1.1 	A bill for an act
1.2 	relating to education; providing for school finance
1.3 	simplification, clarification, and equity; amending
1.4 	Minnesota Statutes 2004, sections 126C.05,
1.5 	subdivisions 1, 15, 16; 126C.10, subdivisions 1, 2;
1.6 	126C.13, subdivision 5; repealing Minnesota Statutes
1.7 	2004, sections 122A.60; 122A.61; 124D.081; 124D.65;
1.8 	124D.86; 126C.01, subdivision 9; 126C.05, subdivisions
1.9 	3, 17; 126C.10, subdivisions 3, 4, 5, 6, 7, 8, 13, 14,
1.10 	16, 17, 18; 126C.12; 126C.15.
1.11 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.12 	Section 1. Minnesota Statutes 2004, section 126C.05,
1.13 	subdivision 1, is amended to read:
1.14 		Subdivision 1.Pupil unit.  Pupil units for each
1.15 	Minnesota resident pupil in average daily membership enrolled in
1.16 	the district of residence, in another district under sections
1.17 	123A.05 to 123A.08, 124D.03, 124D.06, 124D.07, 124D.08, or
1.18 	124D.68; in a charter school under section 124D.10; or for whom
1.19 	the resident district pays tuition under section 123A.18,
1.20 	123A.22, 123A.30, 123A.32, 123A.44, 123A.488, 123B.88,
1.21 	subdivision 4, 124D.04, 124D.05, 125A.03 to 125A.24, 125A.51, or
1.22 	125A.65, shall be counted according to this subdivision.
1.23 	(a) A prekindergarten pupil with a disability who is
1.24 	enrolled in a program approved by the commissioner and has an
1.25 	individual education plan is counted as the ratio of the number
1.26 	of hours of assessment and education service to 825 times 1.25
1.27 	with a minimum average daily membership of 0.28, but not more
1.28 	than 1.25 pupil units.
2.1 	(b) A prekindergarten pupil who is assessed but determined
2.2 	not to be handicapped is counted as the ratio of the number of
2.3 	hours of assessment service to 825 times 1.25.
2.4 	(c) A kindergarten pupil with a disability who is enrolled
2.5 	in a program approved by the commissioner is counted as the
2.6 	ratio of the number of hours of assessment and education
2.7 	services required in the fiscal year by the pupil's individual
2.8 	education program plan to 875, but not more than one.
2.9 	(d) A kindergarten pupil who is not included in paragraph
2.10 	(c) is counted as .557 of a pupil unit for fiscal year 2000 and
2.11 	thereafter.
2.12 	(e) A pupil who is in any of grades 1 to 3 kindergarten
2.13 	through grade 12 is counted as 1.115 one pupil units unit for
2.14 	fiscal year 2000 2006 and thereafter.
2.15 	(f) A pupil who is any of grades 4 to 6 is counted as 1.06
2.16 	pupil units for fiscal year 1995 and thereafter.
2.17 	(g) A pupil who is in any of grades 7 to 12 is counted as
2.18 	1.3 pupil units.
2.19 	(h) (e) A pupil who is in the postsecondary enrollment
2.20 	options program is counted as 1.3 one pupil units unit.
2.21 	
EFFECTIVE DATE. This section is effective for revenue for
2.22 	fiscal year 2006 and later.

2.23 	Sec. 2. Minnesota Statutes 2004, section 126C.05,
2.24 	subdivision 15, is amended to read:
2.25 		Subd. 15.Learning year pupil units.  (a) When a pupil is
2.26 	enrolled in a learning year program under section 124D.128, an
2.27 	area learning center under sections 123A.05 and 123A.06, an
2.28 	alternative program approved by the commissioner, or a contract
2.29 	alternative program under section 124D.68, subdivision 3,
2.30 	paragraph (d), or subdivision 3a, for more than 1,020 hours in a
2.31 	school year for a secondary student, more than 935 hours in a
2.32 	school year for an elementary student, or more than 425 hours in
2.33 	a school year for a kindergarten student without a disability,
2.34 	that pupil may be counted as more than one pupil in average
2.35 	daily membership for purposes of section 126C.10, subdivision
2.36 	2a.  The amount in excess of one pupil must be determined by the
3.1 	ratio of the number of hours of instruction provided to that
3.2 	pupil in excess of:  (i) the greater of 1,020 hours or the
3.3 	number of hours required for a full-time secondary pupil in the
3.4 	district to 1,020 for a secondary pupil; (ii) the greater of 935
3.5 	hours or the number of hours required for a full-time elementary
3.6 	pupil in the district to 935 for an elementary pupil in grades 1
3.7 	through 6; and (iii) the greater of 425 hours or the number of
3.8 	hours required for a full-time kindergarten student without a
3.9 	disability in the district to 425 for a kindergarten student
3.10 	without a disability.  Hours that occur after the close of the
3.11 	instructional year in June shall be attributable to the
3.12 	following fiscal year.  A kindergarten student must not be
3.13 	counted as more than 1.2 pupils in average daily membership
3.14 	under this subdivision.  A student in grades 1 through 12 must
3.15 	not be counted as more than 1.2 pupils in average daily
3.16 	membership under this subdivision.
3.17 	(b)(i) To receive general education revenue for a pupil in
3.18 	an alternative program that has an independent study component,
3.19 	a district must meet the requirements in this paragraph.  The
3.20 	district must develop, for the pupil, a continual learning plan
3.21 	consistent with section 124D.128, subdivision 3.  Each school
3.22 	district that has a state-approved public alternative program
3.23 	must reserve revenue in an amount equal to at least 90 percent
3.24 	of the district average general education revenue per pupil unit
3.25 	less compensatory revenue per pupil unit times the number of
3.26 	pupil units generated by students attending a state-approved
3.27 	public alternative program.  The amount of reserved revenue
3.28 	available under this subdivision may only be spent for program
3.29 	costs associated with the state-approved public alternative
3.30 	program. Compensatory revenue must be allocated according to
3.31 	section 126C.15, subdivision 2.
3.32 	(ii) General education revenue for a pupil in an approved
3.33 	alternative program without an independent study component must
3.34 	be prorated for a pupil participating for less than a full year,
3.35 	or its equivalent.  The district must develop a continual
3.36 	learning plan for the pupil, consistent with section 124D.128,
4.1 	subdivision 3.  Each school district that has a state-approved
4.2 	public alternative program must reserve revenue in an amount
4.3 	equal to at least 90 percent of the district average general
4.4 	education revenue per pupil unit less compensatory revenue per
4.5 	pupil unit times the number of pupil units generated by students
4.6 	attending a state-approved public alternative program.  The
4.7 	amount of reserved revenue available under this subdivision may
4.8 	only be spent for program costs associated with the
4.9 	state-approved public alternative program. Compensatory revenue
4.10 	must be allocated according to section 126C.15, subdivision 2.
4.11 	(iii) General education revenue for a pupil in an approved
4.12 	alternative program that has an independent study component must
4.13 	be paid for each hour of teacher contact time and each hour of
4.14 	independent study time completed toward a credit or graduation
4.15 	standards necessary for graduation.  Average daily membership
4.16 	for a pupil shall equal the number of hours of teacher contact
4.17 	time and independent study time divided by 1,020.
4.18 	(iv) For an alternative program having an independent study
4.19 	component, the commissioner shall require a description of the
4.20 	courses in the program, the kinds of independent study involved,
4.21 	the expected learning outcomes of the courses, and the means of
4.22 	measuring student performance against the expected outcomes.
4.23 	
EFFECTIVE DATE. This section is effective for revenue for
4.24 	fiscal year 2006 and later.

