1.1 	A bill for an act
1.2 	relating to education; providing for prekindergarten
1.3 	through grade 12 education including general
1.4 	education; education excellence; special programs;
1.5 	technology, facilities, and accounting; nutrition;
1.6 	state agencies; school employee health insurance;
1.7 	technical and conforming amendments; authorizing
1.8 	rulemaking; providing for reports; appropriating
1.9 	money; amending Minnesota Statutes 2004, sections
1.10 	13.321, by adding a subdivision; 62E.02, subdivision
1.11 	23; 62E.10, subdivision 1; 62E.11, subdivision 5;
1.12 	120A.05, by adding a subdivision; 120B.02; 120B.021,
1.13 	subdivision 1, by adding a subdivision; 120B.024;
1.14 	120B.11, subdivisions 1, 2, 3, 4, 5, 8; 120B.22,
1.15 	subdivision 1; 120B.30, subdivisions 1, 1a, by adding
1.16 	a subdivision; 120B.31, subdivision 4; 121A.06,
1.17 	subdivisions 2, 3; 121A.41, subdivision 10; 121A.53;
1.18 	121A.66, subdivision 5, by adding subdivisions;
1.19 	121A.67; 122A.06, subdivision 4; 122A.12, subdivision
1.20 	2; 122A.15, by adding a subdivision; 122A.18,
1.21 	subdivision 2a; 122A.40, subdivision 5; 122A.41,
1.22 	subdivisions 2, 5a, 14; 122A.413; 122A.60, subdivision
1.23 	1, by adding subdivisions; 122A.61, subdivision 1;
1.24 	123A.05, subdivision 2; 123B.02, by adding
1.25 	subdivisions; 123B.04, subdivisions 1, 2; 123B.42, by
1.26 	adding a subdivision; 123B.49, subdivision 4;
1.27 	123B.492; 123B.53, subdivision 1; 123B.54, as amended;
1.28 	123B.75, by adding a subdivision; 123B.76, subdivision
1.29 	3; 123B.79, subdivision 6; 123B.81, subdivision 1;
1.30 	123B.82; 123B.83, subdivision 2; 123B.88, by adding a
1.31 	subdivision; 123B.92, subdivisions 1, 5; 124D.081;
1.32 	124D.09, subdivision 12; 124D.095, subdivisions 2, 4,
1.33 	8, by adding a subdivision; 124D.10, subdivision 8;
1.34 	124D.11, subdivisions 1, 2, 5, 6; 124D.111,
1.35 	subdivision 1; 124D.118, subdivision 4; 124D.40;
1.36 	124D.59, subdivision 2; 124D.66, subdivision 3;
1.37 	124D.68, subdivision 9; 124D.69, subdivision 1;
1.38 	124D.74, subdivision 1; 124D.81, subdivision 1;
1.39 	124D.84, subdivision 1; 125A.11, subdivision 1;
1.40 	125A.24; 125A.28; 125A.51; 125A.76, subdivisions 1, 3,
1.41 	4; 125A.79, subdivisions 1, 6; 126C.01, subdivision
1.42 	11; 126C.05, by adding subdivisions; 126C.10,
1.43 	subdivisions 1, 2, 13, 13a, 13b, 18, 24, 29, 30, 31,
1.44 	32, 33; 126C.13, subdivision 4, by adding
1.45 	subdivisions; 126C.17, subdivisions 1, 2, 5, 9, 11,
1.46 	13; 126C.21, subdivision 4; 126C.40, subdivision 1;
2.1 	126C.457; 126C.48, subdivisions 2, 8; 126C.63,
2.2 	subdivisions 5, 8; 127A.41, subdivision 8; 127A.45,
2.3 	subdivisions 11, 12; 127A.47, subdivisions 7, 8;
2.4 	127A.49, subdivisions 2, 3; 128C.12, subdivisions 1,
2.5 	3; 128D.11, subdivision 9; 134.31, by adding a
2.6 	subdivision; 179A.03, subdivision 14; 260C.201,
2.7 	subdivision 1; 275.14; 275.16; 297I.05, subdivision 5;
2.8 	469.177, subdivision 9; 475.61, subdivision 4; 2005
2.9 	S.F. No. 1879, article 3, section 3, subdivisions 2,
2.10 	3, 7, 8, 24, 25, 26, 27, 29, 31, 32, 35, 36, 41, 43,
2.11 	44, 50, if enacted; 2005 S.F. No. 1879, article 3,
2.12 	section 4, if enacted; 2005 S.F. No. 1879, article 3,
2.13 	section 5, if enacted; Laws 1996, chapter 412, article
2.14 	5, section 24; Laws 2003, First Special Session
2.15 	chapter 9, article 4, section 29, as amended;
2.16 	proposing coding for new law in Minnesota Statutes,
2.17 	chapters 62A; 120B; 121A; 122A; 123B; 124D; 125A;
2.18 	125B; 127A; 129C; repealing Minnesota Statutes 2004,
2.19 	sections 121A.23; 122A.414; 122A.415; 123B.83,
2.20 	subdivision 1; 125A.75, subdivision 8; 126C.10,
2.21 	subdivisions 13a, 13b, 29, 30, 31, 32, 33; 126C.42,
2.22 	subdivisions 1, 4; 126C.44; 128C.12, subdivision 4.
2.23 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

2.24 	ARTICLE 1
2.25 	GENERAL EDUCATION

2.26 	Section 1. Minnesota Statutes 2004, section 120A.05, is
2.27 	amended by adding a subdivision to read:
2.28 		Subd. 18.Kindergarten. "Kindergarten" means a program
2.29 	designed for pupils five years of age on September 1 of the
2.30 	calendar year in which the school year commences that prepares
2.31 	pupils to enter first grade the following school year.  A
2.32 	program designed for pupils younger than five years of age on
2.33 	September 1 of the calendar year in which the school year
2.34 	commences that prepares pupils to enter kindergarten the
2.35 	following school year is a prekindergarten program.
2.36 	
EFFECTIVE DATE. This section is effective the day
2.37 	following final enactment.

2.38 	Sec. 2. [121A.24] SAFE SCHOOLS; RESERVED REVENUE.
2.39 	School districts must reserve an amount of the basic
2.40 	revenue under section 126C.10, subdivision 2, equal to $27 per
2.41 	adjusted marginal cost pupil unit in fiscal year 2007 and
2.42 	later.  The amount reserved under this section must be used for
2.43 	the purposes allowed under Minnesota Statutes 2004, section
2.44 	126C.44, including to pay for school counselors, school social
2.45 	workers, school nurses, and school psychologists.

2.46 	Sec. 3. Minnesota Statutes 2004, section 123A.05,
3.1 	subdivision 2, is amended to read:
3.2 		Subd. 2.Reserve revenue.  Each district that is a member
3.3 	of an area learning center must reserve revenue in an amount
3.4 	equal to the sum of (1) at least 90 percent of the district
3.5 	average general education revenue per pupil unit minus an amount
3.6 	equal to the product of the formula allowance according to
3.7 	section 126C.10, subdivision 2, times .0485 for fiscal year 2006
3.8 	and .0458 for fiscal year 2007 and later, calculated without
3.9 	basic skills revenue,and transportation sparsity revenue, and
3.10 	the transportation portion of the transition revenue adjustment,
3.11 	times the number of pupil units attending an area learning
3.12 	center program under this section, plus (2) the amount of basic
3.13 	skills revenue generated by pupils attending the area learning
3.14 	center.  The amount of reserved revenue under this subdivision
3.15 	may only be spent on program costs associated with the area
3.16 	learning center.  Compensatory revenue must be allocated
3.17 	according to section 126C.15, subdivision 2.
3.18 	
EFFECTIVE DATE. This section is effective for revenue for
3.19 	fiscal year 2007.

3.20 	Sec. 4. Minnesota Statutes 2004, section 123B.49,
3.21 	subdivision 4, is amended to read:
3.22 		Subd. 4.Board control of extracurricular activities.
 3.23 	(a) The board may take charge of and control all extracurricular
3.24 	activities of the teachers and children of the public schools in
3.25 	the district.  Extracurricular activities means all direct and
3.26 	personal services for pupils for their enjoyment that are
3.27 	managed and operated under the guidance of an adult or staff
3.28 	member.  The board shall allow all resident pupils receiving
3.29 	instruction in a home school as defined in section 123B.36,
3.30 	subdivision 1, paragraph (a), to be eligible to fully
3.31 	participate in extracurricular activities on the same basis as
3.32 	public school students.
3.33 	(b) Extracurricular activities have all of the following
3.34 	characteristics:
3.35 	(1) they are not offered for school credit nor required for
3.36 	graduation;
4.1 	(2) they are generally conducted outside school hours, or
4.2 	if partly during school hours, at times agreed by the
4.3 	participants, and approved by school authorities;
4.4 	(3) the content of the activities is determined primarily
4.5 	by the pupil participants under the guidance of a staff member
4.6 	or other adult.
4.7 	(c) If the board does not take charge of and control
4.8 	extracurricular activities, these activities shall be
4.9 	self-sustaining with all expenses, except direct salary costs
4.10 	and indirect costs of the use of school facilities, met by dues,
4.11 	admissions, or other student fund-raising events.  The general
4.12 	fund must reflect only those salaries directly related to and
4.13 	readily identified with the activity and paid by public funds.
4.14 	Other revenues and expenditures for extra curricular activities
4.15 	must be recorded according to the "Manual of Instruction for
4.16 	Uniform Student Activities Accounting for Minnesota School
4.17 	Districts and Area Vocational-Technical Colleges." Manual for
4.18 	Activity Fund Accounting.Extracurricular activities not under
4.19 	board control must have an annual financial audit and must also
4.20 	be audited annually for compliance with this section.
4.21 	(d) If the board takes charge of and controls
4.22 	extracurricular activities, any or all costs of these activities
4.23 	may be provided from school revenues and all revenues and
4.24 	expenditures for these activities shall be recorded in the same
4.25 	manner as other revenues and expenditures of the district.
4.26 	(e) If the board takes charge of and controls
4.27 	extracurricular activities, the teachers or pupils in the
4.28 	district must not participate in such activity, nor shall the
4.29 	school name or any allied name be used in connection therewith,
4.30 	except by consent and direction of the board.

4.31 	Sec. 5. Minnesota Statutes 2004, section 123B.53,
4.32 	subdivision 1, is amended to read:
4.33 		Subdivision 1.Definitions.  (a) For purposes of this
4.34 	section, the eligible debt service revenue of a district is
4.35 	defined as follows:
4.36 	(1) the amount needed to produce between five and six
5.1 	percent in excess of the amount needed to meet when due the
5.2 	principal and interest payments on the obligations of the
5.3 	district for eligible projects according to subdivision 2,
5.4 	including the amounts necessary for repayment of energy loans
5.5 	according to section 216C.37 or sections 298.292 to 298.298,
5.6 	debt service loans and capital loans, lease purchase payments
5.7 	under section 126C.40, subdivision 2, alternative facilities
5.8 	levies under section 123B.59, subdivision 5, minus
5.9 	(2) the amount of debt service excess levy reduction for
5.10 	that school year calculated according to the procedure
5.11 	established by the commissioner.
5.12 	(b) The obligations in this paragraph are excluded from
5.13 	eligible debt service revenue:
5.14 	(1) obligations under section 123B.61;
5.15 	(2) the part of debt service principal and interest paid
5.16 	from the taconite environmental protection fund or northeast
5.17 	Minnesota economic protection trust;
5.18 	(3) obligations issued under Laws 1991, chapter 265,
5.19 	article 5, section 18, as amended by Laws 1992, chapter 499,
5.20 	article 5, section 24; and
5.21 	(4) obligations under section 123B.62.
5.22 	(c) For purposes of this section, if a preexisting school
5.23 	district reorganized under sections 123A.35 to 123A.43, 123A.46,
5.24 	and 123A.48 is solely responsible for retirement of the
5.25 	preexisting district's bonded indebtedness, capital loans or
5.26 	debt service loans, debt service equalization aid must be
5.27 	computed separately for each of the preexisting districts.
5.28 	(d) For purposes of this section, the adjusted net tax
5.29 	capacity determined according to section 127A.48 shall be
5.30 	adjusted to include a portion of the tax capacity of property
5.31 	generally exempted from ad valorem taxes under section 272.02,
5.32 	subdivisions 64 and 65, equal to the product of that tax
5.33 	capacity times the ratio of the eligible debt service revenue
5.34 	attributed to general obligation bonds to the total eligible
5.35 	debt service revenue of the district.

5.36 	Sec. 6. Minnesota Statutes 2004, section 123B.75, is
6.1 	amended by adding a subdivision to read:
6.2 		Subd. 4a.Taconite revenue. Taconite revenue received in
6.3 	a calendar year by a school district under section 298.28,
6.4 	subdivisions 4, paragraphs (b) and (c), and 11, paragraph (d),
6.5 	is fully recognized in the fiscal year in which the February
6.6 	payment falls.

6.7 	Sec. 7. Minnesota Statutes 2004, section 123B.76,
6.8 	subdivision 3, is amended to read:
6.9 		Subd. 3.Expenditures by building.  (a) For the purposes
6.10 	of this section, "building" means education site as defined in
6.11 	section 123B.04, subdivision 1.
6.12 	(b) Each district shall maintain separate accounts to
6.13 	identify general fund expenditures, excluding capital
6.14 	expenditures and pupil transportation,for each building.  All
6.15 	expenditures for regular instruction, secondary vocational
6.16 	instruction, and school administration must be reported to the
6.17 	department separately for each building.  All expenditures for
6.18 	special education instruction, instructional support services,
6.19 	and pupil support services provided within a specific building
6.20 	must be reported to the department separately for each
6.21 	building.  Salary expenditures reported by building must reflect
6.22 	actual salaries for staff at the building and must not be based
6.23 	on districtwide averages.  All other general fund expenditures
6.24 	may be reported by building or on a districtwide basis.
6.25 	(c) The department must annually report information showing
6.26 	school district general fund expenditures per pupil by program
6.27 	category for each building and estimated school district general
6.28 	fund revenue generated by pupils attending each building on its
6.29 	Web site.  For purposes of this report:
6.30 	(1) expenditures not required to be reported by building
6.31 	shall be allocated among buildings on a uniform per pupil basis;
6.32 	(2) basic skills revenue shall be allocated according to
6.33 	section 126C.10, subdivision 4;
6.34 	(3) secondary sparsity revenue and elementary sparsity
6.35 	revenue shall be allocated according to section 126C.10,
6.36 	subdivisions 7 and 8;
7.1 	(4) other general education revenue shall be allocated on a
7.2 	uniform per pupil unit basis;
7.3 	(5) first grade preparedness aid shall be allocated
7.4 	according to section 124D.081;
7.5 	(6) state and federal special education aid and Title I aid
7.6 	shall be allocated in proportion to district expenditures for
7.7 	these programs by building; and
7.8 	(7) other general fund revenues shall be allocated on a
7.9 	uniform per pupil basis, except that the department may allocate
7.10 	other revenues attributable to specific buildings directly to
7.11 	those buildings.

7.12 	Sec. 8. Minnesota Statutes 2004, section 123B.79,
7.13 	subdivision 6, is amended to read:
7.14 		Subd. 6.Account transfer for statutory operating debt.
 7.15 	On June 30 of each year, a district may make a permanent
7.16 	transfer from the general fund account entitled " undesignated 
7.17 	net unreserved general fund balance since statutory operating
7.18 	debt" to the account entitled "reserved fund balance reserve
7.19 	account for purposes of statutory operating debt reduction."
7.20 	The amount of the transfer is limited to the lesser of (a) the
7.21 	net undesignated operating unreserved general fund balance, or
7.22 	(b) the sum of the remaining statutory operating debt levies
7.23 	authorized for all future years according to section 126C.42,
7.24 	subdivision 1.  If the net undesignated operating unreserved
7.25 	general fund balance is less than zero, the district may not
7.26 	make a transfer.

