1.1 	A bill for an act
1.2 	relating to education; providing for kindergarten
1.3 	through grade 12 education and early childhood and
1.4 	family education including general education, other
1.5 	general programs, education excellence, special
1.6 	programs, facilities and technology, nutrition,
1.7 	libraries, early childhood family support, community
1.8 	education and prevention, self-sufficiency and
1.9 	lifelong learning, and state agencies; authorizing
1.10 	rulemaking; appropriating money; amending Minnesota
1.11 	Statutes 2004, sections 119A.46, subdivisions 1, 2, 3,
1.12 	8; 120A.05, by adding a subdivision; 121A.17,
1.13 	subdivision 1; 121A.19; 122A.12, subdivision 2;
1.14 	123A.05, subdivision 2; 123A.27; 123A.485, subdivision
1.15 	2; 123B.143, subdivision 1; 123B.42, subdivision 3;
1.16 	123B.49, subdivision 4; 123B.53, subdivision 5;
1.17 	123B.54; 123B.57, subdivision 4; 123B.59, subdivisions
1.18 	3, 3a; 123B.63, subdivision 2; 123B.71, subdivisions
1.19 	8, 12; 123B.75, by adding a subdivision; 123B.76,
1.20 	subdivision 3; 123B.79, subdivision 6; 123B.81,
1.21 	subdivision 1; 123B.82; 123B.83, subdivision 2;
1.22 	123B.92, subdivision 9; 124D.081, subdivision 6;
1.23 	124D.09, subdivision 13; 124D.11, subdivisions 1, 2,
1.24 	4, 5, 8; 124D.135, subdivision 5; 124D.15,
1.25 	subdivisions 1, 3, 5, 10, 12, by adding subdivisions;
1.26 	124D.16, subdivisions 2, 3; 124D.22, subdivision 3;
1.27 	124D.531, subdivisions 1, 4; 124D.65, subdivision 5;
1.28 	124D.68, subdivision 9; 124D.69, subdivision 1;
1.29 	124D.83, subdivision 2; 124D.86, subdivision 3;
1.30 	124D.88, subdivision 4; 125A.11, subdivision 1;
1.31 	125A.76, subdivisions 1, 4, by adding subdivisions;
1.32 	125A.79, subdivisions 1, 5, 7, by adding subdivisions;
1.33 	126C.01, subdivisions 7, 11; 126C.05, subdivisions 1,
1.34 	5, 6, by adding a subdivision; 126C.10, subdivisions
1.35 	1, 2, 2a, 3, 5, 6, 7, 8, 13, 13a, 17, 18, 24, 25, 26,
1.36 	27, 28, 29, 31, 32, by adding subdivisions; 126C.13,
1.37 	subdivision 4; 126C.15, subdivisions 1, 2, by adding a
1.38 	subdivision; 126C.17, subdivisions 1, 2, 4, 5, 6, 7,
1.39 	9, 13; 126C.21, subdivision 4; 126C.40, subdivision 1;
1.40 	126C.48, subdivisions 2, 8, by adding a subdivision;
1.41 	126C.63, subdivisions 5, 8; 127A.45, subdivision 11;
1.42 	127A.47, subdivisions 7, 8; 127A.49, subdivisions 2,
1.43 	3; 275.14; 275.16; 469.177, subdivision 9; proposing
1.44 	coding for new law in Minnesota Statutes, chapters
1.45 	123B; 127A; repealing Minnesota Statutes 2004,
1.46 	sections 123A.39, subdivision 3; 123B.05; 123B.83,
2.1 	subdivision 1; 124D.15, subdivisions 2, 4, 6, 7, 8, 9,
2.2 	11, 13; 124D.16, subdivisions 1, 4; 126C.12; 126C.41,
2.3 	subdivision 5; 126C.42, subdivisions 1, 4; 126C.43,
2.4 	subdivisions 2, 3; 126C.44; 126C.445; 126C.45;
2.5 	126C.455; 127A.50; Laws 1996 chapter 412, article 5,
2.6 	section 28; Laws 1997, First Special Session chapter
2.7 	4, article 4, section 31; Laws 2001, First Special
2.8 	Session chapter 5, article 3, section 87; Laws 2001,
2.9 	First Special Session chapter 6, article 1, section
2.10 	53, as amended.
2.11 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

2.12 	ARTICLE 1
2.13 	GENERAL EDUCATION

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

2.26 	Sec. 2. Minnesota Statutes 2004, section 124D.09,
2.27 	subdivision 13, is amended to read:
2.28 		Subd. 13.Financial arrangements.  For a pupil enrolled
2.29 	in a course under this section, the department must make
2.30 	payments according to this subdivision for courses that were
2.31 	taken for secondary credit.
2.32 	The department must not make payments to a school district
2.33 	or postsecondary institution for a course taken for
2.34 	postsecondary credit only.  The department must not make
2.35 	payments to a postsecondary institution for a course from which
2.36 	a student officially withdraws during the first 14 days of the
2.37 	quarter or semester or who has been absent from the
2.38 	postsecondary institution for the first 15 consecutive school
2.39 	days of the quarter or semester and is not receiving instruction
2.40 	in the home or hospital.
3.1 	A postsecondary institution shall receive the following:
3.2 	(1) for an institution granting quarter credit, the
3.3 	reimbursement per credit hour shall be an amount equal to 88
3.4 	percent of the product of the formula allowance minus $415,
3.5 	multiplied by 1.3, and divided by 45 $109 for fiscal year 2006
3.6 	and $111 for fiscal year 2007 and later; or
3.7 	(2) for an institution granting semester credit, the
3.8 	reimbursement per credit hour shall be an amount equal to 88
3.9 	percent of the product of the general revenue formula allowance
3.10 	minus $415, multiplied by 1.3, and divided by 30 $163 for fiscal
3.11 	year 2006 and $166 for fiscal year 2007 and later.
3.12 	The department must pay to each postsecondary institution
3.13 	100 percent of the amount in clause (1) or (2) within 30 days of
3.14 	receiving initial enrollment information each quarter or
3.15 	semester.  If changes in enrollment occur during a quarter or
3.16 	semester, the change shall be reported by the postsecondary
3.17 	institution at the time the enrollment information for the
3.18 	succeeding quarter or semester is submitted.  At any time the
3.19 	department notifies a postsecondary institution that an
3.20 	overpayment has been made, the institution shall promptly remit
3.21 	the amount due.

3.22 	Sec. 3. Minnesota Statutes 2004, section 124D.65,
3.23 	subdivision 5, is amended to read:
3.24 		Subd. 5.School district lep revenue.  (a) For fiscal
3.25 	year 2006,a district's limited English proficiency programs
3.26 	revenue equals the product of (1) $700 in fiscal year 2004 and
3.27 	later times (2) the greater of 20 or the adjusted marginal cost
3.28 	average daily membership of eligible pupils of limited English
3.29 	proficiency enrolled in the district during the current fiscal
3.30 	year. For fiscal year 2007 and later, a district's limited
3.31 	English proficiency programs revenue equals the product of (1)
3.32 	$704 times (2) the greater of 20 or the adjusted average daily
3.33 	membership of eligible pupils of limited English proficiency
3.34 	enrolled in the district during the current fiscal year.
3.35 	(b) A pupil ceases to generate state limited English
3.36 	proficiency aid in the school year following the school year in
4.1 	which the pupil attains the state cutoff score on a
4.2 	commissioner-provided assessment that measures the pupil's
4.3 	emerging academic English.
4.4 	
EFFECTIVE DATE. This section is effective for revenue for
4.5 	fiscal year 2007.

4.6 	Sec. 4. Minnesota Statutes 2004, section 126C.01,
4.7 	subdivision 7, is amended to read:
4.8 		Subd. 7.Shared time aid. For fiscal year 2006,aid for
4.9 	shared time pupils must equal the formula allowance times the
4.10 	full-time equivalent resident pupil units for shared time
4.11 	pupils. For fiscal year 2007 and later, aid for shared time
4.12 	pupils equals the sum of the formula allowance times the
4.13 	full-time equivalent resident pupil units for shared time pupils
4.14 	and the secondary education allowance times the full-time
4.15 	equivalent resident pupil units for shared time pupils in grades
4.16 	7 through 12.Aid for shared time pupils is in addition to any
4.17 	other aid to which the district is otherwise entitled.  Shared
4.18 	time average daily membership may not be used in the computation
4.19 	of pupil units under section 126C.05, subdivision 1, for any
4.20 	purpose other than the computation of shared time aid pursuant
4.21 	to subdivisions 6 to 8 and section 126C.19, subdivisions 1 to 3.

4.22 	Sec. 5. Minnesota Statutes 2004, section 126C.05,
4.23 	subdivision 1, is amended to read:
4.24 		Subdivision 1.Pupil unit.  Pupil units for each
4.25 	Minnesota resident pupil in average daily membership enrolled in
4.26 	the district of residence, in another district under sections
4.27 	123A.05 to 123A.08, 124D.03, 124D.06, 124D.07, 124D.08, or
4.28 	124D.68; in a charter school under section 124D.10; or for whom
4.29 	the resident district pays tuition under section 123A.18,
4.30 	123A.22, 123A.30, 123A.32, 123A.44, 123A.488, 123B.88,
4.31 	subdivision 4, 124D.04, 124D.05, 125A.03 to 125A.24, 125A.51, or
4.32 	125A.65, shall be counted according to this subdivision.
4.33 	(a) For fiscal year 2006,a prekindergarten pupil with a
4.34 	disability who is enrolled in a program approved by the
4.35 	commissioner and has an individual education plan is counted as
4.36 	the ratio of the number of hours of assessment and education
5.1 	service to 825 times 1.25 with a minimum average daily
5.2 	membership of 0.28, but not more than 1.25 pupil units. For
5.3 	fiscal year 2007 and later, a prekindergarten pupil with a
5.4 	disability who is enrolled in a program approved by the
5.5 	commissioner and has an individual education plan is counted as
5.6 	the ratio of the number of hours of assessment and education
5.7 	service to 825 with a minimum average daily membership of 0.28,
5.8 	but not more than one pupil unit.
5.9 	(b) For fiscal year 2006,a prekindergarten pupil who is
5.10 	assessed but determined not to be handicapped is counted as the
5.11 	ratio of the number of hours of assessment service to 825 times
5.12 	1.25. For fiscal year 2007 and later, a prekindergarten pupil
5.13 	who is assessed but determined not to be handicapped is counted
5.14 	as the ratio of the number of hours of assessment service to 825.
5.15 	(c) A kindergarten pupil with a disability who is enrolled
5.16 	in a program approved by the commissioner is counted as the
5.17 	ratio of the number of hours of assessment and education
5.18 	services required in the fiscal year by the pupil's individual
5.19 	education program plan to 875, but not more than one.
5.20 	(d) A kindergarten pupil who is not included in paragraph
5.21 	(c) is counted as .557 of a pupil unit for fiscal year 2000 2006
5.22 	and .5 of a pupil unit for fiscal year 2007 and thereafter.
5.23 	(e) A pupil who is in any of grades 1 to 3 is counted as
5.24 	1.115 pupil units for fiscal year 2000 2006 and one pupil unit
5.25 	for fiscal year 2007 and thereafter.
5.26 	(f) A pupil who is any of grades 4 to 6 is counted as 1.06
5.27 	pupil units for fiscal year 1995 2006 and one pupil unit for
5.28 	fiscal year 2007 and thereafter.
5.29 	(g) A pupil who is in any of grades 7 to 12 is counted as
5.30 	1.3 pupil units for fiscal year 2006 and one pupil unit for
5.31 	fiscal year 2007 and thereafter.
5.32 	(h) A pupil who is in the postsecondary enrollment options
5.33 	program is counted as 1.3 pupil units for fiscal year 2006 and
5.34 	one pupil unit for fiscal year 2007 and thereafter.
5.35 	
EFFECTIVE DATE. This section is effective for revenue for
5.36 	fiscal year 2007.

6.1 	Sec. 6. Minnesota Statutes 2004, section 126C.05,
6.2 	subdivision 5, is amended to read:
6.3 		Subd. 5.Adjusted pupil units.  (a) Adjusted pupil units
6.4 	for a district or charter school means the sum of:
6.5 	(1) the number of pupil units served, according to
6.6 	subdivision 7, plus
6.7 	(2) pupil units according to subdivision 1 for whom the
6.8 	district or charter school pays tuition under section 123A.18,
6.9 	123A.22, 123A.30, 123A.32, 123A.44, 123A.488, 123B.88,
6.10 	subdivision 4, 124D.04, 124D.05, 125A.03 to 125A.24, 125A.51, or
6.11 	125A.65, minus
6.12 	(3) pupil units according to subdivision 1 for whom the
6.13 	district or charter school receives tuition under section
6.14 	123A.18, 123A.22, 123A.30, 123A.32, 123A.44, 123A.488, 123B.88,
6.15 	subdivision 4, 124D.04, 124D.05, 125A.03 to 125A.24, 125A.51, or
6.16 	125A.65.
6.17 	(b) For fiscal year 2006,adjusted marginal cost pupil
6.18 	units means the greater of:
6.19 	(1) the sum of .77 times the pupil units defined in
6.20 	paragraph (a) for the current school year and .23 times the
6.21 	pupil units defined in paragraph (a) for the previous school
6.22 	year; or
6.23 	(2) the number of adjusted pupil units defined in paragraph
6.24 	(a) for the current school year.

6.25 	Sec. 7. Minnesota Statutes 2004, section 126C.05,
6.26 	subdivision 6, is amended to read:
6.27 		Subd. 6.Resident pupil units.  (a) Resident pupil units
6.28 	for a district means the number of pupil units according to
6.29 	subdivision 1 residing in the district.
6.30 	(b) For fiscal year 2006,resident marginal cost pupil
6.31 	units means the greater of:
6.32 	(1) the sum of .77 times the pupil units defined in
6.33 	paragraph (a) for the current year and .23 times the pupil units
6.34 	defined in paragraph (a) for the previous school year; or
6.35 	(2) the number of resident pupil units defined in paragraph
6.36 	(a) for the current school year.

7.1 	Sec. 8. Minnesota Statutes 2004, section 126C.10,
7.2 	subdivision 1, is amended to read:
7.3 		Subdivision 1.General education revenue.  (a) For fiscal
7.4 	year 2003, the general education revenue for each district
7.5 	equals the sum of the district's basic revenue, basic skills
7.6 	revenue, training and experience revenue, secondary sparsity
7.7 	revenue, elementary sparsity revenue, transportation sparsity
7.8 	revenue, total operating capital revenue, and equity revenue.
7.9 	(b) For fiscal year 2004 and later 2006, the general
7.10 	education revenue for each district equals the sum of the
7.11 	district's basic revenue, extended time revenue, basic skills
7.12 	revenue, training and experience revenue, secondary sparsity
7.13 	revenue, elementary sparsity revenue, transportation sparsity
7.14 	revenue, total operating capital revenue, equity
7.15 	revenue, alternative compensation revenue,and transition
7.16 	revenue.
7.17 	(b) For fiscal year 2007 and later, the general education
7.18 	revenue for each district equals the sum of the district's basic
7.19 	revenue, secondary education revenue, declining enrollment
7.20 	revenue, extended time revenue, basic skills revenue, secondary
7.21 	sparsity revenue, elementary sparsity revenue, transportation
7.22 	sparsity revenue, total operating capital revenue, equity
7.23 	revenue, alternative compensation revenue, discretionary
7.24 	revenue, and transition revenue.
7.25 	
EFFECTIVE DATE. This section is effective for revenue for
7.26 	fiscal year 2007.

7.27 	Sec. 9. Minnesota Statutes 2004, section 126C.10,
7.28 	subdivision 2, is amended to read:
7.29 		Subd. 2.Basic revenue. For fiscal year 2006,the basic
7.30 	revenue for each district equals the formula allowance times the
7.31 	adjusted marginal cost pupil units for the school year.  The
7.32 	formula allowance for fiscal year 2001 2006 is $3,964.  The
7.33 	formula allowance for fiscal year 2002 is $4,068.  The formula
7.34 	allowance for fiscal year 2003 and subsequent years is
7.35 	$4,601 $4,693. For fiscal year 2007 and later, the basic
7.36 	revenue for each district equals the formula allowance times the
8.1 	adjusted pupil units for the school year.  The formula allowance
8.2 	for fiscal year 2007 and later is $5,188.

8.3 	Sec. 10. Minnesota Statutes 2004, section 126C.10,
8.4 	subdivision 2a, is amended to read:
8.5 		Subd. 2a.Extended time revenue.  (a) For fiscal year
8.6 	2006,a school district's extended time revenue is equal to the
8.7 	product of $4,601 $4,693 and the sum of the adjusted marginal
8.8 	cost pupil units of the district for each pupil in average daily
8.9 	membership in excess of 1.0 and less than 1.2 according to
8.10 	section 126C.05, subdivision 8.
8.11 	(b) For fiscal year 2007 and later, a school district's
8.12 	extended time revenue equals $5,801 times the sum of the
8.13 	adjusted pupil units of the district for each pupil in average
8.14 	daily membership in excess of 1.0 and less than 1.2 according to
8.15 	section 126C.05, subdivision 8.
8.16 	(c) A school district's extended time revenue may be used
8.17 	for extended day programs, extended week programs, summer
8.18 	school, and other programming authorized under the learning year
8.19 	program.

8.20 	Sec. 11. Minnesota Statutes 2004, section 126C.10, is
8.21 	amended by adding a subdivision to read:
8.22 		Subd. 2b.Secondary education revenue. For fiscal year
8.23 	2007 and later, the secondary education revenue for each
8.24 	district equals the secondary education allowance times the
8.25 	adjusted pupil units for the school year in grades 7 through
8.26 	12.  The secondary education allowance for fiscal year 2007 and
8.27 	later is $936.
8.28 	
EFFECTIVE DATE. This section is effective for revenue for
8.29 	fiscal year 2007.

8.30 	Sec. 12. Minnesota Statutes 2004, section 126C.10, is
8.31 	amended by adding a subdivision to read:
8.32 		Subd. 2c.Declining enrollment revenue. For fiscal year
8.33 	2007 and later, the declining enrollment revenue for each
8.34 	district with a decline in the number of adjusted pupil units
8.35 	between the previous school year and the current school year
8.36 	equals $1,297 times the decline in adjusted pupil units between
9.1 	the previous school year and the current school year.
9.2 	
EFFECTIVE DATE. This section is effective for revenue for
9.3 	fiscal year 2007.

9.4 	Sec. 13. Minnesota Statutes 2004, section 126C.10,
9.5 	subdivision 3, is amended to read:
9.6 		Subd. 3.Compensatory education revenue.  (a) For fiscal
9.7 	year 2006,the compensatory education revenue for each building
9.8 	in the district equals the formula allowance minus $415 $4,278 
9.9 	times the compensation revenue pupil units computed according to
9.10 	section 126C.05, subdivision 3. For fiscal year 2007 and later,
9.11 	the compensatory education revenue for each building in the
9.12 	district equals $4,388 times the compensation revenue pupil
9.13 	units computed according to section 126C.05, subdivision 3.
9.14 	Revenue shall be paid to the district and must be allocated
9.15 	according to section 126C.15, subdivision 2.
9.16 	(b) When the district contracting with an alternative
9.17 	program under section 124D.69 changes prior to the start of a
9.18 	school year, the compensatory revenue generated by pupils
9.19 	attending the program shall be paid to the district contracting
9.20 	with the alternative program for the current school year, and
9.21 	shall not be paid to the district contracting with the
9.22 	alternative program for the prior school year.
9.23 	(c) When the fiscal agent district for an area learning
9.24 	center changes prior to the start of a school year, the
9.25 	compensatory revenue shall be paid to the fiscal agent district
9.26 	for the current school year, and shall not be paid to the fiscal
9.27 	agent district for the prior school year.

9.28 	Sec. 14. Minnesota Statutes 2004, section 126C.10,
9.29 	subdivision 5, is amended to read:
9.30 		Subd. 5.Training and experience revenue. (a) For fiscal
9.31 	year 2006,the training and experience revenue for each district
9.32 	equals the greater of zero or the result of the following
9.33 	computation:
9.34 	(1) subtract .8 from the training and experience index;
9.35 	(2) multiply the result in clause (1) by the product of
9.36 	$660 times the adjusted marginal cost pupil units for the school
10.1 	year.
10.2 	(b) For fiscal year 2007 and later, the training and
10.3 	experience allowance for each district equals the greater of
10.4 	zero or the result of the following computation:
10.5 	(1) subtract .8 from the training and experience index;
10.6 	(2) multiply the result in clause (1) by $800.
10.7 	
EFFECTIVE DATE. This section is effective for revenue for
10.8 	fiscal year 2007.

10.9 	Sec. 15. Minnesota Statutes 2004, section 126C.10,
10.10 	subdivision 6, is amended to read:
10.11 		Subd. 6.Definitions.  The definitions in this
10.12 	subdivision apply only to subdivisions 7 and 8.
10.13 	(a) "High school" means a secondary school that has pupils
10.14 	enrolled in at least the 10th, 11th, and 12th grades.  If there
10.15 	is no secondary school in the district that has pupils enrolled
10.16 	in at least the 10th, 11th, and 12th grades, and the school is
10.17 	at least 19 miles from the next nearest school, the commissioner
10.18 	must designate one school in the district as a high school for
10.19 	the purposes of this section.
10.20 	(b) "Secondary average daily membership" means, for a
10.21 	district that has only one high school, the average daily
10.22 	membership of pupils served in grades 7 through 12.  For a
10.23 	district that has more than one high school, "secondary average
10.24 	daily membership" for each high school means the product of the
10.25 	average daily membership of pupils served in grades 7 through 12
10.26 	in the high school, times the ratio of six to the number of
10.27 	grades in the high school.
10.28 	(c) "Attendance area" means the total surface area of the
10.29 	district, in square miles, divided by the number of high schools
10.30 	in the district.  For a district that does not operate a high
10.31 	school and is less than 19 miles from the nearest operating high
10.32 	school, the attendance area equals zero.
10.33 	(d) "Isolation index" for a high school means the square
10.34 	root of 55 percent of the attendance area plus the distance in
10.35 	miles, according to the usually traveled routes, between the
10.36 	high school and the nearest high school.  For a district in
11.1 	which there is located land defined in section 84A.01, 84A.20,
11.2 	or 84A.31, the distance in miles is the sum of:
11.3 	(1) the square root of one-half of the attendance area; and
11.4 	(2) the distance from the border of the district to the
11.5 	nearest high school.
11.6 	(e) "Qualifying high school" means a high school that has
11.7 	an isolation index greater than 23 and that has secondary
11.8 	average daily membership of less than 400.
11.9 	(f) "Qualifying elementary school" means an elementary
11.10 	school that is located 19 miles or more from the nearest
11.11 	elementary school or from the nearest elementary school within
11.12 	the district and, in either case, has an elementary average
11.13 	daily membership of an average of 20 or fewer per grade.
11.14 	(g) "Elementary average daily membership" means, for a
11.15 	district that has only one elementary school, the average daily
11.16 	membership of pupils served in kindergarten through grade 6.
11.17 	For a district that has more than one elementary school,
11.18 	"average daily membership" for each school means the average
11.19 	daily membership of pupils served in kindergarten through grade
11.20 	6 multiplied by the ratio of seven to the number of grades in
11.21 	the elementary school.
11.22 	(h) "Sparsity allowance" means $4,693 for fiscal year 2006
11.23 	and $4,787 for fiscal year 2007 and later.

11.24 	Sec. 16. Minnesota Statutes 2004, section 126C.10,
11.25 	subdivision 7, is amended to read:
11.26 		Subd. 7.Secondary sparsity revenue.  (a) A district's
11.27 	secondary sparsity revenue for a school year equals the sum of
11.28 	the results of the following calculation for each qualifying
11.29 	high school in the district:
11.30 	(1) the formula sparsity allowance for the school year,
11.31 	multiplied by
11.32 	(2) the secondary average daily membership of pupils served
11.33 	in the high school, multiplied by
11.34 	(3) the quotient obtained by dividing 400 minus the
11.35 	secondary average daily membership by 400 plus the secondary
11.36 	daily membership, multiplied by
12.1 	(4) the lesser of 1.5 or the quotient obtained by dividing
12.2 	the isolation index minus 23 by ten.
12.3 	(b) A newly formed district that is the result of districts
12.4 	combining under the cooperation and combination program or
12.5 	consolidating under section 123A.48 must receive secondary
12.6 	sparsity revenue equal to the greater of:  (1) the amount
12.7 	calculated under paragraph (a) for the combined district; or (2)
12.8 	the sum of the amounts of secondary sparsity revenue the former
12.9 	districts had in the year prior to consolidation, increased for
12.10 	any subsequent changes in the secondary sparsity formula.

12.11 	Sec. 17. Minnesota Statutes 2004, section 126C.10,
12.12 	subdivision 8, is amended to read:
12.13 		Subd. 8.Elementary sparsity revenue.  A district's
12.14 	elementary sparsity revenue equals the sum of the following
12.15 	amounts for each qualifying elementary school in the district:
12.16 	(1) the formula sparsity allowance for the year, multiplied
12.17 	by
12.18 	(2) the elementary average daily membership of pupils
12.19 	served in the school, multiplied by
12.20 	(3) the quotient obtained by dividing 140 minus the
12.21 	elementary average daily membership by 140 plus the average
12.22 	daily membership.

12.23 	Sec. 18. Minnesota Statutes 2004, section 126C.10,
12.24 	subdivision 13, is amended to read:
12.25 		Subd. 13.Total operating capital revenue.  (a) For
12.26 	fiscal year 2000 and thereafter 2006, total operating capital
12.27 	revenue for a district equals the amount determined under
12.28 	paragraph (b) or (c), plus $73 times the adjusted marginal cost
12.29 	pupil units for the school year. For fiscal year 2007 and
12.30 	later, total operating capital revenue for a district equals the
12.31 	amount determined under paragraph (b) or (c), plus $88 times the
12.32 	adjusted pupil units for the school year.The revenue must be
12.33 	placed in a reserved account in the general fund and may only be
12.34 	used according to paragraph (d) or subdivision 14.
12.35 	(b) For fiscal years 2000 and later year 2006, capital
12.36 	revenue for a district equals $100 times the district's
13.1 	maintenance cost index times its adjusted marginal cost pupil
13.2 	units for the school year. For fiscal year 2007 and later,
13.3 	capital revenue for a district equals $120 times the district's
13.4 	maintenance cost index times its adjusted pupil units for the
13.5 	school year.
13.6 	(c) For fiscal years 2000 and later year 2006, the revenue
13.7 	for a district that operates a program under section 124D.128,
13.8 	is increased by an amount equal to $30 times the number of
13.9 	marginal cost pupil units served at the site where the program
13.10 	is implemented. For fiscal year 2007 and later, the revenue for
13.11 	a district that operates a program under section 124D.128, is
13.12 	increased by an amount equal to $43 times the number of pupil
13.13 	units served at the site where the program is implemented.
13.14 	(d) For fiscal years 2001, 2002, and 2003, the district
13.15 	must reserve an amount equal to $5 per adjusted marginal cost
13.16 	pupil unit for telecommunication access costs.  Reserve revenue
13.17 	under this paragraph must first be used to pay for ongoing or
13.18 	recurring telecommunication access costs, including access to
13.19 	data and video connections, including Internet access.  Any
13.20 	revenue remaining after covering all ongoing or recurring access
13.21 	costs may be used for computer hardware or equipment.

13.22 	Sec. 19. Minnesota Statutes 2004, section 126C.10,
13.23 	subdivision 13a, is amended to read:
13.24 		Subd. 13a.Operating capital levy.  To obtain operating
13.25 	capital revenue for fiscal year 2005 2007 and later, a district
13.26 	may levy an amount not more than the product of its operating
13.27 	capital revenue for the fiscal year times the lesser of one or
13.28 	the ratio of its adjusted net tax capacity per adjusted marginal
13.29 	cost pupil unit to $22,222 $26,640.
13.30 	
EFFECTIVE DATE. This section is effective for revenue for
13.31 	fiscal year 2007.

