124D.81.
248.2 	(b) One hundred percent of the aid for the current fiscal
248.3 	year, based on enrollment in the previous year, must be paid for
248.4 	the first grade preparedness program according to section
248.5 	124D.081.