7.27 	Sec. 9. Minnesota Statutes 2004, section 123B.81,
7.28 	subdivision 1, is amended to read:
7.29 		Subdivision 1.Operating debt.  The "operating debt" of a
7.30 	school district means the net negative undesignated unreserved
7.31 	general fund balance in all school district funds, other than
7.32 	capital expenditure, building construction, debt service, and
7.33 	trust and agency,calculated as of June 30 of each year in
7.34 	accordance with the uniform financial accounting and reporting
7.35 	standards for Minnesota school districts.

7.36 	Sec. 10. Minnesota Statutes 2004, section 123B.82, is
8.1 	amended to read:
8.2 	123B.82 REORGANIZATION OPERATING DEBT.
8.3 	The "reorganization operating debt" of a school district
8.4 	means the net negative undesignated unreserved general fund
8.5 	balance balances in all school district funds, other than
8.6 	building construction, debt redemption, and trust and agency,
8.7 	calculated in accordance with the uniform financial accounting
8.8 	and reporting standards for Minnesota school districts as of:
8.9 	(1) June 30 of the fiscal year before the first year that a
8.10 	district receives revenue according to section 123A.39,
8.11 	subdivision 3; or
8.12 	(2) June 30 of the fiscal year before the effective date of
8.13 	reorganization according to section 123A.46 or 123A.48.

8.14 	Sec. 11. Minnesota Statutes 2004, section 123B.83,
8.15 	subdivision 2, is amended to read:
8.16 		Subd. 2.undesignated net unreserved general fund
8.17 	balances. Beginning in fiscal year 1978 and each year
8.18 	thereafter, any A school district not subject to the provisions
8.19 	of subdivision 1 must limit its expenditures so that
8.20 	its undesignated net unreserved general fund balances do balance
8.21 	does not constitute statutory operating debt as defined in
8.22 	section 126C.42.

8.23 	Sec. 12. Minnesota Statutes 2004, section 123B.92,
8.24 	subdivision 5, is amended to read:
8.25 		Subd. 5.District reports. (a) Each district must report
8.26 	data to the department as required by the department to account
8.27 	for transportation expenditures.
8.28 	(b) Salaries and fringe benefits of district employees
8.29 	whose primary duties are other than transportation, including
8.30 	central office administrators and staff, building administrators
8.31 	and staff, teachers, social workers, school nurses, and
8.32 	instructional aides, must not be included in a district's
8.33 	transportation expenditures, except that a district may include
8.34 	salaries and benefits according to paragraph (c) for (1) an
8.35 	employee designated as the district transportation director, (2)
8.36 	an employee providing direct support to the transportation
9.1 	director, or (3) an employee providing direct transportation
9.2 	services such as a bus driver or bus aide.
9.3 	(c) Salaries and fringe benefits of other district
9.4 	employees who work part-time in transportation and part-time in
9.5 	other areas must not be included in a district's transportation
9.6 	expenditures unless the district maintains documentation of the
9.7 	employee's time spent on pupil transportation matters in the
9.8 	form and manner prescribed by the department.
9.9 	(d) Pupil transportation expenditures, excluding
9.10 	expenditures for capital outlay, leased buses, student board and
9.11 	lodging, crossing guards, and aides on buses, must be allocated
9.12 	among transportation categories based on a cost per mile, cost
9.13 	per student, cost per hour, or cost per route, regardless of
9.14 	whether the transportation services are provided on
9.15 	district-owned or contractor-owned school buses.  Expenditures
9.16 	for school bus driver salaries and fringe benefits may either be
9.17 	directly charged to the appropriate transportation category or
9.18 	may be allocated among transportation categories on a cost per
9.19 	mile, cost per student basis, cost per hour, or cost per route.
9.20 	Expenditures by private contractors or individuals who provide
9.21 	transportation exclusively in one transportation category must
9.22 	be charged directly to the appropriate transportation category.
9.23 	Transportation services provided by contractor-owned school bus
9.24 	companies incorporated under different names but owned by the
9.25 	same individual or group of individuals must be treated as the
9.26 	same company for cost allocation purposes.
9.27 	
EFFECTIVE DATE. This section is effective for expenditure
9.28 	reporting for fiscal year 2006 and later.

9.29 	Sec. 13. Minnesota Statutes 2004, section 124D.11,
9.30 	subdivision 1, is amended to read:
9.31 		Subdivision 1.General education revenue.  (a) For fiscal
9.32 	year 2006,general education revenue must be paid to a charter
9.33 	school as though it were a district.  The general education
9.34 	revenue for each adjusted marginal cost pupil unit is the state
9.35 	average general education revenue per pupil unit, plus the
9.36 	referendum equalization aid allowance in the pupil's district of
10.1 	residence, minus an amount equal to the product of the formula
10.2 	allowance according to section 126C.10, subdivision 2, times
10.3 	.0485, calculated without basic skills revenue, extended time
10.4 	revenue, transition revenue,and transportation sparsity
10.5 	revenue, plus basic skills revenue, extended time revenue,and
10.6 	transition revenue as though the school were a school district.
10.7 	The general education revenue for each extended time marginal
10.8 	cost pupil unit equals $4,378.
10.9 	(b) For fiscal year 2007 and later, general education
10.10 	revenue must be paid to a charter school as though it were a
10.11 	district.  The general education revenue for each adjusted
10.12 	marginal cost pupil unit is the state average general education
10.13 	revenue per pupil unit, plus the referendum equalization aid
10.14 	allowance in the pupil's district of residence, minus an amount
10.15 	equal to the product of the formula allowance according to
10.16 	section 126C.10, subdivision 2, times .0458, calculated without
10.17 	basic skills revenue, extended time revenue, and transportation
10.18 	sparsity revenue, plus basic skills revenue and extended time
10.19 	revenue as though the school were a school district.  The
10.20 	general education revenue for each extended time marginal cost
10.21 	pupil unit equals $4,391.  Each year, a charter school must also
10.22 	be paid an amount equal to its 2004 transition revenue allowance
10.23 	multiplied times its adjusted marginal cost pupil units for the
10.24 	current year.
10.25 	(c) Notwithstanding paragraph paragraphs (a) and (b), for
10.26 	charter schools in the first year of operation, general
10.27 	education revenue shall be computed using the number of adjusted
10.28 	pupil units in the current fiscal year.

10.29 	Sec. 14. Minnesota Statutes 2004, section 124D.11,
10.30 	subdivision 2, is amended to read:
10.31 		Subd. 2.Transportation revenue.  Transportation revenue
10.32 	must be paid to a charter school that provides transportation
10.33 	services according to section 124D.10, subdivision 16, according
10.34 	to this subdivision.  Transportation aid shall equal
10.35 	transportation revenue.
10.36 	In addition to the revenue under subdivision 1, for fiscal
11.1 	year 2006 a charter school providing transportation services
11.2 	must receive general education aid for each pupil unit equal to
11.3 	the sum of the product of (1) an amount equal to the product of
11.4 	the formula allowance according to section 126C.10, subdivision
11.5 	2, times .0485 in fiscal years 2005 and 2006 and .0458 in fiscal
11.6 	years 2007 and later, plus the transportation sparsity allowance
11.7 	for the school district in which the charter school is located,
11.8 	times (2) the adjusted marginal cost pupil units, plus the
11.9 	product of $223 times the extended time marginal cost pupil
11.10 	units.
11.11 	In addition to the revenue under subdivision 1, for fiscal
11.12 	year 2007 and later, a charter school providing transportation
11.13 	services must receive general education aid equal to the sum of
11.14 	the product of (1) the formula allowance according to section
11.15 	126C.10, subdivision 2, times .0458, plus the transportation
11.16 	sparsity allowance for the school district in which the charter
11.17 	school is located, times (2) the adjusted marginal cost pupil
11.18 	units, plus the product of $210 times the extended time marginal
11.19 	cost pupil units.

11.20 	Sec. 15. Minnesota Statutes 2004, section 124D.11,
11.21 	subdivision 6, is amended to read:
11.22 		Subd. 6.Other aid, grants, revenue.  (a) A charter
11.23 	school is eligible to receive other aids, grants, and revenue
11.24 	according to chapters 120A to 129C, as though it were a district.
11.25 	(b) Notwithstanding paragraph (a), a charter school may not
11.26 	receive aid, a grant, or revenue other than general education
11.27 	revenue if a levy is required to obtain the money, except as
11.28 	otherwise provided in this section.
11.29 	(c) Federal aid received by the state must be paid to the
11.30 	school, if it qualifies for the aid as though it were a school
11.31 	district.
11.32 	(d) A charter school may receive money from any source for
11.33 	capital facilities needs.  In the year-end report to the
11.34 	commissioner of education, the charter school shall report the
11.35 	total amount of funds received from grants and other outside
11.36 	sources.

12.1 	Sec. 16. Minnesota Statutes 2004, section 124D.68,
12.2 	subdivision 9, is amended to read:
12.3 		Subd. 9.Enrollment verification.  (a) For a pupil
12.4 	attending an eligible program full time under subdivision 3,
12.5 	paragraph (d), the department must pay 90 percent of the
12.6 	district's average general education revenue less basic skills
12.7 	revenue to the eligible program and ten percent of the
12.8 	district's average general education revenue less basic skills
12.9 	revenue to the contracting district within 30 days after the
12.10 	eligible program verifies enrollment using the form provided by
12.11 	the department.  For a pupil attending an eligible program part
12.12 	time, revenue, excluding compensatory revenue,shall be reduced
12.13 	proportionately, according to the amount of time the pupil
12.14 	attends the program, and the payments to the eligible program
12.15 	and the contracting district shall be reduced accordingly.  A
12.16 	pupil for whom payment is made according to this section may not
12.17 	be counted by any district for any purpose other than
12.18 	computation of general education revenue.  If payment is made
12.19 	for a pupil under this subdivision, a district shall not
12.20 	reimburse a program under section 124D.69 for the same
12.21 	pupil. The basic skills revenue shall be paid generated by
12.22 	pupils attending the eligible program according to section
12.23 	126C.10, subdivision 4, shall be paid to the eligible program.
12.24 	(b) The department must pay up to 100 percent of the
12.25 	revenue to the eligible program if there is an agreement to that
12.26 	effect between the school district and the eligible program.
12.27 	(c) Notwithstanding paragraphs (a) and (b), for an eligible
12.28 	program that provides chemical treatment services to students,
12.29 	the department must pay 100 percent of the revenue to the
12.30 	eligible program.

12.31 	Sec. 17. Minnesota Statutes 2004, section 124D.69,
12.32 	subdivision 1, is amended to read:
12.33 		Subdivision 1.Aid.  If a pupil enrolls in an alternative
12.34 	program, eligible under section 124D.68, subdivision 3,
12.35 	paragraph (d), or subdivision 4, operated by a private
12.36 	organization that has contracted with a school district to
13.1 	provide educational services for eligible pupils under section
13.2 	124D.68, subdivision 2, the district contracting with the
13.3 	private organization must reimburse the provider an amount equal
13.4 	to the sum of (1) at least 95 percent of the district's average
13.5 	general education less basic skills revenue per pupil unit times
13.6 	the number of pupil units for pupils attending the program., and
13.7 	(2) the amount of basic skills revenue shall be paid generated
13.8 	by pupils attending the program according to section 126C.10,
13.9 	subdivision 4. Compensatory revenue must be allocated according
13.10 	to section 126C.15, subdivision 2.For a pupil attending the
13.11 	program part time, the revenue paid to the program, excluding
13.12 	compensatory revenue,must be reduced proportionately, according
13.13 	to the amount of time the pupil attends the program, and revenue
13.14 	paid to the district shall be reduced accordingly.  Pupils for
13.15 	whom a district provides reimbursement may not be counted by the
13.16 	district for any purpose other than computation of general
13.17 	education revenue.  If payment is made to a district or program
13.18 	for a pupil under this section, the department must not make a
13.19 	payment for the same pupil under section 124D.68, subdivision 9.
13.20 	Notwithstanding sections 125A.15, 125A.51, and 125A.515, general
13.21 	education revenue for a student who receives educational
13.22 	services under this section shall be paid according to this
13.23 	section.

13.24 	Sec. 18. Minnesota Statutes 2004, section 126C.01,
13.25 	subdivision 11, is amended to read:
13.26 		Subd. 11.Net unappropriated operating unreserved general 
13.27 	fund balance.  "Net unappropriated operating unreserved general 
13.28 	fund balance" means the sum of the unreserved general fund
13.29 	balances in the general, food service, and community service
13.30 	funds minus the balances reserved for statutory operating debt
13.31 	reduction, bus purchase, severance pay, taconite, unemployment
13.32 	benefits, maintenance levy reduction, operating capital,
13.33 	disabled access, health and safety,balance and encumbrances,
13.34 	computed as of June 30 each year.

13.35 	Sec. 19. Minnesota Statutes 2004, section 126C.05, is
13.36 	amended by adding a subdivision to read:
14.1 		Subd. 5a.Extended time pupil units. (a) "Extended time
14.2 	average daily membership for a district or charter school" means
14.3 	the sum of the average daily membership according to subdivision
14.4 	8, paragraph (a), minus the sum of the average daily membership
14.5 	according to subdivision 8, paragraph (b), for pupils enrolled
14.6 	in a learning year program under section 124D.128; an area
14.7 	learning center under sections 123A.05 and 123A.06; an
14.8 	alternative program under section 124D.68, subdivision 3,
14.9 	paragraph (d); or section 124D.69.
14.10 	(b) "Extended time pupil units for a district or charter
14.11 	school" means the sum of the average daily membership in
14.12 	paragraph (a) weighted according to subdivision 1 for pupils
14.13 	included in the pupil unit calculations under subdivision 5,
14.14 	paragraph (a).
14.15 	(c) "Extended time marginal cost pupil units" means the
14.16 	greater of:
14.17 	(1) the sum of .77 times the pupil units defined in
14.18 	paragraph (b) for the current school year and .23 times the
14.19 	pupil units defined in paragraph (b) for the previous school
14.20 	year; or 
14.21 	(2) the number of extended time pupil units defined in
14.22 	paragraph (b) for the current school year.

14.23 	Sec. 20. Minnesota Statutes 2004, section 126C.05, is
14.24 	amended by adding a subdivision to read:
14.25 		Subd. 20.Project-based average daily membership. (a) To
14.26 	receive general education revenue for a pupil enrolled in a
14.27 	public school with a project-based program, a school must meet
14.28 	the requirements in this paragraph.  The school must:
14.29 	(1) register with the commissioner as a project-based
14.30 	program by May 30 of the preceding fiscal year;
14.31 	(2) provide a minimum teacher contact of no less than one
14.32 	hour per week per project-based credit for each pupil;
14.33 	(3) maintain a record system that shows when each credit or
14.34 	portion thereof was reported for membership for each pupil; and 
14.35 	(4) report pupil membership consistent with paragraph (b).
14.36 	(b) The commissioner must develop a formula for reporting
15.1 	pupil membership to compute average daily membership for each
15.2 	registered project-based school.  Average daily membership for a
15.3 	pupil in a registered project-based program is the lesser of:
15.4 	(1) 1.0; or 
15.5 	(2) the ratio of (i) the number of membership hours
15.6 	generated by project-based credits completed during the school
15.7 	year plus membership hours generated by credits completed in a
15.8 	seat-based setting to (ii) the annual required instructional
15.9 	hours at that grade level.  Membership hours for a partially
15.10 	completed project-based credit must be prorated.