13.32 	Sec. 20. Minnesota Statutes 2004, section 126C.10,
13.33 	subdivision 17, is amended to read:
13.34 		Subd. 17.Transportation sparsity definitions.  The
13.35 	definitions in this subdivision apply to subdivisions 18 and 19.
13.36 	(a) "Sparsity index" for a district means the greater of .2
14.1 	or the ratio of the square mile area of the district to the
14.2 	resident pupil units of the district.
14.3 	(b) "Density index" for a district means the ratio of the
14.4 	square mile area of the district to the resident pupil units of
14.5 	the district.  However, the density index for a district cannot
14.6 	be greater than .2 or less than .005.
14.7 	(c) "Transportation allowance" means $4,693 for fiscal year
14.8 	2006 and $5,188 for fiscal year 2007 and later.

14.9 	Sec. 21. Minnesota Statutes 2004, section 126C.10,
14.10 	subdivision 18, is amended to read:
14.11 		Subd. 18.Transportation sparsity revenue allowance.  (a)
14.12 	For fiscal year 2006,a district's transportation sparsity
14.13 	allowance equals the greater of zero or the result of the
14.14 	following computation:
14.15 	(i) (1) Multiply the formula transportation allowance
14.16 	according to subdivision 2,by .1469.
14.17 	(ii) (2) Multiply the result in clause (i) (1) by the
14.18 	district's sparsity index raised to the 26/100 power.
14.19 	(iii) (3) Multiply the result in clause (ii) (2) by the
14.20 	district's density index raised to the 13/100 power.
14.21 	(iv) (4) Multiply the formula transportation allowance
14.22 	according to subdivision 2,by .0485.
14.23 	(v) (5) Subtract the result in clause (iv) (4) from the
14.24 	result in clause (iii) (3).
14.25 	(b) For fiscal year 2007 and later, a district's
14.26 	transportation sparsity allowance equals the greater of zero or
14.27 	the result of the following computation:
14.28 	(1) Multiply the transportation allowance by .1432.
14.29 	(2) Multiply the result in clause (1) by the district's
14.30 	sparsity index raised to the 28/100 power.
14.31 	(3) Multiply the result in clause (2) by the district's
14.32 	density index raised to the 13/100 power.
14.33 	(4) Multiply the transportation allowance by .0458.
14.34 	(5) Subtract the result in clause (4) from the result in
14.35 	clause (3).
14.36 	(b) (c) For fiscal year 2006,transportation sparsity
15.1 	revenue is equal to the transportation sparsity allowance times
15.2 	the adjusted marginal cost pupil units. For fiscal year 2007
15.3 	and later, transportation sparsity revenue is equal to the
15.4 	transportation sparsity allowance times the adjusted pupil units.

15.5 	Sec. 22. Minnesota Statutes 2004, section 126C.10,
15.6 	subdivision 24, is amended to read:
15.7 		Subd. 24.Equity revenue.  (a) For fiscal years 2004
15.8 	through 2006,a school district qualifies for equity revenue if:
15.9 	(1) the school district's adjusted marginal cost pupil unit
15.10 	amount of basic revenue, supplemental revenue, transition
15.11 	revenue,and referendum revenue is less than the value of the
15.12 	school district at or immediately above the 95th percentile of
15.13 	school districts in its equity region for those revenue
15.14 	categories; and
15.15 	(2) the school district's administrative offices are not
15.16 	located in a city of the first class on July 1, 1999.
15.17 	For fiscal year 2007 and later, a school district qualifies for
15.18 	equity revenue if the school district's referendum revenue per
15.19 	adjusted pupil unit is less than 28 percent of the formula
15.20 	allowance.
15.21 	(b) For fiscal year 2006,equity revenue for a qualifying
15.22 	district that receives referendum revenue under section 126C.17,
15.23 	subdivision 4, equals the product of (1) the district's adjusted
15.24 	marginal cost pupil units for that year; times (2) the sum of
15.25 	(i) $13, plus (ii) $75, times the school district's equity index
15.26 	computed under subdivision 27.
15.27 	(c) For fiscal year 2006,equity revenue for a qualifying
15.28 	district that does not receive referendum revenue under section
15.29 	126C.17, subdivision 4, equals the product of the district's
15.30 	adjusted marginal cost pupil units for that year times $13.
15.31 	(d) For fiscal year 2007 and later, equity revenue for a
15.32 	qualifying district equals the product of (1) the district's
15.33 	adjusted pupil units for that year; times (2) $101 times the
15.34 	school district's equity index computed under subdivision 27.
15.35 	
EFFECTIVE DATE. This section is effective the day
15.36 	following final enactment and applies to revenue for fiscal year
16.1 	2004 and later.

16.2 	Sec. 23. Minnesota Statutes 2004, section 126C.10,
16.3 	subdivision 25, is amended to read:
16.4 		Subd. 25.Regional equity gap. For fiscal year 2006,the
16.5 	regional equity gap equals the difference between the value of
16.6 	the school district at or immediately above the fifth percentile
16.7 	of adjusted general referendum revenue per adjusted marginal
16.8 	cost pupil unit and the value of the school district at or
16.9 	immediately above the 95th percentile of adjusted general 
16.10 	referendum revenue per adjusted marginal cost pupil unit.

16.11 	Sec. 24. Minnesota Statutes 2004, section 126C.10,
16.12 	subdivision 26, is amended to read:
16.13 		Subd. 26.District equity gap. For fiscal year 2006,a
16.14 	district's equity gap equals the greater of zero or the
16.15 	difference between the district's adjusted general referendum 
16.16 	revenue and the value per adjusted marginal cost pupil unit of
16.17 	the school district at or immediately above the regional 95th
16.18 	percentile of adjusted general and the district's referendum 
16.19 	revenue per adjusted marginal cost pupil unit. For fiscal year
16.20 	2007 and later, a district's equity gap equals the greater of
16.21 	zero or the difference between 28 percent of the formula
16.22 	allowance and the district's referendum revenue per adjusted
16.23 	pupil unit.

16.24 	Sec. 25. Minnesota Statutes 2004, section 126C.10,
16.25 	subdivision 27, is amended to read:
16.26 		Subd. 27.District equity index. For fiscal year 2006,a
16.27 	district's equity index equals the ratio of the sum of the 
16.28 	district equity gap amount to the regional equity gap
16.29 	amount. For fiscal year 2007 and later, a district's equity
16.30 	index equals the ratio of the district equity gap amount to 28
16.31 	percent of the formula allowance.

16.32 	Sec. 26. Minnesota Statutes 2004, section 126C.10,
16.33 	subdivision 28, is amended to read:
16.34 		Subd. 28.Equity region.  For the purposes of computing
16.35 	equity revenue under subdivision 24 for fiscal year 2006, a
16.36 	district whose administrative offices on July 1, 1999, is
17.1 	located in Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, or
17.2 	Washington County is part of the metro equity region.  Districts
17.3 	whose administrative offices on July 1, 1999, are not located in
17.4 	Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, or Washington
17.5 	County are part of the rural equity region.

17.6 	Sec. 27. Minnesota Statutes 2004, section 126C.10,
17.7 	subdivision 29, is amended to read:
17.8 		Subd. 29.Equity levy.  To obtain equity revenue for
17.9 	fiscal year 2005 and later 2006, a district may levy an amount
17.10 	not more than the product of its equity revenue for the fiscal
17.11 	year times the lesser of one or the ratio of its referendum
17.12 	market value per resident marginal cost pupil unit to $476,000.
17.13 	To obtain equity revenue for fiscal year 2007 and later, a
17.14 	district may levy an amount not more than the product of its
17.15 	equity revenue for the fiscal year times the lesser of one or
17.16 	the ratio of its referendum market value per resident pupil unit
17.17 	to $572,000.

17.18 	Sec. 28. Minnesota Statutes 2004, section 126C.10,
17.19 	subdivision 31, is amended to read:
17.20 		Subd. 31.Transition revenue.  (a) A district's
17.21 	transition allowance for fiscal years 2004 through 2008 2006 
17.22 	equals the greater of zero or the product of the ratio of the
17.23 	number of adjusted marginal cost pupil units the district would
17.24 	have counted for fiscal year 2004 under Minnesota Statutes 2002
17.25 	to the district's adjusted marginal cost pupil units for fiscal
17.26 	year 2004, times the difference between:  (1) the lesser of the
17.27 	district's general education revenue per adjusted marginal cost
17.28 	pupil unit for fiscal year 2003 or the amount of general
17.29 	education revenue the district would have received per adjusted
17.30 	marginal cost pupil unit for fiscal year 2004 according to
17.31 	Minnesota Statutes 2002, and (2) the district's general
17.32 	education revenue for fiscal year 2004 excluding transition
17.33 	revenue divided by the number of adjusted marginal cost pupil
17.34 	units the district would have counted for fiscal year 2004 under
17.35 	Minnesota Statutes 2002.
17.36 	(b) A district's transition allowance for fiscal years 2007
18.1 	through 2010 equals the greater of zero or the difference
18.2 	between:
18.3 	(1) the sum of:
18.4 	(i) the amount of general education revenue the district
18.5 	would have received for fiscal year 2007 under the formulas in
18.6 	effect for fiscal year 2006, plus 
18.7 	(ii) $199 times the district's adjusted pupil units for
18.8 	fiscal year 2007, plus 
18.9 	(iii) the amount of the district's levy limitations for
18.10 	taxes payable in 2005 for:
18.11 	(A) building leases, according to Minnesota Statutes 2004,
18.12 	section 126C.40, subdivision 1, excluding the portion of the
18.13 	levy limitation attributable to leases eligible for levy for
18.14 	taxes payable in 2006 and later under section 126C.40,
18.15 	subdivision 1, paragraph (j);
18.16 	(B) unemployment insurance, according to Minnesota Statutes
18.17 	2004, section 126C.43, subdivision 2;
18.18 	(C) judgments, according to Minnesota Statutes 2004,
18.19 	section 126C.43, subdivision 3;
18.20 	(D) safe schools, according to Minnesota Statutes 2004,
18.21 	section 126C.44;
18.22 	(E) tree growth replacement, according to Minnesota
18.23 	Statutes 2004, section 126C.445;
18.24 	(F) ice arenas, according to Minnesota Statutes 2004,
18.25 	section 126C.45;
18.26 	(G) swimming pools, according to Minnesota Statutes 2004,
18.27 	section 126C.455;
18.28 	(H) lost interest earnings, according to Laws 2002, chapter
18.29 	377, article 5, section 53;
18.30 	(I) severance, according to Minnesota Statutes 2004,
18.31 	sections 123A.39, subdivision 3 and 126C.41, subdivision 5;
18.32 	(J) extended hours and school days according to Laws 1997,
18.33 	First Special Session chapter 4, article 4, section 31; and 
18.34 	(K) other miscellaneous levies according to Laws 1996,
18.35 	chapter 412, article 5, section 28 and Laws 2001, First Special
18.36 	Session chapter 5, article 3, section 87; and 
19.1 	(2) the district's general education revenue for fiscal
19.2 	year 2007 excluding transition revenue, divided by the
19.3 	district's adjusted pupil units for fiscal year 2007.
19.4 	(c) A district's transition allowance for fiscal year 2009 
19.5 	2011 and later is zero.
19.6 	(b) (d) A district's transition revenue for fiscal year
19.7 	2004 and later 2006 equals the sum of (1) the product of the
19.8 	district's transition allowance times the district's adjusted
19.9 	marginal cost pupil units.plus (2) the amount of referendum
19.10 	revenue under section 126C.17 and general education revenue,
19.11 	excluding transition revenue, for fiscal year 2004 attributable
19.12 	to pupils four or five years of age on September 1, 2003,
19.13 	enrolled in a prekindergarten program implemented by the
19.14 	district before July 1, 2003, and reported as kindergarten
19.15 	pupils under section 126C.05, subdivision 1, for fiscal year
19.16 	2004, plus (3) the amount of compensatory education revenue
19.17 	under subdivision 3 for fiscal year 2005 attributable to pupils
19.18 	four years of age on September 1, 2003, enrolled in a
19.19 	prekindergarten program implemented by the district before July
19.20 	1, 2003, and reported as kindergarten pupils under section
19.21 	126C.05, subdivision 1, for fiscal year 2004.
19.22 	(e) A district's transition revenue for fiscal year 2007
19.23 	through fiscal year 2010 equals the product of the district's
19.24 	transition allowance times the district's adjusted pupil units.

19.25 	Sec. 29. Minnesota Statutes 2004, section 126C.10,
19.26 	subdivision 32, is amended to read:
19.27 		Subd. 32.Transition levy.  To obtain transition revenue
19.28 	for fiscal year 2005 2007 and later, a district may levy an
19.29 	amount not more than the product of its transition revenue for
19.30 	the fiscal year times the lesser of one or the ratio of its
19.31 	referendum market value per resident marginal cost pupil unit to
19.32 	$476,000 $572,000.
19.33 	
EFFECTIVE DATE. This section is effective for revenue for
19.34 	fiscal year 2007.

19.35 	Sec. 30. Minnesota Statutes 2004, section 126C.10, is
19.36 	amended by adding a subdivision to read:
20.1 		Subd. 34.Discretionary revenue. (a) For fiscal year
20.2 	2007 and later, a district's discretionary revenue equals the
20.3 	product of (1) the sum of $150 plus the district's training and
20.4 	experience allowance according to subdivision 5, times (2) the
20.5 	adjusted pupil units for the school year.
20.6 	(b) Discretionary revenue is subject to reverse referendum
20.7 	according to section 126C.48, subdivision 9.
20.8 	
EFFECTIVE DATE. This section is effective for revenue for
20.9 	fiscal year 2007.

20.10 	Sec. 31. Minnesota Statutes 2004, section 126C.10, is
20.11 	amended by adding a subdivision to read:
20.12 		Subd. 35.Discretionary levy. To obtain discretionary
20.13 	revenue for fiscal year 2007 and later, a district may levy an
20.14 	amount not more than the product of its discretionary revenue
20.15 	for the fiscal year times the lesser of one or the ratio of its
20.16 	adjusted net tax capacity per adjusted pupil unit to $6,900.
20.17 	
EFFECTIVE DATE. This section is effective for revenue for
20.18 	fiscal year 2007.

20.19 	Sec. 32. Minnesota Statutes 2004, section 126C.10, is
20.20 	amended by adding a subdivision to read:
20.21 		Subd. 36.Discretionary aid. For fiscal year 2007 and
20.22 	later, a district's discretionary aid equals its discretionary
20.23 	revenue minus its discretionary levy times the ratio of the
20.24 	actual amount levied to the permitted levy.
20.25 	
EFFECTIVE DATE. This section is effective for revenue for
20.26 	fiscal year 2007.

20.27 	Sec. 33. Minnesota Statutes 2004, section 126C.13,
20.28 	subdivision 4, is amended to read:
20.29 		Subd. 4.General education aid.  (a) For fiscal year
20.30 	2004, a district's general education aid is the sum of the
20.31 	following amounts:
20.32 	(1) general education revenue;
20.33 	(2) shared time aid according to section 126C.01,
20.34 	subdivision 7;
20.35 	(3) referendum aid according to section 126C.17; and 
20.36 	(4) online learning aid according to section 126C.24.
21.1 	(b) For fiscal year 2005 and later 2006, a district's
21.2 	general education aid is the sum of the following amounts:
21.3 	(1) general education revenue, excluding equity revenue,
21.4 	total operating capital, and transition revenue;
21.5 	(2) operating capital aid according to section 126C.10,
21.6 	subdivision 13b;
21.7 	(3) equity aid according to section 126C.10, subdivision
21.8 	30;
21.9 	(4) transition aid according to section 126C.10,
21.10 	subdivision 33;
21.11 	(5) shared time aid according to section 126C.01,
21.12 	subdivision 7;
21.13 	(6) referendum aid according to section 126C.17; and
21.14 	(7) online learning aid according to section 126C.24.
21.15 	(b) For fiscal year 2007 and later, a district's general
21.16 	education aid is the sum of the following amounts:
21.17 	(1) general education revenue, excluding equity revenue,
21.18 	total operating capital revenue, alternative compensation
21.19 	revenue, transition revenue, and discretionary revenue;
21.20 	(2) operating capital aid according to section 126C.10,
21.21 	subdivision 13b;
21.22 	(3) equity aid according to section 126C.10, subdivision
21.23 	30;
21.24 	(4) alternative compensation aid according to section
21.25 	126C.10, subdivision 36;
21.26 	(5) transition aid according to section 126C.10,
21.27 	subdivision 33;
21.28 	(6) discretionary aid according to section 126C.10,
21.29 	subdivision 39;
21.30 	(7) shared time aid according to section 126C.01,
21.31 	subdivision 7;
21.32 	(8) referendum aid according to section 126C.17; and 
21.33 	(9) online learning aid according to section 126C.24.

21.34 	Sec. 34. Minnesota Statutes 2004, section 126C.17,
21.35 	subdivision 1, is amended to read:
21.36 		Subdivision 1.Referendum allowance.  (a) For fiscal year
22.1 	2003 and later 2006, a district's initial referendum revenue
22.2 	allowance equals the sum of the allowance under section 126C.16,
22.3 	subdivision 2, plus any additional allowance per resident
22.4 	marginal cost pupil unit authorized under subdivision 9 before
22.5 	May 1, 2001, for fiscal year 2002 and later, plus the referendum
22.6 	conversion allowance approved under subdivision 13, minus $415.
22.7 	For districts with more than one referendum authority, the
22.8 	reduction must be computed separately for each authority.  The
22.9 	reduction must be applied first to the referendum conversion
22.10 	allowance and next to the authority with the earliest expiration
22.11 	date.  A district's initial referendum revenue allowance may not
22.12 	be less than zero.
22.13 	(b) For fiscal year 2003, a district's referendum revenue
22.14 	allowance equals the initial referendum allowance plus any
22.15 	additional allowance per resident marginal cost pupil unit
22.16 	authorized under subdivision 9 between April 30, 2001, and
22.17 	December 30, 2001, for fiscal year 2003 and later.
22.18 	(c) For fiscal year 2004 and later 2006, a district's
22.19 	referendum revenue allowance equals the sum of:
22.20 	(1) the product of (i) the ratio of the resident marginal
22.21 	cost pupil units the district would have counted for fiscal year
22.22 	2004 under Minnesota Statutes 2002, section 126C.05, to the
22.23 	district's resident marginal cost pupil units for fiscal year
22.24 	2004, times (ii) the initial referendum allowance plus any
22.25 	additional allowance per resident marginal cost pupil unit
22.26 	authorized under subdivision 9 between April 30, 2001, and May
22.27 	30, 2003, for fiscal year 2003 and later, plus
22.28 	(2) any additional allowance per resident marginal cost
22.29 	pupil unit authorized under subdivision 9 after May 30, 2003,
22.30 	for fiscal year 2005 and later.
22.31 	(c) For fiscal year 2007 and later, a district's referendum
22.32 	revenue allowance equals the sum of:
22.33 	(1) the product of (i) the ratio of the resident marginal
22.34 	cost pupil units the district would have counted for fiscal year
22.35 	2007 under Minnesota Statutes 2004, section 126C.05, to the
22.36 	district's resident pupil units for fiscal year 2007, times (ii)
23.1 	the referendum revenue allowance the district would have
23.2 	received for fiscal year 2007 and later under Minnesota Statutes
23.3 	2004, section 126C.17, subdivision 1, paragraph (c), based on
23.4 	elections held under subdivision 9, before May 30, 2005, plus 
23.5 	(2) any additional allowance per resident pupil unit
23.6 	authorized under subdivision 9 after May 30, 2005.

23.7 	Sec. 35. Minnesota Statutes 2004, section 126C.17,
23.8 	subdivision 2, is amended to read:
23.9 		Subd. 2.Referendum allowance limit.  (a) Notwithstanding
23.10 	subdivision 1, for fiscal year 2003, a district's referendum
23.11 	allowance must not exceed the greater of:
23.12 	(1) the sum of a district's referendum allowance for fiscal
23.13 	year 1994 times 1.162 plus its referendum conversion allowance
23.14 	for fiscal year 2003, minus $415;
23.15 	(2) 18.2 percent of the formula allowance;
23.16 	(3) for a newly reorganized district created on July 1,
23.17 	2002, the referendum revenue authority for each reorganizing
23.18 	district in the year preceding reorganization divided by its
23.19 	resident marginal cost pupil units for the year preceding
23.20 	reorganization, minus $415; or 
23.21 	(4) for a newly reorganized district created after July 1,
23.22 	2002, the referendum revenue authority for each reorganizing
23.23 	district in the year preceding reorganization divided by its
23.24 	resident marginal cost pupil units for the year preceding
23.25 	reorganization.
23.26 	(b) Notwithstanding subdivision 1, for fiscal year 2004 
23.27 	2007 and later, a district's referendum allowance must not
23.28 	exceed the greater of:
23.29 	(1) the sum of:  (i) a district's referendum allowance for
23.30 	fiscal year 1994 times 1.177 times the annual inflationary
23.31 	increase as calculated under paragraph (c) plus (ii) its
23.32 	referendum conversion allowance for fiscal year 2003, minus
23.33 	(iii) $415;
23.34 	(2) the greater of (i) 18.6 28 percent of the formula
23.35 	allowance or (ii) $855.79 $1,396 times the annual inflationary
23.36 	increase as calculated under paragraph (c); or
24.1 	(3) for a newly reorganized district created after July 1,
24.2 	2002 2006, the referendum revenue authority for each
24.3 	reorganizing district in the year preceding reorganization
24.4 	divided by its resident marginal cost pupil units for the year
24.5 	preceding reorganization.
24.6 	(c) (b) For purposes of this subdivision, for fiscal year
24.7 	2005 and later, "inflationary increase" means one plus the
24.8 	percentage change in the Consumer Price Index for urban
24.9 	consumers, as prepared by the United States Bureau of Labor
24.10 	Standards, for the current fiscal year to fiscal year 2004. For
24.11 	fiscal years 2009 and later, for purposes of paragraph (b),
24.12 	clause (1), the inflationary increase equals the inflationary
24.13 	increase for fiscal year 2008 plus one-fourth of the percentage
24.14 	increase in the formula allowance for that year compared with
24.15 	the formula allowance for fiscal year 2008.
24.16 	
EFFECTIVE DATE. This section is effective for revenue for
24.17 	fiscal year 2007.

24.18 	Sec. 36. Minnesota Statutes 2004, section 126C.17,
24.19 	subdivision 4, is amended to read:
24.20 		Subd. 4.Total referendum revenue. For fiscal year 2006,
24.21 	the total referendum revenue for each district equals the
24.22 	district's referendum allowance times the resident marginal cost
24.23 	pupil units for the school year. For fiscal year 2007 and
24.24 	later, the total referendum revenue for each district equals the
24.25 	district's referendum allowance times the resident pupil units
24.26 	for the school year.

24.27 	Sec. 37. Minnesota Statutes 2004, section 126C.17,
24.28 	subdivision 5, is amended to read:
24.29 		Subd. 5.Referendum equalization revenue.  (a) For fiscal
24.30 	year 2003 and later, a district's referendum equalization
24.31 	revenue equals the sum of the first tier referendum equalization
24.32 	revenue and the second tier referendum equalization revenue.
24.33 	(b) A district's first tier referendum equalization revenue
24.34 	equals the district's first tier referendum equalization
24.35 	allowance times the district's resident marginal cost pupil
24.36 	units for that year.
25.1 	(c) For fiscal years 2003 and 2004, a district's first tier
25.2 	referendum equalization allowance equals the lesser of the
25.3 	district's referendum allowance under subdivision 1 or $126.
25.4 	For fiscal year 2005, a district's first tier referendum
25.5 	equalization allowance equals the lesser of the district's
25.6 	referendum allowance under subdivision 1 or $405.For fiscal
25.7 	year 2006 and later, a district's first tier referendum
25.8 	equalization allowance equals the lesser of the district's
25.9 	referendum allowance under subdivision 1 or $500. For fiscal
25.10 	year 2007 and later, a district's first tier referendum
25.11 	equalization allowance equals the lesser of the district's
25.12 	referendum allowance under subdivision 1 or $601.
25.13 	(d) For fiscal year 2006,a district's second tier
25.14 	referendum equalization revenue equals the district's second
25.15 	tier referendum equalization allowance times the district's
25.16 	resident marginal cost pupil units for that year. For fiscal
25.17 	year 2007 and later, a district's second tier referendum
25.18 	equalization revenue equals the district's second tier
25.19 	referendum equalization allowance times the district's resident
25.20 	pupil units for that year.
25.21 	(e) For fiscal year 2006,a district's second tier
25.22 	referendum equalization allowance equals the lesser of the
25.23 	district's referendum allowance under subdivision 1 or 18.6
25.24 	percent of the formula allowance, minus the district's first
25.25 	tier referendum equalization allowance. For fiscal year 2007
25.26 	and later, a district's second tier referendum equalization
25.27 	allowance equals the lesser of the district's referendum
25.28 	allowance under subdivision 1 or 28 percent of the formula
25.29 	allowance, minus the district's first tier referendum
25.30 	equalization allowance.
25.31 	(f) Notwithstanding paragraph (e), the second tier
25.32 	referendum allowance for a district qualifying for secondary
25.33 	sparsity revenue under section 126C.10, subdivision 7, or
25.34 	elementary sparsity revenue under section 126C.10, subdivision
25.35 	8, equals the district's referendum allowance under subdivision
25.36 	1 minus the district's first tier referendum equalization
26.1 	allowance.

26.2 	Sec. 38. Minnesota Statutes 2004, section 126C.17,
26.3 	subdivision 6, is amended to read:
26.4 		Subd. 6.Referendum equalization levy.  (a) For fiscal
26.5 	year 2003 and later, a district's referendum equalization levy
26.6 	equals the sum of the first tier referendum equalization levy
26.7 	and the second tier referendum equalization levy.
26.8 	(b) For fiscal year 2006,a district's first tier
26.9 	referendum equalization levy equals the district's first tier
26.10 	referendum equalization revenue times the lesser of one or the
26.11 	ratio of the district's referendum market value per resident
26.12 	marginal cost pupil unit to $476,000. For fiscal year 2007 and
26.13 	later, a district's first tier referendum equalization levy
26.14 	equals the district's first tier referendum equalization revenue
26.15 	times the lesser of one or the ratio of the district's
26.16 	referendum market value per resident pupil unit to $572,000.
26.17 	(c) For fiscal year 2006,a district's second tier
26.18 	referendum equalization levy equals the district's second tier
26.19 	referendum equalization revenue times the lesser of one or the
26.20 	ratio of the district's referendum market value per resident
26.21 	marginal cost pupil unit to $270,000. For fiscal year 2007 and
26.22 	later, a district's second tier referendum equalization levy
26.23 	equals the district's second tier referendum equalization
26.24 	revenue times the lesser of one or the ratio of the district's
26.25 	referendum market value per resident pupil unit to $331,500.

26.26 	Sec. 39. Minnesota Statutes 2004, section 126C.17,
26.27 	subdivision 7, is amended to read:
26.28 		Subd. 7.Referendum equalization aid.  (a) A district's
26.29 	referendum equalization aid equals the difference between its
26.30 	referendum equalization revenue and levy.
26.31 	(b) If a district's actual levy for first or second tier
26.32 	referendum equalization revenue is less than its maximum levy
26.33 	limit for that tier, aid shall be proportionately reduced.
26.34 	(c) Notwithstanding paragraph (a), the referendum
26.35 	equalization aid for a district, where the referendum
26.36 	equalization aid under paragraph (a) exceeds 90 percent of the
27.1 	referendum revenue, must not exceed 18.6 28 percent of the
27.2 	formula allowance times the district's resident marginal cost 
27.3 	pupil units.  A district's referendum levy is increased by the
27.4 	amount of any reduction in referendum aid under this paragraph.
27.5 	
EFFECTIVE DATE. This section is effective for revenue for
27.6 	fiscal year 2007.