4.25 	Sec. 3. Minnesota Statutes 2004, section 126C.05,
4.26 	subdivision 16, is amended to read:
4.27 		Subd. 16.Free and reduced priced lunches.  The
4.28 	commissioner shall determine the number of children eligible to
4.29 	receive either a free or reduced priced lunch on October 1 each
4.30 	year. Children enrolled in a building on October 1 and
4.31 	determined to be eligible to receive free or reduced price lunch
4.32 	by December 15 of that school year shall be counted as eligible
4.33 	on October 1 for purposes of subdivision 3.The commissioner
4.34 	may use federal definitions for these purposes and may adjust
4.35 	these definitions as appropriate.  The commissioner may adopt
4.36 	reporting guidelines to assure accuracy of data counts and
5.1 	eligibility.  Districts shall use any guidelines adopted by the
5.2 	commissioner.
5.3 	
EFFECTIVE DATE. This section is effective for revenue for
5.4 	fiscal year 2006 and later.

5.5 	Sec. 4. Minnesota Statutes 2004, section 126C.10,
5.6 	subdivision 1, is amended to read:
5.7 		Subdivision 1.General education revenue.  (a) For fiscal
5.8 	year 2003, the general education revenue for each district
5.9 	equals the sum of the district's basic revenue, basic skills
5.10 	revenue, training and experience revenue, secondary sparsity
5.11 	revenue, elementary sparsity revenue, transportation sparsity
5.12 	revenue, total operating capital revenue, and equity revenue.
5.13 	(b) For fiscal year 2004 2006 and later, the general
5.14 	education revenue for each district equals the sum of the
5.15 	district's basic revenue, extended time revenue, basic skills
5.16 	revenue, training and experience revenue, secondary sparsity
5.17 	revenue, elementary sparsity revenue, transportation sparsity
5.18 	revenue, total operating capital revenue,equity revenue, and
5.19 	transition revenue.
5.20 	
EFFECTIVE DATE. This section is effective for revenue for
5.21 	fiscal year 2006 and later.

5.22 	Sec. 5. Minnesota Statutes 2004, section 126C.10,
5.23 	subdivision 2, is amended to read:
5.24 		Subd. 2.Basic revenue.  The basic revenue for each
5.25 	district equals the formula allowance times the adjusted
5.26 	marginal cost pupil units for the school year.  The formula
5.27 	allowance for fiscal year 2001 is $3,964.  The formula allowance
5.28 	for fiscal year 2002 is $4,068.  The formula allowance for
5.29 	fiscal year years 2003, 2004, and 2005 is $4,601 and for fiscal
5.30 	year 2006 and subsequent years is $4,601 $........
5.31 	
EFFECTIVE DATE. This section is effective for revenue for
5.32 	fiscal year 2006 and later.

5.33 	Sec. 6. Minnesota Statutes 2004, section 126C.13,
5.34 	subdivision 5, is amended to read:
5.35 		Subd. 5.Uses of revenue. Except as provided in sections
5.36 	126C.10, subdivision 14; 126C.12; and 126C.15,General education
6.1 	revenue may be used during the regular school year and the
6.2 	summer for general and special school purposes.
6.3 	
EFFECTIVE DATE. This section is effective for revenue for
6.4 	fiscal year 2006 and later.

6.5 	Sec. 7. REPEALER.
 6.6 	Minnesota Statutes 2004, sections 122A.60; 122A.61;
6.7 	124D.081; 124D.65; 124D.86; 126C.01, subdivision 9; 126C.05,
6.8 	subdivisions 3 and 17; 126C.10, subdivisions 3, 4, 5, 6, 7, 8,
6.9 	13, 14, 16, 17, and 18; 126C.12; and 126C.15, are repealed
6.10 	effective for revenue for fiscal year 2006 and later.