15.11 	Sec. 21. Minnesota Statutes 2004, section 126C.10,
15.12 	subdivision 1, is amended to read:
15.13 		Subdivision 1.General education revenue.  (a) For fiscal
15.14 	year 2003, the general education revenue for each district
15.15 	equals the sum of the district's basic revenue, basic skills
15.16 	revenue, training and experience revenue, secondary sparsity
15.17 	revenue, elementary sparsity revenue, transportation sparsity
15.18 	revenue, total operating capital revenue, and equity revenue.
15.19 	(b) For fiscal year 2004 and later 2006, the general
15.20 	education revenue for each district equals the sum of the
15.21 	district's basic revenue, extended time revenue, basic skills
15.22 	revenue, training and experience revenue, secondary sparsity
15.23 	revenue, elementary sparsity revenue, transportation sparsity
15.24 	revenue, total operating capital revenue, equity revenue, and
15.25 	transition revenue.
15.26 	(b) For fiscal year 2007 and later, the general education
15.27 	revenue for each district equals the sum of the district's basic
15.28 	revenue, extended time revenue, basic skills revenue, training
15.29 	and experience revenue, secondary sparsity revenue, elementary
15.30 	sparsity revenue, transportation sparsity revenue, total
15.31 	operating capital revenue, and equity revenue.

15.32 	Sec. 22. Minnesota Statutes 2004, section 126C.10,
15.33 	subdivision 2, is amended to read:
15.34 		Subd. 2.Basic revenue.  The basic revenue for each
15.35 	district equals the formula allowance times the adjusted
15.36 	marginal cost pupil units for the school year.  The formula
16.1 	allowance for fiscal year 2001 2005 is $3,964 $4,601.  The
16.2 	formula allowance for fiscal year 2002 2006 is $4,068 $4,832.
16.3 	The formula allowance for fiscal year 2003 2007 and subsequent
16.4 	years is $4,601 $5,053.

16.5 	Sec. 23. Minnesota Statutes 2004, section 126C.10,
16.6 	subdivision 13, is amended to read:
16.7 		Subd. 13.Total operating capital revenue.  (a) For
16.8 	fiscal year 2000 and thereafter, total operating capital revenue
16.9 	for a district equals the amount determined under paragraph (b)
16.10 	or (c), plus $73 times the adjusted marginal cost pupil units
16.11 	for the school year.  The revenue must be placed in a reserved
16.12 	account in the general fund and may only be used according to
16.13 	paragraph (d) or subdivision 14.
16.14 	(b) For fiscal years 2000 and later, capital revenue for a
16.15 	district equals $100 times the district's maintenance cost index
16.16 	times its adjusted marginal cost pupil units for the school year.
16.17 	(c) For fiscal years 2000 and later, the revenue for a
16.18 	district that operates a program under section 124D.128, is
16.19 	increased by an amount equal to $30 times the number of marginal
16.20 	cost pupil units served at the site where the program is
16.21 	implemented.
16.22 	(d) For fiscal years 2001, 2002, and 2003, the district
16.23 	must reserve an amount equal to $5 per adjusted marginal cost
16.24 	pupil unit for telecommunication access costs.  Reserve revenue
16.25 	under this paragraph must first be used to pay for ongoing or
16.26 	recurring telecommunication access costs, including access to
16.27 	data and video connections, including Internet access.  Any
16.28 	revenue remaining after covering all ongoing or recurring access
16.29 	costs may be used for computer hardware or equipment.

16.30 	Sec. 24. Minnesota Statutes 2004, section 126C.10,
16.31 	subdivision 13a, is amended to read:
16.32 		Subd. 13a.Operating capital levy.  To obtain operating
16.33 	capital revenue for fiscal year years 2005 and later 2006, a
16.34 	district may levy an amount not more than the product of its
16.35 	operating capital revenue for the fiscal year times the lesser
16.36 	of one or the ratio of its adjusted net tax capacity per
17.1 	adjusted marginal cost pupil unit to $22,222.

17.2 	Sec. 25. Minnesota Statutes 2004, section 126C.10,
17.3 	subdivision 13b, is amended to read:
17.4 		Subd. 13b.Operating capital aid. For fiscal years 2005
17.5 	and 2006,a district's operating capital aid equals its
17.6 	operating capital revenue minus its operating capital levy times
17.7 	the ratio of the actual amount levied to the permitted levy.

17.8 	Sec. 26. Minnesota Statutes 2004, section 126C.10,
17.9 	subdivision 18, is amended to read:
17.10 		Subd. 18.Transportation sparsity revenue allowance.  (a)
17.11 	For fiscal year 2006,a district's transportation sparsity
17.12 	allowance equals the greater of zero or the result of the
17.13 	following computation:
17.14 	(i) (1) multiply the formula allowance according to
17.15 	subdivision 2, by .1469.;
17.16 	(ii) (2) multiply the result in clause (i) (1) by the
17.17 	district's sparsity index raised to the 26/100 power.;
17.18 	(iii) (3) multiply the result in clause (ii) (2) by the
17.19 	district's density index raised to the 13/100 power.;
17.20 	(iv) (4) multiply the formula allowance according to
17.21 	subdivision 2, by .0485.; and 
17.22 	(v) (5) subtract the result in clause (iv) (4) from the
17.23 	result in clause (iii) (3).
17.24 	(b) For fiscal year 2007 and later, a district's
17.25 	transportation sparsity allowance equals the greater of zero or
17.26 	the result of the following computation:
17.27 	(1) multiply the formula allowance according to subdivision
17.28 	2 by .1469;
17.29 	(2) multiply the result in clause (1) by the district's
17.30 	sparsity index raised to the 28/100 power;
17.31 	(3) multiply the result in clause (2) by the district's
17.32 	density index raised to the 13/100 power;
17.33 	(4) multiply the formula allowance according to subdivision
17.34 	2 by .0458; and 
17.35 	(5) subtract the result in clause (4) from the result in
17.36 	clause (3).
18.1 	(c) Transportation sparsity revenue is equal to the
18.2 	transportation sparsity allowance times the adjusted marginal
18.3 	cost pupil units.
18.4 	(d) Transportation sparsity revenue is equal to the
18.5 	transportation sparsity allowance times the adjusted marginal
18.6 	cost pupil units.

18.7 	Sec. 27. Minnesota Statutes 2004, section 126C.10,
18.8 	subdivision 24, is amended to read:
18.9 		Subd. 24.Equity revenue.  (a) A school district
18.10 	qualifies for equity revenue if:
18.11 	(1) the school district's adjusted marginal cost pupil unit
18.12 	amount of basic revenue, supplemental revenue, transition
18.13 	revenue,and referendum revenue is less than the value of the
18.14 	school district at or immediately above the 95th percentile of
18.15 	school districts in its equity region for those revenue
18.16 	categories; and
18.17 	(2) the school district's administrative offices are not
18.18 	located in a city of the first class on July 1, 1999.
18.19 	(b) Equity revenue for a qualifying district that receives
18.20 	referendum revenue under section 126C.17, subdivision 4, equals
18.21 	the product of (1) the district's adjusted marginal cost pupil
18.22 	units for that year; times (2) the sum of (i) $13, plus (ii)
18.23 	$75, times the school district's equity index computed under
18.24 	subdivision 27.
18.25 	(c) Equity revenue for a qualifying district that does not
18.26 	receive referendum revenue under section 126C.17, subdivision 4,
18.27 	equals the product of the district's adjusted marginal cost
18.28 	pupil units for that year times $13.
18.29 	(d) For fiscal year 2007 and later, referendum revenue for
18.30 	the purpose of this section does not include referendum
18.31 	conversion allowance authority transferred to the referendum
18.32 	allowance in fiscal year 2007 under section 126C.17, subdivision
18.33 	13, by the vote of a school board.  Referendum conversion
18.34 	allowance authority added to the referendum allowance under
18.35 	section 126C.17, subdivision 1, shall be included in the
18.36 	referendum for the purposes of this section if a school district
19.1 	reauthorizes the revenue at an election according to section
19.2 	126C.17, subdivision 9.

19.3 	Sec. 28. Minnesota Statutes 2004, section 126C.10,
19.4 	subdivision 29, is amended to read:
19.5 		Subd. 29.Equity levy.  To obtain equity revenue for
19.6 	fiscal year years 2005 and later 2006, a district may levy an
19.7 	amount not more than the product of its equity revenue for the
19.8 	fiscal year times the lesser of one or the ratio of its
19.9 	referendum market value per resident marginal cost pupil unit to
19.10 	$476,000.

19.11 	Sec. 29. Minnesota Statutes 2004, section 126C.10,
19.12 	subdivision 30, is amended to read:
19.13 		Subd. 30.Equity aid. For fiscal years 2005 and 2006,a
19.14 	district's equity aid equals its equity revenue minus its equity
19.15 	levy times the ratio of the actual amount levied to the
19.16 	permitted levy.

19.17 	Sec. 30. Minnesota Statutes 2004, section 126C.10,
19.18 	subdivision 31, is amended to read:
19.19 		Subd. 31.Transition revenue.  (a) A district's
19.20 	transition allowance for fiscal years 2004 through 2008 2006 
19.21 	equals the greater of zero or the product of the ratio of the
19.22 	number of adjusted marginal cost pupil units the district would
19.23 	have counted for fiscal year 2004 under Minnesota Statutes 2002
19.24 	to the district's adjusted marginal cost pupil units for fiscal
19.25 	year 2004, times the difference between:  (1) the lesser of the
19.26 	district's general education revenue per adjusted marginal cost
19.27 	pupil unit for fiscal year 2003 or the amount of general
19.28 	education revenue the district would have received per adjusted
19.29 	marginal cost pupil unit for fiscal year 2004 according to
19.30 	Minnesota Statutes 2002, and (2) the district's general
19.31 	education revenue for fiscal year 2004 excluding transition
19.32 	revenue divided by the number of adjusted marginal cost pupil
19.33 	units the district would have counted for fiscal year 2004 under
19.34 	Minnesota Statutes 2002.  A district's transition allowance for
19.35 	fiscal year 2009 2007 and later is zero.
19.36 	(b) A district's transition revenue for fiscal year years 
20.1 	2004 and later 2005 equals the product of the district's
20.2 	transition allowance times the district's adjusted marginal cost
20.3 	pupil units.
20.4 	(c) A district's transition revenue for fiscal year 2006
20.5 	equals the sum of (1) the product of the district's transition
20.6 	allowance times the district's adjusted marginal cost pupil
20.7 	units, plus (2) the amount of referendum revenue under section
20.8 	126C.17 and general education revenue, excluding transition
20.9 	revenue, for fiscal year 2004 attributable to pupils four or
20.10 	five years of age on September 1, 2003, enrolled in a
20.11 	prekindergarten program implemented by the district before July
20.12 	1, 2003, and reported as kindergarten pupils under section
20.13 	126C.05, subdivision 1, for fiscal year 2004 multiplied times
20.14 	0.01, plus (3) the amount of compensatory education revenue
20.15 	under subdivision 3 for fiscal year 2005 attributable to pupils
20.16 	four years of age on September 1, 2003, enrolled in a
20.17 	prekindergarten program implemented by the district before July
20.18 	1, 2003, and reported as kindergarten pupils under section
20.19 	126C.05, subdivision 1, for fiscal year 2004 multiplied times
20.20 	0.01.

20.21 	Sec. 31. Minnesota Statutes 2004, section 126C.10,
20.22 	subdivision 32, is amended to read:
20.23 		Subd. 32.Transition levy.  To obtain transition revenue
20.24 	for fiscal year years 2005 and later 2006, a district may levy
20.25 	an amount not more than the product of its transition revenue
20.26 	for the fiscal year times the lesser of one or the ratio of its
20.27 	referendum market value per resident marginal cost pupil unit to
20.28 	$476,000.

20.29 	Sec. 32. Minnesota Statutes 2004, section 126C.10,
20.30 	subdivision 33, is amended to read:
20.31 		Subd. 33.Transition aid.  (a) For fiscal year 2004, a
20.32 	district's transition aid equals its transition revenue.
20.33 	(b) For fiscal year years 2005 and later 2006, a district's
20.34 	transition aid equals its transition revenue minus its
20.35 	transition levy times the ratio of the actual amount levied to
20.36 	the permitted levy.

21.1 	Sec. 33. Minnesota Statutes 2004, section 126C.13, is
21.2 	amended by adding a subdivision to read:
21.3 		Subd. 3a.Consolidated tax rate. The commissioner must
21.4 	establish the consolidated tax rate by July 1 of each year for
21.5 	levies payable in the following year.  The consolidated tax
21.6 	capacity rate must be a rate, rounded up to the nearest
21.7 	hundredth of a percent, that, when applied to the adjusted net
21.8 	tax capacity for all districts, raises the amount specified in
21.9 	this subdivision.  The consolidated tax rate must be the rate
21.10 	that raises $91,097,300 for fiscal year 2007, $110,770,300 for
21.11 	fiscal year 2008, and $122,380,100 for fiscal year 2009 and
21.12 	later years.  The consolidated tax rate may not be changed due
21.13 	to changes or corrections made to a district's adjusted net tax
21.14 	capacity after the tax rate has been established.

21.15 	Sec. 34. Minnesota Statutes 2004, section 126C.13, is
21.16 	amended by adding a subdivision to read:
21.17 		Subd. 3b.Consolidated levy. To obtain general education
21.18 	revenue, a district may levy an amount not to exceed the
21.19 	consolidated tax rate times the adjusted net tax capacity of the
21.20 	district for the preceding year.  If the amount of the
21.21 	consolidated levy would exceed the general education revenue,
21.22 	the consolidated levy must be determined according to
21.23 	subdivision 3c.

21.24 	Sec. 35. Minnesota Statutes 2004, section 126C.13, is
21.25 	amended by adding a subdivision to read:
21.26 		Subd. 3c.Consolidated levy; districts off the
21.27 	formula. If the amount of the consolidated levy for a district
21.28 	exceeds the district's general education revenue, the amount of
21.29 	the consolidated levy must be limited to the following:
21.30 	(1) the district's general education revenue; minus 
21.31 	(2) payments made for the same school year according to
21.32 	section 126C.21, subdivision 3.
21.33 	For purposes of statutory cross-reference, a levy made
21.34 	according to this subdivision shall be construed to be the levy
21.35 	made according to subdivision 3b.

21.36 	Sec. 36. Minnesota Statutes 2004, section 126C.13,
22.1 	subdivision 4, is amended to read:
22.2 		Subd. 4.General education aid.  (a) For fiscal year
22.3 	2004, a district's general education aid is the sum of the
22.4 	following amounts:
22.5 	(1) general education revenue;
22.6 	(2) shared time aid according to section 126C.01,
22.7 	subdivision 7;
22.8 	(3) referendum aid according to section 126C.17; and 
22.9 	(4) online learning aid according to section 126C.24.
22.10 	(b) For fiscal year years 2005 and later 2006, a
22.11 	district's general education aid is the sum of the following
22.12 	amounts:
22.13 	(1) general education revenue, excluding equity revenue,
22.14 	total operating capital, and transition revenue;
22.15 	(2) operating capital aid according to section 126C.10,
22.16 	subdivision 13b;
22.17 	(3) equity aid according to section 126C.10, subdivision
22.18 	30;
22.19 	(4) transition aid according to section 126C.10,
22.20 	subdivision 33;
22.21 	(5) shared time aid according to section 126C.01,
22.22 	subdivision 7;
22.23 	(6) referendum aid according to section 126C.17; and
22.24 	(7) online learning aid according to section 126C.24 
22.25 	124D.0962.
22.26 	(b) For fiscal year 2007 and later, a district's general
22.27 	education aid is the sum of the following amounts:
22.28 	(1) the product of:
22.29 	(i) the difference between the general education revenue
22.30 	and the consolidated levy; times 
22.31 	(ii) the ratio of the actual amount levied to the permitted
22.32 	levy;
22.33 	(2) shared time aid according to section 126C.01,
22.34 	subdivision 7;
22.35 	(3) referendum aid according to section 126C.17; and 
22.36 	(4) online learning aid according to section 126C.24.