27.7 	Sec. 40. Minnesota Statutes 2004, section 126C.17,
27.8 	subdivision 9, is amended to read:
27.9 		Subd. 9.Referendum revenue.  (a) The revenue authorized
27.10 	by section 126C.10, subdivision 1, may be increased in the
27.11 	amount approved by the voters of the district at a referendum
27.12 	called for the purpose.  The referendum may be called by the
27.13 	board or shall be called by the board upon written petition of
27.14 	qualified voters of the district.  The referendum must be
27.15 	conducted one or two calendar years before the increased levy
27.16 	authority, if approved, first becomes payable.  Only one
27.17 	election to approve an increase may be held in a calendar year.
27.18 	Unless the referendum is conducted by mail under paragraph (g),
27.19 	the referendum must be held on the first Tuesday after the first
27.20 	Monday in November.  The ballot must state the maximum amount of
27.21 	the increased revenue per resident marginal cost pupil unit, the
27.22 	estimated referendum tax rate as a percentage of referendum
27.23 	market value in the first year it is to be levied, and that the
27.24 	revenue must be used to finance school operations.  The ballot
27.25 	may state a schedule, determined by the board, of increased
27.26 	revenue per resident marginal cost pupil unit that differs from
27.27 	year to year over the number of years for which the increased
27.28 	revenue is authorized. If the ballot contains a schedule
27.29 	showing different amounts, it must also indicate the estimated
27.30 	referendum tax rate as a percent of referendum market value for
27.31 	the amount specified for the first year and for the maximum
27.32 	amount specified in the schedule.The ballot may state that
27.33 	existing referendum levy authority is expiring.  In this case,
27.34 	the ballot may also compare the proposed levy authority to the
27.35 	existing expiring levy authority, and express the proposed
27.36 	increase as the amount, if any, over the expiring referendum
28.1 	levy authority.  The ballot must designate the specific number
28.2 	of years, not to exceed ten, for which the referendum
28.3 	authorization applies. The ballot, including a ballot on the
28.4 	question to revoke or reduce the increased revenue amount under
28.5 	paragraph (c), must abbreviate the term "per resident pupil
28.6 	unit" as "per pupil." The notice required under section 275.60
28.7 	may be modified to read, in cases of renewing existing levies:
28.8 	"BY VOTING "YES" ON THIS BALLOT QUESTION, YOU MAY BE VOTING
28.9 	FOR A PROPERTY TAX INCREASE."
28.10 	The ballot may contain a textual portion with the
28.11 	information required in this subdivision and a question stating
28.12 	substantially the following:
28.13 	"Shall the increase in the revenue proposed by (petition
28.14 	to) the board of ........., School District No. .., be approved?"
28.15 	If approved, an amount equal to the approved revenue per
28.16 	resident marginal cost pupil unit times the resident marginal
28.17 	cost pupil units for the school year beginning in the year after
28.18 	the levy is certified shall be authorized for certification for
28.19 	the number of years approved, if applicable, or until revoked or
28.20 	reduced by the voters of the district at a subsequent referendum.
28.21 	(b) The board must prepare and deliver by first class mail
28.22 	at least 15 days but no more than 30 days before the day of the
28.23 	referendum to each taxpayer a notice of the referendum and the
28.24 	proposed revenue increase.  The board need not mail more than
28.25 	one notice to any taxpayer.  For the purpose of giving mailed
28.26 	notice under this subdivision, owners must be those shown to be
28.27 	owners on the records of the county auditor or, in any county
28.28 	where tax statements are mailed by the county treasurer, on the
28.29 	records of the county treasurer.  Every property owner whose
28.30 	name does not appear on the records of the county auditor or the
28.31 	county treasurer is deemed to have waived this mailed notice
28.32 	unless the owner has requested in writing that the county
28.33 	auditor or county treasurer, as the case may be, include the
28.34 	name on the records for this purpose.  The notice must project
28.35 	the anticipated amount of tax increase in annual dollars and
28.36 	annual percentage for typical residential homesteads,
29.1 	agricultural homesteads, apartments, and commercial-industrial
29.2 	property within the school district.
29.3 	The notice for a referendum may state that an existing
29.4 	referendum levy is expiring and project the anticipated amount
29.5 	of increase over the existing referendum levy in the first year,
29.6 	if any, in annual dollars and annual percentage for typical
29.7 	residential homesteads, agricultural homesteads, apartments, and
29.8 	commercial-industrial property within the district.
29.9 	The notice must include the following statement:  "Passage
29.10 	of this referendum will result in an increase in your property
29.11 	taxes."  However, in cases of renewing existing levies, the
29.12 	notice may include the following statement:  "Passage of this
29.13 	referendum may result in an increase in your property taxes."
29.14 	(c) A referendum on the question of revoking or reducing
29.15 	the increased revenue amount authorized pursuant to paragraph
29.16 	(a) may be called by the board and shall be called by the board
29.17 	upon the written petition of qualified voters of the district.
29.18 	A referendum to revoke or reduce the revenue amount must state
29.19 	the amount per resident marginal cost pupil unit by which the
29.20 	authority is to be reduced.  Revenue authority approved by the
29.21 	voters of the district pursuant to paragraph (a) must be
29.22 	available to the school district at least once before it is
29.23 	subject to a referendum on its revocation or reduction for
29.24 	subsequent years.  Only one revocation or reduction referendum
29.25 	may be held to revoke or reduce referendum revenue for any
29.26 	specific year and for years thereafter.
29.27 	(d) A petition authorized by paragraph (a) or (c) is
29.28 	effective if signed by a number of qualified voters in excess of
29.29 	15 percent of the registered voters of the district on the day
29.30 	the petition is filed with the board.  A referendum invoked by
29.31 	petition must be held on the date specified in paragraph (a).
29.32 	(e) The approval of 50 percent plus one of those voting on
29.33 	the question is required to pass a referendum authorized by this
29.34 	subdivision.
29.35 	(f) At least 15 days before the day of the referendum, the
29.36 	district must submit a copy of the notice required under
30.1 	paragraph (b) to the commissioner and to the county auditor of
30.2 	each county in which the district is located.  Within 15 days
30.3 	after the results of the referendum have been certified by the
30.4 	board, or in the case of a recount, the certification of the
30.5 	results of the recount by the canvassing board, the district
30.6 	must notify the commissioner of the results of the referendum.

30.7 	Sec. 41. Minnesota Statutes 2004, section 126C.17,
30.8 	subdivision 13, is amended to read:
30.9 		Subd. 13.Referendum conversion allowance.  (a) A school
30.10 	district that received supplemental or transition revenue in
30.11 	fiscal year 2002 may convert its supplemental revenue conversion
30.12 	allowance and transition revenue conversion allowance to
30.13 	additional referendum allowance under subdivision 1 for fiscal
30.14 	year 2003 and thereafter.  A majority of the school board must
30.15 	approve the conversion at a public meeting before November 1,
30.16 	2001.  For a district with other referendum authority, the
30.17 	referendum conversion allowance approved by the board continues
30.18 	until the portion of the district's other referendum authority
30.19 	with the earliest expiration date after June 30, 2006, expires.
30.20 	For a district with no other referendum authority, the
30.21 	referendum conversion allowance approved by the board continues
30.22 	until June 30, 2012.
30.23 	(b) A school district that received transition revenue in
30.24 	fiscal year 2004 2007 may convert all or part of its transition
30.25 	revenue to referendum revenue with voter approval in a
30.26 	referendum called for the purpose.  The referendum must be held
30.27 	in accordance with subdivision 9, except that the ballot may
30.28 	state that existing transition revenue authority is being
30.29 	canceled or is expiring.  In this case, the ballot shall compare
30.30 	the proposed referendum allowance to the canceled or expiring
30.31 	transition revenue allowance.  For purposes of this comparison,
30.32 	the canceled or expiring transition revenue allowance per
30.33 	adjusted marginal cost pupil unit shall be converted to an
30.34 	allowance per resident marginal cost pupil unit based on the
30.35 	district's ratio of adjusted marginal cost pupil units to
30.36 	resident marginal cost pupil units for the preceding fiscal
31.1 	year.  The referendum must be held on the first Tuesday after
31.2 	the first Monday in November of 2006, 2007, 2008, or 2009.  The
31.3 	notice required under section 275.60 may be modified to read:
31.4 	"BY VOTING 'YES' ON THIS BALLOT QUESTION, YOU MAY BE VOTING FOR
31.5 	A PROPERTY TAX INCREASE." Elections under this paragraph must
31.6 	be held in 2007 or earlier.

31.7 	Sec. 42. Minnesota Statutes 2004, section 127A.45,
31.8 	subdivision 11, is amended to read:
31.9 		Subd. 11.Payment percentage for reimbursement aids.  One
31.10 	hundred percent of the aid for the previous fiscal year must be
31.11 	paid in the current year for the following aids:
31.12 	telecommunications/Internet access equity and according to
31.13 	section 125B.26,special education special pupil aid according
31.14 	to section 125A.75, subdivision 3, aid for litigation costs
31.15 	according to section 125A.75, subdivision 8, aid for
31.16 	court-placed special education expenses according to section
31.17 	125A.79, subdivision 4, and aid for special education
31.18 	out-of-state tuition according to section 125A.79, subdivision 8
31.19 	and shared time aid according to section 126C.01, subdivision 7.

31.20 	Sec. 43. KINDERGARTEN REPORTING.
 31.21 	Notwithstanding Minnesota Statutes, sections 120A.05,
31.22 	subdivision 18; 120A.20, subdivision 1; and 124D.02, subdivision
31.23 	1, pupils four or five years of age on September 1 of the
31.24 	calendar year in which the school year commences and enrolled in
31.25 	a prekindergarten program implemented by the district before
31.26 	July 1, 2003, may be reported as kindergarten pupils under
31.27 	Minnesota Statutes, section 126C.05, subdivision 1, for fiscal
31.28 	years 2004 and earlier.

31.29 	EFFECTIVE DATE. This section is effective the day
31.30 	following final enactment and applies to fiscal years 2004 and
31.31 	earlier.

31.32 	Sec. 44. TRANSITION REVENUE ADJUSTMENTS.
 31.33 	For taxes payable in 2006, a district may levy an amount
31.34 	equal to the increase in the district's transition levy for
31.35 	fiscal year 2006 under Minnesota Statutes, section 126C.10,
31.36 	subdivision 31, paragraphs (c) and (d).

32.1 	Sec. 45. FISCAL YEAR 2006 COMPENSATORY REVENUE FOR
32.2 	REFUGEES.
 32.3 	Notwithstanding Minnesota Statutes, section 126C.05,
32.4 	subdivisions 3 and 16, refugees from the Wat Krabok Refugee Camp
32.5 	in Thailand who were not enrolled in a Minnesota public school
32.6 	on October 1, 2004, but who were enrolled in a Minnesota public
32.7 	school on March 15, 2005, must be included in the calculation of
32.8 	compensatory revenue pupil units for fiscal year 2006.

32.9 	Sec. 46. APPROPRIATIONS.
 32.10 		Subdivision 1.Department of education. The sums
32.11 	indicated in this section are appropriated from the general fund
32.12 	to the Department of Education for the fiscal years designated.
32.13 		Subd. 2.General education aid. For general education
32.14 	aid under Minnesota Statutes, section 126C.13, subdivision 4:
32.15 	$ 5,022,250,000 .....2006 
32.16 	$ 5,194,663,400 .....2007 
32.17 	The 2006 appropriation includes $906,039,000 for 2005 and
32.18 	$4,116,211,000 for 2006.
32.19 	The 2007 appropriation includes $920,521,000 for 2006 and
32.20 	$4,274,142,600 for 2007.
32.21 		Subd. 3.Referendum tax base replacement aid. For
32.22 	referendum tax base replacement aid under Minnesota Statutes,
32.23 	section 126C.17, subdivision 7a:
32.24 	$ 8,704,000 .....2006 
32.25 	$ 8,704,000 .....2007 
32.26 	The 2006 appropriation includes $1,575,000 for 2005 and
32.27 	$7,129,000 for 2006.
32.28 	The 2007 appropriation includes $1,575,000 for 2006 and
32.29 	$7,129,000 for 2007.

32.30 	Sec. 47. REPEALER.
 32.31 	(a) Minnesota Statutes 2004, section 123B.05, is repealed.
32.32 	(b) Minnesota Statutes 2004, sections 126C.12 and 127A.50,
32.33 	are repealed for revenue for fiscal year 2007.

32.34 	ARTICLE 2
32.35 	OTHER GENERAL PROGRAMS

32.36 	Section 1. Minnesota Statutes 2004, section 123A.05,
33.1 	subdivision 2, is amended to read:
33.2 		Subd. 2.Reserve revenue.  Each district that is a member
33.3 	of an area learning center must reserve revenue in an amount
33.4 	equal to at least 90 percent of the district average general
33.5 	education revenue per pupil unit minus an amount equal to the
33.6 	product of the formula allowance according to section 126C.10,
33.7 	subdivision 2, times .0485 for fiscal year 2006 and .0458 for
33.8 	fiscal year 2007 and later, calculated without basic skills
33.9 	revenue, transportation sparsity revenue, and the transportation
33.10 	portion of the transition revenue adjustment, times the number
33.11 	of pupil units attending an area learning center program under
33.12 	this section.  The amount of reserved revenue under this
33.13 	subdivision may only be spent on program costs associated with
33.14 	the area learning center.  Compensatory revenue must be
33.15 	allocated according to section 126C.15, subdivision 2.
33.16 	
EFFECTIVE DATE. This section is effective for revenue for
33.17 	fiscal year 2007.

33.18 	Sec. 2. Minnesota Statutes 2004, section 123A.27, is
33.19 	amended to read:
33.20 	123A.27 RESERVED REVENUE FOR DISTRICT COOPERATION.
33.21 	(a) A district that was a member of an intermediate school
33.22 	district organized pursuant to chapter 136D on July 1, 1996,
33.23 	must place a portion of its general education revenue in a
33.24 	reserved account for instructional services from entities formed
33.25 	for cooperative services for special education programs and
33.26 	secondary vocational programs.  The amount reserved is equal to
33.27 	the levy made according to Minnesota Statutes 1993 Supplement,
33.28 	section 124.2727, subdivision 6, for taxes payable in 1994
33.29 	divided by the actual pupil units in the intermediate school
33.30 	district for fiscal year 1995 times the number of actual pupil
33.31 	units in the school district in 1995.  The district must use
33.32 	5/11 of the revenue for special education and 6/11 of the
33.33 	revenue for secondary vocational education.  The district must
33.34 	demonstrate that the revenue is being used to provide the full
33.35 	range of special education and secondary vocational programs and
33.36 	services available to each child served by the intermediate.
34.1 	The secondary vocational programs and services must meet the
34.2 	requirements established in an articulation agreement developed
34.3 	between the commissioner of education and the Board of Trustees
34.4 	of the Minnesota State Colleges and Universities.
34.5 	(b) A school district that is a member of an intermediate
34.6 	school district must place a portion of its discretionary
34.7 	revenue under section 126C.10, subdivision 37, in a reserve
34.8 	account for leases of administrative and classroom space for
34.9 	intermediate school district programs.  The amount reserved is
34.10 	equal to the district's share of intermediate school district
34.11 	lease costs for administrative and classroom space for the
34.12 	fiscal year in which the levy is certified not to exceed $27 per
34.13 	adjusted pupil unit.
34.14 	(c) A district that was a member of an education district
34.15 	organized pursuant to section 123A.15 on July 1, 1999, must
34.16 	place a portion of its general education revenue in a reserve
34.17 	account for instructional services from entities formed for
34.18 	cooperative services.  Services may include secondary vocational
34.19 	programs, special education programs, staff development, and
34.20 	gifted and talented instruction.  The amount reserved is equal
34.21 	to $50 per pupil unit times the actual number of pupil units in
34.22 	the district.

34.23 	Sec. 3. Minnesota Statutes 2004, section 123A.485,
34.24 	subdivision 2, is amended to read:
34.25 		Subd. 2.Aid.  (a) Consolidation transition aid is equal
34.26 	to $200 $240 times the number of resident pupil units in the
34.27 	newly created district in the year of consolidation and $100 
34.28 	$120 times the number of resident pupil units in the first year
34.29 	following the year of consolidation.  The number of pupil units
34.30 	used to calculate aid in either year shall not exceed 1,000 for
34.31 	districts consolidating July 1, 1994, and 1,500 1,250 for
34.32 	districts consolidating July 1, 1995 2005, and thereafter.
34.33 	(b) If the total appropriation for consolidation transition
34.34 	aid for any fiscal year, plus any amount transferred under
34.35 	section 127A.41, subdivision 8, is insufficient to pay all
34.36 	districts the full amount of aid earned, the department must
35.1 	first pay the districts in the first year following the year of
35.2 	consolidation the full amount of aid earned and distribute any
35.3 	remaining funds to the newly created districts in the first year
35.4 	of consolidation.
35.5 	
EFFECTIVE DATE. This section is effective for revenue for
35.6 	fiscal year 2007.

35.7 	Sec. 4. Minnesota Statutes 2004, section 123B.42,
35.8 	subdivision 3, is amended to read:
35.9 		Subd. 3.Cost; limitation.  (a) The cost per pupil of the
35.10 	textbooks, individualized instructional or cooperative learning
35.11 	materials, and standardized tests provided for in this section
35.12 	for each school year must not exceed the statewide average
35.13 	expenditure per pupil, adjusted pursuant according to clause 
35.14 	paragraph (b), by the Minnesota public elementary and secondary
35.15 	schools for textbooks, individualized instructional materials
35.16 	and standardized tests as computed and established by the
35.17 	department by February 1 of the preceding school year from the
35.18 	most recent public school year data then available.
35.19 	(b) The cost computed in clause paragraph (a) shall be
35.20 	increased by an inflation adjustment equal to the percent of
35.21 	increase in the formula allowance, pursuant to section 126C.10,
35.22 	subdivision 2, from the second preceding school year to the
35.23 	current school year two percent for fiscal year 2006, 4.04
35.24 	percent for fiscal year 2007, and two percent for fiscal year
35.25 	2008.
35.26 	(c) The commissioner shall allot to the districts or
35.27 	intermediary service areas the total cost for each school year
35.28 	of providing or loaning the textbooks, individualized
35.29 	instructional or cooperative learning materials, and
35.30 	standardized tests for the pupils in each nonpublic school.  The
35.31 	allotment shall not exceed the product of the statewide average
35.32 	expenditure per pupil, according to clause (a), adjusted
35.33 	pursuant to clause (b), multiplied by the number of nonpublic
35.34 	school pupils who make requests pursuant to this section and who
35.35 	are enrolled as of September 15 of the current school year.

35.36 	Sec. 5. Minnesota Statutes 2004, section 123B.92,
36.1 	subdivision 9, is amended to read:
36.2 		Subd. 9.Nonpublic pupil transportation aid.  (a) A
36.3 	district's nonpublic pupil transportation aid for the 1996-1997
36.4 	and later school years fiscal year 2006 and later for
36.5 	transportation services for nonpublic school pupils according to
36.6 	sections 123B.88, 123B.84 to 123B.86, and this section, equals
36.7 	the sum of the amounts computed in paragraphs (b) and (c).  This
36.8 	aid does not limit the obligation to transport pupils under
36.9 	sections 123B.84 to 123B.87.
36.10 	(b) For regular and excess transportation according to
36.11 	subdivision 1, paragraph (b), clauses (1) and (2), an amount
36.12 	equal to the product of:
36.13 	(1) the district's actual expenditure per pupil transported
36.14 	in the regular and excess transportation categories during the
36.15 	second preceding school year; times
36.16 	(2) the number of nonpublic school pupils residing in the
36.17 	district who receive regular or excess transportation service or
36.18 	reimbursement for the current school year; times
36.19 	(3) the ratio of the formula allowance pursuant to section
36.20 	126C.10, subdivision 2, for the current school year to the
36.21 	formula allowance pursuant to section 126C.10, subdivision 2,
36.22 	for the second preceding school year 1.02 for fiscal year 2006,
36.23 	1.0404 for fiscal year 2007, 1.02 for fiscal year 2008, and 1.0
36.24 	for fiscal year 2009 and later.
36.25 	(c) For nonpublic nonregular transportation according to
36.26 	subdivision 1, paragraph (b), clause (5), an amount equal to the
36.27 	product of:
36.28 	(1) the district's actual expenditure for nonpublic
36.29 	nonregular transportation during the second preceding school
36.30 	year; times
36.31 	(2) the ratio of the formula allowance pursuant to section
36.32 	126C.10, subdivision 2, for the current school year to the
36.33 	formula allowance pursuant to section 126C.10, subdivision 2,
36.34 	for the second preceding school year 1.02 for fiscal year 2006,
36.35 	1.0404 for fiscal year 2007, 1.02 for fiscal year 2008, and 1.0
36.36 	for fiscal year 2009 and later.
37.1 	(d) Notwithstanding the amount of the formula allowance for
37.2 	fiscal year 2004 in section 126C.10, subdivision 2, the
37.3 	commissioner shall use the amount of the formula allowance for
37.4 	the current year minus $415 in determining the nonpublic pupil
37.5 	transportation revenue in paragraphs (b) and (c) for fiscal year
37.6 	2004.

37.7 	Sec. 6. Minnesota Statutes 2004, section 124D.081,
37.8 	subdivision 6, is amended to read:
37.9 		Subd. 6.Preparedness revenue.  (a) A qualifying school
37.10 	district is eligible for first-grade preparedness revenue equal
37.11 	to the basic formula allowance for that year $2,537 times the
37.12 	number of children five years of age or older enrolled in a
37.13 	kindergarten program at the site on October 1 of the previous
37.14 	year times .53.
37.15 	(b) This revenue must supplement and not replace
37.16 	compensatory revenue that the district uses for the same or
37.17 	similar purposes under chapters 120B, 123A, 123B, 124D, 126C,
37.18 	and 127A.
37.19 	(c) A pupil enrolled in the first grade preparedness
37.20 	program at a qualifying school site is eligible for
37.21 	transportation under section 123B.88, subdivision 1.
37.22 	(d) First grade preparedness revenue paid to a charter
37.23 	school for which a school district is providing transportation
37.24 	according to section 124D.10, subdivision 16, shall be decreased
37.25 	by an amount equal to the product of the formula allowance
37.26 	according to section 126C.10, subdivision 2, times.0485 .0458 
37.27 	times the pupil units calculated according to paragraph (a).
37.28 	This amount shall be paid to the school district for
37.29 	transportation costs.
37.30 	
EFFECTIVE DATE. This section is effective for revenue for
37.31 	fiscal year 2007.

37.32 	Sec. 7. Minnesota Statutes 2004, section 126C.40,
37.33 	subdivision 1, is amended to read:
37.34 		Subdivision 1.To lease building or land.  (a) When an
37.35 	independent or a special school district or a group of
37.36 	independent or special school districts finds it economically
38.1 	advantageous to rent or lease a building or land for any
38.2 	instructional purposes or for school storage or furniture
38.3 	repair, and it determines that the operating capital revenue
38.4 	authorized under section 126C.10, subdivision 13, is
38.5 	insufficient for this purpose, it may apply to the commissioner
38.6 	for permission to make an additional capital expenditure levy
38.7 	for this purpose.  An application for permission to levy under
38.8 	this subdivision must contain financial justification for the
38.9 	proposed levy, the terms and conditions of the proposed lease,
38.10 	and a description of the space to be leased and its proposed use.
38.11 	(b) The criteria for approval of applications to levy under
38.12 	this subdivision must include:  the reasonableness of the price,
38.13 	the appropriateness of the space to the proposed activity, the
38.14 	feasibility of transporting pupils to the leased building or
38.15 	land, conformity of the lease to the laws and rules of the state
38.16 	of Minnesota, and the appropriateness of the proposed lease to
38.17 	the space needs and the financial condition of the district.
38.18 	The commissioner must not authorize a levy under this
38.19 	subdivision in an amount greater than 90 percent of the cost to
38.20 	the district of renting or leasing a building or land for
38.21 	approved purposes.  The proceeds of this levy must not be used
38.22 	for custodial or other maintenance services.  A district may not
38.23 	levy under this subdivision for the purpose of leasing or
38.24 	renting a district-owned building or site to itself.
38.25 	(c) For agreements finalized after July 1, 1997, a district
38.26 	may not levy under this subdivision for the purpose of leasing:
38.27 	(1) a newly constructed building used primarily for regular
38.28 	kindergarten, elementary, or secondary instruction; or (2) a
38.29 	newly constructed building addition or additions used primarily
38.30 	for regular kindergarten, elementary, or secondary instruction
38.31 	that contains more than 20 percent of the square footage of the
38.32 	previously existing building.
38.33 	(d) Notwithstanding paragraph (b), a district may levy
38.34 	under this subdivision for the purpose of leasing or renting a
38.35 	district-owned building or site to itself only if the amount is
38.36 	needed by the district to make payments required by a lease
39.1 	purchase agreement, installment purchase agreement, or other
39.2 	deferred payments agreement authorized by law, and the levy
39.3 	meets the requirements of paragraph (c).  A levy authorized for
39.4 	a district by the commissioner under this paragraph may be in
39.5 	the amount needed by the district to make payments required by a
39.6 	lease purchase agreement, installment purchase agreement, or
39.7 	other deferred payments agreement authorized by law, provided
39.8 	that any agreement include a provision giving the school
39.9 	districts the right to terminate the agreement annually without
39.10 	penalty.
39.11 	(e) The total levy under this subdivision for a district
39.12 	for any year must not exceed $90 $108 times the resident pupil
39.13 	units for the fiscal year to which the levy is attributable.
39.14 	(f) For agreements for which a review and comment have been
39.15 	submitted to the Department of Education after April 1, 1998,
39.16 	the term "instructional purpose" as used in this subdivision
39.17 	excludes expenditures on stadiums.
39.18 	(g) The commissioner of education may authorize a school
39.19 	district to exceed the limit in paragraph (e) if the school
39.20 	district petitions the commissioner for approval.  The
39.21 	commissioner shall grant approval to a school district to exceed
39.22 	the limit in paragraph (e) for not more than five years if the
39.23 	district meets the following criteria:
39.24 	(1) the school district has been experiencing pupil
39.25 	enrollment growth in the preceding five years;
39.26 	(2) the purpose of the increased levy is in the long-term
39.27 	public interest;
39.28 	(3) the purpose of the increased levy promotes colocation
39.29 	of government services; and
39.30 	(4) the purpose of the increased levy is in the long-term
39.31 	interest of the district by avoiding over construction of school
39.32 	facilities.
39.33 	(h) A school district that is a member of an intermediate
39.34 	school district may include in its authority under this section
39.35 	90 percent of the costs associated with leases of administrative
39.36 	and classroom space for intermediate school district programs.
40.1 	This authority must not exceed $22.50 $27 times the adjusted
40.2 	marginal cost pupil units of the member districts.  This
40.3 	authority is in addition to any other authority authorized under
40.4 	this section.
40.5 	(i) In addition to the allowable capital levies in
40.6 	paragraph (a), a district that is a member of the "Technology
40.7 	and Information Education Systems" data processing joint board,
40.8 	that finds it economically advantageous to enter into a lease
40.9 	purchase agreement for a building for a group of school
40.10 	districts or special school districts for staff development
40.11 	purposes, may levy for its portion of lease costs attributed to
40.12 	the district within the total levy limit in paragraph (e).
40.13 	(j) For taxes payable in 2006 and later, no lease levy
40.14 	shall be authorized under this subdivision unless the amount is
40.15 	needed by the district to make payments required by a lease
40.16 	purchase agreement, installment purchase agreement, or other
40.17 	deferred payment agreement where ownership of the leased
40.18 	property is being acquired by the lessee at the end of the lease
40.19 	term, and the agreement was entered into prior to January 1,
40.20 	2005.