23.1 	Sec. 37. Minnesota Statutes 2004, section 126C.17,
23.2 	subdivision 1, is amended to read:
23.3 		Subdivision 1.Referendum allowance.  (a) For fiscal year
23.4 	2003 2006 and later, a district's initial referendum revenue
23.5 	allowance equals the sum of the allowance under section 126C.16,
23.6 	subdivision 2, plus any additional allowance per resident
23.7 	marginal cost pupil unit authorized under subdivision 9 before
23.8 	May 1, 2001, for fiscal year 2002 and later, plus the referendum
23.9 	conversion allowance approved under subdivision 13, minus $415.
23.10 	For districts with more than one referendum authority, the
23.11 	reduction must be computed separately for each authority.  The
23.12 	reduction must be applied first to the referendum conversion
23.13 	allowance and next to the authority with the earliest expiration
23.14 	date.  A district's initial referendum revenue allowance may not
23.15 	be less than zero.
23.16 	(b) For fiscal year 2003, a district's referendum revenue
23.17 	allowance equals the initial referendum allowance plus any
23.18 	additional allowance per resident marginal cost pupil unit
23.19 	authorized under subdivision 9 between April 30, 2001, and
23.20 	December 30, 2001, for fiscal year 2003 and later.
23.21 	(c) For fiscal year 2004 and later 2006, a district's
23.22 	referendum revenue allowance equals the sum of:
23.23 	(1) the product of (i) the ratio of the resident marginal
23.24 	cost pupil units the district would have counted for fiscal year
23.25 	2004 under Minnesota Statutes 2002, section 126C.05, to the
23.26 	district's resident marginal cost pupil units for fiscal year
23.27 	2004, times (ii) the initial referendum allowance plus any
23.28 	additional allowance per resident marginal cost pupil unit
23.29 	authorized under subdivision 9 between April 30, 2001, and May
23.30 	30, 2003, for fiscal year 2003 and later, plus
23.31 	(2) any additional allowance per resident marginal cost
23.32 	pupil unit authorized under subdivision 9 after May 30, 2003,
23.33 	for fiscal year 2005 and later.
23.34 	(c) For fiscal year 2007 and later, a district's referendum
23.35 	revenue allowance equals the sum of:  (1) the referendum
23.36 	allowance the district would have received for fiscal year 2007
24.1 	and later under Minnesota Statutes 2004, section 126C.17,
24.2 	subdivision 1, paragraph (c), based on elections held under
24.3 	subdivision 9, before May 30, 2005, plus any additional
24.4 	allowance per resident pupil unit authorized under subdivision 9
24.5 	after May 30, 2005, plus the referendum conversion allowance
24.6 	approved under subdivision 13.

24.7 	Sec. 38. Minnesota Statutes 2004, section 126C.17,
24.8 	subdivision 2, is amended to read:
24.9 		Subd. 2.Referendum allowance limit.  (a) Notwithstanding
24.10 	subdivision 1, for fiscal year 2003, a district's referendum
24.11 	allowance must not exceed the greater of:
24.12 	(1) the sum of a district's referendum allowance for fiscal
24.13 	year 1994 times 1.162 plus its referendum conversion allowance
24.14 	for fiscal year 2003, minus $415;
24.15 	(2) 18.2 percent of the formula allowance;
24.16 	(3) for a newly reorganized district created on July 1,
24.17 	2002, the referendum revenue authority for each reorganizing
24.18 	district in the year preceding reorganization divided by its
24.19 	resident marginal cost pupil units for the year preceding
24.20 	reorganization, minus $415; or 
24.21 	(4) for a newly reorganized district created after July 1,
24.22 	2002, the referendum revenue authority for each reorganizing
24.23 	district in the year preceding reorganization divided by its
24.24 	resident marginal cost pupil units for the year preceding
24.25 	reorganization.
24.26 	(b) Notwithstanding subdivision 1, for fiscal year 2004 and
24.27 	later, a district's referendum allowance must not exceed the
24.28 	greater of:
24.29 	(1) the sum of:  (i) a district's referendum allowance for
24.30 	fiscal year 1994 times 1.177 times the annual inflationary
24.31 	increase as calculated under paragraph (c) (b) plus (ii) its
24.32 	referendum conversion allowance for fiscal year 2003, minus
24.33 	(iii) $415;
24.34 	(2) the greater of (i) 18.6 percent of the formula
24.35 	allowance or (ii) $855.79 times the annual inflationary increase
24.36 	as calculated under paragraph (c) (b); or
25.1 	(3) for a newly reorganized district created after July 1,
25.2 	2002, the referendum revenue authority for each reorganizing
25.3 	district in the year preceding reorganization divided by its
25.4 	resident marginal cost pupil units for the year preceding
25.5 	reorganization.
25.6 	(c) (b) For purposes of this subdivision, for fiscal year
25.7 	2005 and later, "inflationary increase" means one plus the
25.8 	percentage change in the Consumer Price Index for urban
25.9 	consumers, as prepared by the United States Bureau of Labor
25.10 	Standards, for the current fiscal year to fiscal year 2004.  For
25.11 	fiscal years 2009 and later, for purposes of paragraph (b),
25.12 	clause (1), the inflationary increase equals the inflationary
25.13 	increase for fiscal year 2008 plus one-fourth of the percentage
25.14 	increase in the formula allowance for that year compared with
25.15 	the formula allowance for fiscal year 2008.

25.16 	Sec. 39. Minnesota Statutes 2004, section 126C.17,
25.17 	subdivision 5, is amended to read:
25.18 		Subd. 5.Referendum equalization revenue.  (a) For fiscal
25.19 	year 2003 and later, a district's referendum equalization
25.20 	revenue equals the sum of the first tier referendum equalization
25.21 	revenue and the second tier referendum equalization revenue.
25.22 	(b) A district's first tier referendum equalization revenue
25.23 	equals the district's first tier referendum equalization
25.24 	allowance times the district's resident marginal cost pupil
25.25 	units for that year.
25.26 	(c) For fiscal years 2003 and 2004, a district's first tier
25.27 	referendum equalization allowance equals the lesser of the
25.28 	district's referendum allowance under subdivision 1 or $126.
25.29 	For fiscal year 2005, a district's first tier referendum
25.30 	equalization allowance equals the lesser of the district's
25.31 	referendum allowance under subdivision 1 or $405.  For fiscal
25.32 	year 2006 and later, a district's first tier referendum
25.33 	equalization allowance equals the lesser of the district's
25.34 	referendum allowance under subdivision 1 or $500. For fiscal
25.35 	year 2007 and later, a district's first tier referendum
25.36 	equalization allowance equals the lesser of the district's
26.1 	referendum allowance under subdivision 1 or $524.
26.2 	(d) A district's second tier referendum equalization
26.3 	revenue equals the district's second tier referendum
26.4 	equalization allowance times the district's resident marginal
26.5 	cost pupil units for that year.
26.6 	(e) A district's second tier referendum equalization
26.7 	allowance equals the lesser of the district's referendum
26.8 	allowance under subdivision 1 or 18.6 percent of the formula
26.9 	allowance, minus the district's first tier referendum
26.10 	equalization allowance.
26.11 	(f) Notwithstanding paragraph (e), the second tier
26.12 	referendum allowance for a district qualifying for secondary
26.13 	sparsity revenue under section 126C.10, subdivision 7, or
26.14 	elementary sparsity revenue under section 126C.10, subdivision
26.15 	8, equals the district's referendum allowance under subdivision
26.16 	1 minus the district's first tier referendum equalization
26.17 	allowance.

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

29.19 	Sec. 41. Minnesota Statutes 2004, section 126C.17,
29.20 	subdivision 13, is amended to read:
29.21 		Subd. 13.Referendum conversion allowance.  (a) A school
29.22 	district that received supplemental or transition revenue in
29.23 	fiscal year 2002 may convert its supplemental revenue conversion
29.24 	allowance and transition revenue conversion allowance to
29.25 	additional referendum allowance under subdivision 1 for fiscal
29.26 	year 2003 and thereafter.  A majority of the school board must
29.27 	approve the conversion at a public meeting before November 1,
29.28 	2001.  For a district with other referendum authority, the
29.29 	referendum conversion allowance approved by the board continues
29.30 	until the portion of the district's other referendum authority
29.31 	with the earliest expiration date after June 30, 2006, expires.
29.32 	For a district with no other referendum authority, the
29.33 	referendum conversion allowance approved by the board continues
29.34 	until June 30, 2012.
29.35 	(b) A school district that received transition revenue in
29.36 	fiscal year 2004 may convert all or part of its transition
30.1 	revenue to referendum revenue with voter approval in a
30.2 	referendum called for the purpose.  The referendum must be held
30.3 	in accordance with subdivision 9, except that the ballot may
30.4 	state that existing transition revenue authority is being
30.5 	canceled or is expiring.  In this case, the ballot shall compare
30.6 	the proposed referendum allowance to the canceled or expiring
30.7 	transition revenue allowance.  For purposes of this comparison,
30.8 	the canceled or expiring transition revenue allowance per
30.9 	adjusted marginal cost pupil unit shall be converted to an
30.10 	allowance per resident marginal cost pupil unit based on the
30.11 	district's ratio of adjusted marginal cost pupil units to
30.12 	resident marginal cost pupil units for the preceding fiscal
30.13 	year.  The referendum must be held on the first Tuesday after
30.14 	the first Monday in November.  The notice required under section
30.15 	275.60 may be modified to read:  "BY VOTING 'YES' ON THIS BALLOT
30.16 	QUESTION, YOU MAY BE VOTING FOR A PROPERTY TAX INCREASE."
30.17 	Elections under this paragraph must be held in 2007 or
30.18 	earlier.its transition revenue 2004 conversion allowance to
30.19 	additional referendum allowance under subdivision 1 for fiscal
30.20 	year 2007 and thereafter.  A majority of the school board must
30.21 	approve the conversion at a public meeting before November 1,
30.22 	2005.  For a district with other referendum authority, as of
30.23 	July 1, 2005, that extends beyond June 30, 2010, the referendum
30.24 	conversion allowance approved by the board under this paragraph
30.25 	continues until the portion of the district's other referendum
30.26 	authority, as of July 1, 2005, with the earliest expiration date
30.27 	after June 30, 2010, expires.  For a district with no other
30.28 	referendum authority, as of July 1, 2005, that extends beyond
30.29 	June 30, 2010, the referendum conversion allowance approved by
30.30 	the board continues until June 30, 2016.

30.31 	Sec. 42. Minnesota Statutes 2004, section 126C.21,
30.32 	subdivision 4, is amended to read:
30.33 		Subd. 4.Taconite deductions. (1) Notwithstanding any
30.34 	provisions of any other law to the contrary, the adjusted net
30.35 	tax capacity used in calculating general education aid may
30.36 	include only that property that is currently taxable in the
31.1 	district.
31.2 	(2) For districts that received payments have revenue under
31.3 	sections 298.018; 298.225; 229.24 to 298.28, excluding 298.26
31.4 	and 298.28, subdivision 4, paragraph (d); 298.34 to 298.39;
31.5 	298.391 to 298.396; and 298.405; and 477A.15, any law imposing a
31.6 	tax upon severed mineral values; or recognized revenue under
31.7 	section 477A.15;the general education aid must be reduced in
31.8 	the final adjustment payment by (1) the difference between the
31.9 	dollar amount of the payments received revenue recognized 
31.10 	pursuant to those sections, or revenue recognized under section
31.11 	477A.15 in for the fiscal year to which the final adjustment is
31.12 	attributable and , less (2) the amount that was calculated,
31.13 	pursuant to section 126C.48, subdivision 8, as a reduction of
31.14 	the levy attributable to the fiscal year to which the final
31.15 	adjustment is attributable.  If the final adjustment of a
31.16 	district's general education aid for a fiscal year is a negative
31.17 	amount because of this clause subdivision, the next fiscal
31.18 	year's general education aid to that district must be reduced by
31.19 	this negative amount in the following manner:  there must be
31.20 	withheld from each scheduled general education aid payment due
31.21 	the district in such fiscal year, 15 percent of the total
31.22 	negative amount, until the total negative amount has been
31.23 	withheld.  The amount reduced from general education aid
31.24 	pursuant to this clause subdivision must be recognized as reduce 
31.25 	revenue in the fiscal year to which the final adjustment payment
31.26 	is attributable.

31.27 	Sec. 43. Minnesota Statutes 2004, section 126C.48,
31.28 	subdivision 2, is amended to read:
31.29 		Subd. 2.Notice to commissioner; forms.  By October 7 of
31.30 	each year each district must notify the commissioner of the
31.31 	proposed levies in compliance with the levy limitations of this
31.32 	chapter and chapters 120B, 122A, 123A, 123B, 124D, 125A, 127A,
31.33 	and 136D.  By January 15 7 of each year each district must
31.34 	notify the commissioner of the final levies certified.  The
31.35 	commissioner shall prescribe the form of these notifications and
31.36 	may request any additional information necessary to compute
32.1 	certified levy amounts.

32.2 	Sec. 44. Minnesota Statutes 2004, section 126C.48,
32.3 	subdivision 8, is amended to read:
32.4 		Subd. 8.Taconite payment and other reductions.  (1)
32.5 	Reductions in levies pursuant to subdivision 1 must be made
32.6 	prior to the reductions in clause (2).
32.7 	(2) Notwithstanding any other law to the contrary,
32.8 	districts which received payments that have revenue pursuant to
32.9 	sections 298.018; 298.225; 298.24 to 298.28, except an amount
32.10 	distributed under section sections 298.26;298.28, subdivision
32.11 	4, paragraph paragraphs (c), clause (ii), and (d); 298.34 to
32.12 	298.39; 298.391 to 298.396; 298.405; 477A.15;and any law
32.13 	imposing a tax upon severed mineral values; or recognized
32.14 	revenue under section 477A.15 must not include a portion of
32.15 	these aids in their permissible levies pursuant to those
32.16 	sections, but instead must reduce the permissible levies
32.17 	authorized by this chapter and chapters 120B, 122A, 123A, 123B,
32.18 	124A, 124D, 125A, and 127A by the greater of the following:95
32.19 	percent of the previous year's revenue specified under this
32.20 	clause.
32.21 	(a) an amount equal to 50 percent of the total dollar
32.22 	amount of the payments received pursuant to those sections or
32.23 	revenue recognized under section 477A.15 in the previous fiscal
32.24 	year; or 
32.25 	(b) an amount equal to the total dollar amount of the
32.26 	payments received pursuant to those sections or revenue
32.27 	recognized under section 477A.15 in the previous fiscal year
32.28 	less the product of the same dollar amount of payments or
32.29 	revenue times five percent.
32.30 	For levy year 2002 only, 77 percent of the amounts
32.31 	distributed under section 298.225 and 298.28, and 100 percent of
32.32 	the amounts distributed under sections 298.018; 298.34 to
32.33 	298.39; 298.391 to 298.396; 298.405; and any law imposing a tax
32.34 	upon severed mineral values, or recognized revenue under section
32.35 	477A.15, shall be used for purposes of the calculations under
32.36 	this paragraph.  For levy year 2003 only, the levy reductions
33.1 	under this subdivision must be calculated as if section 298.28,
33.2 	subdivision 4, paragraph (f), did not apply for the 2003
33.3 	distribution.
33.4 	(3) The amount of any voter approved referendum, facilities
33.5 	down payment, and debt levies shall not be reduced by more than
33.6 	50 percent under this subdivision.  In administering this
33.7 	paragraph, the commissioner shall first reduce the nonvoter
33.8 	approved levies of a district; then, if any payments, severed
33.9 	mineral value tax revenue or recognized revenue under paragraph
33.10 	(2) remains, the commissioner shall reduce any voter approved
33.11 	referendum levies authorized under section 126C.17; then, if any
33.12 	payments, severed mineral value tax revenue or recognized
33.13 	revenue under paragraph (2) remains, the commissioner shall
33.14 	reduce any voter approved facilities down payment levies
33.15 	authorized under section 123B.63 and then, if any payments,
33.16 	severed mineral value tax revenue or recognized revenue under
33.17 	paragraph (2) remains, the commissioner shall reduce any voter
33.18 	approved debt levies.
33.19 	(4) Before computing the reduction pursuant to this
33.20 	subdivision of the health and safety levy authorized by sections
33.21 	123B.57 and 126C.40, subdivision 5, the commissioner shall
33.22 	ascertain from each affected school district the amount it
33.23 	proposes to levy under each section or subdivision.  The
33.24 	reduction shall be computed on the basis of the amount so
33.25 	ascertained.
33.26 	(5) To the extent the levy reduction calculated under
33.27 	paragraph (2) exceeds the limitation in paragraph (3), an amount
33.28 	equal to the excess must be distributed from the school
33.29 	district's distribution under sections 298.225, 298.28, and
33.30 	477A.15 in the following year to the cities and townships within
33.31 	the school district in the proportion that their taxable net tax
33.32 	capacity within the school district bears to the taxable net tax
33.33 	capacity of the school district for property taxes payable in
33.34 	the year prior to distribution.  No city or township shall
33.35 	receive a distribution greater than its levy for taxes payable
33.36 	in the year prior to distribution.  The commissioner of revenue
34.1 	shall certify the distributions of cities and towns under this
34.2 	paragraph to the county auditor by September 30 of the year
34.3 	preceding distribution.  The county auditor shall reduce the
34.4 	proposed and final levies of cities and towns receiving
34.5 	distributions by the amount of their distribution.
34.6 	Distributions to the cities and towns shall be made at the times
34.7 	provided under section 298.27.

34.8 	Sec. 45. Minnesota Statutes 2004, section 127A.45,
34.9 	subdivision 11, is amended to read:
34.10 		Subd. 11.Payment percentage for reimbursement aids.  One
34.11 	hundred percent of the aid for the previous fiscal year must be
34.12 	paid in the current year for the following aids:
34.13 	telecommunications/Internet access equity aid according to
34.14 	section 125B.26,special education special pupil aid according
34.15 	to section 125A.75, subdivision 3, aid for litigation costs
34.16 	according to section 125A.75, subdivision 8, aid for
34.17 	court-placed special education expenses according to section
34.18 	125A.79, subdivision 4, and aid for special education
34.19 	out-of-state tuition according to section 125A.79, subdivision 8
34.20 	and shared time aid according to section 126C.01, subdivision 7.

34.21 	Sec. 46. Minnesota Statutes 2004, section 127A.47,
34.22 	subdivision 8, is amended to read:
34.23 		Subd. 8.Charter schools.  (a) The general education aid
34.24 	for districts must be adjusted for each pupil attending a
34.25 	charter school under section 124D.10.  The adjustments must be
34.26 	made according to this subdivision.
34.27 	(b) General education aid paid to a district in which a
34.28 	charter school not providing transportation according to section
34.29 	124D.10, subdivision 16, is located must be increased by an
34.30 	amount equal to the product of:  (1) the sum of an amount equal
34.31 	to the product of the formula allowance according to section
34.32 	126C.10, subdivision 2, times .0485 for fiscal years 2005 and
34.33 	2006 and times .0458 for fiscal year 2007 and later, plus the
34.34 	transportation sparsity allowance for the district; times (2)
34.35 	the pupil units attributable to the pupil.

34.36 	Sec. 47. Minnesota Statutes 2004, section 127A.49,
35.1 	subdivision 2, is amended to read:
35.2 		Subd. 2.Abatements.  Whenever by virtue of chapter 278,
35.3 	sections 270.07, 375.192, or otherwise, the net tax capacity of
35.4 	any district for any taxable year is changed after the taxes for
35.5 	that year have been spread by the county auditor and the local
35.6 	tax rate as determined by the county auditor based upon the
35.7 	original net tax capacity is applied upon the changed net tax
35.8 	capacities, the county auditor shall, prior to February 1 of
35.9 	each year, certify to the commissioner of education the amount
35.10 	of any resulting net revenue loss that accrued to the district
35.11 	during the preceding year.  Each year, the commissioner shall
35.12 	pay an abatement adjustment to the district in an amount
35.13 	calculated according to the provisions of this subdivision.
35.14 	This amount shall be deducted from the amount of the levy
35.15 	authorized by section 126C.46.  The amount of the abatement
35.16 	adjustment must be the product of:
35.17 	(1) the net revenue loss as certified by the county
35.18 	auditor, times
35.19 	(2) the ratio of:
35.20 	(i) the sum of the amounts of the district's certified levy
35.21 	in the third preceding year according to the following:
35.22 	(A) section 123B.57, if the district received health and
35.23 	safety aid according to that section for the second preceding
35.24 	year;
35.25 	(B) section 124D.20, if the district received aid for
35.26 	community education programs according to that section for the
35.27 	second preceding year;
35.28 	(C) section 124D.135, subdivision 3, if the district
35.29 	received early childhood family education aid according to
35.30 	section 124D.135 for the second preceding year; and
35.31 	(D) section 126C.17, subdivision 6, if the district
35.32 	received referendum equalization aid according to that section
35.33 	for the second preceding year; to
35.34 	(ii) the total amount of the district's certified levy in
35.35 	the third preceding December, plus or minus auditor's
35.36 	adjustments.

36.1 	Sec. 48. Minnesota Statutes 2004, section 127A.49,
36.2 	subdivision 3, is amended to read:
36.3 		Subd. 3.Excess tax increment.  (a) If a return of excess
36.4 	tax increment is made to a district pursuant to section sections 
36.5 	469.176, subdivision 2, and 469.177, subdivision 9,or upon
36.6 	decertification of a tax increment district, the school
36.7 	district's aid and levy limitations must be adjusted for the
36.8 	fiscal year in which the excess tax increment is paid under the
36.9 	provisions of this subdivision.
36.10 	(b) An amount must be subtracted from the district's aid
36.11 	for the current fiscal year equal to the product of:
36.12 	(1) the amount of the payment of excess tax increment to
36.13 	the district, times
36.14 	(2) the ratio of:
36.15 	(i) the sum of the amounts of the district's certified levy
36.16 	for the fiscal year in which the excess tax increment is paid
36.17 	according to the following:
36.18 	(A) section 123B.57, if the district received health and
36.19 	safety aid according to that section for the second preceding
36.20 	year;
36.21 	(B) section 124D.20, if the district received aid for
36.22 	community education programs according to that section for the
36.23 	second preceding year;
36.24 	(C) section 124D.135, subdivision 3, if the district
36.25 	received early childhood family education aid according to
36.26 	section 124D.135 for the second preceding year; and
36.27 	(D) section 126C.17, subdivision 6, if the district
36.28 	received referendum equalization aid according to that section
36.29 	for the second preceding year; to
36.30 	(ii) the total amount of the district's certified levy for
36.31 	the fiscal year, plus or minus auditor's adjustments.
36.32 	(c) An amount must be subtracted from the school district's
36.33 	levy limitation for the next levy certified equal to the
36.34 	difference between:
36.35 	(1) the amount of the distribution of excess increment; and
36.36 	(2) the amount subtracted from aid pursuant to clause (a).
37.1 	If the aid and levy reductions required by this subdivision
37.2 	cannot be made to the aid for the fiscal year specified or to
37.3 	the levy specified, the reductions must be made from aid for
37.4 	subsequent fiscal years, and from subsequent levies.  The school
37.5 	district must use the payment of excess tax increment to replace
37.6 	the aid and levy revenue reduced under this subdivision.
37.7 	(d) This subdivision applies only to the total amount of
37.8 	excess increments received by a district for a calendar year
37.9 	that exceeds $25,000.

37.10 	Sec. 49. Minnesota Statutes 2004, section 275.14, is
37.11 	amended to read:
37.12 	275.14 CENSUS.
37.13 	For the purposes of sections 275.124 to 275.16, the
37.14 	population of a city shall be that established by the last
37.15 	federal census, by a special census taken by the United States
37.16 	Bureau of the Census, by an estimate made by the Metropolitan
37.17 	Council, or by the state demographer made according to section
37.18 	4A.02, whichever has the latest stated date of count or
37.19 	estimate, before July 2 of the current levy year.The
37.20 	population of a school district must be as certified by the
37.21 	Department of Education from the most recent federal census.  In
37.22 	any year in which no federal census is taken pursuant to law in
37.23 	any school district affected by sections 275.124 to
37.24 	275.16 124D.20 and 124D.531a population estimate may be made
37.25 	and submitted to the state demographer for approval as
37.26 	hereinafter provided.  The school board of a school district, in
37.27 	case it desires a population estimate, shall pass a resolution
37.28 	by July 1 containing a current estimate of the population of the
37.29 	school district and shall submit the resolution to the state
37.30 	demographer.  The resolution shall describe the criteria on
37.31 	which the estimate is based and shall be in a form and
37.32 	accompanied by the data prescribed by the state demographer.
37.33 	The state demographer shall determine whether or not the
37.34 	criteria and process described in the resolution provide a
37.35 	reasonable basis for the population estimate and shall inform
37.36 	the school district of that determination within 30 days of
38.1 	receipt of the resolution.  If the state demographer determines
38.2 	that the criteria and process described in the resolution do not
38.3 	provide a reasonable basis for the population estimate, the
38.4 	resolution shall be of no effect.  If the state demographer
38.5 	determines that the criteria and process do provide a reasonable
38.6 	basis for the population estimate, the estimate shall be treated
38.7 	as the population of the school district for the purposes of
38.8 	sections 275.124 to 275.16124D.20 and 124D.531until the
38.9 	population of the school district has been established by the
38.10 	next federal census or until a more current population estimate
38.11 	is prepared and approved as provided herein, whichever occurs
38.12 	first.  The state demographer shall establish guidelines for
38.13 	acceptable population estimation criteria and processes.  The
38.14 	state demographer shall issue advisory opinions upon request in
38.15 	writing to cities or school districts as to proposed criteria
38.16 	and processes prior to their implementation in an estimation.
38.17 	The advisory opinion shall be final and binding upon the
38.18 	demographer unless the demographer can show cause why it should
38.19 	not be final and binding.
38.20 	In the event that a census tract employed in taking a
38.21 	federal or local census overlaps two or more school districts,
38.22 	the county auditor shall, on the basis of the best information
38.23 	available, allocate the population of said census tract to the
38.24 	school districts involved.
38.25 	The term "council," as used in sections 275.124 to 275.16,
38.26 	means any board or body, whether composed of one or more
38.27 	branches, authorized to make ordinances for the government of a
38.28 	city within this state.

38.29 	Sec. 50. Minnesota Statutes 2004, section 275.16, is
38.30 	amended to read:
38.31 	275.16 COUNTY AUDITOR TO FIX AMOUNT OF LEVY.
38.32 	If any such municipality shall return to the county auditor
38.33 	a levy greater than permitted by chapters 123A, 123B, 124D,
38.34 	126C, and 136C, and 136D,sections 275.124 to 275.16, and 275.70
38.35 	to 275.74, such county auditor shall extend only such amount of
38.36 	taxes as the limitations herein prescribed will permit;
39.1 	provided, if such levy shall include any levy for the payment of
39.2 	bonded indebtedness or judgments, such levies for bonded
39.3 	indebtedness or judgments shall be extended in full, and the
39.4 	remainder of the levies shall be reduced so that the total
39.5 	thereof, including levies for bonds and judgments, shall not
39.6 	exceed such amount as the limitations herein prescribed will
39.7 	permit.

39.8 	Sec. 51. Minnesota Statutes 2004, section 469.177,
39.9 	subdivision 9, is amended to read:
39.10 		Subd. 9.Distributions of excess taxes on captured net
39.11 	tax capacity.  (a) If the amount of tax paid on captured net tax
39.12 	capacity exceeds the amount of tax increment, the county auditor
39.13 	shall distribute the excess to the municipality, county, and
39.14 	school district as follows:  each governmental unit's share of
39.15 	the excess equals
39.16 	(1) the total amount of the excess for the tax increment
39.17 	financing district, multiplied by
39.18 	(2) a fraction, the numerator of which is the current local
39.19 	tax rate of the governmental unit less the governmental unit's
39.20 	local tax rate for the year the original local tax rate for the
39.21 	district was certified (in no case may this amount be less than
39.22 	zero) and the denominator of which is the sum of the numerators
39.23 	for the municipality, county, and school district.
39.24 	If the entire increase in the local tax rate is attributable to
39.25 	a taxing district, other than the municipality, county, or
39.26 	school district, then the excess must be distributed to the
39.27 	municipality, county, and school district in proportion to their
39.28 	respective local tax rates.
39.29 	(b) The amounts distributed shall be deducted in computing
39.30 	the levy limits of the taxing district for the succeeding
39.31 	taxable year. In the case of a school district, only the
39.32 	proportion of the excess taxes attributable to unequalized
39.33 	levies that are subject to a fixed dollar amount levy limit
39.34 	shall be deducted from the levy limit.
39.35 	(c) In the case of distributions to a school district that
39.36 	are attributable to state equalized levies, the county auditor
40.1 	shall report amounts distributed to the commissioner of
40.2 	education in the same manner as provided for excess increments
40.3 	under section 469.176, subdivision 2, and the distribution shall
40.4 	be deducted from the school district's state aid payments and
40.5 	levy limitation according to section 127A.49, subdivision 3.
40.6 	Sec. 52.  2005 S.F. No. 1879, article 3, section 3,
40.7 	subdivision 2, if enacted, is amended to read:
40.8 		Subd. 2.General education aid. For general education
40.9 	aid under Minnesota Statutes, section 126C.13, subdivision 4:
40.10 	$ 5,012,148,000 5,215,775,000.....     2006
40.11 	$ 5,007,512,000 5,419,316,000.....     2007
40.12 	The 2006 appropriation includes $784,978,000 for 2005 and
40.13 	$ 4,227,170,000 4,430,797,000 for 2006.
40.14 	The 2007 appropriation includes $ 782,399,000 825,190,000 
40.15 	for 2006 and $ 4,225,113,000 4,594,126,000 for 2007.
40.16 	Sec. 53.  2005 S.F. No. 1879, article 3, section 3,
40.17 	subdivision 3, if enacted, is amended to read:
40.18 		Subd. 3.Referendum tax base replacement aid. For
40.19 	referendum tax base replacement aid under Minnesota Statutes,
40.20 	section 126C.17, subdivision 7a:
40.21 	$8,704,000    .....     2006
40.22 	$ 8,704,000 8,706,000.....     2007
40.23 	The 2006 appropriation includes $1,366,000 for 2005 and
40.24 	$7,338,000 for 2006.
40.25 	The 2007 appropriation includes $1,366,000 for 2006 and
40.26 	$ 7,338,000 7,340,000 for 2007.
40.27 	Sec. 54.  2005 S.F. No. 1879, article 3, section 3,
40.28 	subdivision 7, if enacted, is amended to read:
40.29 		Subd. 7.Nonpublic pupil education aid. For nonpublic
40.30 	pupil education aid under Minnesota Statutes, sections 123B.40
40.31 	to 123B.43 and 123B.87:
40.32 	$ 15,174,000 15,817,000.....     2006
40.33 	$ 15,976,000 17,426,000.....     2007
40.34 	The 2006 appropriation includes $2,305,000 for 2005 and
40.35 	$ 12,869,000 13,512,000 for 2006.
40.36 	The 2007 appropriation includes $ 2,396,000 2,516,000 for
41.1 	2006 and $ 13,580,000 14,910,000 for 2007.
41.2 	Sec. 55.  2005 S.F. No. 1879, article 3, section 3,
41.3 	subdivision 8, if enacted, is amended to read:
41.4 		Subd. 8.Nonpublic pupil transportation aid. For
41.5 	nonpublic pupil transportation aid under Minnesota Statutes,
41.6 	section 123B.92, subdivision 9:
41.7 	$ 20,758,000 21,633,000.....     2006
41.8 	$ 21,446,000 23,390,000.....     2007
41.9 	The 2006 appropriation includes $3,274,000 for 2005 and
41.10 	$ 17,484,000 18,359,000 for 2006.
41.11 	The 2007 appropriation includes $ 3,256,000 3,418,000 for
41.12 	2006 and $ 18,190,000 19,972,000 for 2007.