40.21 	Sec. 8. Minnesota Statutes 2004, section 126C.48, is
40.22 	amended by adding a subdivision to read:
40.23 		Subd. 9.Reverse referendum. (a) At the time a district
40.24 	certifies its proposed levy to the county auditor according to
40.25 	section 275.065, subdivision 1, the school board must certify
40.26 	the amount of discretionary revenue, special education levy
40.27 	revenue, and deferred maintenance revenue per pupil unit that
40.28 	the board intends to raise.  If the board certifies an amount
40.29 	for fiscal year 2007 greater than the sum of the district's
40.30 	training and experience revenue for fiscal year 2006 plus the
40.31 	district's levy limitation for taxes payable in 2005 for the
40.32 	levies specified in subdivision 31, paragraph (b), clause
40.33 	(1)(iii), plus $76 times the district's fiscal year 2007
40.34 	adjusted pupil units, the excess amount certified is subject to
40.35 	reverse referendum under paragraphs (b) and (c).  If the amount
40.36 	certified for fiscal year 2008 and later exceeds the amount
41.1 	certified for the previous fiscal year, the increase over the
41.2 	amount certified for the previous fiscal year is subject to
41.3 	reverse referendum under paragraphs (b) and (c).
41.4 	(b) If a district certifies revenue under paragraph (a)
41.5 	that is subject to reverse referendum, the district must publish
41.6 	notice of the intended increase subject to reverse referendum by
41.7 	September 30.  The notice must include the amount of the revenue
41.8 	increase per adjusted pupil unit and the property tax increase
41.9 	in annual dollars for typical residential homesteads,
41.10 	agricultural homesteads, apartments, and commercial-industrial
41.11 	property within the district.
41.12 	(c) Revenue tentatively authorized by the board under this
41.13 	subdivision becomes authorized unless a petition signed by more
41.14 	than 15 percent of the registered voters of the district is
41.15 	filed with the school board within 30 days of the publication of
41.16 	notice.  The percentage is to be determined with reference to
41.17 	the number of registered voters in the district on the last day
41.18 	before the petition is filed with the board.  The petition must
41.19 	call for a referendum on the question of whether to increase the
41.20 	revenue.  The approval of 50 percent plus one of those voting on
41.21 	the question is required to pass a referendum authorized by this
41.22 	section.  The referendum must be held on the last Tuesday in
41.23 	January.

41.24 	Sec. 9. Minnesota Statutes 2004, section 127A.49,
41.25 	subdivision 2, is amended to read:
41.26 		Subd. 2.Abatements.  Whenever by virtue of chapter 278,
41.27 	sections 270.07, 375.192, or otherwise, the net tax capacity of
41.28 	any district for any taxable year is changed after the taxes for
41.29 	that year have been spread by the county auditor and the local
41.30 	tax rate as determined by the county auditor based upon the
41.31 	original net tax capacity is applied upon the changed net tax
41.32 	capacities, the county auditor shall, prior to February 1 of
41.33 	each year, certify to the commissioner of education the amount
41.34 	of any resulting net revenue loss that accrued to the district
41.35 	during the preceding year.  Each year, the commissioner shall
41.36 	pay an abatement adjustment to the district in an amount
42.1 	calculated according to the provisions of this subdivision.
42.2 	This amount shall be deducted from the amount of the levy
42.3 	authorized by section 126C.46.  The amount of the abatement
42.4 	adjustment must be the product of:
42.5 	(1) the net revenue loss as certified by the county
42.6 	auditor, times
42.7 	(2) the ratio of:
42.8 	(i) the sum of the amounts of the district's certified levy
42.9 	in the third preceding year according to the following:
42.10 	(A) section 123B.57, if the district received health and
42.11 	safety aid according to that section for the second preceding
42.12 	year;
42.13 	(B) section 124D.20, if the district received aid for
42.14 	community education programs according to that section for the
42.15 	second preceding year;
42.16 	(C) section 124D.135, subdivision 3, if the district
42.17 	received early childhood family education aid according to
42.18 	section 124D.135 for the second preceding year; and
42.19 	(D) section 126C.17, subdivision 6, if the district
42.20 	received referendum equalization aid according to that section
42.21 	for the second preceding year; to
42.22 	(ii) the total amount of the district's certified levy in
42.23 	the third preceding December, plus or minus auditor's
42.24 	adjustments.

42.25 	Sec. 10. SCHOOL BUS LEVY; CARPENTER SCHOOL BUSES.
 42.26 	For taxes payable in 2006 through 2010, a school district
42.27 	may levy an amount, not to exceed in the aggregate, $30,000
42.28 	times the number of Carpenter school buses in its fleet as of
42.29 	January 1, 2004, that have been determined to have potentially
42.30 	defective welds and are subject to limitations imposed by the
42.31 	Minnesota Department of Public Safety.

42.32 	EFFECTIVE DATE. This section is effective for taxes
42.33 	payable in 2006.

42.34 	Sec. 11. APPROPRIATIONS.
 42.35 		Subdivision 1.Department of education. The sums
42.36 	indicated in this section are appropriated from the general fund
43.1 	to the Department of Education for the fiscal years designated.
43.2 		Subd. 2.Enrollment options transportation. For
43.3 	transportation of pupils attending postsecondary institutions
43.4 	under Minnesota Statutes, section 124D.09, or for transportation
43.5 	of pupils attending nonresident districts under Minnesota
43.6 	Statutes, section 124D.03:
43.7 	$55,000 .....2006 
43.8 	$55,000 .....2007 
43.9 		Subd. 3.Abatement revenue. For abatement aid under
43.10 	Minnesota Statutes, section 127A.49:
43.11 	$820,000 .....2006 
43.12 	$870,000 .....2007 
43.13 	The 2006 appropriation includes $216,000 for 2005 and
43.14 	$604,000 for 2006.
43.15 	The 2007 appropriation includes $133,000 for 2006 and
43.16 	$737,000 for 2007.
43.17 		Subd. 4.Consolidation transition. For districts
43.18 	consolidating under Minnesota Statutes, section 123A.485:
43.19 	$246,000 .....2007 
43.20 	The 2007 appropriation includes $-0- for 2006 and $246,000
43.21 	for 2007.
43.22 		Subd. 5.Nonpublic pupil aid. For nonpublic pupil
43.23 	education aid under Minnesota Statutes, sections 123B.87 and
43.24 	123B.40 to 123B.43:
43.25 	$15,797,000 .....2006 
43.26 	$16,770,000 .....2007 
43.27 	The 2006 appropriation includes $2,718,000 for 2005 and
43.28 	$13,079,000 for 2006.
43.29 	The 2007 appropriation includes $2,890,000 for 2006 and
43.30 	$13,880,000 for 2007.
43.31 		Subd. 6.Nonpublic pupil transportation. For nonpublic
43.32 	pupil transportation aid under Minnesota Statutes, section
43.33 	123B.92, subdivision 9:
43.34 	$22,098,000 .....2006 
43.35 	$23,249,000 .....2007 
43.36 	The 2006 appropriation includes $3,788,000 for 2005 and
44.1 	$18,310,000 for 2006.
44.2 	The 2007 appropriation includes $4,046,000 for 2006 and
44.3 	$19,203,000 for 2007.
44.4 		Subd. 7.First grade preparedness. For first grade
44.5 	preparedness grants under Minnesota Statutes, section 124D.081:
44.6 	$7,250,000 .....2006 
44.7 	$7,250,000 .....2007 
44.8 		Subd. 8.One room schoolhouse. For a grant to
44.9 	Independent School District No. 690, Warroad, to operate the
44.10 	Angle Inlet School:
44.11 	$50,000 .....2006 
44.12 	$50,000 .....2007 
44.13 		Subd. 9.Declining pupil aid; albert lea. For declining
44.14 	pupil aid to Independent School District No. 241, Albert Lea:
44.15 	$75,000 .....2006 
44.16 		Subd. 10.Declining pupil aid; mesabi east. For
44.17 	declining pupil aid to Independent School District No. 2711,
44.18 	Mesabi East:
44.19 	$50,000 .....2006 
44.20 		Subd. 11.Declining pupil aid; roseau. For declining
44.21 	pupil aid to Independent School District No. 682, Roseau:
44.22 	$10,000 .....2006 

44.23 	Sec. 12. REPEALER.
 44.24 	Minnesota Statutes 2004, sections 123A.39, subdivision 3;
44.25 	126C.41, subdivision 5; 126C.43, subdivisions 2 and 3; 126C.44;
44.26 	126C.445; 126C.45; and 126C.455, are repealed effective for
44.27 	taxes payable in 2006.
44.28 	Laws 1996, chapter 412, article 5, section 28; Laws 1997,
44.29 	First Special Session chapter 4, article 4, section 31; Laws
44.30 	2001, First Special Session chapter 5, article 3, section 87;
44.31 	and Laws 2001, First Special Session chapter 6, article 1,
44.32 	section 53, as amended by Laws 2002, chapter 377, article 5,
44.33 	section 5, are repealed effective for taxes payable in 2006.

44.34 	ARTICLE 3
44.35 	EDUCATION EXCELLENCE

44.36 	Section 1. Minnesota Statutes 2004, section 122A.12,
45.1 	subdivision 2, is amended to read:
45.2 		Subd. 2.Terms; compensation; removal; administration;
45.3 	reimbursement. (a) Membership terms, removal of members, and
45.4 	the filling of membership vacancies are as provided in section
45.5 	214.09.  The terms of the initial board members must be
45.6 	determined by lot as follows:
45.7 	(1) three members must be appointed for terms that expire
45.8 	August 1, 2002;
45.9 	(2) three members must be appointed for terms that expire
45.10 	August 1, 2003; and
45.11 	(3) four members must be appointed for terms that expire
45.12 	August 1, 2004.
45.13 	Members shall not receive the daily payment under section
45.14 	214.09, subdivision 3.  The public employer of a member shall
45.15 	not reduce the member's compensation or benefits for the
45.16 	member's absence from employment when engaging in the business
45.17 	of the board.  The provision of staff, administrative services,
45.18 	and office space; the review and processing of complaints; the
45.19 	setting of fees; the selection and duties of an executive
45.20 	secretary to serve the board; and other provisions relating to
45.21 	board operations are as provided in chapter 214.  Fiscal year
45.22 	and reporting requirements are as provided in sections 214.07
45.23 	and 214.08.
45.24 	(b) The board may reimburse local school districts for the
45.25 	cost of a substitute teacher employed when a regular teacher is
45.26 	providing professional assistance to the state by serving on the
45.27 	board or on a committee or task force appointed by the board.

45.28 	Sec. 2. Minnesota Statutes 2004, section 124D.11,
45.29 	subdivision 1, is amended to read:
45.30 		Subdivision 1.General education revenue.  (a) General
45.31 	education revenue must be paid to a charter school as though it
45.32 	were a district. For fiscal years 2004 and 2005,the general
45.33 	education revenue for each adjusted marginal cost pupil unit is
45.34 	the state average general education revenue per pupil unit, plus
45.35 	the referendum equalization aid allowance in the pupil's
45.36 	district of residence, minus an amount equal to the product of
46.1 	the formula allowance according to section 126C.10, subdivision
46.2 	2, times.0485 0.0485, calculated without basic skills
46.3 	revenue, extended time revenue, transition revenue,and
46.4 	transportation sparsity revenue, plus basic skills revenue and
46.5 	transition revenue as though the school were a school district.
46.6 	For fiscal year 2006, the general education revenue for each
46.7 	adjusted marginal cost pupil unit is the state average general
46.8 	education revenue per pupil unit, plus the referendum
46.9 	equalization aid allowance in the pupil's district of residence,
46.10 	minus an amount equal to the product of the formula allowance
46.11 	according to section 126C.10, subdivision 2, times 0.0485,
46.12 	calculated without basic skills revenue, extended time revenue,
46.13 	alternative compensation revenue, transition revenue, and
46.14 	transportation sparsity revenue, plus basic skills revenue and
46.15 	transition revenue as though the school were a school district,
46.16 	plus the basic alternative compensation aid according to section
46.17 	126C.10, subdivision 34.  For fiscal year 2007 and later, the
46.18 	general education revenue for each adjusted pupil unit is the
46.19 	state average general education revenue per pupil unit, plus the
46.20 	referendum equalization aid allowance in the pupil's district of
46.21 	residence, minus an amount equal to the product of the formula
46.22 	allowance according to section 126C.10, subdivision 2, times
46.23 	0.0458, calculated without basic skills revenue, extended time
46.24 	revenue, secondary education revenue, declining enrollment
46.25 	revenue, alternative compensation revenue, transition revenue,
46.26 	and transportation sparsity revenue, plus secondary education
46.27 	revenue, declining enrollment revenue, basic skills revenue, and
46.28 	transition revenue as though the school were a school district
46.29 	plus the basic alternative compensation aid according to section
46.30 	126C.10, subdivision 34.  For fiscal year 2006, the general
46.31 	education revenue for each extended time marginal cost pupil
46.32 	unit equals $4,465.  For fiscal year 2007 and later, the general
46.33 	education revenue for each extended time pupil unit equals
46.34 	$5,535.  Notwithstanding section 126C.10, the general education
46.35 	aid for a charter school for general education revenue
46.36 	categories that require a levy equals the school's revenue for
47.1 	those categories.
47.2 	(b) Notwithstanding paragraph (a), for charter schools in
47.3 	the first year of operation, general education revenue for
47.4 	fiscal year 2006 shall be computed using the number of adjusted
47.5 	pupil units in the current fiscal year.

47.6 	Sec. 3. Minnesota Statutes 2004, section 124D.11,
47.7 	subdivision 2, is amended to read:
47.8 		Subd. 2.Transportation revenue.  Transportation revenue
47.9 	must be paid to a charter school that provides transportation
47.10 	services according to section 124D.10, subdivision 16, according
47.11 	to this subdivision.  Transportation aid shall equal
47.12 	transportation revenue.
47.13 	In addition to the revenue under subdivision 1, for fiscal
47.14 	year 2006,a charter school providing transportation services
47.15 	must receive general education aid for each pupil unit equal to
47.16 	the sum of the product of (i) an amount equal to the product of
47.17 	the formula allowance according to section 126C.10, subdivision
47.18 	2, times.0485 0.0485, plus the transportation sparsity
47.19 	allowance for the school district in which the charter school is
47.20 	located times (ii) the adjusted marginal cost pupil units, plus
47.21 	the product of $228 times the extended time marginal cost pupil
47.22 	units.
47.23 	In addition to the revenue under subdivision 1, for fiscal
47.24 	year 2007 and later, a charter school providing transportation
47.25 	services must receive general education aid equal to the sum of
47.26 	the product of (i) the formula allowance according to section
47.27 	126C.10, subdivision 2, times 0.0458, plus the transportation
47.28 	sparsity allowance for the school district in which the charter
47.29 	school is located times (ii) the adjusted pupil units, plus the
47.30 	product of $266 times the extended time pupil units.

47.31 	Sec. 4. Minnesota Statutes 2004, section 124D.11,
47.32 	subdivision 4, is amended to read:
47.33 		Subd. 4.Building lease aid. (a) When a charter school
47.34 	finds it economically advantageous to rent or lease a building
47.35 	or land for any instructional purposes and it determines that
47.36 	the total operating capital revenue under section 126C.10,
48.1 	subdivision 13, is insufficient for this purpose, it may apply
48.2 	to the commissioner for building lease aid for this purpose.
48.3 	The commissioner must review and either approve or deny a lease
48.4 	aid application using the following criteria:
48.5 	(1) the reasonableness of the price based on current market
48.6 	values;
48.7 	(2) the extent to which the lease conforms to applicable
48.8 	state laws and rules; and
48.9 	(3) the appropriateness of the proposed lease in the
48.10 	context of the space needs and financial circumstances of the
48.11 	charter school.
48.12 	A charter school must not use the building lease aid it receives
48.13 	for custodial, maintenance service, utility, or other operating
48.14 	costs.
48.15 	(b) For fiscal year 2006,the amount of building lease aid
48.16 	per pupil unit served for a charter school for any year shall
48.17 	not exceed the lesser of (a) 90 percent of the approved cost or
48.18 	(b) the product of the pupil units served for the current school
48.19 	year times the greater of the charter school's building lease
48.20 	aid per pupil unit served for fiscal year 2003, excluding the
48.21 	adjustment under Laws 2002, chapter 392, article 6, section 4,
48.22 	or $1,200. For fiscal year 2007 and later, the amount of
48.23 	building lease aid for a charter school shall not exceed the
48.24 	lesser of (1) 90 percent of the approved cost or (2) the greater
48.25 	of (i) the sum of the elementary pupil units served for the
48.26 	current school year times $1,316 plus the secondary pupil units
48.27 	served for the current school year times $1,552 or (ii) the
48.28 	product of the charter school's building lease aid per pupil
48.29 	unit served for fiscal year 2003 as adjusted according to
48.30 	section 126C.05, subdivision 14, excluding the adjustment under
48.31 	Laws 2002, chapter 392, article 6, section 4, times the pupil
48.32 	units served for the current school year.

48.33 	Sec. 5. Minnesota Statutes 2004, section 124D.11,
48.34 	subdivision 8, is amended to read:
48.35 		Subd. 8.Start-up costs. (a) During the first two years
48.36 	of a charter school's operation, the charter school is eligible
49.1 	for aid to pay for start-up costs and additional operating costs.
49.2 	For fiscal year 2006,start-up cost aid equals the greater of:
49.3 	(1) $50,000 per charter school; or
49.4 	(2) $500 times the charter school's pupil units served for
49.5 	that year.
49.6 	(b) For fiscal year 2007 and later, start-up cost aid
49.7 	equals the greater of:
49.8 	(1) $50,000 per charter school; or 
49.9 	(2) the sum of $550 times the charter school's pupil units
49.10 	served in prekindergarten through grade 6 for that year plus
49.11 	$648 times the charter school's pupil units served in grades 7
49.12 	through 12.

49.13 	Sec. 6. Minnesota Statutes 2004, section 124D.83,
49.14 	subdivision 2, is amended to read:
49.15 		Subd. 2.Revenue amount.  An American Indian-controlled
49.16 	tribal contract or grant school that is located on a reservation
49.17 	within the state and that complies with the requirements in
49.18 	subdivision 1 is eligible to receive tribal contract or grant
49.19 	school aid.  The amount of aid is derived by:
49.20 	(1) multiplying the formula allowance under section
49.21 	126C.10, subdivision 2, less $170,$5,425 times the difference
49.22 	between (i) the resident pupil units as defined in section
49.23 	126C.05, subdivision 6, in average daily membership, excluding
49.24 	section 126C.05, subdivision 13, and (ii) the number of pupils
49.25 	for the current school year, weighted according to section
49.26 	126C.05, subdivision 1, receiving benefits under section 123B.42
49.27 	or 123B.44 or for which the school is receiving reimbursement
49.28 	under section 124D.69;
49.29 	(2) adding to the result in clause (1) an amount equal to
49.30 	the product of the formula allowance under section 126C.10,
49.31 	subdivision 2, less $300 $4,475 times the tribal contract
49.32 	compensation revenue pupil units;
49.33 	(3) subtracting from the result in clause (2) the amount of
49.34 	money allotted to the school by the federal government through
49.35 	Indian School Equalization Program of the Bureau of Indian
49.36 	Affairs, according to Code of Federal Regulations, title 25,
50.1 	part 39, subparts A to E, for the basic program as defined by
50.2 	section 39.11, paragraph (b), for the base rate as applied to
50.3 	kindergarten through twelfth grade, excluding small school
50.4 	adjustments and additional weighting, but not money allotted
50.5 	through subparts F to L for contingency funds, school board
50.6 	training, student training, interim maintenance and minor
50.7 	repair, interim administration cost, prekindergarten, and
50.8 	operation and maintenance, and the amount of money that is
50.9 	received according to section 124D.69;
50.10 	(4) dividing the result in clause (3) by the sum of the
50.11 	resident pupil units in average daily membership, excluding
50.12 	section 126C.05, subdivision 13, plus the tribal contract
50.13 	compensation revenue pupil units; and
50.14 	(5) multiplying the sum of the resident pupil units,
50.15 	including section 126C.05, subdivision 13, in average daily
50.16 	membership plus the tribal contract compensation revenue pupil
50.17 	units by the lesser of $1,500 $1,676 or the result in clause (4).
50.18 	
EFFECTIVE DATE. This section is effective for revenue for
50.19 	fiscal year 2007.

50.20 	Sec. 7. Minnesota Statutes 2004, section 124D.86,
50.21 	subdivision 3, is amended to read:
50.22 		Subd. 3.Integration revenue.  Integration revenue equals
50.23 	the following amounts:
50.24 	(1) for Independent School District No. 709, Duluth, $206
50.25 	times the adjusted pupil units for the school year fiscal year
50.26 	2006 and $249 times the adjusted pupil units for fiscal year
50.27 	2007 and later;
50.28 	(2) for Independent School District No. 625, St. Paul, $445
50.29 	times the adjusted pupil units for the school year fiscal year
50.30 	2006 and $534 times the adjusted pupil units for fiscal year
50.31 	2007 and later;
50.32 	(3) for Special School District No. 1, Minneapolis, the sum
50.33 	of $445 times the adjusted pupil units for the school year and
50.34 	an additional $35 times the adjusted pupil units for the school
50.35 	year that is provided entirely through a local levy for fiscal
50.36 	year 2006, and the sum of $534 times the adjusted pupil units
51.1 	and an additional $43 times the adjusted pupil units that is
51.2 	provided entirely through a local levy for fiscal year 2007 and
51.3 	later;
51.4 	(4) for a district not listed in clause (1), (2), or (3),
51.5 	that must implement a plan under Minnesota Rules, parts
51.6 	3535.0100 to 3535.0180, where the district's enrollment of
51.7 	protected students, as defined under Minnesota Rules, part
51.8 	3535.0110, exceeds 15 percent, the lesser of (i) the actual cost
51.9 	of implementing the plan during the fiscal year minus the aid
51.10 	received under subdivision 6, or (ii) $129 times the adjusted
51.11 	pupil units for the school year fiscal year 2006 and $156 times
51.12 	the adjusted pupil units for fiscal year 2007 and later;
51.13 	(5) for a district not listed in clause (1), (2), (3), or
51.14 	(4), that is required to implement a plan according to the
51.15 	requirements of Minnesota Rules, parts 3535.0100 to 3535.0180,
51.16 	the lesser of
51.17 	(i) the actual cost of implementing the plan during the
51.18 	fiscal year minus the aid received under subdivision 6, or
51.19 	(ii) $92 times the adjusted pupil units for the school year 
51.20 	fiscal year 2006 and $111 times the adjusted pupil units for
51.21 	fiscal year 2007 and later.
51.22 	Any money received by districts in clauses (1) to (3) which
51.23 	exceeds the amount received in fiscal year 2000 shall be subject
51.24 	to the budget requirements in subdivision 1a; and
51.25 	(6) for a member district of a multidistrict integration
51.26 	collaborative that files a plan with the commissioner, but is
51.27 	not contiguous to a racially isolated district, integration
51.28 	revenue equals the amount defined in clause (5).

51.29 	Sec. 8. Minnesota Statutes 2004, section 124D.88,
51.30 	subdivision 4, is amended to read:
51.31 		Subd. 4.Start-up costs.  During the first two years of a
51.32 	metropolitan magnet school's operation, the school is eligible
51.33 	for aid to pay for start-up costs and additional operating
51.34 	costs. For fiscal year 2006,start-up cost aid equals $500
51.35 	times the magnet school's pupil units served for that year. For
51.36 	fiscal year 2007 and later, start-up cost aid equals $569 times
52.1 	the magnet school's pupil units served for that year.

52.2 	Sec. 9. Minnesota Statutes 2004, section 127A.47,
52.3 	subdivision 8, is amended to read:
52.4 		Subd. 8.Charter schools.  (a) The general education aid
52.5 	for districts must be adjusted for each pupil attending a
52.6 	charter school under section 124D.10.  The adjustments must be
52.7 	made according to this subdivision.
52.8 	(b) For fiscal year 2006,general education aid paid to a
52.9 	district in which a charter school not providing transportation
52.10 	according to section 124D.10, subdivision 16, is located must be
52.11 	increased by an amount equal to the sum of:
52.12 	(1) the product of: (1) (i) the sum of an amount equal to
52.13 	the product of the formula allowance according to section
52.14 	126C.10, subdivision 2, times .0485, plus the transportation
52.15 	sparsity allowance for the district; times (2) (ii) the adjusted
52.16 	marginal cost pupil units attributable to the pupil; plus 
52.17 	(2) the product of $228 times the extended time marginal
52.18 	cost pupil units attributable to the pupil.
52.19 	(c) For fiscal year 2007 and later, general education aid
52.20 	paid to a district in which a charter school not providing
52.21 	transportation according to section 124D.10, subdivision 16, is
52.22 	located must be increased by an amount equal to the sum of:
52.23 	(1) the product of:  (i) the sum of an amount equal to the
52.24 	product of the transportation allowance according to section
52.25 	126C.10, subdivision 17, times .0458, plus the transportation
52.26 	sparsity allowance for the district; times (ii) the adjusted
52.27 	pupil units attributable to the pupil; plus 
52.28 	(2) the product of $266 times the extended time pupil units
52.29 	attributable to the pupil.

52.30 	Sec. 10. BOARD OF SCHOOL ADMINISTRATORS; RULEMAKING
52.31 	AUTHORITY.
 52.32 	On or before June 30, 2007, the Board of School
52.33 	Administrators may adopt rules to revise and clarify Minnesota
52.34 	Rules, chapter 3512.

52.35 	Sec. 11. APPROPRIATIONS.
 52.36 		Subdivision 1.Department. The sums indicated in this
53.1 	section are appropriated from the general fund to the Department
53.2 	of Education for the fiscal years designated.
53.3 		Subd. 2.Examination fees; teacher training and support
53.4 	programs; teacher stipends. For student examination fees,
53.5 	training and related costs for teachers and other interested
53.6 	educators, and teacher stipends under Minnesota Statutes,
53.7 	section 120B.13:
53.8 	$2,000,000 .....2006 
53.9 	$2,000,000 .....2007 
53.10 	The advanced placement program shall receive 75 percent of
53.11 	the appropriation each year and the international baccalaureate
53.12 	program shall receive 25 percent of the appropriation each
53.13 	year.  The department, in consultation with representatives of
53.14 	the advanced placement and international baccalaureate programs
53.15 	selected by the Advanced Placement Advisory Council and IBMN,
53.16 	respectively, shall determine the amounts of the expenditures
53.17 	each year for examination fees, training and support programs,
53.18 	and teacher stipends for each program.
53.19 	Any balance in the first year does not cancel but is
53.20 	available in the second year.
53.21 		Subd. 3.Charter school building lease aid. For building
53.22 	lease aid under Minnesota Statutes, section 124D.11, subdivision
53.23 	4:
53.24 	$25,401,000 .....2006 
53.25 	$30,791,000 .....2007 
53.26 	The 2006 appropriation includes $3,894,000 for 2005 and
53.27 	$21,507,000 for 2006.
53.28 	The 2007 appropriation includes $4,752,000 for 2006 and
53.29 	$26,039,000 for 2007.
53.30 		Subd. 4.Charter school startup aid. For charter school
53.31 	startup cost aid under Minnesota Statutes, section 124D.11:
53.32 	$1,353,000 .....2006 
53.33 	$3,141,000 .....2007 
53.34 	The 2006 appropriation includes $-0- for 2005 and
53.35 	$1,353,000 for 2006.
53.36 	The 2007 appropriation includes $299,000 for 2006 and
54.1 	$2,842,000 for 2007.
54.2 		Subd. 5.Integration aid. For integration aid under
54.3 	Minnesota Statutes, section 124D.86, subdivision 5:
54.4 	$57,513,000 .....2006 
54.5 	$57,310,000 .....2007 
54.6 	The 2006 appropriation includes $9,820,000 for 2005 and
54.7 	$47,693,000 for 2006.
54.8 	The 2007 appropriation includes $10,539,000 for 2006 and
54.9 	$46,771,000 for 2007.
54.10 		Subd. 6.Magnet school grants. For magnet school and
54.11 	program grants:
54.12 	$  750,000 .....2006 
54.13 	$  750,000 .....2007 
54.14 	These amounts may be used for magnet school programs under
54.15 	Minnesota Statutes, section 124D.88.
54.16 		Subd. 7.Magnet school startup aid. For magnet school
54.17 	startup aid under Minnesota Statutes, section 124D.88:
54.18 	$  221,000 .....2007 
54.19 	The 2007 appropriation includes $-0- for 2006 and $221,000
54.20 	for 2007.
54.21 		Subd. 8.Interdistrict desegregation or integration
54.22 	transportation grants. For interdistrict desegregation or
54.23 	integration transportation grants under Minnesota Statutes,
54.24 	section 124D.87:
54.25 	$7,714,000 .....2006 
54.26 	$9,851,000 .....2007 
54.27 		Subd. 9.Success for the future. For American Indian
54.28 	success for the future grants under Minnesota Statutes, section
54.29 	124D.81:
54.30 	$2,137,000 .....2006 
54.31 	$2,137,000 .....2007 
54.32 	The 2006 appropriation includes $386,000 for 2005 and
54.33 	$1,751,000 for 2006.
54.34 	The 2007 appropriation includes $386,000 for 2006 and
54.35 	$1,751,000 for 2007.
54.36 		Subd. 10.American indian scholarships. For American
55.1 	Indian scholarships under Minnesota Statutes, section 124D.84:
55.2 	$1,875,000 .....2006 
55.3 	$1,875,000 .....2007 
55.4 		Subd. 11.American indian teacher preparation
55.5 	grants. For joint grants to assist American Indian people to
55.6 	become teachers under Minnesota Statutes, section 122A.63:
55.7 	$  190,000 .....2006 
55.8 	$  190,000 .....2007 
55.9 		Subd. 12.Tribal contract schools. For tribal contract
55.10 	school aid under Minnesota Statutes, section 124D.83:
55.11 	$2,169,000 .....2006 
55.12 	$2,362,000 .....2007 
55.13 	The 2006 appropriation includes $363,000 for 2005 and
55.14 	$1,806,000 for 2006.
55.15 	The 2007 appropriation includes $398,000 for 2006 and
55.16 	$1,964,000 for 2007.
55.17 		Subd. 13.Early childhood programs at tribal
55.18 	schools. For early childhood family education programs at
55.19 	tribal contract schools under Minnesota Statutes, section
55.20 	124D.83, subdivision 4:
55.21 	$   68,000 .....2006 
55.22 	$   68,000 .....2007 
55.23 		Subd. 14.Youthworks program. For funding youthworks
55.24 	programs under Minnesota Statutes, sections 124D.37 to 124D.45:
55.25 	$  900,000 .....2006 
55.26 	$  900,000 .....2007 
55.27 	A grantee organization may provide health and child care
55.28 	coverage to the dependents of each participant enrolled in a
55.29 	full-time youth works program to the extent such coverage is not
55.30 	otherwise available.
55.31 		Subd. 15.Student organizations. For student
55.32 	organizations:
55.33 	$  625,000 .....2006 
55.34 	$  625,000 .....2007 
55.35 		Subd. 16.Online learning aid. For online learning aid
55.36 	under Minnesota Statutes, section 124D.096:
56.1 	$2,250,000 .....2006 
56.2 	$3,250,000 .....2007 
56.3 		Subd. 17.Education planning and assessment program. For
56.4 	the Educational Planning and Assessment (EPAS) program under
56.5 	Minnesota Statutes, section 120B.128:
56.6 	$  829,000 .....2006 
56.7 	$  829,000 .....2007 
56.8 	Subd. 18.[COLLEGE LEVEL EXAMINATION PROGRAM (CLEP).] For
56.9 	the College Level Examination program (CLEP) under Minnesota
56.10 	Statutes, section 120B.131:
56.11 	$  825,000 .....2006 
56.12 	$1,650,000 .....2007 
56.13 	This is a onetime appropriation.
56.14 		Subd. 19.Collaborative urban educator. For the
56.15 	collaborative urban educator program:
56.16 	$  528,000 .....2006 
56.17 	$  528,000 .....2007 
56.18 		Subd. 20.Career and technical education grants. For
56.19 	career and technical education grants:
56.20 	$1,000,000 .....2006 
56.21 	$1,000,000 .....2007 

56.22 	ARTICLE 4
56.23 	SPECIAL PROGRAMS

56.24 	Section 1. Minnesota Statutes 2004, section 124D.11,
56.25 	subdivision 5, is amended to read:
56.26 		Subd. 5.Special education aid. (a) Except as provided
56.27 	in subdivision 2, special education aid must be paid to a
56.28 	charter school according to section 125A.76, as though it were a
56.29 	school district.
56.30 	(b) For fiscal year 2006,the charter school may charge
56.31 	tuition to the district of residence as follows:
56.32 	(1) if the charter school does not receive general
56.33 	education revenue on behalf of the student according to
56.34 	subdivision 1, tuition shall be charged as provided in section
56.35 	125A.11; or 
56.36 	(2) if the charter school receives general education
57.1 	revenue on behalf of the student according to subdivision 1,
57.2 	tuition shall be charged as provided in section 127A.47,
57.3 	subdivision 7, paragraph (d).
57.4 	(c) For fiscal year 2007 and later, the special education
57.5 	aid paid to the charter school shall be adjusted as follows:
57.6 	(1) if the charter school does not receive general
57.7 	education revenue on behalf of the student according to
57.8 	subdivision 1, the aid shall be adjusted as provided in section
57.9 	125A.11; or 
57.10 	(2) if the charter school receives general education
57.11 	revenue on behalf of the student according to subdivision 1, the
57.12 	aid shall be adjusted as provided in section 127A.47,
57.13 	subdivision 7, paragraph (d).

57.14 	Sec. 2. Minnesota Statutes 2004, section 125A.11,
57.15 	subdivision 1, is amended to read:
57.16 		Subdivision 1.Nonresident tuition rate; other costs.
 57.17 	(a) For fiscal year 2006,when a school district provides
57.18 	instruction and services outside the district of residence,
57.19 	board and lodging, and any tuition to be paid, shall be paid by
57.20 	the district of residence.  The tuition rate to be charged for
57.21 	any child with a disability, excluding a pupil for whom tuition
57.22 	is calculated according to section 127A.47, subdivision 7,
57.23 	paragraph (d),must be the sum of (1) the actual cost of
57.24 	providing special instruction and services to the child
57.25 	including a proportionate amount for capital outlay and debt
57.26 	service but not including any amount for special transportation,
57.27 	plus (2) the amount of general education revenue and referendum
57.28 	aid excluding portions attributable to district and school
57.29 	administration, district support services, operations and
57.30 	maintenance, capital expenditures, and pupil transportation
57.31 	attributable to that pupil for the portion of time the pupil
57.32 	receives instruction in the regular classroom, plus (3) the
57.33 	portion of general education revenue and referendum aid
57.34 	attributable to district and school administration, district
57.35 	support services, operations and maintenance, capital
57.36 	expenditures, and pupil transportation attributable to that
58.1 	pupil,minus (4) the amount of special education aid for
58.2 	children with a disability received on behalf of that child.  If
58.3 	the boards involved do not agree upon the tuition rate, either
58.4 	board may apply to the commissioner to fix the rate. Without
58.5 	regard to chapter 14,the commissioner must then set a date for
58.6 	a hearing or request a written statement from each board, giving
58.7 	each board at least ten days' notice, and after the hearing or
58.8 	review of the written statements the commissioner must make an
58.9 	order fixing the tuition rate, which is binding on both school
58.10 	districts. General education revenue and referendum aid
58.11 	attributable to a pupil must be calculated using the resident
58.12 	district's average general education and referendum revenue per
58.13 	adjusted average daily membership.
58.14 	(b) For fiscal year 2007 and later, when a school district
58.15 	provides special instruction and services for a pupil with a
58.16 	disability as defined in section 125A.02 outside the district of
58.17 	residence, excluding a pupil for whom an adjustment to special
58.18 	education aid is calculated according to section 127A.47,
58.19 	subdivision 7, paragraph (e), special education aid paid to the
58.20 	resident district must be reduced by an amount equal to (1) the
58.21 	actual cost of providing special instruction and services
58.22 	including special transportation to the pupil, plus (2) the
58.23 	amount of general education revenue and referendum aid excluding
58.24 	portions attributable to district and school administration,
58.25 	district support services, operations and maintenance, capital
58.26 	expenditures, and pupil transportation attributable to that
58.27 	pupil for the portion of time the pupil receives instruction in
58.28 	the regular classroom, plus (3) the portion of general education
58.29 	revenue and referendum aid attributable to district and school
58.30 	administration, district support services, operations and
58.31 	maintenance, capital expenditures, and pupil transportation
58.32 	attributable to that pupil, minus (4) the amount of special
58.33 	education aid received on behalf of that child.  General
58.34 	education revenue and referendum aid attributable to a pupil
58.35 	must be calculated using the resident district's average general
58.36 	education and referendum revenue per adjusted average daily
59.1 	membership.  If the resident district's special education aid is
59.2 	insufficient to make the full adjustment, the remaining
59.3 	adjustment shall be made to other state aid due to the district.

59.4 	Sec. 3. Minnesota Statutes 2004, section 125A.76,
59.5 	subdivision 1, is amended to read:
59.6 		Subdivision 1.Definitions.  For the purposes of this
59.7 	section, the definitions in this subdivision apply.
59.8 	(a) "Base year" for fiscal year 1998 and later fiscal years
59.9 	means the second fiscal year preceding the fiscal year for which
59.10 	aid will be paid.
59.11 	(b) "Basic revenue" has the meaning given it in section
59.12 	126C.10, subdivision 2.  For the purposes of computing basic
59.13 	revenue pursuant to this section, each child with a disability
59.14 	shall be counted as prescribed in section 126C.05, subdivision 1.
59.15 	(c) "Essential personnel" means teachers, cultural
59.16 	liaisons, related services, and support services staff providing
59.17 	direct services to students.  Essential personnel may also
59.18 	include special education paraprofessionals or clericals
59.19 	providing support to teachers and students by preparing
59.20 	paperwork and making arrangements related to special education
59.21 	compliance requirements, including parent meetings and
59.22 	individual education plans.
59.23 	(d) "Average daily membership" has the meaning given it in
59.24 	section 126C.05.
59.25 	(e) "Program growth factor" means 1.046 1.04 for fiscal
59.26 	year 2003 years 2007 and 2008, and 1.0 for fiscal year 2004 2009 
59.27 	and later.

59.28 	Sec. 4. Minnesota Statutes 2004, section 125A.76,
59.29 	subdivision 4, is amended to read:
59.30 		Subd. 4.State total special education aid. The state
59.31 	total special education aid for fiscal year 2004 equals
59.32 	$530,642,000.The state total special education aid for fiscal
59.33 	year 2005 equals $529,164,000.  The state total special
59.34 	education aid for later fiscal years equals:
59.35 	(1) the state total special education aid for the preceding
59.36 	fiscal year; times
60.1 	(2) the program growth factor; times 
60.2 	(3) the ratio of the state total average daily membership
60.3 	for the current fiscal year to the state total average daily
60.4 	membership for the preceding fiscal year.

60.5 	Sec. 5. Minnesota Statutes 2004, section 125A.76, is
60.6 	amended by adding a subdivision to read:
60.7 		Subd. 5a.Special education levy revenue. (a) For fiscal
60.8 	year 2007, the state total special education revenue equals the
60.9 	state total special education aid times the program growth
60.10 	factor.  For fiscal year 2008 and later, the state total special
60.11 	education revenue equals:
60.12 	(1) the state total special education revenue for the
60.13 	preceding fiscal year, times 
60.14 	(2) the program growth factor, times 
60.15 	(3) the ratio of the state total average daily membership
60.16 	for the current fiscal year to the state total average daily
60.17 	membership for the preceding fiscal year.
60.18 	(b) For fiscal year 2007 and later, the state total special
60.19 	education levy revenue equals the difference between the state
60.20 	total special education revenue and the state total special
60.21 	education aid.
60.22 	(c) For fiscal year 2007 and later, the special education
60.23 	levy revenue for a school district, charter school, or state
60.24 	academy equals the product of the state total special education
60.25 	levy revenue times the ratio of the school district, charter
60.26 	school, or state academy's special education aid to the state
60.27 	total special education aid.
60.28 	(d) Special education levy equalization revenue is subject
60.29 	to reverse referendum according to section 126C.48, subdivision
60.30 	9.

60.31 	Sec. 6. Minnesota Statutes 2004, section 125A.76, is
60.32 	amended by adding a subdivision to read:
60.33 		Subd. 5b.Special education levy. To obtain special
60.34 	education levy revenue for fiscal year 2007 and later, a
60.35 	district may levy an amount not more than the product of its
60.36 	special education levy revenue for the fiscal year times the
61.1 	lesser of one or the ratio of its adjusted net tax capacity per
61.2 	adjusted pupil unit to $6,900.

61.3 	Sec. 7. Minnesota Statutes 2004, section 125A.76, is
61.4 	amended by adding a subdivision to read:
61.5 		Subd. 5c.Special education levy equalization aid. (a)
61.6 	For fiscal year 2007 and later, a school district's special
61.7 	education levy equalization aid equals its special education
61.8 	levy equalization revenue minus its special education levy times
61.9 	the ratio of the actual amount levied to the permitted levy.
61.10 	(b) The special education levy equalization aid for a
61.11 	charter school or a state academy equals the charter school or
61.12 	state academy's special education levy revenue.

61.13 	Sec. 8. Minnesota Statutes 2004, section 125A.79,
61.14 	subdivision 1, is amended to read:
61.15 		Subdivision 1.Definitions.  For the purposes of this
61.16 	section, the definitions in this subdivision apply.
61.17 	(a) "Unreimbursed special education cost" means the sum of
61.18 	the following:
61.19 	(1) expenditures for teachers' salaries, contracted
61.20 	services, supplies, equipment, and transportation services
61.21 	eligible for revenue under section 125A.76; plus
61.22 	(2) expenditures for tuition bills received under sections
61.23 	125A.03 to 125A.24 and 125A.65 for services eligible for revenue
61.24 	under section 125A.76, subdivision 2; minus
61.25 	(3) revenue for teachers' salaries, contracted services,
61.26 	supplies, and equipment under section 125A.76; minus
61.27 	(4) tuition receipts under sections 125A.03 to 125A.24 and
61.28 	125A.65 for services eligible for revenue under section 125A.76,
61.29 	subdivision 2.
61.30 	(b) "General revenue" means for fiscal year 1996, the sum
61.31 	of the general education revenue according to section 126C.10,
61.32 	subdivision 1, as adjusted according to section 127A.47,
61.33 	subdivision 7, plus the total referendum revenue according to
61.34 	section 126C.17, subdivision 4.  For fiscal years 1997 and
61.35 	later,"General revenue" means the sum of the general education
61.36 	revenue according to section 126C.10, subdivision 1, as adjusted
62.1 	according to section 127A.47, subdivisions 7 and 8, plus the
62.2 	total referendum revenue minus transportation sparsity revenue
62.3 	minus total operating capital revenue.
62.4 	(c) "Average daily membership" has the meaning given it in
62.5 	section 126C.05.
62.6 	(d) "Program growth factor" means 1.02 for fiscal year
62.7 	2003, and 1.0 for fiscal year 2004 and later.

62.8 	Sec. 9. Minnesota Statutes 2004, section 125A.79,
62.9 	subdivision 5, is amended to read:
62.10 		Subd. 5.Initial excess cost aid; fiscal years 2004 and
62.11 	2005.  For fiscal years 2002 2004 and later 2005, a district's
62.12 	initial excess cost aid equals the greatest of:
62.13 	(1) 75 percent of the difference between (i) the district's
62.14 	unreimbursed special education cost and (ii) 4.36 percent of the
62.15 	district's general revenue;
62.16 	(2) 70 percent of the difference between (i) the increase
62.17 	in the district's unreimbursed special education cost between
62.18 	the base year as defined in section 125A.76, subdivision 1, and
62.19 	the current year and (ii) 1.6 percent of the district's general
62.20 	revenue; or
62.21 	(3) zero.

62.22 	Sec. 10. Minnesota Statutes 2004, section 125A.79, is
62.23 	amended by adding a subdivision to read:
62.24 		Subd. 5a.Initial excess cost aid. For fiscal years 2006
62.25 	and later, a district's initial excess cost aid equals the
62.26 	greater of:
62.27 	(1) 75 percent of the difference between (i) the district's
62.28 	unreimbursed special education cost for the previous fiscal
62.29 	year, and (ii) 4.36 percent of the district's general revenue
62.30 	for the previous fiscal year; or 
62.31 	(2) zero.

62.32 	Sec. 11. Minnesota Statutes 2004, section 125A.79, is
62.33 	amended by adding a subdivision to read:
62.34 		Subd. 5b.Supplemental excess cost aid. (a) For fiscal
62.35 	years 2006 and later, a district's supplemental excess cost aid
62.36 	equals the greater of:
63.1 	(1) 75 percent of the difference between (i) the increase
63.2 	in the district's unreimbursed special education excess cost
63.3 	between the previous fiscal year and the current fiscal year,
63.4 	and (ii) $80 times the district's adjusted marginal cost pupil
63.5 	units for the current fiscal year; or 
63.6 	(2) zero.
63.7 	(b) The state total supplemental excess cost aid for any
63.8 	fiscal year must not exceed $2,000,000.  If the state total
63.9 	supplemental excess cost aid according to paragraph (a) exceeds
63.10 	$2,000,000, the supplemental excess cost aid for each district
63.11 	shall be reduced proportionately so that the state total equals
63.12 	$2,000,000.

63.13 	Sec. 12. Minnesota Statutes 2004, section 125A.79,
63.14 	subdivision 7, is amended to read:
63.15 		Subd. 7.District special education excess cost aid. (a) 
63.16 	A district's special education excess cost aid for fiscal year
63.17 	2002 and later years 2004 and 2005 equals the state total
63.18 	special education excess cost aid times the ratio of the
63.19 	district's initial excess cost aid to the state total initial
63.20 	excess cost aid.
63.21 	(b) A district's special education excess cost aid for
63.22 	fiscal year 2006 and later equals the sum of:
63.23 	(1) the product of the difference between the state total
63.24 	special education excess cost aid and the state total
63.25 	supplemental excess cost aid times the ratio of the district's
63.26 	initial excess cost aid to the state total initial excess cost
63.27 	aid; and 
63.28 	(2) the district's supplemental excess cost aid according
63.29 	to subdivision 5b.

63.30 	Sec. 13. Minnesota Statutes 2004, section 127A.47,
63.31 	subdivision 7, is amended to read:
63.32 		Subd. 7.Alternative attendance programs.  The general
63.33 	education aid and special education aid for districts must be
63.34 	adjusted for each pupil attending a nonresident district under
63.35 	sections 123A.05 to 123A.08, 124D.03, 124D.06, 124D.08, and
63.36 	124D.68.  The adjustments must be made according to this
64.1 	subdivision.
64.2 	(a) General education aid paid to a resident district must
64.3 	be reduced by an amount equal to the referendum equalization aid
64.4 	attributable to the pupil in the resident district.
64.5 	(b) General education aid paid to a district serving a
64.6 	pupil in programs listed in this subdivision must be increased
64.7 	by an amount equal to the referendum equalization aid
64.8 	attributable to the pupil in the nonresident district.
64.9 	(c) If the amount of the reduction to be made from the
64.10 	general education aid of the resident district is greater than
64.11 	the amount of general education aid otherwise due the district,
64.12 	the excess reduction must be made from other state aids due the
64.13 	district.
64.14 	(d) For fiscal year 2006,the district of residence must
64.15 	pay tuition to a district or an area learning center, operated
64.16 	according to paragraph (e) (f), providing special instruction
64.17 	and services to a pupil with a disability, as defined in section
64.18 	125A.02, or a pupil, as defined in section 125A.51, who is
64.19 	enrolled in a program listed in this subdivision.  The tuition
64.20 	must be equal to (1) the actual cost of providing special
64.21 	instruction and services to the pupil, including a proportionate
64.22 	amount for debt service and for capital expenditure facilities
64.23 	and equipment, and debt service but not including any amount for 
64.24 	special transportation, minus (2) the amount of general
64.25 	education revenue and referendum aid attributable to that pupil
64.26 	for the portion of time the pupil receives special instruction
64.27 	and services outside of the regular classroom, excluding
64.28 	portions attributable to district and school administration,
64.29 	district support services, operations and maintenance, capital
64.30 	expenditures, and pupil transportation, minus (3) special
64.31 	education aid but not including any amount for transportation,
64.32 	attributable to that pupil, that is received by the district
64.33 	providing special instruction and services. For purposes of
64.34 	this paragraph, general education revenue and referendum aid
64.35 	attributable to a pupil must be calculated using the serving
64.36 	district's average general education revenue and referendum aid
65.1 	per adjusted average daily membership.
65.2 	(e) For fiscal year 2007 and later, special education aid
65.3 	paid to a resident district must be reduced by an amount equal
65.4 	to (1) the actual cost of providing special instruction and
65.5 	services, including special transportation, for a pupil with a
65.6 	disability, as defined in section 125A.02, or a pupil, as
65.7 	defined in section 125A.51, who is enrolled in a program listed
65.8 	in this subdivision, minus (2) the amount of general education
65.9 	revenue and referendum aid attributable to that pupil for the
65.10 	portion of time the pupil receives special instruction and
65.11 	services outside of the regular classroom, excluding portions
65.12 	attributable to district and school administration, district
65.13 	support services, operations and maintenance, capital
65.14 	expenditures, and pupil transportation, minus (3) special
65.15 	education aid attributable to that pupil, that is received by
65.16 	the district providing special instruction and services.  For
65.17 	purposes of this paragraph, general education revenue and
65.18 	referendum aid attributable to a pupil must be calculated using
65.19 	the serving district's average general education revenue and
65.20 	referendum aid per adjusted average daily membership.  Special
65.21 	education aid paid to the district providing special instruction
65.22 	and services for the pupil, or to the fiscal agent district for
65.23 	a cooperative, must be increased by the amount of the reduction
65.24 	in the aid paid to the resident district.  If the resident
65.25 	district's special education aid is insufficient to make the
65.26 	full adjustment, the remaining adjustment shall be made to other
65.27 	state aids due to the district.
65.28 	(f) An area learning center operated by a service
65.29 	cooperative, intermediate district, education district, or a
65.30 	joint powers cooperative may elect through the action of the
65.31 	constituent boards to charge the resident district tuition for
65.32 	pupils rather than to have the general education revenue paid to
65.33 	a fiscal agent school district.  Except as provided in paragraph
65.34 	(d) or (e), the district of residence must pay tuition equal to
65.35 	at least 90 percent of the district average general education
65.36 	revenue per pupil unit minus an amount equal to the product of
66.1 	the formula allowance according to section 126C.10, subdivision
66.2 	2, times .0485 for fiscal year 2006, and .0458 for fiscal year
66.3 	2007 and later fiscal years, calculated without basic skills
66.4 	revenue and transportation sparsity revenue, times the number of
66.5 	pupil units for pupils attending the area learning center, plus
66.6 	the amount of compensatory revenue generated by pupils attending
66.7 	the area learning center.

66.8 	Sec. 14. APPROPRIATIONS.
 66.9 		Subdivision 1.Department of education. The sums
66.10 	indicated in this section are appropriated from the general fund
66.11 	to the Department of Education for the fiscal years designated.
66.12 		Subd. 2.Special education; regular. For special
66.13 	education aid under Minnesota Statutes, section 125A.75:
66.14 	$527,768,000 .....2006 
66.15 	$526,102,000 .....2007 
66.16 	The 2006 appropriation includes $95,778,000 for 2005 and
66.17 	$431,990,000 for 2006.
66.18 	The 2007 appropriation includes $95,471,000 for 2006 and
66.19 	$430,631,000 for 2007.
66.20 		Subd. 3.Special education regular equalization aid. For
66.21 	special education regular equalization aid:
66.22 	$2,030,000 .....2007 
66.23 		Subd. 4.Aid for children with disabilities. For aid
66.24 	under Minnesota Statutes, section 125A.75, subdivision 3, for
66.25 	children with disabilities placed in residential facilities
66.26 	within the district boundaries for whom no district of residence
66.27 	can be determined:
66.28 	$3,351,000 .....2006 
66.29 	$3,942,000 .....2007 
66.30 	If the appropriation for either year is insufficient, the
66.31 	appropriation for the other year is available.
66.32 		Subd. 5.Travel for home-based services. For aid for
66.33 	teacher travel for home-based services under Minnesota Statutes,
66.34 	section 125A.75, subdivision 1:
66.35 	$  186,000 .....2006 
66.36 	$  192,000 .....2007 
67.1 	The 2006 appropriation includes $32,000 for 2005 and
67.2 	$154,000 for 2006.
67.3 	The 2007 appropriation includes $33,000 for 2006 and
67.4 	$159,000 for 2007.
67.5 		Subd. 6.Special education; excess costs. For excess
67.6 	cost aid under Minnesota Statutes, section 125A.79, subdivision
67.7 	7:
67.8 	$91,786,000 .....2006 
67.9 	$91,360,000 .....2007 
67.10 	The 2006 appropriation includes $39,003,000 for 2005 and
67.11 	$52,783,000 for 2006.
67.12 	The 2007 appropriation includes $38,724,000 for 2006 and
67.13 	$52,636,000 for 2007.
67.14 		Subd. 7.Litigation costs for special education. For
67.15 	paying the costs a district incurs under Minnesota Statutes,
67.16 	section 125A.75, subdivision 8:
67.17 	$   17,000 .....2006 
67.18 	$   17,000 .....2007 
67.19 		Subd. 8.Transition for disabled students. For aid for
67.20 	transition programs for children with disabilities under
67.21 	Minnesota Statutes, section 124D.454:
67.22 	$8,774,000 .....2006 
67.23 	$8,748,000 .....2007 
67.24 	The 2006 appropriation includes $1,591,000 for 2005 and
67.25 	$7,183,000 for 2006.
67.26 	The 2007 appropriation includes $1,587,000 for 2006 and
67.27 	$7,161,000 for 2007.
67.28 		Subd. 9.Court-placed special education revenue. For
67.29 	reimbursing serving school districts for unreimbursed eligible
67.30 	expenditures attributable to children placed in the serving
67.31 	school district by court action under Minnesota Statutes,
67.32 	section 125A.79, subdivision 4:
67.33 	$   65,000 .....2006 
67.34 	$   70,000 .....2007 
67.35 		Subd. 10.Out-of-state tuition special education. For
67.36 	special education out-of-state tuition according to Minnesota
68.1 	Statutes, section 125A.79, subdivision 8:
68.2 	$  250,000 .....2006 
68.3 	$  250,000 .....2007 

68.4 	ARTICLE 5
68.5 	FACILITIES AND TECHNOLOGY

68.6 	Section 1. Minnesota Statutes 2004, section 123B.53,
68.7 	subdivision 5, is amended to read:
68.8 		Subd. 5.Equalized debt service levy.  (a) The equalized
68.9 	debt service levy of a district equals the sum of the first tier
68.10 	equalized debt service levy and the second tier equalized debt
68.11 	service levy.
68.12 	(b) A district's first tier equalized debt service levy
68.13 	equals the district's first tier debt service equalization
68.14 	revenue times the lesser of one or the ratio of:
68.15 	(1) the quotient derived by dividing the adjusted net tax
68.16 	capacity of the district for the year before the year the levy
68.17 	is certified by the adjusted pupil units in the district for the
68.18 	school year ending in the year prior to the year the levy is
68.19 	certified; to
68.20 	(2) $3,200 $3,832.
68.21 	(c) A district's second tier equalized debt service levy
68.22 	equals the district's second tier debt service equalization
68.23 	revenue times the lesser of one or the ratio of:
68.24 	(1) the quotient derived by dividing the adjusted net tax
68.25 	capacity of the district for the year before the year the levy
68.26 	is certified by the adjusted pupil units in the district for the
68.27 	school year ending in the year prior to the year the levy is
68.28 	certified; to
68.29 	(2) $8,000 $9,546.

68.30 	Sec. 2. Minnesota Statutes 2004, section 123B.54, is
68.31 	amended to read:
68.32 	123B.54 DEBT SERVICE APPROPRIATION.
68.33 	(a) $28,367,000 $19,167,000 in fiscal year 2006 2008 and
68.34 	$25,560,000 $16,403,000 in fiscal year 2007 2009 and later are
68.35 	appropriated from the general fund to the commissioner of
68.36 	education for payment of debt service equalization aid under
69.1 	section 123B.53.
69.2 	(b) The appropriations in paragraph (a) must be reduced by
69.3 	the amount of any money specifically appropriated for the same
69.4 	purpose in any year from any state fund.

69.5 	Sec. 3. Minnesota Statutes 2004, section 123B.57,
69.6 	subdivision 4, is amended to read:
69.7 		Subd. 4.Health and safety levy.  To receive health and
69.8 	safety revenue, a district may levy an amount equal to the
69.9 	district's health and safety revenue as defined in subdivision 3
69.10 	multiplied by the lesser of one, or the ratio of the quotient
69.11 	derived by dividing the adjusted net tax capacity of the
69.12 	district for the year preceding the year the levy is certified
69.13 	by the adjusted marginal cost pupil units in the district for
69.14 	the school year to which the levy is attributable,
69.15 	to $2,935 $3,535.