41.13 	Sec. 56. FOUR-YEAR OLD PREKINDERGARTEN ALLOWANCE.
 41.14 	(a) A district's four-year old prekindergarten revenue
41.15 	equals the sum of (1) the amount of referendum revenue under
41.16 	Minnesota Statutes, section 126C.17, and general education
41.17 	revenue, excluding transition revenue, for fiscal year 2004
41.18 	attributable to pupils four or five years of age on September 1,
41.19 	2003, enrolled in a prekindergarten program implemented by the
41.20 	district before July 1, 2003, and reported as kindergarten
41.21 	pupils under Minnesota Statutes, section 126C.05, subdivision 1,
41.22 	for fiscal year 2004, plus (2) the amount of compensatory
41.23 	education revenue under Minnesota Statutes, section 126C.05,
41.24 	subdivision 3, for fiscal year 2005 attributable to pupils four
41.25 	years of age on September 1, 2003, enrolled in a prekindergarten
41.26 	program implemented by the district before July 1, 2003, and
41.27 	reported as kindergarten pupils under Minnesota Statutes,
41.28 	section 126C.05, subdivision 1, for 2004.
41.29 	(b) A district's four-year old prekindergarten allowance
41.30 	equals a district's four-year old prekindergarten revenue under
41.31 	paragraph (a) divided by its 2007 resident marginal cost pupil
41.32 	units.

41.33 	Sec. 57. TRANSITION REVENUE 2004 CONVERSION ALLOWANCE.
 41.34 	(a) A district's transition revenue 2004 conversion
41.35 	allowance is equal to the sum of (1) the district's fiscal year
41.36 	2004 transition revenue allowance multiplied by the ratio of its
42.1 	adjusted marginal cost pupil units to its resident marginal cost
42.2 	pupil units for the preceding fiscal year, plus (2) its
42.3 	four-year old prekindergarten allowance multiplied by 0.01.
42.4 	(b) Notwithstanding Minnesota Statutes, section 126C.17,
42.5 	subdivision 2, the transition revenue 2004 conversion allowance
42.6 	is increased by $40 for any school district whose referendum
42.7 	allowance limit under Minnesota Statutes, section 126C.17,
42.8 	subdivision 2, does not increase in fiscal year 2007 as a result
42.9 	of growth, excluding roll-ins, in the formula allowance under
42.10 	Minnesota Statutes, section 126C.10, subdivision 2, and whose
42.11 	referendum allowance under Minnesota Statutes, section 126C.17,
42.12 	subdivision 1, is greater than the formula allowance multiplied
42.13 	by 18.6 percent.  A district that is eligible for sparsity
42.14 	revenue is not eligible for this additional transition allowance
42.15 	adjustment.

42.16 	Sec. 58. SCHOOL BUS LOAN; CARPENTER SCHOOL BUSES.
 42.17 		Subdivision 1.Bus loan revenue. In fiscal year 2006
42.18 	only, a school district may receive bus loan revenue equal to up
42.19 	to $30,000 times the number of Carpenter school buses in its
42.20 	fleet between March 30, 2003, and March 30, 2004, that have been
42.21 	determined to have potentially defective welds and are subject
42.22 	to the limitations imposed by the Department of Public Safety.
42.23 	A school district that is eligible to receive revenue under this
42.24 	subdivision must approve a board resolution to receive revenue
42.25 	according to this section.
42.26 		Subd. 2.Levy. For taxes payable in 2006 through 2009, a
42.27 	school district that receives revenue under subdivision 1 must
42.28 	levy an amount equal to its bus loan revenue times .25.
42.29 		Subd. 3.General education revenue withholding. For
42.30 	fiscal years 2007 through 2010, the Department of Education
42.31 	shall reduce the general education aid under Minnesota Statutes,
42.32 	section 126C.13, subdivision 4, for each district that receives
42.33 	revenue under subdivision 1 in an amount equal to the district's
42.34 	bus loan revenue times .25.

42.35 	Sec. 59. RED LAKE FISCAL YEAR 2005 PUPIL UNITS.
 42.36 	Notwithstanding Minnesota Statutes, section 126C.05, the
43.1 	fiscal year 2005 average daily membership for Independent School
43.2 	District No. 38, Red Lake, shall be the greater of the amount
43.3 	that would have been computed if the district's school buildings
43.4 	had not reopened after March 21, 2005, or the amount computed
43.5 	using actual data for the entire school year.  Notwithstanding
43.6 	Minnesota Statutes, section 126C.05, subdivision 15, for fiscal
43.7 	year 2005, learning year pupil units for Independent School
43.8 	District No. 38, Red Lake, must be calculated using the hours in
43.9 	excess of the actual number of instructional hours in the
43.10 	calendar year for the school attended by the student, instead of
43.11 	the number of hours in excess of 1,020 for a secondary school
43.12 	pupil.

43.13 	Sec. 60. FISCAL YEARS 2006 AND 2007 DECLINING PUPIL UNIT
43.14 	AID, RED LAKE.
 43.15 	For fiscal years 2006 and 2007 only, Independent School
43.16 	District No. 38, Red Lake, is eligible for declining pupil unit
43.17 	aid equal to the greater of zero or the product of the general
43.18 	education formula allowance times the difference between the
43.19 	district's adjusted marginal cost pupil units for fiscal year
43.20 	2005 and the district's adjusted marginal cost pupil units for
43.21 	that fiscal year.  Notwithstanding Minnesota Statutes, section
43.22 	126C.13, the declining pupil unit aid must be included in
43.23 	calculating the district's general education aid.

43.24 	Sec. 61. KINDERGARTEN REPORTING.
 43.25 	Notwithstanding Minnesota Statutes, sections 120A.05,
43.26 	subdivision 18; 120A.20, subdivision 1; and 124D.02, subdivision
43.27 	1, pupils four or five years of age on September 1 of the
43.28 	calendar year in which the school year commences and enrolled in
43.29 	a prekindergarten program implemented by the district before
43.30 	July 1, 2003, may be reported as kindergarten pupils under
43.31 	Minnesota Statutes, section 126C.05, subdivision 1, for fiscal
43.32 	year 2004 and earlier.

43.33 	EFFECTIVE DATE. This section is effective the day
43.34 	following final enactment and applies to fiscal year 2004 and
43.35 	earlier.

43.36 	Sec. 62. TRANSITION REVENUE ADJUSTMENTS.
 44.1 	For taxes payable in 2006, a district may levy an amount
44.2 	equal to the increase in the district's transition levy for
44.3 	fiscal year 2006 under Minnesota Statutes, section 126C.10,
44.4 	subdivision 31, paragraph (c).

44.5 	Sec. 63. APPROPRIATIONS.
 44.6 		Subdivision 1.Department of education. The sums
44.7 	indicated in this section are appropriated from the general fund
44.8 	to the Department of Education for the fiscal years designated.
44.9 		Subd. 2.School bus loan revenue. For school bus loan
44.10 	revenue under section 58:
44.11 	$3,630,000 .....2006 

44.12 	Sec. 64. REPEALER.
 44.13 	(a) Minnesota Statutes 2004, sections 123B.83, subdivision
44.14 	1; and 126C.42, subdivisions 1 and 4, are repealed.
44.15 	(b) Minnesota Statutes 2004, sections 126C.10, subdivisions
44.16 	13a, 13b, 29, 30, 31, 32, and 33; and 126C.44, are repealed for
44.17 	revenue for fiscal year 2007.

44.18 	ARTICLE 2
44.19 	EDUCATION EXCELLENCE

44.20 	Section 1. Minnesota Statutes 2004, section 13.321, is
44.21 	amended by adding a subdivision to read:
44.22 		Subd. 10.Teacher data from value-added assessment
44.23 	model. Data on individual teachers generated from a value-added
44.24 	assessment model are governed under section 120B.362.
44.25 	
EFFECTIVE DATE. This section is effective the day
44.26 	following final enactment.

44.27 	Sec. 2. Minnesota Statutes 2004, section 120B.02, is
44.28 	amended to read:
44.29 	120B.02 EDUCATIONAL EXPECTATIONS FOR MINNESOTA'S
44.30 	STUDENTS.
44.31 	(a) The legislature is committed to establishing rigorous
44.32 	academic standards for Minnesota's public school students.  To
44.33 	that end, the commissioner shall adopt in rule statewide
44.34 	academic standards.  The commissioner shall not prescribe in
44.35 	rule or otherwise the delivery system, classroom assessments, or
44.36 	form of instruction that school sites must use.  For purposes of
45.1 	this chapter, a school site is a separate facility, or a
45.2 	separate program within a facility that a local school board
45.3 	recognizes as a school site for funding purposes.
45.4 	(b) All commissioner actions regarding the rule must be
45.5 	premised on the following:
45.6 	(1) the rule is intended to raise academic expectations for
45.7 	students, teachers, and schools;
45.8 	(2) any state action regarding the rule must evidence
45.9 	consideration of school district autonomy; and
45.10 	(3) the Department of Education, with the assistance of
45.11 	school districts, must make available information about all
45.12 	state initiatives related to the rule to students and parents,
45.13 	teachers, and the general public in a timely format that is
45.14 	appropriate, comprehensive, and readily understandable.
45.15 	(c) When fully implemented, the requirements for high
45.16 	school graduation in Minnesota must require students to pass the
45.17 	basic skills test requirements and satisfactorily complete, as
45.18 	determined by the school district, the course credit
45.19 	requirements under section 120B.024and:
45.20 	(1) for students enrolled in grade 8 before the 2005-2006
45.21 	school year, to pass the basic skills test requirements; or 
45.22 	(2) for students enrolled in grade 8 in the 2005-2006
45.23 	school year and later, to pass the Minnesota Comprehensive
45.24 	Assessments Second Edition (MCA-IIs).
45.25 	(d) The commissioner shall periodically review and report
45.26 	on the state's assessment process.
45.27 	(e) School districts are not required to adopt specific
45.28 	provisions of the Goals 2000 and the federal School-to-Work
45.29 	programs.

45.30 	Sec. 3. Minnesota Statutes 2004, section 120B.021,
45.31 	subdivision 1, is amended to read:
45.32 		Subdivision 1.Required academic standards.  The
45.33 	following subject areas are required for statewide
45.34 	accountability:
45.35 	(1) language arts;
45.36 	(2) mathematics;
46.1 	(3) science;
46.2 	(4) social studies, including history, geography,
46.3 	economics, and government and citizenship;
46.4 	(5) health and physical education, for which locally
46.5 	developed academic standards apply; and
46.6 	(6) the arts, for which statewide or locally developed
46.7 	academic standards apply, as determined by the school district.
46.8 	Public elementary and middle schools must offer at least three
46.9 	and require at least two of the following four arts areas:
46.10 	dance; music; theater; and visual arts.  Public high schools
46.11 	must offer at least three and require at least one of the
46.12 	following five arts areas:  media arts; dance; music; theater;
46.13 	and visual arts.
46.14 	The commissioner must submit proposed standards in science
46.15 	and social studies to the legislature by February 1, 2004.
46.16 	For purposes of applicable federal law, the academic standards
46.17 	for language arts, mathematics, and science apply to all public
46.18 	school students, except the very few students with extreme
46.19 	cognitive or physical impairments for whom an individualized
46.20 	education plan team has determined that the required academic
46.21 	standards are inappropriate.  An individualized education plan
46.22 	team that makes this determination must establish alternative
46.23 	standards.
46.24 	A school district, no later than the 2007-2008 school year,
46.25 	must adopt graduation requirements that meet or exceed state
46.26 	graduation requirements established in law or rule.  A school
46.27 	district that incorporates these state graduation requirements
46.28 	before the 2007-2008 school year must provide students who enter
46.29 	the 9th grade in or before the 2003-2004 school year the
46.30 	opportunity to earn a diploma based on existing locally
46.31 	established graduation requirements in effect when the students
46.32 	entered the 9th grade.  District efforts to develop, implement,
46.33 	or improve instruction or curriculum as a result of the
46.34 	provisions of this section must be consistent with sections
46.35 	120B.10, 120B.11, and 120B.20.
46.36 	At a minimum, school districts must maintain the same
47.1 	physical education and health education requirements for
47.2 	students in kindergarten through grade 8 adopted for the
47.3 	2004-2005 school year through the 2007-2008 school year.  Before
47.4 	a revision of the local health and physical education standards,
47.5 	a school district must consult the grade-specific benchmarks
47.6 	developed by the Department of Education's health and physical
47.7 	education quality teaching network for the six national physical
47.8 	education standards and the seven national health standards.

47.9 	Sec. 4. Minnesota Statutes 2004, section 120B.021, is
47.10 	amended by adding a subdivision to read:
47.11 		Subd. 1a.Rigorous course of study; waiver. (a) Upon
47.12 	receiving a student's application signed by the student's parent
47.13 	or guardian, a school district, area learning center, or charter
47.14 	school must declare that a student meets or exceeds a specific
47.15 	academic standard required for graduation under this section if
47.16 	the local school board, the school board of the school district
47.17 	in which the area learning center is located, or the charter
47.18 	school board of directors determines that the student:
47.19 	(1) is participating in a course of study, including an
47.20 	advanced placement or international baccalaureate course or
47.21 	program; a learning opportunity outside the curriculum of the
47.22 	district, area learning center, or charter school; or an
47.23 	approved preparatory program for employment or postsecondary
47.24 	education that is equally or more rigorous than the
47.25 	corresponding state or local academic standard required by the
47.26 	district, area learning center, or charter school;
47.27 	(2) would be precluded from participating in the rigorous
47.28 	course of study, learning opportunity, or preparatory employment
47.29 	or postsecondary education program if the student were required
47.30 	to achieve the academic standard to be waived; and 
47.31 	(3) satisfactorily completes the requirements for the
47.32 	rigorous course of study, learning opportunity, or preparatory
47.33 	employment or postsecondary education program.
47.34 	Consistent with the requirements of this section, the local
47.35 	school board, the school board of the school district in which
47.36 	the area learning center is located, or the charter school board
48.1 	of directors also may formally determine other circumstances in
48.2 	which to declare that a student meets or exceeds a specific
48.3 	academic standard that the site requires for graduation under
48.4 	this section.
48.5 	(b) A student who satisfactorily completes a postsecondary
48.6 	enrollment options course or program under section 124D.09 is
48.7 	not required to complete other requirements of the academic
48.8 	standards corresponding to that specific rigorous course of
48.9 	study.