69.16 	Sec. 4. [123B.591] DEFERRED MAINTENANCE REVENUE.
69.17 		Subdivision 1.Eligibility. (a) An independent or
69.18 	special school district that does not qualify to participate in
69.19 	the alternative facilities bonding and levy under section
69.20 	123B.59, subdivision 1, paragraph (a), is eligible to receive
69.21 	deferred maintenance revenue.
69.22 	(b) Deferred maintenance revenue is subject to reverse
69.23 	referendum according to section 126C.48, subdivision 9.
69.24 		Subd. 2.Deferred maintenance revenue. The deferred
69.25 	maintenance revenue for an eligible school district equals the
69.26 	product of $50 times the adjusted pupil units for the school
69.27 	year times the lesser of one or the ratio of the district's
69.28 	average age of building space to 35 years.
69.29 		Subd. 3.Deferred maintenance levy. To obtain deferred
69.30 	maintenance revenue for fiscal year 2007 and later, a district
69.31 	may levy an amount not more than the product of its deferred
69.32 	maintenance revenue for the fiscal year times the lesser of one
69.33 	or the ratio of its adjusted net tax capacity per adjusted pupil
69.34 	unit to $6,900.
69.35 		Subd. 4.Deferred maintenance aid. For fiscal year 2007
69.36 	and later, a district's deferred maintenance aid equals its
70.1 	deferred maintenance revenue minus its deferred maintenance levy
70.2 	times the ratio of the actual amount levied to the permitted
70.3 	levy.
70.4 		Subd. 5.Reserve account. Deferred maintenance revenue
70.5 	must be maintained in a reserve account within the general fund.
70.6 	Deferred maintenance revenue may be used only for expenditures
70.7 	that would be eligible for alternative facilities bonding and
70.8 	levy revenue under section 123B.59, subdivision 2, paragraph
70.9 	(a), if the district qualified for that revenue under section
70.10 	123B.59, subdivision 1, paragraph (a).
70.11 	
EFFECTIVE DATE. This section is effective for revenue for
70.12 	fiscal year 2007.

70.13 	Sec. 5. Minnesota Statutes 2004, section 126C.63,
70.14 	subdivision 5, is amended to read:
70.15 		Subd. 5.Levy.  "Levy" means a district's net debt
70.16 	service levy after the reduction of debt service equalization
70.17 	aid under section 123B.53, subdivision 6.  For taxes payable in
70.18 	2003 and later, each district's maximum effort debt service levy
70.19 	for purposes of subdivision 8, must be reduced by an equal
70.20 	number of percentage points if the commissioner of finance
70.21 	determines that the levy reduction will not result in a payment
70.22 	from the general fund in the state treasury according to section
70.23 	16A.641, as would be required under section 126C.72, subdivision
70.24 	3.  A district's levy that is adjusted under this section must
70.25 	not be reduced below 30.1 25 percent of the district's adjusted
70.26 	net tax capacity.

70.27 	Sec. 6. Minnesota Statutes 2004, section 126C.63,
70.28 	subdivision 8, is amended to read:
70.29 		Subd. 8.Maximum effort debt service levy.  (a) "Maximum
70.30 	effort debt service levy" means the lesser of:
70.31 	(1) a levy in whichever of the following amounts is
70.32 	applicable:
70.33 	(i) in any district receiving a debt service loan for a
70.34 	debt service levy payable in 2002 and thereafter, or granted a
70.35 	capital loan after January 1, 2002, a levy in total dollar
70.36 	amount computed at a rate of 40 32 percent of adjusted net tax
71.1 	capacity for taxes payable in 2002 and thereafter;
71.2 	(ii) in any district receiving a debt service loan for a
71.3 	debt service levy payable in 2001 or earlier, or granted a
71.4 	capital loan before January 2, 2001 2002, a levy in a total
71.5 	dollar amount computed at a rate of 32 28 percent of adjusted
71.6 	net tax capacity for taxes payable in 2002 and thereafter; or
71.7 	(2) a levy in any district for which a capital loan was
71.8 	approved prior to August 1, 1981, a levy in a total dollar
71.9 	amount equal to the sum of the amount of the required debt
71.10 	service levy and an amount which when levied annually will in
71.11 	the opinion of the commissioner be sufficient to retire the
71.12 	remaining interest and principal on any outstanding loans from
71.13 	the state within 30 years of the original date when the capital
71.14 	loan was granted.
71.15 	(b) The board in any district affected by the provisions of
71.16 	paragraph (a), clause (2), may elect instead to determine the
71.17 	amount of its levy according to the provisions of paragraph (a),
71.18 	clause (1).  If a district's capital loan is not paid within 30
71.19 	years because it elects to determine the amount of its levy
71.20 	according to the provisions of paragraph (a), clause (2), the
71.21 	liability of the district for the amount of the difference
71.22 	between the amount it levied under paragraph (a), clause (2),
71.23 	and the amount it would have levied under paragraph (a), clause
71.24 	(1), and for interest on the amount of that difference, must not
71.25 	be satisfied and discharged pursuant to Minnesota Statutes 1988,
71.26 	or an earlier edition of Minnesota Statutes if applicable,
71.27 	section 124.43, subdivision 4.

71.28 	Sec. 7. APPROPRIATIONS.
 71.29 		Subdivision 1.Department of education. The sums
71.30 	indicated in this section are appropriated from the general fund
71.31 	to the Department of Education for the fiscal years designated.
71.32 		Subd. 2.Health and safety revenue. For health and
71.33 	safety aid according to Minnesota Statutes, section 123B.57,
71.34 	subdivision 5:
71.35 	$  818,000 .....2006 
71.36 	$  575,000 .....2007 
72.1 	The 2006 appropriation includes $244,000 for 2005 and
72.2 	$574,000 for 2006.
72.3 	The 2007 appropriation includes $126,000 for 2006 and
72.4 	$449,000 for 2007.
72.5 		Subd. 3.Debt service equalization. For debt service aid
72.6 	according to Minnesota Statutes, section 123B.53, subdivision 6:
72.7 	$25,882,000 .....2006 
72.8 	$21,769,000 .....2007 
72.9 	The 2006 appropriation includes $5,365,000 for 2005 and
72.10 	$20,517,000 for 2006.
72.11 	The 2007 appropriation includes $4,534,000 for 2006 and
72.12 	$17,235,000 for 2007.
72.13 		Subd. 4.Alternative facilities bonding aid. For
72.14 	alternative facilities bonding aid, according to Minnesota
72.15 	Statutes, section 123B.59, subdivision 1:
72.16 	$19,287,000 .....2006 
72.17 	$19,287,000 .....2007 
72.18 	The 2006 appropriation includes $3,490,000 for 2005 and
72.19 	$15,797,000 for 2006.
72.20 	The 2007 appropriation includes $3,490,000 for 2006 and
72.21 	$15,797,000 for 2007.
72.22 		Subd. 5.Equity in telecommunications access. For equity
72.23 	in telecommunications access:
72.24 	$4,500,000 .....2006 
72.25 	$4,600,000 .....2007 
72.26 		Subd. 6.Deferred maintenance aid. For deferred
72.27 	maintenance aid under Minnesota Statutes, section 123B.591:
72.28 	$2,383,000 .....2007 

72.29 	ARTICLE 6
72.30 	NUTRITION

72.31 	Section 1. APPROPRIATIONS.
 72.32 		Subdivision 1.Department of education. The sums
72.33 	indicated in this section are appropriated from the general fund
72.34 	to the Department of Education for the fiscal years designated.
72.35 		Subd. 2.School lunch. For school lunch aid according to
72.36 	Minnesota Statutes, section 124D.111, and Code of Federal
73.1 	Regulations, title 7, section 210.17:
73.2 	$7,765,000 .....2006 
73.3 	$7,880,000 .....2007 
73.4 		Subd. 3.Traditional school breakfast. For traditional
73.5 	school breakfast aid under Minnesota Statutes, section 124D.116:
73.6 	$4,655,000 .....2006 
73.7 	$4,745,000 .....2007 
73.8 		Subd. 4.Summer school service replacement aid. For
73.9 	summer food service replacement aid under Minnesota Statutes,
73.10 	section 124D.119:
73.11 	$  150,000 .....2006 
73.12 	$  150,000 .....2007 

73.13 	ARTICLE 7
73.14 	LIBRARIES

73.15 	Section 1. APPROPRIATIONS.
 73.16 		Subdivision 1.Department of education. The sums
73.17 	indicated in this section are appropriated from the general fund
73.18 	to the Department of Education for the fiscal years designated.
73.19 		Subd. 2.Basic support. For basic support grants
73.20 	according to Minnesota Statutes, sections 134.32 to 134.35:
73.21 	$8,570,000 .....2006 
73.22 	$8,570,000 .....2007 
73.23 	The 2006 appropriation includes $1,551,000 for 2005 and
73.24 	$7,019,000 for 2006.
73.25 	The 2007 appropriation includes $1,551,000 for 2006 and
73.26 	$7,019,000 for 2007.
73.27 		Subd. 3.Multicounty, multitype library systems. For
73.28 	grants according to Minnesota Statutes, sections 134.353 and
73.29 	134.354, to multicounty, multitype library systems:
73.30 	$  903,000 .....2006 
73.31 	$  903,000 .....2007 
73.32 	The 2006 appropriation includes $163,000 for 2005 and
73.33 	$740,000 for 2006.
73.34 	The 2007 appropriation includes $163,000 for 2006 and
73.35 	$740,000 for 2007.
73.36 		Subd. 4.Electronic library for minnesota. For statewide
74.1 	licenses to on-line databases selected in cooperation with the
74.2 	Higher Education Services Office for school media centers,
74.3 	public libraries, and state government agency libraries, and
74.4 	public, private, or university libraries:
74.5 	$1,039,000 .....2006 
74.6 	$1,091,000 .....2007 
74.7 		Subd. 5.Regional library telecommunications aid. For
74.8 	regional library telecommunications aid under Minnesota
74.9 	Statutes, section 134.355:
74.10 	$1,200,000 .....2006 
74.11 	$1,200,000 .....2007 
74.12 	Of the 2006 appropriation, $217,000 is for 2005 and
74.13 	$983,000 is for 2006.
74.14 	Of the 2007 appropriation, $217,000 is for 2006 and
74.15 	$983,000 is for 2007.

74.16 	ARTICLE 8
74.17 	EARLY CHILDHOOD FAMILY SUPPORT

74.18 	Section 1. Minnesota Statutes 2004, section 121A.17,
74.19 	subdivision 1, is amended to read:
74.20 		Subdivision 1.Early childhood developmental screening.
 74.21 	Every school board must provide for a mandatory program of early
74.22 	childhood developmental screening for children once before
74.23 	school entrance, targeting children who are between 3-1/2 three 
74.24 	and four years old.  This screening program must be established
74.25 	either by one board, by two or more boards acting in
74.26 	cooperation, by service cooperatives, by early childhood family
74.27 	education programs, or by other existing programs.  This
74.28 	screening examination is a mandatory requirement for a student
74.29 	to continue attending kindergarten or first grade in a public
74.30 	school.  A child need not submit to developmental screening
74.31 	provided by a board if the child's health records indicate to
74.32 	the board that the child has received comparable developmental
74.33 	screening from a public or private health care organization or
74.34 	individual health care provider. A student identification
74.35 	number, as defined by the commissioner of education, shall be
74.36 	assigned at the time of early childhood developmental screening
75.1 	or at the time of the provision of health records indicating a
75.2 	comparable screening.  Each school district must provide the
75.3 	essential data in accordance with section 125B.07, subdivision
75.4 	6, to the Department of Education.Districts are encouraged to
75.5 	reduce the costs of preschool developmental screening programs
75.6 	by utilizing volunteers in implementing the program.

75.7 	Sec. 2. Minnesota Statutes 2004, section 121A.19, is
75.8 	amended to read:
75.9 	121A.19 DEVELOPMENTAL SCREENING AID.
75.10 	Each school year, the state must pay a district $40 $50 for
75.11 	each three-year-old child screened; $40 for each four-year-old
75.12 	child screened; and $30 for each five-year-old child screened
75.13 	prior to kindergarten according to the requirements of section
75.14 	121A.17.  If this amount of aid is insufficient, the district
75.15 	may permanently transfer from the general fund an amount that,
75.16 	when added to the aid, is sufficient.

75.17 	Sec. 3. Minnesota Statutes 2004, section 124D.15,
75.18 	subdivision 1, is amended to read:
75.19 		Subdivision 1.Establishment; purpose.  A district or a
75.20 	group of districts may establish a school readiness program
75.21 	for eligible children age three to kindergarten entrance.  The
75.22 	purpose of a school readiness program is to provide all eligible
75.23 	children adequate opportunities to participate in child
75.24 	development programs that enable the children to enter school
75.25 	with the necessary skills and behavior and family stability and
75.26 	support to progress and flourish prepare children to enter
75.27 	kindergarten.

75.28 	Sec. 4. Minnesota Statutes 2004, section 124D.15,
75.29 	subdivision 3, is amended to read:
75.30 		Subd. 3.Program eligibility requirements.  A school
75.31 	readiness program must include the following:
75.32 	(1) a comprehensive plan to anticipate and meet the needs
75.33 	of participating families by coordinating existing social
75.34 	services programs and by fostering collaboration among agencies
75.35 	or other community-based organizations and programs that provide
75.36 	a full range of flexible, family-focused services to families
76.1 	with young children Conduct a child development assessment on
76.2 	each child to guide intentional curriculum planning and promote
76.3 	kindergarten readiness.  This assessment must be conducted on
76.4 	each child at entrance into the program and once prior to exit
76.5 	of the program and be maintained as part of a child's cumulative
76.6 	record;
76.7 	(2) a development and learning component to help children
76.8 	develop appropriate social, cognitive, and physical skills, and
76.9 	emotional well-being adopt and implement department early
76.10 	learning standards;
76.11 	(3) health referral services to address children's medical,
76.12 	dental, mental health, and nutritional needs demonstrate use of
76.13 	comprehensive curriculum based on early childhood research and
76.14 	professional practice that prepares children for kindergarten;
76.15 	(4) a nutrition component to meet children's daily
76.16 	nutritional needs arrange for early childhood screening and
76.17 	appropriate referral;
76.18 	(5) parents' involvement in meeting children's educational,
76.19 	health, social service, and other needs involve parents in
76.20 	program planning and decision making;
76.21 	(6) community outreach to ensure participation by families
76.22 	who represent the racial, cultural, and economic diversity of
76.23 	the community;coordinate with relevant community-based
76.24 	services; and 
76.25 	(7) community-based staff and program resources, including
76.26 	interpreters, that reflect the racial and ethnic characteristics
76.27 	of the children participating in the program; and 
76.28 	(8) a literacy component to ensure that the literacy needs
76.29 	of parents are addressed through referral to and cooperation 
76.30 	cooperate with adult basic education programs and other adult
76.31 	literacy programs.

76.32 	Sec. 5. Minnesota Statutes 2004, section 124D.15, is
76.33 	amended by adding a subdivision to read:
76.34 		Subd. 3a.Application and reporting requirements. (a) A
76.35 	school readiness program must submit a biennial plan to the
76.36 	commissioner for approval to receive aid under section 124D.16.
77.1 	The plan must document that the program will meet the program
77.2 	requirements under subdivision 3.  A school district shall
77.3 	submit the biennial plan by April 1 to the commissioner on a
77.4 	form prescribed by the commissioner.  One-half of the districts
77.5 	shall first submit the plan by April 1, 2006, and one-half of
77.6 	the districts by April 1, 2007.
77.7 	(b) Programs receiving school readiness funds must submit
77.8 	an annual report to the department.

77.9 	Sec. 6. Minnesota Statutes 2004, section 124D.15,
77.10 	subdivision 5, is amended to read:
77.11 		Subd. 5.Services with new or existing providers.  A
77.12 	district is encouraged to may contract with a public charter
77.13 	school or nonprofit community-based organization to provide
77.14 	eligible children developmentally appropriate services that meet
77.15 	the program requirements in subdivision 3.  In the alternative,
77.16 	a district may pay tuition or fees to place an eligible child in
77.17 	an existing program.  A district may establish a new program
77.18 	where no existing, reasonably accessible program meets the
77.19 	program requirements in subdivision 3. A copy of each contract
77.20 	must be submitted to the commissioner with the biennial plan.
77.21 	Services may be provided in a site-based program or in the home
77.22 	of the child or a combination of both.  The district may not
77.23 	restrict participation to district residents.

77.24 	Sec. 7. Minnesota Statutes 2004, section 124D.15,
77.25 	subdivision 10, is amended to read:
77.26 		Subd. 10.Supervision.  A program provided by a board
77.27 	must be supervised by a licensed early childhood teacher, a
77.28 	certified early childhood educator, or a licensed parent
77.29 	educator. A program provided according to a contract between a
77.30 	district and a nonprofit organization or another private
77.31 	organization must be supervised and staffed according to the
77.32 	terms of the contract.

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

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

78.8 	Sec. 10. Minnesota Statutes 2004, section 124D.16,
78.9 	subdivision 2, is amended to read:
78.10 		Subd. 2.Amount of aid.  (a) A district is eligible to
78.11 	receive school readiness aid for eligible prekindergarten pupils
78.12 	enrolled in a school readiness program under section 124D.15if
78.13 	the program biennial plan required by subdivision 1 section
78.14 	124D.15, subdivision 3a,has been approved by the commissioner.
78.15 	(b) For fiscal year 2002 and thereafter, a district must
78.16 	receive school readiness aid equal to:
78.17 	(1) the number of eligible four-year-old children in the
78.18 	district on October 1 for the previous school year times the
78.19 	ratio of 50 percent of the total school readiness aid for that
78.20 	year to the total number of eligible four-year-old children
78.21 	reported to the commissioner for the previous school year; plus
78.22 	(2) the number of pupils enrolled in the school district
78.23 	from families eligible for the free or reduced school lunch
78.24 	program for the second previous school year times the ratio of
78.25 	50 percent of the total school readiness aid for that year to
78.26 	the total number of pupils in the state from families eligible
78.27 	for the free or reduced school lunch program for the second 
78.28 	previous school year.

78.29 	Sec. 11. Minnesota Statutes 2004, section 124D.16,
78.30 	subdivision 3, is amended to read:
78.31 		Subd. 3.Use of aid.  School readiness aid shall be used
78.32 	only to provide a school readiness program and may be used to
78.33 	provide transportation.  Not more than five percent of the
78.34 	aid program revenue, as defined in subdivision 5,may be used
78.35 	for the cost of administering the program.  Aid must be used to
78.36 	supplement and not supplant local, state, and federal funding.
79.1 	Aid may not be used for instruction and services required under
79.2 	sections 125A.03 to 125A.24 and 125A.65. Aid may not be used to
79.3 	purchase land or construct buildings, but may be used to lease
79.4 	or renovate existing buildings.

79.5 	Sec. 12. APPROPRIATIONS.
 79.6 		Subdivision 1.Department of education. The sums
79.7 	indicated in this section are appropriated from the general fund
79.8 	to the Department of Education for the fiscal years designated.
79.9 		Subd. 2.School readiness. For revenue for school
79.10 	readiness programs under Minnesota Statutes, sections 124D.15
79.11 	and 124D.16:
79.12 	$8,893,000 .....2006 
79.13 	$8,888,000 .....2007 
79.14 	The 2006 appropriation includes $1,638,000 for 2005 and
79.15 	$7,255,000 for 2006.
79.16 	The 2007 appropriation includes $1,603,000 for 2006 and
79.17 	$7,285,000 for 2007.
79.18 		Subd. 3.Early childhood family education aid. For early
79.19 	childhood family education aid under Minnesota Statutes, section
79.20 	124D.135:
79.21 	$12,187,000 .....2006 
79.22 	$12,558,000 .....2007 
79.23 	The 2006 appropriation includes $2,150,000 for 2005 and
79.24 	$10,037,000 for 2006.
79.25 	The 2007 appropriation includes $2,217,000 for 2006 and
79.26 	$10,341,000 for 2007.
79.27 		Subd. 4.Health and developmental screening aid. For
79.28 	health and developmental screening aid under Minnesota Statutes,
79.29 	sections 121A.17 and 121A.19:
79.30 	$2,984,000 .....2006 
79.31 	$3,413,000 .....2007 
79.32 	The 2006 appropriation includes $481,000 for 2005 and
79.33 	$2,503,000 for 2006.
79.34 	The 2007 appropriation includes $552,000 for 2006 and
79.35 	$2,861,000 for 2007.
79.36 		Subd. 5.Head start program. For Head Start programs
80.1 	under Minnesota Statutes, section 119A.52:
80.2 	$17,100,000 .....2006 
80.3 	$17,100,000 .....2007 

80.4 	Sec. 13. REPEALER.
 80.5 	(a) Minnesota Statutes 2004, sections 124D.15, subdivisions
80.6 	2, 4, 6, 7, 8, 9, 11, and 13; and 124D.16, subdivision 4, are
80.7 	repealed.
80.8 	(b) Minnesota Statutes 2004, section 124D.16, subdivision
80.9 	1, is repealed effective July 1, 2006.

80.10 	ARTICLE 9
80.11 	COMMUNITY EDUCATION AND PREVENTION

80.12 	Section 1. Minnesota Statutes 2004, section 124D.22,
80.13 	subdivision 3, is amended to read:
80.14 		Subd. 3.School-age care levy.  To obtain school-age care
80.15 	revenue, a school district may levy an amount equal to the
80.16 	district's school-age care revenue as defined in subdivision 2
80.17 	multiplied by the lesser of one, or the ratio of the quotient
80.18 	derived by dividing the adjusted net tax capacity of the
80.19 	district for the year before the year the levy is certified by
80.20 	the resident pupil units in the district for the school year to
80.21 	which the levy is attributable, to $2,433 $2,925.
80.22 	
EFFECTIVE DATE. This section is effective for revenue for
80.23 	fiscal year 2007.

80.24 	Sec. 2. APPROPRIATIONS.
 80.25 		Subdivision 1.Department of education. The sums
80.26 	indicated in this section are appropriated from the general fund
80.27 	to the Department of Education for the fiscal years designated.
80.28 		Subd. 2.Community education aid. For community
80.29 	education aid under Minnesota Statutes, section 124D.20:
80.30 	$1,958,000 .....2006 
80.31 	$1,250,000 .....2007 
80.32 	The 2006 appropriation includes $459,000 for 2005 and
80.33 	$1,499,000 for 2006.
80.34 	The 2007 appropriation includes $331,000 for 2006 and
80.35 	$919,000 for 2007.
80.36 		Subd. 3.Adults with disabilities program aid. For
81.1 	adults with disabilities programs under Minnesota Statutes,
81.2 	section 124D.56:
81.3 	$  710,000 .....2006 
81.4 	$  710,000 .....2007 
81.5 	The 2006 appropriation includes $128,000 for 2005 and
81.6 	$582,000 for 2006.
81.7 	The 2007 appropriation includes $128,000 for 2006 and
81.8 	$582,000 for 2007.
81.9 		Subd. 4.Hearing-impaired adults. For programs for
81.10 	hearing-impaired adults under Minnesota Statutes, section
81.11 	124D.57:
81.12 	$   70,000 .....2006 
81.13 	$   70,000 .....2007 
81.14 		Subd. 5.School-age care revenue. For extended day aid
81.15 	under Minnesota Statutes, section 124D.22:
81.16 	$   15,000 .....2006 
81.17 	$    5,000 .....2007 
81.18 	The 2006 appropriation includes $4,000 for 2005 and $11,000
81.19 	for 2006.
81.20 	The 2007 appropriation includes $2,000 for 2006 and $3,000
81.21 	for 2007.

81.22 	ARTICLE 10
81.23 	SELF-SUFFICIENCY AND LIFELONG LEARNING

81.24 	Section 1. Minnesota Statutes 2004, section 124D.531,
81.25 	subdivision 1, is amended to read:
81.26 		Subdivision 1.State total adult basic education aid.
 81.27 	(a) The state total adult basic education aid for fiscal year
81.28 	2004 equals $34,388,000.  The state total adult basic education
81.29 	aid for fiscal year 2005 and later is $36,509,000. The state
81.30 	total adult basic education aid for fiscal year 2006 and later
81.31 	is $36,509,000 plus any amount that is not paid for during the
81.32 	previous fiscal year, as a result of adjustments under
81.33 	subdivision 4, paragraph (a), or section 124D.52, subdivision
81.34 	3.Beginning in fiscal year 2002, two percent of the state
81.35 	total adult basic education aid must be set aside for adult
81.36 	basic education supplemental service grants under section
82.1 	124D.522.
82.2 	(b) The state total adult basic education aid, excluding
82.3 	basic population aid, equals the difference between the amount
82.4 	computed in paragraph (a), and the state total basic population
82.5 	aid under subdivision 2.
82.6 	
EFFECTIVE DATE. This section is effective the day
82.7 	following final enactment and applies to revenue distributions
82.8 	for fiscal year 2006.

82.9 	Sec. 2. Minnesota Statutes 2004, section 124D.531,
82.10 	subdivision 4, is amended to read:
82.11 		Subd. 4.Adult basic education program aid limit.  (a)
82.12 	Notwithstanding subdivisions 2 and 3, the total adult basic
82.13 	education aid for a program per prior year contact hour must not
82.14 	exceed $21 per prior year contact hour computed under
82.15 	subdivision 3, clause (2).
82.16 	(b) For fiscal year 2004, the aid for a program under
82.17 	subdivision 3, clause (2), adjusted for changes in program
82.18 	membership, must not exceed the aid for that program under
82.19 	subdivision 3, clause (2), for fiscal year 2003 by more than the
82.20 	greater of eight percent or $10,000.
82.21 	(c) For fiscal year 2005, the aid for a program under
82.22 	subdivision 3, clause (2), adjusted for changes in program
82.23 	membership, must not exceed the sum of the aid for that program
82.24 	under subdivision 3, clause (2), and Laws 2003, First Special
82.25 	Session chapter 9, article 9, section 8, paragraph (a), for the
82.26 	preceding fiscal year by more than the greater of eight percent
82.27 	or $10,000.
82.28 	(d) For fiscal year 2006 and later, the aid for a program
82.29 	under subdivision 3, clause (2), adjusted for changes in program
82.30 	membership, must not exceed the aid for that program under
82.31 	subdivision 3, clause (2), for the first preceding fiscal year
82.32 	by more than the greater of eight percent or $10,000.
82.33 	(e) Adult basic education aid is payable to a program for
82.34 	unreimbursed costs occurring in the program year as defined in
82.35 	section 124D.52, subdivision 3.
82.36 	(f) Any adult basic education aid that is not paid to a
83.1 	program because of the program aid limitation under paragraph
83.2 	(a) must be added to the state total adult basic education aid
83.3 	for the next fiscal year under subdivision 1.  Any adult basic
83.4 	education aid that is not paid to a program because of the
83.5 	program aid limitations under paragraph (b), (c), or (d), must
83.6 	be reallocated among programs by adjusting the rate per contact
83.7 	hour under subdivision 3, clause (2).
83.8 	
EFFECTIVE DATE. This section is effective the day
83.9 	following final enactment and applies to revenue distributions
83.10 	for fiscal year 2006.

83.11 	Sec. 3. GRANTS FOR INTENSIVE ENGLISH INSTRUCTION FOR NEW
83.12 	ADULT REFUGEES.
 83.13 	The commissioner of education shall establish a
83.14 	reimbursement grant program to fund intensive English as a
83.15 	second language (ESL) programs for adult refugees. Intensive ESL
83.16 	programming must provide intensive instruction for adult
83.17 	refugees who are making inadequate literacy progress as measured
83.18 	by a standard assessment test.  The intensive instruction must
83.19 	be focused on participants gaining sufficient literacy to
83.20 	achieve self-sufficiency through employment.
83.21 	Organizations eligible for grants under this section
83.22 	include adult basic education programs, school districts,
83.23 	postsecondary institutions, and nonprofit or community-based
83.24 	organizations or other private organizations with experience in
83.25 	providing English language instruction to non-English speaking
83.26 	immigrants and refugees.  Grant applications must contain
83.27 	information required by the commissioner in the form prescribed
83.28 	by the commissioner.  At a minimum, the application must
83.29 	document experience in literacy programs serving immigrants and
83.30 	refugees, describe fiscal accounting systems and reporting
83.31 	capacity, ensure that administrative expenses are limited to
83.32 	five percent of grant funds, and provide a description of the
83.33 	proposed instructional services and training plans.  Funds must
83.34 	be paid to programs on a reimbursement basis.  The grant program
83.35 	expires on June 30, 2007.