48.10 	Sec. 5. Minnesota Statutes 2004, section 120B.024, is
48.11 	amended to read:
48.12 	120B.024 GRADUATION REQUIREMENTS; COURSE CREDITS.
48.13 	Students beginning 9th grade in the 2004-2005 school year
48.14 	and later must successfully complete the following high school
48.15 	level course credits for graduation:
48.16 	(1) four credits of language arts;
48.17 	(2) three credits of mathematics, encompassing at least the
48.18 	mathematical reasoning,algebra, geometry, statistics, and
48.19 	probability sufficient to satisfy the academic
48.20 	standard identified in the mathematics grades 9, 10, and 11
48.21 	standards documents;
48.22 	(3) three credits of science, including at least one credit
48.23 	in biology;
48.24 	(4) three and one-half credits of social studies,
48.25 	encompassing at least United States history, geography,
48.26 	government and citizenship, world history, and economics or
48.27 	three credits of social studies encompassing at least United
48.28 	States history, geography, government and citizenship, and world
48.29 	history, and one-half credit of economics taught in a school's
48.30 	social studies or business department;
48.31 	(5) one credit in the arts; and 
48.32 	(6) one-half credit in physical education and one-half
48.33 	credit in health education; and 
48.34 	(7) a minimum of seven six elective course credits.
48.35 	A course credit is equivalent to a student successfully
48.36 	completing an academic year of study or a student mastering the
49.1 	applicable subject matter, as determined by the local school
49.2 	district.

49.3 	Sec. 6. Minnesota Statutes 2004, section 120B.11,
49.4 	subdivision 1, is amended to read:
49.5 		Subdivision 1.Definitions.  For the purposes of this
49.6 	section and section 120B.10, the following terms have the
49.7 	meanings given them.
49.8 	(a) "Instruction" means methods of providing learning
49.9 	experiences that enables enable a student to meet state and
49.10 	district academic standards and graduation
49.11 	standards requirements.
49.12 	(b) "Curriculum" means district or school adopted programs
49.13 	and written plans for providing students with learning
49.14 	experiences that lead to expected knowledge,and skills, and
49.15 	positive attitudes.

49.16 	Sec. 7. Minnesota Statutes 2004, section 120B.11,
49.17 	subdivision 2, is amended to read:
49.18 		Subd. 2.Adopting policies.  (a) A school board shall
49.19 	adopt annually a have in place an adopted written policy that
49.20 	includes the following:
49.21 	(1) district goals for instruction and including the use of
49.22 	best practices, district and school curriculum, and achievement
49.23 	for all student subgroups;
49.24 	(2) a process for evaluating each student's progress toward
49.25 	meeting graduation academic standards and identifying the
49.26 	strengths and weaknesses of instruction and curriculum affecting
49.27 	students' progress;
49.28 	(3) a system for periodically reviewing and evaluating all
49.29 	instruction and curriculum;
49.30 	(4) a plan for improving instruction and ,curriculum, and
49.31 	student achievement; and
49.32 	(5) an instruction plan that includes education
49.33 	effectiveness processes developed under plan aligned with 
49.34 	section 122A.625and that integrates instruction, curriculum,
49.35 	and technology.

49.36 	Sec. 8. Minnesota Statutes 2004, section 120B.11,
50.1 	subdivision 3, is amended to read:
50.2 		Subd. 3.instruction and curriculum district advisory
50.3 	committee.  Each school board shall establish an Instruction and
50.4 	Curriculum advisory committee to ensure active community
50.5 	participation in all phases of planning and improving the
50.6 	instruction and curriculum affecting state graduation and
50.7 	district academic standards.  A district advisory committee, to
50.8 	the extent possible, shall reflect the diversity of the district
50.9 	and its learning sites, and shall include teachers, parents,
50.10 	support staff, pupils students, and other community residents.
50.11 	The district may establish building teams as subcommittees of
50.12 	the district advisory committee under subdivision 4.  The
50.13 	district advisory committee shall recommend to the school
50.14 	board districtwide education standards rigorous academic
50.15 	standards, student achievement goals and measures, assessments,
50.16 	and program evaluations.  Learning sites may expand upon
50.17 	district evaluations of instruction, curriculum, assessments, or
50.18 	programs.  Whenever possible, parents and other community
50.19 	residents shall comprise at least two-thirds of advisory
50.20 	committee members.

50.21 	Sec. 9. Minnesota Statutes 2004, section 120B.11,
50.22 	subdivision 4, is amended to read:
50.23 		Subd. 4.Building team.  A school may establish a
50.24 	building team to develop and implement an education
50.25 	effectiveness plan to improve instruction and ,curriculum, and
50.26 	student achievement.  The team shall advise the board and the
50.27 	advisory committee about developing an instruction and
50.28 	curriculum improvement plan that aligns curriculum, assessment
50.29 	of student progress in meeting state graduation and district
50.30 	academic standards, and instruction.

50.31 	Sec. 10. Minnesota Statutes 2004, section 120B.11,
50.32 	subdivision 5, is amended to read:
50.33 		Subd. 5.Report.  (a) By October 1 of each year, the
50.34 	school board shall use standard statewide reporting procedures
50.35 	the commissioner develops and adopt a report that includes the
50.36 	following:
51.1 	(1) student performance achievement goals for meeting state
51.2 	graduation academic standards adopted for that year;
51.3 	(2) results of local assessment data, and any additional
51.4 	test data;
51.5 	(3) the annual school district improvement plans including
51.6 	staff development goals under section 122A.60;
51.7 	(4) information about district and learning site progress
51.8 	in realizing previously adopted improvement plans; and
51.9 	(5) the amount and type of revenue attributed to each
51.10 	education site as defined in section 123B.04.
51.11 	(b) The school board shall publish the report in the local
51.12 	newspaper with the largest circulation in the district or ,by
51.13 	mail, or by electronic means such as the district Web site.  If
51.14 	electronic means are used, copies of the report must be made
51.15 	available to the public on request.  The board shall make a copy
51.16 	of the report available to the public for inspection.  The board
51.17 	shall send a copy of the report to the commissioner of education
51.18 	by October 15 of each year.
51.19 	(c) The title of the report shall contain the name and
51.20 	number of the school district and read "Annual Report on
51.21 	Curriculum, Instruction, and Student Performance Achievement."
51.22 	The report must include at least the following information about
51.23 	advisory committee membership:
51.24 	(1) the name of each committee member and the date when
51.25 	that member's term expires;
51.26 	(2) the method and criteria the school board uses to select
51.27 	committee members; and
51.28 	(3) the date by which a community resident must apply to
51.29 	next serve on the committee.

51.30 	Sec. 11. Minnesota Statutes 2004, section 120B.11,
51.31 	subdivision 8, is amended to read:
51.32 		Subd. 8.Biennial evaluation; assessment program.  At
51.33 	least once every two years, the district report shall include an
51.34 	evaluation of the district testing programs, according to the
51.35 	following:
51.36 	(1) written objectives of the assessment program;
52.1 	(2) names of tests and grade levels tested;
52.2 	(3) use of test results; and
52.3 	(4) implementation of an assurance of mastery program 
52.4 	student achievement results compared to previous years.

52.5 	Sec. 12. [120B.15] GIFTED AND TALENTED STUDENTS
52.6 	PROGRAMS.
52.7 		Subdivision 1.Gifted and talented students. School
52.8 	districts must adopt guidelines for assessing and identifying
52.9 	students for participation in gifted and talented programs.  The
52.10 	guidelines should include the use of:
52.11 	(1) multiple and objective criteria; and 
52.12 	(2) assessments and procedures that are valid and reliable,
52.13 	fair, and based on current theory and research.
52.14 		Subd. 2.Student access; program content and
52.15 	development. (a) Gifted and talented programs may include:
52.16 	(1) curriculum aligned with the cognitive, affective,
52.17 	developmental, and physical needs of gifted and talented
52.18 	students;
52.19 	(2) articulated prekindergarten through grade 12 learning
52.20 	experiences;
52.21 	(3) flexible instructional pacing and subject and
52.22 	grade-based opportunities to accelerate instruction;
52.23 	(4) rigorous content consistent with students' abilities
52.24 	and social and emotional development;
52.25 	(5) challenging learning experiences focused on problem
52.26 	solving and advanced reasoning; and 
52.27 	(6) differentiated guidance services to nurture students'
52.28 	social and emotional development.
52.29 	(b) School districts, in collaboration with interested
52.30 	community members and with technical assistance from the state
52.31 	Department of Education, may offer gifted and talented programs.
52.32 	
EFFECTIVE DATE. This section is effective for the
52.33 	2005-2006 school year and later.

52.34 	Sec. 13. Minnesota Statutes 2004, section 120B.22,
52.35 	subdivision 1, is amended to read:
52.36 		Subdivision 1.Violence prevention curriculum.  (a) The
53.1 	commissioner of education, in consultation with the
53.2 	commissioners of health and human services, state minority
53.3 	councils, battered women's and domestic abuse programs, battered
53.4 	women's shelters, sexual assault centers, representatives of
53.5 	religious communities, and the assistant commissioner of the
53.6 	Office of Drug Policy and Violence Prevention, shall assist
53.7 	districts on request in developing or implementing a violence
53.8 	prevention program for students in kindergarten to grade 12 that
53.9 	can be integrated into existing curriculum.  The purpose of the
53.10 	program is to help students learn how to resolve conflicts
53.11 	within their families and communities in nonviolent, effective
53.12 	ways.
53.13 	(b) Each district is encouraged to integrate into its
53.14 	existing curriculum a program for violence prevention that
53.15 	includes at least:
53.16 	(1) a comprehensive, accurate, and age appropriate
53.17 	curriculum on violence prevention, nonviolent conflict
53.18 	resolution, sexual, racial, and cultural
53.19 	harassment, self-protection,and student hazing that promotes
53.20 	equality, respect, understanding, effective communication,
53.21 	individual responsibility, thoughtful decision making, positive
53.22 	conflict resolution, useful coping skills, critical thinking,
53.23 	listening and watching skills, and personal safety;
53.24 	(2) planning materials, guidelines, and other accurate
53.25 	information on preventing physical and emotional violence,
53.26 	identifying and reducing the incidence of sexual, racial, and
53.27 	cultural harassment, and reducing child abuse and neglect;
53.28 	(3) a special parent education component of early childhood
53.29 	family education programs to prevent child abuse and neglect and
53.30 	to promote positive parenting skills, giving priority to
53.31 	services and outreach programs for at-risk families;
53.32 	(4) involvement of parents and other community members,
53.33 	including the clergy, business representatives, civic leaders,
53.34 	local elected officials, law enforcement officials, and the
53.35 	county attorney;
53.36 	(5) collaboration with local community services, agencies,
54.1 	and organizations that assist in violence intervention or
54.2 	prevention, including family-based services, crisis services,
54.3 	life management skills services, case coordination services,
54.4 	mental health services, and early intervention services;
54.5 	(6) collaboration among districts and service cooperatives;
54.6 	(7) targeting early adolescents for prevention efforts,
54.7 	especially early adolescents whose personal circumstances may
54.8 	lead to violent or harassing behavior;
54.9 	(8) opportunities for teachers to receive in-service
54.10 	training or attend other programs on strategies or curriculum
54.11 	designed to assist students in intervening in or preventing
54.12 	violence in school and at home; and
54.13 	(9) administrative policies that reflect, and a staff that
54.14 	models, nonviolent behaviors that do not display or condone
54.15 	sexual, racial, or cultural harassment or student hazing.
54.16 	(c) The department may provide assistance at a neutral site
54.17 	to a nonpublic school participating in a district's program.

54.18 	Sec. 14. [120B.25] AMERICAN HERITAGE EDUCATION.
54.19 	School districts shall permit grade-level instruction for
54.20 	students to read and study America's founding documents,
54.21 	including documents that contributed to the foundation or
54.22 	maintenance of America's representative form of limited
54.23 	government, the Bill of Rights, our free-market economic system,
54.24 	and patriotism.

54.25 	Sec. 15. Minnesota Statutes 2004, section 120B.30,
54.26 	subdivision 1, is amended to read:
54.27 		Subdivision 1.Statewide testing.  (a) The commissioner,
54.28 	with advice from experts with appropriate technical
54.29 	qualifications and experience and stakeholders, consistent with
54.30 	subdivision 1a, shall include in the comprehensive assessment
54.31 	system, for each grade level to be tested, state-constructed
54.32 	tests developed from and aligned with the state's required
54.33 	academic standards under section 120B.021 and administered
54.34 	annually to all students in grades 3 through 8 and at the high
54.35 	school level.  A state-developed test in a subject other than
54.36 	writing, developed after the 2002-2003 school year, must include
55.1 	both multiple choice machine-scoreable and constructed response
55.2 	questions.  The commissioner shall establish one or more months
55.3 	during which schools shall administer the tests to students each
55.4 	school year. For students enrolled in grade 8 before the
55.5 	2005-2006 school year,only Minnesota basic skills tests in
55.6 	reading, mathematics, and writing shall fulfill students' basic
55.7 	skills testing requirements for a passing state notation.  The
55.8 	passing scores of the state tests in reading and mathematics are
55.9 	the equivalent of:
55.10 	(1) 70 percent correct for students entering grade 9 in
55.11 	1996; and
55.12 	(2) 75 percent correct for students entering grade 9 in
55.13 	1997 and thereafter, as based on the first uniform test
55.14 	administration of February 1998.
55.15 	For students enrolled in grade 8 in the 2005-2006 school
55.16 	year and later, only the Minnesota Comprehensive Assessments
55.17 	Second Edition (MCA-IIs) in reading, mathematics, and writing
55.18 	shall fulfill students' academic standard requirements.
55.19 	(b) The third through 8th grade and high school level test
55.20 	results shall be available to districts for diagnostic purposes
55.21 	affecting student learning and district instruction and
55.22 	curriculum, and for establishing educational accountability.
55.23 	The commissioner must disseminate to the public the test results
55.24 	upon receiving those results.
55.25 	(c) State tests must be constructed and aligned with state
55.26 	academic standards.  The testing process and the order of
55.27 	administration shall be determined by the commissioner.  The
55.28 	statewide results shall be aggregated at the site and district
55.29 	level, consistent with subdivision 1a.
55.30 	(d) In addition to the testing and reporting requirements
55.31 	under this section, the commissioner shall include the following
55.32 	components in the statewide public reporting system:
55.33 	(1) uniform statewide testing of all students in grades 3
55.34 	through 8 and at the high school level that provides exemptions,
55.35 	only with parent or guardian approval, for those very few
55.36 	students for whom the student's individual education plan team
56.1 	under sections 125A.05 and 125A.06, determines that the student
56.2 	is incapable of taking a statewide test, or for a limited
56.3 	English proficiency student under section 124D.59, subdivision
56.4 	2, if the student has been in the United States for fewer than
56.5 	three years;
56.6 	(2) educational indicators that can be aggregated and
56.7 	compared across school districts and across time on a statewide
56.8 	basis, including average daily attendance, high school
56.9 	graduation rates, and high school drop-out rates by age and
56.10 	grade level;
56.11 	(3) students' scores on the American College Test; and
56.12 	(4) state results from participation in the National
56.13 	Assessment of Educational Progress so that the state can
56.14 	benchmark its performance against the nation and other states,
56.15 	and, where possible, against other countries, and contribute to
56.16 	the national effort to monitor achievement.
56.17 	(e) Districts must report exemptions under paragraph (d),
56.18 	clause (1), to the commissioner consistent with a format
56.19 	provided by the commissioner.