83.36 	Sec. 4. APPROPRIATIONS.
 84.1 		Subdivision 1.Department of education. The sums
84.2 	indicated in this section are appropriated from the general fund
84.3 	to the Department of Education for the fiscal years designated.
84.4 		Subd. 2.Adult basic education aid. For adult basic
84.5 	education aid under Minnesota Statutes, section 124D.52, in
84.6 	fiscal year 2004 and Minnesota Statutes, section 124D.531, in
84.7 	fiscal year 2005:
84.8 	$36,514,000 .....2006 
84.9 	$36,541,000 .....2007 
84.10 	The 2006 appropriation includes $6,580,000 for 2005 and
84.11 	$29,934,000 for 2006.
84.12 	The 2007 appropriation includes $6,614,000 for 2006 and
84.13 	$29,927,000 for 2007.
84.14 		Subd. 3.Ged tests. For payment of 60 percent of the
84.15 	costs of GED tests under Laws 1993, chapter 224, article 4,
84.16 	section 44, subdivision 10:
84.17 	$  125,000 .....2006 
84.18 	$  125,000 .....2007 
84.19 		Subd. 4.Intensive english instruction. For grants for
84.20 	intensive English instruction for adult refugees under section 3:
84.21 	$1,000,000 .....2006 
84.22 	$1,000,000 .....2007 
84.23 		Subd. 5.Lead hazard reduction. For lead hazard
84.24 	reduction under Minnesota Statutes, section 119A.46:
84.25 	$  100,000 .....2006 
84.26 	$  100,000 .....2007 
84.27 	Any balance in the first year does not cancel but is
84.28 	available in the second year.  The commissioner of education may
84.29 	transfer this appropriation to the commissioner of health.

84.30 	ARTICLE 11
84.31 	STATE AGENCIES

84.32 	Section 1. APPROPRIATIONS; DEPARTMENT OF EDUCATION.
 84.33 		Subdivision 1.Department of education. Unless otherwise
84.34 	indicated, the sums indicated in this section are appropriated
84.35 	from the general fund to the Department of Education for the
84.36 	fiscal years designated.
85.1 		Subd. 2.Department. (a) For the Department of Education:
85.2 	$31,896,000 .....2006 
85.3 	$33,757,000 .....2007 
85.4 	Any balance in the first year does not cancel but is
85.5 	available in the second year.
85.6 	(b) $260,000 each year is for the Minnesota Children's
85.7 	Museum.
85.8 	(c) $41,000 each year is for the Minnesota Academy of
85.9 	Science.
85.10 	(d) $250,000 each year is for the administration of the
85.11 	scholarship tax credit.  The commissioner of education may
85.12 	transfer these funds to the Department of Revenue to assist with
85.13 	the administration of this program.
85.14 	(e) $9,000,000 each year is for statewide testing support
85.15 	under Minnesota Statutes, section 120B.30.
85.16 	(f) $500,000 in fiscal year 2007 is for alternative teacher
85.17 	programs.
85.18 	(g) $300,000 in fiscal year 2006 and $1,600,000 in fiscal
85.19 	year 2007 is for value added index assessment model.
85.20 	(h) $164,000 in fiscal year 2006 and $200,000 in fiscal
85.21 	year 2007 is for administration of the school readiness program
85.22 	under Minnesota Statutes, sections 124D.15 and 124D.16.
85.23 	(i) $1,200,000 each year is for development of interactive
85.24 	science assessments.
85.25 	(j) $50,000 in fiscal year 2006 and $75,000 in fiscal year
85.26 	2007 is for the development and distribution to school districts
85.27 	of materials addressing the dangers of methamphetamine.
85.28 		Subd. 3.Board of teaching. For the Board of Teaching:
85.29 	$605,000 .....2006 
85.30 	$605,000 .....2007 
85.31 		Subd. 4.Board of school administrators. For the Board
85.32 	of School Administrators:
85.33 	$180,000 .....2006 
85.34 	$160,000 .....2007 
85.35 		Subd. 5.Federal grants and aids. The expenditures of
85.36 	federal grants and aids as shown in the biennial budget document
86.1 	and its supplements are approved and appropriated and shall be
86.2 	spent as indicated.

86.3 	Sec. 2. APPROPRIATIONS; MINNESOTA STATE ACADEMIES.
 86.4 	The sums indicated in this section are appropriated from
86.5 	the general fund to the Minnesota State Academies for the Deaf
86.6 	and the Blind for the fiscal years designated:
86.7 	$10,800,000 .....2006 
86.8 	$10,953,000 .....2007 
86.9 	Any balance in the first year does not cancel but is
86.10 	available in the second year.

86.11 	Sec. 3. APPROPRIATIONS; PERPICH CENTER FOR ARTS
86.12 	EDUCATION.
 86.13 	The sums indicated in this section are appropriated from
86.14 	the general fund to the Perpich Center for Arts Education for
86.15 	the fiscal years designated:
86.16 	$6,255,000 .....2006 
86.17 	$6,255,000 .....2007 
86.18 	Any balance in the first year does not cancel but is
86.19 	available in the second year.

86.20 	ARTICLE 12
86.21 	OTHER GENERAL EDUCATION POLICY

86.22 	Section 1. Minnesota Statutes 2004, section 123A.05,
86.23 	subdivision 2, is amended to read:
86.24 		Subd. 2.Reserve revenue.  Each district that is a member
86.25 	of an area learning center must reserve revenue in an amount
86.26 	equal to the sum of (1) at least 90 percent of the district
86.27 	average general education revenue per pupil unit minus an amount
86.28 	equal to the product of the formula allowance according to
86.29 	section 126C.10, subdivision 2, times .0485, calculated without
86.30 	basic skills revenue,and transportation sparsity revenue, and
86.31 	the transportation portion of the transition revenue adjustment,
86.32 	times the number of pupil units attending an area learning
86.33 	center program under this section, plus (2) the amount of basic
86.34 	skills revenue generated by pupils attending the area learning
86.35 	center.  The amount of reserved revenue under this subdivision
86.36 	may only be spent on program costs associated with the area
87.1 	learning center. Compensatory revenue must be allocated
87.2 	according to section 126C.15, subdivision 2.

87.3 	Sec. 2. Minnesota Statutes 2004, section 123B.49,
87.4 	subdivision 4, is amended to read:
87.5 		Subd. 4.Board control of extracurricular activities.
 87.6 	(a) The board may take charge of and control all extracurricular
87.7 	activities of the teachers and children of the public schools in
87.8 	the district.  Extracurricular activities means all direct and
87.9 	personal services for pupils for their enjoyment that are
87.10 	managed and operated under the guidance of an adult or staff
87.11 	member.  The board shall allow all resident pupils receiving
87.12 	instruction in a home school as defined in section 123B.36,
87.13 	subdivision 1, paragraph (a), to be eligible to fully
87.14 	participate in extracurricular activities on the same basis as
87.15 	public school students.
87.16 	(b) Extracurricular activities have all of the following
87.17 	characteristics:
87.18 	(1) they are not offered for school credit nor required for
87.19 	graduation;
87.20 	(2) they are generally conducted outside school hours, or
87.21 	if partly during school hours, at times agreed by the
87.22 	participants, and approved by school authorities;
87.23 	(3) the content of the activities is determined primarily
87.24 	by the pupil participants under the guidance of a staff member
87.25 	or other adult.
87.26 	(c) If the board does not take charge of and control
87.27 	extracurricular activities, these activities shall be
87.28 	self-sustaining with all expenses, except direct salary costs
87.29 	and indirect costs of the use of school facilities, met by dues,
87.30 	admissions, or other student fund-raising events.  The general
87.31 	fund must reflect only those salaries directly related to and
87.32 	readily identified with the activity and paid by public funds.
87.33 	Other revenues and expenditures for extra curricular activities
87.34 	must be recorded according to the "Manual of Instruction for
87.35 	Uniform Student Activities Accounting for Minnesota School
87.36 	Districts and Area Vocational-Technical Colleges." Manual for
88.1 	Activity Fund Accounting.Extracurricular activities not under
88.2 	board control must have an annual financial audit and must also
88.3 	be audited annually for compliance with this section.
88.4 	(d) If the board takes charge of and controls
88.5 	extracurricular activities, any or all costs of these activities
88.6 	may be provided from school revenues and all revenues and
88.7 	expenditures for these activities shall be recorded in the same
88.8 	manner as other revenues and expenditures of the district.
88.9 	(e) If the board takes charge of and controls
88.10 	extracurricular activities, the teachers or pupils in the
88.11 	district must not participate in such activity, nor shall the
88.12 	school name or any allied name be used in connection therewith,
88.13 	except by consent and direction of the board.

88.14 	Sec. 3. Minnesota Statutes 2004, section 123B.75, is
88.15 	amended by adding a subdivision to read:
88.16 		Subd. 4a.Taconite revenue. Taconite revenue received in
88.17 	a calendar year by a school district under section 298.28,
88.18 	subdivisions 4, paragraphs (b) and (c), and 11, paragraph (d),
88.19 	is fully recognized in the fiscal year in which the February
88.20 	payment falls.

88.21 	Sec. 4. Minnesota Statutes 2004, section 123B.76,
88.22 	subdivision 3, is amended to read:
88.23 		Subd. 3.Expenditures by building.  (a) For the purposes
88.24 	of this section, "building" means education site as defined in
88.25 	section 123B.04, subdivision 1.
88.26 	(b) Each district shall maintain separate accounts to
88.27 	identify general fund expenditures, excluding capital
88.28 	expenditures and pupil transportation,for each building.  All
88.29 	expenditures for regular instruction, secondary vocational
88.30 	instruction, and school administration must be reported to the
88.31 	department separately for each building.  All expenditures for
88.32 	special education instruction, instructional support services,
88.33 	and pupil support services provided within a specific building
88.34 	must be reported to the department separately for each
88.35 	building.  Salary expenditures reported by building must reflect
88.36 	actual salaries for staff at the building and must not be based
89.1 	on districtwide averages.  All other general fund expenditures
89.2 	may be reported by building or on a districtwide basis.
89.3 	(c) The department must annually report information showing
89.4 	school district general fund expenditures per pupil by program
89.5 	category for each building and estimated school district general
89.6 	fund revenue generated by pupils attending each building on its
89.7 	Web site.  For purposes of this report:
89.8 	(1) expenditures not required to be reported by building
89.9 	shall be allocated among buildings on a uniform per pupil basis;
89.10 	(2) basic skills revenue shall be allocated according to
89.11 	section 126C.10, subdivision 4;
89.12 	(3) secondary sparsity revenue and elementary sparsity
89.13 	revenue shall be allocated according to section 126C.10,
89.14 	subdivisions 7 and 8;
89.15 	(4) other general education revenue shall be allocated on a
89.16 	uniform per pupil unit basis;
89.17 	(5) first grade preparedness aid shall be allocated
89.18 	according to section 124D.081;
89.19 	(6) state and federal special education aid and Title I aid
89.20 	shall be allocated in proportion to district expenditures for
89.21 	these programs by building; and
89.22 	(7) other general fund revenues shall be allocated on a
89.23 	uniform per pupil basis, except that the department may allocate
89.24 	other revenues attributable to specific buildings directly to
89.25 	those buildings.

89.26 	Sec. 5. Minnesota Statutes 2004, section 123B.79,
89.27 	subdivision 6, is amended to read:
89.28 		Subd. 6.Account transfer for statutory operating debt.
 89.29 	On June 30 of each year, a district may make a permanent
89.30 	transfer from the general fund account entitled " undesignated 
89.31 	net unreserved general fund balance since statutory operating
89.32 	debt" to the account entitled "reserved fund balance reserve
89.33 	account for purposes of statutory operating debt reduction."
89.34 	The amount of the transfer is limited to the lesser of (a) the
89.35 	net undesignated operating unreserved general fund balance, or
89.36 	(b) the sum of the remaining statutory operating debt levies
90.1 	authorized for all future years according to section 126C.42,
90.2 	subdivision 1.  If the net undesignated operating unreserved
90.3 	general fund balance is less than zero, the district may not
90.4 	make a transfer.

90.5 	Sec. 6. Minnesota Statutes 2004, section 123B.81,
90.6 	subdivision 1, is amended to read:
90.7 		Subdivision 1.Operating debt.  The "operating debt" of a
90.8 	school district means the net negative undesignated unreserved
90.9 	general fund balance in all school district funds, other than
90.10 	capital expenditure, building construction, debt service, and
90.11 	trust and agency,calculated as of June 30 of each year in
90.12 	accordance with the uniform financial accounting and reporting
90.13 	standards for Minnesota school districts.

90.14 	Sec. 7. Minnesota Statutes 2004, section 123B.82, is
90.15 	amended to read:
90.16 	123B.82 REORGANIZATION OPERATING DEBT.
90.17 	The "reorganization operating debt" of a school district
90.18 	means the net negative undesignated unreserved fund balance 
90.19 	balances in all school district funds, other than building
90.20 	construction, debt redemption, and trust and agency, calculated
90.21 	in accordance with the uniform financial accounting and
90.22 	reporting standards for Minnesota school districts as of:
90.23 	(1) June 30 of the fiscal year before the first year that a
90.24 	district receives revenue according to section 123A.39,
90.25 	subdivision 3; or
90.26 	(2) June 30 of the fiscal year before the effective date of
90.27 	reorganization according to section 123A.46 or 123A.48.

90.28 	Sec. 8. Minnesota Statutes 2004, section 123B.83,
90.29 	subdivision 2, is amended to read:
90.30 		Subd. 2.undesignated unreserved fund balances.
 90.31 	Beginning in fiscal year 1978 and each year thereafter, any A
90.32 	school district not subject to the provisions of subdivision 1 
90.33 	must limit its expenditures so that its undesignated net
90.34 	unreserved general fund balances do balance does not constitute
90.35 	statutory operating debt as defined in section 126C.42.

90.36 	Sec. 9. Minnesota Statutes 2004, section 124D.68,
91.1 	subdivision 9, is amended to read:
91.2 		Subd. 9.Enrollment verification.  (a) For a pupil
91.3 	attending an eligible program full time under subdivision 3,
91.4 	paragraph (d), the department must pay 90 percent of the
91.5 	district's average general education revenue less basic skills
91.6 	revenue to the eligible program and ten percent of the
91.7 	district's average general education revenue less basic skills
91.8 	revenue to the contracting district within 30 days after the
91.9 	eligible program verifies enrollment using the form provided by
91.10 	the department.  For a pupil attending an eligible program part
91.11 	time, revenue, excluding compensatory revenue,shall be reduced
91.12 	proportionately, according to the amount of time the pupil
91.13 	attends the program, and the payments to the eligible program
91.14 	and the contracting district shall be reduced accordingly.  A
91.15 	pupil for whom payment is made according to this section may not
91.16 	be counted by any district for any purpose other than
91.17 	computation of general education revenue.  If payment is made
91.18 	for a pupil under this subdivision, a district shall not
91.19 	reimburse a program under section 124D.69 for the same
91.20 	pupil. The basic skills revenue shall be paid generated by
91.21 	pupils attending the eligible program according to section
91.22 	126C.10, subdivision 4, shall be paid to the eligible program.
91.23 	(b) The department must pay up to 100 percent of the
91.24 	revenue to the eligible program if there is an agreement to that
91.25 	effect between the school district and the eligible program.
91.26 	(c) Notwithstanding paragraphs (a) and (b), for an eligible
91.27 	program that provides chemical treatment services to students,
91.28 	the department must pay 100 percent of the revenue to the
91.29 	eligible program.

91.30 	Sec. 10. Minnesota Statutes 2004, section 124D.69,
91.31 	subdivision 1, is amended to read:
91.32 		Subdivision 1.Aid.  If a pupil enrolls in an alternative
91.33 	program, eligible under section 124D.68, subdivision 3,
91.34 	paragraph (d), or subdivision 4, operated by a private
91.35 	organization that has contracted with a school district to
91.36 	provide educational services for eligible pupils under section
92.1 	124D.68, subdivision 2, the district contracting with the
92.2 	private organization must reimburse the provider an amount equal
92.3 	to the sum of (1) at least 95 percent of the district's average
92.4 	general education less basic skills revenue per pupil unit times
92.5 	the number of pupil units for pupils attending the program., and
92.6 	(2) the amount of basic skills revenue shall be paid generated
92.7 	by pupils attending the program according to section 126C.10,
92.8 	subdivision 4. Compensatory revenue must be allocated according
92.9 	to section 126C.15, subdivision 2.For a pupil attending the
92.10 	program part time, the revenue paid to the program, excluding
92.11 	compensatory revenue,must be reduced proportionately, according
92.12 	to the amount of time the pupil attends the program, and revenue
92.13 	paid to the district shall be reduced accordingly.  Pupils for
92.14 	whom a district provides reimbursement may not be counted by the
92.15 	district for any purpose other than computation of general
92.16 	education revenue.  If payment is made to a district or program
92.17 	for a pupil under this section, the department must not make a
92.18 	payment for the same pupil under section 124D.68, subdivision 9.
92.19 	Notwithstanding sections 125A.15, 125A.51, and 125A.515, general
92.20 	education revenue for a student who receives educational
92.21 	services under this section shall be paid according to this
92.22 	section.

92.23 	Sec. 11. Minnesota Statutes 2004, section 126C.01,
92.24 	subdivision 11, is amended to read:
92.25 		Subd. 11.Net unappropriated operating unreserved general 
92.26 	fund balance.  "Net unappropriated operating unreserved general 
92.27 	fund balance" means the sum of the unreserved general fund
92.28 	balances in the general, food service, and community service
92.29 	funds minus the balances reserved for statutory operating debt
92.30 	reduction, bus purchase, severance pay, taconite, unemployment
92.31 	benefits, maintenance levy reduction, operating capital,
92.32 	disabled access, health and safety,balance and encumbrances,
92.33 	computed as of June 30 each year.

92.34 	Sec. 12. Minnesota Statutes 2004, section 126C.05, is
92.35 	amended by adding a subdivision to read:
92.36 		Subd. 20.Project-based average daily membership. (a) To
93.1 	receive general education revenue for a pupil enrolled in a
93.2 	public school with a project-based program, a school must meet
93.3 	the requirements in this paragraph.  The school must:
93.4 	(1) register with the commissioner as a project-based
93.5 	program by May 30 of the preceding fiscal year;
93.6 	(2) provide a minimum teacher contact of no less than one
93.7 	hour per week per project-based credit for each pupil;
93.8 	(3) maintain a record system that shows when each credit or
93.9 	portion thereof was reported for membership for each pupil; and 
93.10 	(4) report pupil membership consistent with paragraph (b).
93.11 	(b) The commissioner must develop a formula for reporting
93.12 	pupil membership to compute average daily membership for each
93.13 	registered project-based school.  Average daily membership for a
93.14 	pupil in a registered project-based program is the lesser of:
93.15 	(1) 1.0; or 
93.16 	(2) the ratio of (i) the number of membership hours
93.17 	generated by project-based credits completed during the school
93.18 	year plus membership hours generated by credits completed in a
93.19 	seat-based setting to (ii) the annual required instructional
93.20 	hours at that grade level.  Membership hours for a partially
93.21 	completed project-based credit must be prorated.

93.22 	Sec. 13. Minnesota Statutes 2004, section 126C.21,
93.23 	subdivision 4, is amended to read:
93.24 		Subd. 4.Taconite deductions. (1) Notwithstanding any
93.25 	provisions of any other law to the contrary, the adjusted net
93.26 	tax capacity used in calculating general education aid may
93.27 	include only that property that is currently taxable in the
93.28 	district.
93.29 	(2) For districts that received payments have revenue under
93.30 	sections 298.018; 298.225; 298.24 to 298.28, excluding 298.26
93.31 	and 298.28, subdivision 4, paragraph (d); 298.34 to 298.39;
93.32 	298.391 to 298.396; and 298.405; and 477A.15, any law imposing a
93.33 	tax upon severed mineral values; or recognized revenue under
93.34 	section 477A.15;the general education aid must be reduced in
93.35 	the final adjustment payment by (1) the difference between the
93.36 	dollar amount of the payments received revenue recognized 
94.1 	pursuant to those sections, or revenue recognized under section
94.2 	477A.15 in for the fiscal year to which the final adjustment is
94.3 	attributable and , less (2) the amount that was calculated,
94.4 	pursuant to section 126C.48, subdivision 8, as a reduction of
94.5 	the levy attributable to the fiscal year to which the final
94.6 	adjustment is attributable.  If the final adjustment of a
94.7 	district's general education aid for a fiscal year is a negative
94.8 	amount because of this clause subdivision, the next fiscal
94.9 	year's general education aid to that district must be reduced by
94.10 	this negative amount in the following manner:  there must be
94.11 	withheld from each scheduled general education aid payment due
94.12 	the district in such fiscal year, 15 percent of the total
94.13 	negative amount, until the total negative amount has been
94.14 	withheld.  The amount reduced from general education aid
94.15 	pursuant to this clause subdivision must be recognized as reduce 
94.16 	revenue in the fiscal year to which the final adjustment payment
94.17 	is attributable.

94.18 	Sec. 14. Minnesota Statutes 2004, section 126C.48,
94.19 	subdivision 2, is amended to read:
94.20 		Subd. 2.Notice to commissioner; forms.  By October 7 of
94.21 	each year each district must notify the commissioner of the
94.22 	proposed levies in compliance with the levy limitations of this
94.23 	chapter and chapters 120B, 122A, 123A, 123B, 124D, 125A, 127A,
94.24 	and 136D.  By January 15 7 of each year each district must
94.25 	notify the commissioner of the final levies certified.  The
94.26 	commissioner shall prescribe the form of these notifications and
94.27 	may request any additional information necessary to compute
94.28 	certified levy amounts.

94.29 	Sec. 15. Minnesota Statutes 2004, section 126C.48,
94.30 	subdivision 8, is amended to read:
94.31 		Subd. 8.Taconite payment and other reductions.  (1)
94.32 	Reductions in levies pursuant to subdivision 1 must be made
94.33 	prior to the reductions in clause (2).
94.34 	(2) Notwithstanding any other law to the contrary,
94.35 	districts which received payments that have revenue pursuant to
94.36 	sections 298.018; 298.225; 298.24 to 298.28, except an amount
95.1 	distributed under section sections 298.26;298.28, subdivision
95.2 	4, paragraph paragraphs (c), clause (ii), and (d); 298.34 to
95.3 	298.39; 298.391 to 298.396; 298.405; 477A.15;and any law
95.4 	imposing a tax upon severed mineral values; or recognized
95.5 	revenue under section 477A.15 must not include a portion of
95.6 	these aids in their permissible levies pursuant to those
95.7 	sections, but instead must reduce the permissible levies
95.8 	authorized by this chapter and chapters 120B, 122A, 123A, 123B,
95.9 	124A, 124D, 125A, and 127A by the greater of the following:95
95.10 	percent of the previous year's revenue specified under this
95.11 	clause.
95.12 	(a) an amount equal to 50 percent of the total dollar
95.13 	amount of the payments received pursuant to those sections or
95.14 	revenue recognized under section 477A.15 in the previous fiscal
95.15 	year; or 
95.16 	(b) an amount equal to the total dollar amount of the
95.17 	payments received pursuant to those sections or revenue
95.18 	recognized under section 477A.15 in the previous fiscal year
95.19 	less the product of the same dollar amount of payments or
95.20 	revenue times five percent.
95.21 	For levy year 2002 only, 77 percent of the amounts
95.22 	distributed under section 298.225 and 298.28, and 100 percent of
95.23 	the amounts distributed under sections 298.018; 298.34 to
95.24 	298.39; 298.391 to 298.396; 298.405; and any law imposing a tax
95.25 	upon severed mineral values, or recognized revenue under section
95.26 	477A.15, shall be used for purposes of the calculations under
95.27 	this paragraph.  For levy year 2003 only, the levy reductions
95.28 	under this subdivision must be calculated as if section 298.28,
95.29 	subdivision 4, paragraph (f), did not apply for the 2003
95.30 	distribution.
95.31 	(3) The amount of any voter approved referendum, facilities
95.32 	down payment, and debt levies shall not be reduced by more than
95.33 	50 percent under this subdivision.  In administering this
95.34 	paragraph, the commissioner shall first reduce the nonvoter
95.35 	approved levies of a district; then, if any payments, severed
95.36 	mineral value tax revenue or recognized revenue under paragraph
96.1 	(2) remains, the commissioner shall reduce any voter approved
96.2 	referendum levies authorized under section 126C.17; then, if any
96.3 	payments, severed mineral value tax revenue or recognized
96.4 	revenue under paragraph (2) remains, the commissioner shall
96.5 	reduce any voter approved facilities down payment levies
96.6 	authorized under section 123B.63 and then, if any payments,
96.7 	severed mineral value tax revenue or recognized revenue under
96.8 	paragraph (2) remains, the commissioner shall reduce any voter
96.9 	approved debt levies.
96.10 	(4) Before computing the reduction pursuant to this
96.11 	subdivision of the health and safety levy authorized by sections
96.12 	123B.57 and 126C.40, subdivision 5, the commissioner shall
96.13 	ascertain from each affected school district the amount it
96.14 	proposes to levy under each section or subdivision.  The
96.15 	reduction shall be computed on the basis of the amount so
96.16 	ascertained.
96.17 	(5) To the extent the levy reduction calculated under
96.18 	paragraph (2) exceeds the limitation in paragraph (3), an amount
96.19 	equal to the excess must be distributed from the school
96.20 	district's distribution under sections 298.225, 298.28, and
96.21 	477A.15 in the following year to the cities and townships within
96.22 	the school district in the proportion that their taxable net tax
96.23 	capacity within the school district bears to the taxable net tax
96.24 	capacity of the school district for property taxes payable in
96.25 	the year prior to distribution.  No city or township shall
96.26 	receive a distribution greater than its levy for taxes payable
96.27 	in the year prior to distribution.  The commissioner of revenue
96.28 	shall certify the distributions of cities and towns under this
96.29 	paragraph to the county auditor by September 30 of the year
96.30 	preceding distribution.  The county auditor shall reduce the
96.31 	proposed and final levies of cities and towns receiving
96.32 	distributions by the amount of their distribution.
96.33 	Distributions to the cities and towns shall be made at the times
96.34 	provided under section 298.27.

96.35 	Sec. 16. Minnesota Statutes 2004, section 127A.49,
96.36 	subdivision 3, is amended to read:
97.1 		Subd. 3.Excess tax increment.  (a) If a return of excess
97.2 	tax increment is made to a district pursuant to section sections 
97.3 	469.176, subdivision 2, and 469.177, subdivision 9,or upon
97.4 	decertification of a tax increment district, the school
97.5 	district's aid and levy limitations must be adjusted for the
97.6 	fiscal year in which the excess tax increment is paid under the
97.7 	provisions of this subdivision.
97.8 	(b) An amount must be subtracted from the district's aid
97.9 	for the current fiscal year equal to the product of:
97.10 	(1) the amount of the payment of excess tax increment to
97.11 	the district, times
97.12 	(2) the ratio of:
97.13 	(i) the sum of the amounts of the district's certified levy
97.14 	for the fiscal year in which the excess tax increment is paid
97.15 	according to the following:
97.16 	(A) section 123B.57, if the district received health and
97.17 	safety aid according to that section for the second preceding
97.18 	year;
97.19 	(B) section 124D.20, if the district received aid for
97.20 	community education programs according to that section for the
97.21 	second preceding year;
97.22 	(C) section 124D.135, subdivision 3, if the district
97.23 	received early childhood family education aid according to
97.24 	section 124D.135 for the second preceding year; and
97.25 	(D) section 126C.17, subdivision 6, if the district
97.26 	received referendum equalization aid according to that section
97.27 	for the second preceding year; to
97.28 	(ii) the total amount of the district's certified levy for
97.29 	the fiscal year, plus or minus auditor's adjustments.
97.30 	(c) An amount must be subtracted from the school district's
97.31 	levy limitation for the next levy certified equal to the
97.32 	difference between:
97.33 	(1) the amount of the distribution of excess increment; and
97.34 	(2) the amount subtracted from aid pursuant to clause (a).
97.35 	If the aid and levy reductions required by this subdivision
97.36 	cannot be made to the aid for the fiscal year specified or to
98.1 	the levy specified, the reductions must be made from aid for
98.2 	subsequent fiscal years, and from subsequent levies.  The school
98.3 	district must use the payment of excess tax increment to replace
98.4 	the aid and levy revenue reduced under this subdivision.
98.5 	(d) This subdivision applies only to the total amount of
98.6 	excess increments received by a district for a calendar year
98.7 	that exceeds $25,000.

98.8 	Sec. 17. Minnesota Statutes 2004, section 275.14, is
98.9 	amended to read:
98.10 	275.14 CENSUS.
98.11 	For the purposes of sections 275.124 to 275.16, the
98.12 	population of a city shall be that established by the last
98.13 	federal census, by a special census taken by the United States
98.14 	Bureau of the Census, by an estimate made by the Metropolitan
98.15 	Council, or by the state demographer made according to section
98.16 	4A.02, whichever has the latest stated date of count or
98.17 	estimate, before July 2 of the current levy year.The
98.18 	population of a school district must be as certified by the
98.19 	Department of Education from the most recent federal census.  In
98.20 	any year in which no federal census is taken pursuant to law in
98.21 	any school district affected by sections 275.124 to
98.22 	275.16 124D.20 and 124D.531a population estimate may be made
98.23 	and submitted to the state demographer for approval as
98.24 	hereinafter provided.  The school board of a school district, in
98.25 	case it desires a population estimate, shall pass a resolution
98.26 	by July 1 containing a current estimate of the population of the
98.27 	school district and shall submit the resolution to the state
98.28 	demographer.  The resolution shall describe the criteria on
98.29 	which the estimate is based and shall be in a form and
98.30 	accompanied by the data prescribed by the state demographer.
98.31 	The state demographer shall determine whether or not the
98.32 	criteria and process described in the resolution provide a
98.33 	reasonable basis for the population estimate and shall inform
98.34 	the school district of that determination within 30 days of
98.35 	receipt of the resolution.  If the state demographer determines
98.36 	that the criteria and process described in the resolution do not
99.1 	provide a reasonable basis for the population estimate, the
99.2 	resolution shall be of no effect.  If the state demographer
99.3 	determines that the criteria and process do provide a reasonable
99.4 	basis for the population estimate, the estimate shall be treated
99.5 	as the population of the school district for the purposes of
99.6 	sections 275.124 to 275.16124D.20 and 124D.531until the
99.7 	population of the school district has been established by the
99.8 	next federal census or until a more current population estimate
99.9 	is prepared and approved as provided herein, whichever occurs
99.10 	first.  The state demographer shall establish guidelines for
99.11 	acceptable population estimation criteria and processes.  The
99.12 	state demographer shall issue advisory opinions upon request in
99.13 	writing to cities or school districts as to proposed criteria
99.14 	and processes prior to their implementation in an estimation.
99.15 	The advisory opinion shall be final and binding upon the
99.16 	demographer unless the demographer can show cause why it should
99.17 	not be final and binding.
99.18 	In the event that a census tract employed in taking a
99.19 	federal or local census overlaps two or more school districts,
99.20 	the county auditor shall, on the basis of the best information
99.21 	available, allocate the population of said census tract to the
99.22 	school districts involved.
99.23 	The term "council," as used in sections 275.124 to 275.16,
99.24 	means any board or body, whether composed of one or more
99.25 	branches, authorized to make ordinances for the government of a
99.26 	city within this state.

99.27 	Sec. 18. Minnesota Statutes 2004, section 275.16, is
99.28 	amended to read:
99.29 	275.16 COUNTY AUDITOR TO FIX AMOUNT OF LEVY.
99.30 	If any such municipality shall return to the county auditor
99.31 	a levy greater than permitted by chapters 123A, 123B, 124D,
99.32 	126C, and 136C, and 136D,sections 275.124 to 275.16, and 275.70
99.33 	to 275.74, such county auditor shall extend only such amount of
99.34 	taxes as the limitations herein prescribed will permit;
99.35 	provided, if such levy shall include any levy for the payment of
99.36 	bonded indebtedness or judgments, such levies for bonded
100.1 	indebtedness or judgments shall be extended in full, and the
100.2 	remainder of the levies shall be reduced so that the total
100.3 	thereof, including levies for bonds and judgments, shall not
100.4 	exceed such amount as the limitations herein prescribed will
100.5 	permit.

100.6 	Sec. 19. Minnesota Statutes 2004, section 469.177,
100.7 	subdivision 9, is amended to read:
100.8 		Subd. 9.Distributions of excess taxes on captured net
100.9 	tax capacity.  (a) If the amount of tax paid on captured net tax
100.10 	capacity exceeds the amount of tax increment, the county auditor
100.11 	shall distribute the excess to the municipality, county, and
100.12 	school district as follows:  each governmental unit's share of
100.13 	the excess equals
100.14 	(1) the total amount of the excess for the tax increment
100.15 	financing district, multiplied by
100.16 	(2) a fraction, the numerator of which is the current local
100.17 	tax rate of the governmental unit less the governmental unit's
100.18 	local tax rate for the year the original local tax rate for the
100.19 	district was certified (in no case may this amount be less than
100.20 	zero) and the denominator of which is the sum of the numerators
100.21 	for the municipality, county, and school district.
100.22 	If the entire increase in the local tax rate is attributable to
100.23 	a taxing district, other than the municipality, county, or
100.24 	school district, then the excess must be distributed to the
100.25 	municipality, county, and school district in proportion to their
100.26 	respective local tax rates.
100.27 	(b) The amounts distributed shall be deducted in computing
100.28 	the levy limits of the taxing district for the succeeding
100.29 	taxable year. In the case of a school district, only the
100.30 	proportion of the excess taxes attributable to unequalized
100.31 	levies that are subject to a fixed dollar amount levy limit
100.32 	shall be deducted from the levy limit.
100.33 	(c) In the case of distributions to a school district that
100.34 	are attributable to state equalized levies, the county auditor
100.35 	shall report amounts distributed to the commissioner of
100.36 	education in the same manner as provided for excess increments
101.1 	under section 469.176, subdivision 2, and the distribution shall
101.2 	be deducted from the school district's state aid payments and
101.3 	levy limitation according to section 127A.49, subdivision 3.

101.4 	Sec. 20. REPEALER.
 101.5 	Minnesota Statutes 2004, sections 123B.83, subdivision 1,
101.6 	and 126C.42, subdivisions 1 and 4, are repealed.

101.7 	ARTICLE 13
101.8 	OTHER EDUCATION EXCELLENCE POLICY

101.9 	Section 1. Minnesota Statutes 2004, section 123B.143,
101.10 	subdivision 1, is amended to read:
101.11 		Subdivision 1.Contract; duties.  All districts
101.12 	maintaining a classified secondary school must employ a
101.13 	superintendent who shall be an ex officio nonvoting member of
101.14 	the school board.  The authority for selection and employment of
101.15 	a superintendent must be vested in the board in all cases.  An
101.16 	individual employed by a board as a superintendent shall have an
101.17 	initial employment contract for a period of time no longer than
101.18 	three years from the date of employment.  Any subsequent
101.19 	employment contract must not exceed a period of three years.  A
101.20 	board, at its discretion, may or may not renew an employment
101.21 	contract.  A board must not, by action or inaction, extend the
101.22 	duration of an existing employment contract.  Beginning 365 days
101.23 	prior to the expiration date of an existing employment contract,
101.24 	a board may negotiate and enter into a subsequent employment
101.25 	contract to take effect upon the expiration of the existing
101.26 	contract.  A subsequent contract must be contingent upon the
101.27 	employee completing the terms of an existing contract.  If a
101.28 	contract between a board and a superintendent is terminated
101.29 	prior to the date specified in the contract, the board may not
101.30 	enter into another superintendent contract with that same
101.31 	individual that has a term that extends beyond the date
101.32 	specified in the terminated contract.  A board may terminate a
101.33 	superintendent during the term of an employment contract for any
101.34 	of the grounds specified in section 122A.40, subdivision 9 or 13.
101.35 	A superintendent shall not rely upon an employment contract with
101.36 	a board to assert any other continuing contract rights in the
102.1 	position of superintendent under section 122A.40.
102.2 	Notwithstanding the provisions of sections 122A.40, subdivision
102.3 	10 or 11, 123A.32, 123A.75, or any other law to the contrary, no
102.4 	individual shall have a right to employment as a superintendent
102.5 	based on order of employment in any district.  If two or more
102.6 	districts enter into an agreement for the purchase or sharing of
102.7 	the services of a superintendent, the contracting districts have
102.8 	the absolute right to select one of the individuals employed to
102.9 	serve as superintendent in one of the contracting districts and
102.10 	no individual has a right to employment as the superintendent to
102.11 	provide all or part of the services based on order of employment
102.12 	in a contracting district. The superintendent of a district
102.13 	shall perform the following:
102.14 	(1) visit and supervise the schools in the district, report
102.15 	and make recommendations about their condition when advisable or
102.16 	on request by the board;
102.17 	(2) recommend to the board employment and dismissal of
102.18 	teachers;
102.19 	(3) superintend school grading practices and examinations
102.20 	for promotions;
102.21 	(4) make reports required by the commissioner; and 
102.22 	(5) by January 10, submit an annual report to the
102.23 	commissioner in a manner prescribed by the commissioner, in
102.24 	consultation with school districts, identifying the expenditures
102.25 	that the district requires to ensure an 80 percent student
102.26 	passage rate on the basic standards test taken in the eighth
102.27 	grade, identifying the highest student passage rate the district
102.28 	expects it will be able to attain on the basic standards test by
102.29 	grade 12, the amount of expenditures that the district requires
102.30 	to attain the targeted student passage rate, and how much the
102.31 	district is cross-subsidizing programs with special education,
102.32 	basic skills, and general education revenue; and 
102.33 	(6) perform other duties prescribed by the board.

102.34 	Sec. 2. [127A.52] CROSS-SUBSIDY REPORTS.
102.35 	By January 30 of each year, the commissioner must estimate
102.36 	how much each district cross-subsidized the cost of special
103.1 	education and basic skills programs with general education
103.2 	revenue during the fiscal year ending on June 30 of the previous
103.3 	year.  The commissioner must make the cross-subsidy estimates
103.4 	available to all districts and the public by posting the
103.5 	cross-subsidy reports on the department's Web site.

103.6 	ARTICLE 14
103.7 	OTHER FACILITIES AND TECHNOLOGY POLICY

103.8 	Section 1. Minnesota Statutes 2004, section 123B.59,
103.9 	subdivision 3, is amended to read:
103.10 		Subd. 3.Bond authorization.  (a) A school district may
103.11 	issue general obligation bonds under this section to finance
103.12 	facilities plans approved by its board and the commissioner.
103.13 	Chapter 475, except sections 475.58 and 475.59, must be complied
103.14 	with.  The district may levy under subdivision 5 for the debt
103.15 	service revenue.  The authority to issue bonds under this
103.16 	section is in addition to any bonding authority authorized by
103.17 	this chapter, or other law.  The amount of bonding authority
103.18 	authorized under this section must be disregarded in calculating
103.19 	the bonding or net debt limits of this chapter, or any other law
103.20 	other than section 475.53, subdivision 4.
103.21 	(b) At least 60 days before a district issues bonds the
103.22 	earliest of solicitation of bids, the issuance of bonds, or the
103.23 	final certification of levies under this subdivision 5, it the
103.24 	district must publish notice of the intended projects, the
103.25 	amount of the bond issue, and the total amount of district
103.26 	indebtedness, and the commissioner's review and comment, if
103.27 	applicable.

103.28 	Sec. 2. Minnesota Statutes 2004, section 123B.59,
103.29 	subdivision 3a, is amended to read:
103.30 		Subd. 3a.Levy authorization.  (a) A school district may
103.31 	levy under this section to finance the portion of facilities
103.32 	plans approved by its board and the commissioner that are not
103.33 	financed through bond issues according to subdivision 3.
103.34 	(b) At least 60 days before a final district certification
103.35 	of levies under this subdivision 5, it the district must
103.36 	publish notice of the intended projects, including the total
104.1 	estimated project cost, and the commissioner's review and
104.2 	comment, if applicable.

104.3 	Sec. 3. Minnesota Statutes 2004, section 123B.63,
104.4 	subdivision 2, is amended to read:
104.5 		Subd. 2.Uses of the account.  Money in the capital
104.6 	project referendum account must be used only for the purposes
104.7 	specified in section 126C.10, subdivision 14, for operating
104.8 	capital revenue, including the costs of acquisition and
104.9 	betterment for a project that has been reviewed under section
104.10 	123B.71 and has been approved according to subdivision 3.

104.11 	Sec. 4. Minnesota Statutes 2004, section 123B.71,
104.12 	subdivision 8, is amended to read:
104.13 		Subd. 8.Review and comment.  A school district, a
104.14 	special education cooperative, or a cooperative unit of
104.15 	government, as defined in section 123A.24, subdivision 2, must
104.16 	not initiate an installment contract for purchase or a lease
104.17 	agreement, hold a referendum for bonds, nor solicit bids for new
104.18 	construction, expansion, or remodeling of an educational
104.19 	facility that requires an expenditure in excess of $500,000 per
104.20 	school site prior to review and comment by the commissioner.
104.21 	The commissioner may exempt a facility maintenance project
104.22 	funded with general education aid and levy, alternative
104.23 	facilities bonding and levy program,or health and safety
104.24 	revenue from this provision after reviewing a written request
104.25 	from a school district describing the scope of work.  A school
104.26 	board shall not separate portions of a single project into
104.27 	components to avoid the requirements of this subdivision.

104.28 	Sec. 5. Minnesota Statutes 2004, section 123B.71,
104.29 	subdivision 12, is amended to read:
104.30 		Subd. 12.Publication. (a) At least 20 days but not more
104.31 	than 60 days before a referendum for bonds or solicitation of
104.32 	bids for a project that has received a positive or unfavorable
104.33 	review and comment under section 123B.70, the school board shall
104.34 	publish the commissioner's review and comment of that project in
104.35 	the legal newspaper of the district.  Supplementary information
104.36 	shall be available to the public.
105.1 	(b) The publication requirement in paragraph (a) does not
105.2 	apply to alternative facilities projects approved under section
105.3 	123B.59.  Publication for alternative facilities projects shall
105.4 	be as specified in section 123B.59, subdivisions 3 and 3a.

105.5 	ARTICLE 15
105.6 	OTHER EARLY CHILDHOOD FAMILY SUPPORT POLICY

105.7 	Section 1. Minnesota Statutes 2004, section 124D.135,
105.8 	subdivision 5, is amended to read:
105.9 		Subd. 5.Use of revenue restricted.  Early childhood
105.10 	family education revenue may be used only for early childhood
105.11 	family education programs.  Not more than five percent of early
105.12 	childhood family education revenue, as defined in subdivision 7,
105.13 	may be used to administer early childhood family education
105.14 	programs.

105.15 	Sec. 2. Minnesota Statutes 2004, section 124D.16,
105.16 	subdivision 3, is amended to read:
105.17 		Subd. 3.Use of aid.  School readiness aid shall be used
105.18 	only to provide a school readiness program and may be used to
105.19 	provide transportation.  Not more than five percent of the
105.20 	aid school readiness revenue, as defined in subdivision 5,may
105.21 	be used for the cost of administering the program.  Aid must be
105.22 	used to supplement and not supplant local, state, and federal
105.23 	funding.  Aid may not be used for instruction and services
105.24 	required under sections 125A.03 to 125A.24 and 125A.65. Aid may
105.25 	not be used to purchase land or construct buildings, but may be
105.26 	used to lease or renovate existing buildings.

105.27 	Sec. 3. Minnesota Statutes 2004, section 126C.15,
105.28 	subdivision 1, is amended to read:
105.29 		Subdivision 1.Use of the revenue. Except for revenue
105.30 	allocated for prekindergarten programs under subdivision 2,
105.31 	paragraph (c),the basic skills revenue under section 126C.10,
105.32 	subdivision 4, must be reserved and used to meet the educational
105.33 	needs of pupils who enroll under-prepared to learn and whose
105.34 	progress toward meeting state or local content or performance
105.35 	standards is below the level that is appropriate for learners of
105.36 	their age.  Any of the following may be provided to meet these
106.1 	learners' needs:
106.2 	(1) direct instructional services under the assurance of
106.3 	mastery program according to section 124D.66;
106.4 	(2) remedial instruction in reading, language arts,
106.5 	mathematics, other content areas, or study skills to improve the
106.6 	achievement level of these learners;
106.7 	(3) additional teachers and teacher aides to provide more
106.8 	individualized instruction to these learners through individual
106.9 	tutoring, lower instructor-to-learner ratios, or team teaching;
106.10 	(4) a longer school day or week during the regular school
106.11 	year or through a summer program that may be offered directly by
106.12 	the site or under a performance-based contract with a
106.13 	community-based organization;
106.14 	(5) comprehensive and ongoing staff development consistent
106.15 	with district and site plans according to section 122A.60, for
106.16 	teachers, teacher aides, principals, and other personnel to
106.17 	improve their ability to identify the needs of these learners
106.18 	and provide appropriate remediation, intervention,
106.19 	accommodations, or modifications;
106.20 	(6) instructional materials and technology appropriate for
106.21 	meeting the individual needs of these learners;
106.22 	(7) programs to reduce truancy, encourage completion of
106.23 	high school, enhance self-concept, provide health services,
106.24 	provide nutrition services, provide a safe and secure learning
106.25 	environment, provide coordination for pupils receiving services
106.26 	from other governmental agencies, provide psychological services
106.27 	to determine the level of social, emotional, cognitive, and
106.28 	intellectual development, and provide counseling services,
106.29 	guidance services, and social work services;
106.30 	(8) bilingual programs, bicultural programs, and programs
106.31 	for learners of limited English proficiency;
106.32 	(9) all day kindergarten;
106.33 	(10) extended school day and extended school year programs;
106.34 	and
106.35 	(11) substantial parent involvement in developing and
106.36 	implementing remedial education or intervention plans for a
107.1 	learner, including learning contracts between the school, the
107.2 	learner, and the parent that establish achievement goals and
107.3 	responsibilities of the learner and the learner's parent or
107.4 	guardian.

107.5 	Sec. 4. Minnesota Statutes 2004, section 126C.15,
107.6 	subdivision 2, is amended to read:
107.7 		Subd. 2.Building allocation.  (a) A district must
107.8 	allocate its compensatory revenue to each school building in the
107.9 	district where the children who have generated the revenue are
107.10 	served.
107.11 	(b) Notwithstanding paragraph (a), a district may allocate
107.12 	up to five percent of the amount of compensatory revenue that
107.13 	the district received during the previous fiscal year receives 
107.14 	to school sites according to a plan adopted by the school board.
107.15 	(c) Notwithstanding paragraph (a), a district may allocate
107.16 	up to ten percent of the amount of compensatory revenue the
107.17 	district receives to support prekindergarten programs under
107.18 	subdivision 2a.
107.19 	(d) For the purposes of this section and section 126C.05,
107.20 	subdivision 3, "building" means education site as defined in
107.21 	section 123B.04, subdivision 1.
107.22 	(d) (e) If the pupil is served at a site other than one
107.23 	owned and operated by the district, the revenue shall be paid to
107.24 	the district and used for services for pupils who generate the
107.25 	revenue.

107.26 	Sec. 5. Minnesota Statutes 2004, section 126C.15, is
107.27 	amended by adding a subdivision to read:
107.28 		Subd. 2a.Prekindergarten programs. Revenue allocated
107.29 	under subdivision 2, paragraph (c), must be reserved and used
107.30 	for programs and activities that prepare for kindergarten
107.31 	children ages 3-1/2 to kindergarten entrance from families
107.32 	eligible for the free or reduced price school lunch program.
107.33 	Programs may serve resident and nonresident children.  Districts
107.34 	may contract with private preschools and other providers of
107.35 	prekindergarten programs.

107.36 	ARTICLE 16
108.1 	OTHER PREVENTION POLICY

108.2 	Section 1. Minnesota Statutes 2004, section 119A.46,
108.3 	subdivision 1, is amended to read:
108.4 		Subdivision 1.Definitions.  (a) The definitions in
108.5 	section 144.9501 and in this subdivision apply to this section.
108.6 	(b) "Eligible organization" means a lead contractor, city,
108.7 	board of health, community health department, community action
108.8 	agency as defined in section 119A.374, or community development
108.9 	corporation.
108.10 	(c) "Commissioner" means the commissioner of education 
108.11 	health, or the commissioner of the Minnesota Housing Finance
108.12 	Agency as authorized by section 462A.05, subdivision 15c.

108.13 	Sec. 2. Minnesota Statutes 2004, section 119A.46,
108.14 	subdivision 2, is amended to read:
108.15 		Subd. 2.Grants; administration.  Within the limits of
108.16 	the available appropriation, the commissioner must develop a
108.17 	swab team services program which may make demonstration and
108.18 	training grants to eligible organizations to train workers to
108.19 	provide swab team services and swab team services for
108.20 	residential property.  Grants may be awarded to nonprofit
108.21 	organizations to provide technical assistance and training to
108.22 	ensure quality and consistency within the statewide program.
108.23 	Grants must be awarded to help ensure full-time employment to
108.24 	workers providing swab team services and must be awarded for a
108.25 	two-year period.
108.26 	Grants awarded under this section must be made in
108.27 	consultation with the commissioners of the Department of Health
108.28 	and commissioner of the Housing Finance Agency,and
108.29 	representatives of neighborhood groups from areas at high risk
108.30 	for toxic lead exposure, a labor organization, the lead
108.31 	coalition, community action agencies, and the legal aid
108.32 	society.  The consulting team must review grant applications and
108.33 	recommend awards to eligible organizations that meet
108.34 	requirements for receiving a grant under this section.

108.35 	Sec. 3. Minnesota Statutes 2004, section 119A.46,
108.36 	subdivision 3, is amended to read:
109.1 		Subd. 3.Applicants.  (a) Interested eligible
109.2 	organizations may apply to the commissioner for grants under
109.3 	this section.  Two or more eligible organizations may jointly
109.4 	apply for a grant.  Priority shall be given to community action
109.5 	agencies in greater Minnesota and to either community action
109.6 	agencies or neighborhood based nonprofit organizations in cities
109.7 	of the first class.  Of the total annual appropriation, 12.5
109.8 	percent may be used for administrative purposes.  The
109.9 	commissioner may deviate from this percentage if a grantee can
109.10 	justify the need for a larger administrative allowance.  Of this
109.11 	amount, up to five percent may be used by the commissioner for
109.12 	state administrative purposes.  Applications must provide
109.13 	information requested by the commissioner, including at least
109.14 	the information required to assess the factors listed in
109.15 	paragraph (d).
109.16 	(b) The commissioner must coordinate with the commissioner
109.17 	of health who must consult with boards of health to provide swab
109.18 	team services for purposes of secondary prevention.  The
109.19 	priority for swab teams created by grants to eligible
109.20 	organizations under this section must be work assigned by the
109.21 	commissioner of health, or by a board of health if so designated
109.22 	by the commissioner of health, to provide secondary prevention
109.23 	swab team services to fulfill the requirements of section
109.24 	144.9504, subdivision 6, in response to a lead order.  Swab
109.25 	teams assigned work under this section by the commissioner, that
109.26 	are not engaged daily in fulfilling the requirements of section
109.27 	144.9504, subdivision 6, must deliver swab team services in
109.28 	response to elevated blood lead levels as defined in section
109.29 	144.9501, subdivision 9, where lead orders were not issued, and
109.30 	for purposes of primary prevention in census tracts known to be
109.31 	in areas at high risk for toxic lead exposure as described in
109.32 	section 144.9503, subdivision 2.
109.33 	(c) Any additional money must be used for grants to
109.34 	establish swab teams for primary prevention under section
109.35 	144.9503, in census tracts in areas at high risk for toxic lead
109.36 	exposure as determined under section 144.9503, subdivision 2.
110.1 	(d) In evaluating grant applications, the commissioner must
110.2 	consider the following criteria:
110.3 	(1) the use of lead contractors and lead workers for
110.4 	residential swab team services;
110.5 	(2) the participation of neighborhood groups and
110.6 	individuals, as swab team workers, in areas at high risk for
110.7 	toxic lead exposure;
110.8 	(3) plans for the provision of swab team services for
110.9 	primary and secondary prevention as required under subdivision
110.10 	4;
110.11 	(4) plans for supervision, training, career development,
110.12 	and postprogram placement of swab team members;
110.13 	(5) plans for resident and property owner education on lead
110.14 	safety;
110.15 	(6) plans for distributing cleaning supplies to area
110.16 	residents and educating residents and property owners on
110.17 	cleaning techniques;
110.18 	(7) sources of other funding and cost estimates for
110.19 	training, lead inspections, swab team services, equipment,
110.20 	monitoring, testing, and administration;
110.21 	(8) measures of program effectiveness;
110.22 	(9) coordination of program activities with other federal,
110.23 	state, and local public health, job training, apprenticeship,
110.24 	and housing renovation programs including programs under
110.25 	sections 116L.86 to 116L.881; and
110.26 	(10) prior experience in providing swab team services.

110.27 	Sec. 4. Minnesota Statutes 2004, section 119A.46,
110.28 	subdivision 8, is amended to read:
110.29 		Subd. 8.Testing and evaluation.  (a) Testing of the
110.30 	environment is not necessary by swab teams whose work is
110.31 	assigned by the commissioner of health or a designated board of
110.32 	health under section 144.9504.  The commissioner of health or
110.33 	designated board of health must share the analytical testing
110.34 	data collected on each residence for purposes of secondary
110.35 	prevention under section 144.9504 with the swab team workers in
110.36 	order to provide constructive feedback on their work and to the
111.1 	commissioner for the purposes set forth in paragraph (c).
111.2 	(b) For purposes of primary prevention evaluation, the
111.3 	following samples must be collected:  pretesting and posttesting
111.4 	of one noncarpeted floor dust lead sample and a notation of the
111.5 	extent and location of bare soil and of deteriorated lead-based
111.6 	paint.  The analytical testing data collected on each residence
111.7 	for purposes of primary prevention under section 144.9503 must
111.8 	be shared with the swab team workers in order to provide
111.9 	constructive feedback on their work and to the commissioner for
111.10 	the purposes set forth in paragraph (c).
111.11 	(c) The commissioner of health must establish a program in
111.12 	cooperation with the commissioner to collect appropriate data as
111.13 	required under paragraphs (a) and (b), in order to conduct an
111.14 	ongoing evaluation of swab team services for primary and
111.15 	secondary prevention.  Within the limits of available
111.16 	appropriations, the commissioner of health must conduct or
111.17 	contract with the commissioner,on up to 1,000 residences which
111.18 	have received primary or secondary prevention swab team
111.19 	services, a postremediation evaluation, on at least a quarterly
111.20 	basis for a period of at least two years for each residence.
111.21 	The evaluation must note the condition of the paint within the
111.22 	residence, the extent of bare soil on the grounds, and collect
111.23 	and analyze one noncarpeted floor dust lead sample.  The data
111.24 	collected must be evaluated to determine the efficacy of
111.25 	providing swab team services as a method of reducing lead
111.26 	exposure in young children.  In evaluating this data, the
111.27 	commissioner of health must consider city size, community
111.28 	location, historic traffic flow, soil lead level of the property
111.29 	by area or census tract, distance to industrial point sources
111.30 	that emit lead, season of the year, age of the housing, age and
111.31 	number of children living at the residence, the presence of pets
111.32 	that move in and out of the residence, and other relevant
111.33 	factors as the commissioner of health may determine.

111.34 	Sec. 5. REVISOR'S INSTRUCTION.
 111.35 	In the next edition of Minnesota Statutes, the revisor of
111.36 	statutes shall renumber Minnesota Statutes, section 119A.46, as
112.1 	section 144.9512.