56.20 	Sec. 16. Minnesota Statutes 2004, section 120B.30,
56.21 	subdivision 1a, is amended to read:
56.22 		Subd. 1a.Statewide and local assessments; results.  (a)
56.23 	The commissioner must develop language arts reading,
56.24 	mathematics, and science assessments aligned with state academic
56.25 	standards that districts and sites must use to monitor student
56.26 	growth toward achieving those standards.  The commissioner must
56.27 	not develop statewide assessments for academic standards in
56.28 	social studies, health and physical education,and the arts.
56.29 	The commissioner must require:
56.30 	(1) annual language arts reading and mathematics
56.31 	assessments in grades 3 through 8 and at the high school level
56.32 	for the 2005-2006 school year and later; and
56.33 	(2) annual science assessments in one grade in the grades 3
56.34 	through 5 span, the grades 6 through 9 span, and a life sciences
56.35 	assessment in the grades 10 through 12 span for the 2007-2008
56.36 	school year and later.
57.1 	(b) The commissioner must ensure that all statewide tests
57.2 	administered to elementary and secondary students measure
57.3 	students' academic knowledge and skills and not students'
57.4 	values, attitudes, and beliefs.
57.5 	(c) Reporting of assessment results must:
57.6 	(1) provide timely, useful, and understandable information
57.7 	on the performance of individual students, schools, school
57.8 	districts, and the state;
57.9 	(2) include, by the 2006-2007 school year, a value-added
57.10 	component to measure student achievement growth over time; and
57.11 	(3) (i) for students enrolled in grade 8 before the
57.12 	2005-2006 school year,determine whether students have met the
57.13 	state's basic skills requirements; or 
57.14 	(ii) for students enrolled in grade 8 in the 2005-2006
57.15 	school year and later, determine whether students have met the
57.16 	state's academic standards.
57.17 	(d) Consistent with applicable federal law and subdivision
57.18 	1, paragraph (d), clause (1), the commissioner must include
57.19 	alternative assessments for the very few students with
57.20 	disabilities for whom statewide assessments are inappropriate
57.21 	and for students with limited English proficiency.
57.22 	(e) A school, school district, and charter school must
57.23 	administer statewide assessments under this section, as the
57.24 	assessments become available, to evaluate student progress in
57.25 	achieving the academic standards.  If a state assessment is not
57.26 	available, a school, school district, and charter school must
57.27 	determine locally if a student has met the required academic
57.28 	standards.  A school, school district, or charter school may use
57.29 	a student's performance on a statewide assessment as one of
57.30 	multiple criteria to determine grade promotion or retention.  A
57.31 	school, school district, or charter school may use a high school
57.32 	student's performance on a statewide assessment as a percentage
57.33 	of the student's final grade in a course, or place a student's
57.34 	assessment score on the student's transcript.

57.35 	Sec. 17. Minnesota Statutes 2004, section 120B.30, is
57.36 	amended by adding a subdivision to read:
58.1 		Subd. 4.Access to tests. The commissioner must adopt
58.2 	and publish a policy to provide public and parental access for
58.3 	review of basic skills tests, Minnesota Comprehensive
58.4 	Assessments, or any other such statewide test and assessment.
58.5 	Upon receiving a written request, the commissioner must make
58.6 	available to parents or guardians a copy of their student's
58.7 	actual answer sheet to the test questions to be reviewed by the
58.8 	parent.

58.9 	Sec. 18. [120B.361] VALUE-ADDED ASSESSMENT PROGRAM.
58.10 	(a) The commissioner of education must implement a
58.11 	value-added assessment program to assist school districts,
58.12 	public schools, and charter schools in assessing and reporting
58.13 	students' growth in academic achievement under section 120B.30,
58.14 	subdivision 1a.  The program must use assessments consistent
58.15 	with paragraph (d) of students' academic achievement to make
58.16 	longitudinal comparisons of each student's academic growth over
58.17 	time.  School districts, public schools, and charter schools may
58.18 	apply to the commissioner to participate in the initial trial
58.19 	program using a form and in the manner the commissioner
58.20 	prescribes.  The commissioner must select program participants
58.21 	from urban, suburban, and rural areas throughout the state.
58.22 	(b) The commissioner may issue a request for a proposal to
58.23 	contract with an organization that provides a value-added
58.24 	assessment model that uses fully adaptive computer-based
58.25 	assessments that reliably estimates school and school district
58.26 	effects on students' academic achievement over time.  The model
58.27 	the commissioner selects must use each student's test data
58.28 	across grades.
58.29 	(c) The contract under paragraph (b) must be consistent
58.30 	with the definition of "best value" under section 16C.02,
58.31 	subdivision 4, and may not be executed until the state has
58.32 	authority to use the assessments described in paragraph (d) for
58.33 	purposes of the No Child Left Behind Act, Public Law 107-110.
58.34 	(d) In connection with implementation of the value-added
58.35 	assessment program, the department must request and obtain from
58.36 	the United States Department of Education authority to use fully
59.1 	adaptive computer-based assessments that accurately measure
59.2 	student achievement and growth over time.  The assessments must
59.3 	be aligned with Minnesota standards, use a common scale score
59.4 	over multiple grades or ages, and be capable of being used for
59.5 	source data for a growth or value-added model of school
59.6 	evaluation.
59.7 	(e) In implementing the value-added assessment program, the
59.8 	commissioner must report assessment result data in a way that
59.9 	shows the growth trends over time for students in four groups:
59.10 	(1) performing above grade level;
59.11 	(2) performing at grade level;
59.12 	(3) approaching grade-level performance; and 
59.13 	(4) performing significantly below grade level.

59.14 	EFFECTIVE DATE. This section is effective the day
59.15 	following final enactment.

59.16 	Sec. 19. Minnesota Statutes 2004, section 121A.06,
59.17 	subdivision 2, is amended to read:
59.18 		Subd. 2.Reports; content. By January 1, 1994, the
59.19 	commissioner, in consultation with the criminal and juvenile
59.20 	information policy group, shall develop a standardized form to
59.21 	be used by schools to report incidents involving the use or
59.22 	possession of a dangerous weapon in school zones.School
59.23 	districts must electronically report to the commissioner of
59.24 	education incidents involving the use or possession of a
59.25 	dangerous weapon in school zones.The form shall must include
59.26 	the following information:
59.27 	(1) a description of each incident, including a description
59.28 	of the dangerous weapon involved in the incident;
59.29 	(2) where, at what time, and under what circumstances the
59.30 	incident occurred;
59.31 	(3) information about the offender, other than the
59.32 	offender's name, including the offender's age; whether the
59.33 	offender was a student and, if so, where the offender attended
59.34 	school; and whether the offender was under school expulsion or
59.35 	suspension at the time of the incident;
59.36 	(4) information about the victim other than the victim's
60.1 	name, if any, including the victim's age; whether the victim was
60.2 	a student and, if so, where the victim attended school; and if
60.3 	the victim was not a student, whether the victim was employed at
60.4 	the school;
60.5 	(5) the cost of the incident to the school and to the
60.6 	victim; and
60.7 	(6) the action taken by the school administration to
60.8 	respond to the incident.
60.9 	The commissioner also shall develop provide an alternative 
60.10 	electronic reporting format that allows school districts to
60.11 	provide aggregate data, with an option to use computer
60.12 	technology to report the data.

60.13 	Sec. 20. Minnesota Statutes 2004, section 121A.06,
60.14 	subdivision 3, is amended to read:
60.15 		Subd. 3.Reports; filing requirements.  By February 1 and 
60.16 	July 1 31 of each year, each school, other than a home-school,
60.17 	shall report incidents involving the use or possession of a
60.18 	dangerous weapon in school zones to the commissioner.  The
60.19 	reports by public schools must be made on the standardized forms
60.20 	or using the alternative format submitted using the electronic
60.21 	reporting system developed by the commissioner under subdivision
60.22 	2.  The commissioner shall compile the information it receives
60.23 	from the schools and report it annually to the commissioner of
60.24 	public safety, the criminal and juvenile information policy
60.25 	group,and the legislature.

60.26 	Sec. 21. [121A.0695] SCHOOL BOARD POLICY; PROHIBITING
60.27 	INTIMIDATION AND BULLYING.
60.28 		Subdivision 1.Intimidation or bullying
60.29 	defined. "Intimidation or bullying" means an intentional
60.30 	gesture or a written, oral, or physical act or threat that a
60.31 	reasonable person under the circumstances knows or should know
60.32 	has the effect of:
60.33 	(1) harming a student;
60.34 	(2) damaging a student's property;
60.35 	(3) placing a student in reasonable fear of harm to the
60.36 	student's person;
61.1 	(4) placing a student in reasonable fear of damage to the
61.2 	student's property; or 
61.3 	(5) creating a severe or persistent environment of
61.4 	intimidation or abuse.
61.5 		Subd. 2.Model policy. The commissioner of education
61.6 	shall maintain and make available to school boards and other
61.7 	schools a model policy prohibiting intimidation and bullying
61.8 	that addresses the requirements of subdivision 3.
61.9 		Subd. 3.School board policy. Each school board shall
61.10 	adopt a written policy prohibiting intimidation and bullying of
61.11 	any student, including, but not limited to, the acts defined in
61.12 	subdivision 1.  The policy must describe the behavior expected
61.13 	of each student and state the consequences for and the
61.14 	appropriate remedial action to be taken against the person
61.15 	acting to intimidate or bully.  The policy must include
61.16 	reporting procedures, including, at a minimum, requiring school
61.17 	personnel to report student intimidation or bullying incidents
61.18 	and allowing persons to report incidents anonymously.  Each
61.19 	district must integrate into its violence prevention program
61.20 	under section 120B.22, if applicable, behavior and expectations
61.21 	established under this section.  Each school must include the
61.22 	policy in the student handbook on school policies.
61.23 	
EFFECTIVE DATE. This section is effective for the
61.24 	2005-2006 school year and later.

61.25 	Sec. 22. [121A.222] POSSESSION AND USE OF NONPRESCRIPTION
61.26 	PAIN RELIEVERS BY SECONDARY STUDENTS.
61.27 	A secondary student may possess and use nonprescription
61.28 	pain relief in a manner consistent with the labeling, if the
61.29 	district has received a written authorization from the student's
61.30 	parent permitting the student to self-administer the
61.31 	medication.  The parent must submit written authorization for
61.32 	the student to self-administer the medication each school year.
61.33 	The district may revoke a student's privilege to possess and use
61.34 	nonprescription pain relievers if the district determines that
61.35 	the student is abusing the privilege.

61.36 	Sec. 23. [121A.231] COMPREHENSIVE FAMILY LIFE AND
62.1 	SEXUALITY EDUCATION PROGRAMS.
62.2 		Subdivision 1.Definitions. (a) "Comprehensive family
62.3 	life and sexuality education" means education in grades 7
62.4 	through 12 that:
62.5 	(1) respects community values and encourages family
62.6 	communication;
62.7 	(2) develops skills in communication, decision making, and
62.8 	conflict resolution;
62.9 	(3) contributes to healthy relations;
62.10 	(4) provides human development and sexuality education that
62.11 	is age appropriate and medically accurate;
62.12 	(5) promotes responsible sexual behavior, including an
62.13 	abstinence-first approach to delaying initiation to sexual
62.14 	activity that emphasizes abstinence while also including
62.15 	education about the use of protection and contraception; and 
62.16 	(6) promotes individual responsibility.
62.17 	(b) "Age appropriate" refers to topics, messages, and
62.18 	teaching methods suitable to particular ages or age groups of
62.19 	children and adolescents, based on developing cognitive,
62.20 	emotional, and behavioral capacity typical for the age or age
62.21 	group.
62.22 	(c) "Medically accurate" means verified or supported by
62.23 	research conducted in compliance with scientific methods and
62.24 	published in peer-reviewed journals, where appropriate, and
62.25 	recognized as accurate and objective by professional
62.26 	organizations and agencies in the relevant field, such as the
62.27 	federal Centers for Disease Control and Prevention, the American
62.28 	Public Health Association, the American Academy of Pediatrics,
62.29 	or the American College of Obstetricians and Gynecologists.
62.30 		Subd. 2.Curriculum requirements. (a) A school district
62.31 	may offer and may independently establish policies, procedures,
62.32 	curriculum, and services for providing comprehensive family life
62.33 	and sexuality education that is age appropriate and medically
62.34 	accurate for kindergarten through grade 6.
62.35 	(b) A school district must offer and may independently
62.36 	establish policies, procedures, curriculum, and services for
63.1 	providing comprehensive family life and sexuality education that
63.2 	is age appropriate and medically accurate for grades 7 through
63.3 	12.
63.4 		Subd. 3.Notice and parental options. (a) It is the
63.5 	legislature's intent to encourage pupils to communicate with the
63.6 	pupils' parents or guardians about human sexuality and to
63.7 	respect rights of parents or guardians to supervise the parents'
63.8 	or guardians' children's education on these subjects.
63.9 	(b) Parents or guardians may excuse the parents' or
63.10 	guardians' children from all or part of a comprehensive family
63.11 	life and sexuality education program.
63.12 	(c) A school district must establish procedures for
63.13 	providing parents or guardians reasonable notice with the
63.14 	following information:
63.15 	(1) if the district is offering a comprehensive family life
63.16 	and sexuality education program to the parents' or guardians'
63.17 	child during the course of the year;
63.18 	(2) how the parents or guardians may inspect the written
63.19 	and audiovisual educational materials used in the program and
63.20 	the process for inspection;
63.21 	(3) if the program is presented by school district
63.22 	personnel or outside consultants, and if outside consultants are
63.23 	used, who they may be; and 
63.24 	(4) the right to choose not to have the parents' or
63.25 	guardians' child participate in the program and the procedure
63.26 	for exercising that right.
63.27 	(d) A school district must establish procedures for
63.28 	reasonably restricting the availability of written and
63.29 	audiovisual educational materials from public view of students
63.30 	who have been excused from all or part of a comprehensive family
63.31 	life and sexuality education program at the request of a parent
63.32 	or guardian.

63.33 	Sec. 24. Minnesota Statutes 2004, section 121A.53, is
63.34 	amended to read:
63.35 	121A.53 REPORT TO COMMISSIONER OF EDUCATION.
63.36 		Subdivision 1.Exclusions and expulsions. The school
64.1 	board shall must report through the department electronic
64.2 	reporting system each exclusion or expulsion within 30 days of
64.3 	the effective date of the action to the commissioner of
64.4 	education.  This report shall must include a statement of
64.5 	alternative educational services given the pupil and the reason
64.6 	for, the effective date, and the duration of the exclusion or
64.7 	expulsion. The report must also include the student's age,
64.8 	grade, gender, race, and special education status.
64.9 		Subd. 2.Report. The school board must include state
64.10 	student identification numbers of affected pupils on all
64.11 	dismissal reports required by the department.  The department
64.12 	must report annually to the commissioner summary data on the
64.13 	number of dismissals by age, grade, gender, race, and special
64.14 	education status of the affected pupils. All dismissal reports
64.15 	must be submitted through the department electronic reporting
64.16 	system.

64.17 	Sec. 25. Minnesota Statutes 2004, section 122A.06,
64.18 	subdivision 4, is amended to read:
64.19 		Subd. 4.Comprehensive, scientifically based reading
64.20 	instruction. "Comprehensive, scientifically based reading
64.21 	instruction" includes instruction and practice in phonemic
64.22 	awareness, phonics and other word-recognition skills, and guided
64.23 	oral reading for beginning readers, as well as extensive silent
64.24 	reading, vocabulary instruction, instruction in comprehension,
64.25 	and instruction that fosters understanding and higher-order
64.26 	thinking for readers of all ages and proficiency
64.27 	levels."Comprehensive, scientifically based reading
64.28 	instruction" includes a program or collection of instructional
64.29 	practices with demonstrated success in instructing learners and
64.30 	reliable and valid evidence to support the conclusion that when
64.31 	these methods are used with learners, learners can be expected
64.32 	to achieve, at a minimum, satisfactory progress in reading
64.33 	achievement.  The program or collection of practices must
64.34 	include, at a minimum, instruction in five areas of reading:
64.35 	phonemic awareness, phonics, fluency, vocabulary, and text
64.36 	comprehension.
65.1 	Comprehensive, scientifically based reading instruction
65.2 	also includes and integrates instructional strategies for
65.3 	continuously assessing and evaluating the learner's reading
65.4 	progress and needs in order to design and implement ongoing
65.5 	interventions so that learners of all ages and proficiency
65.6 	levels can read and comprehend text and apply higher-level
65.7 	thinking skills.

65.8 	Sec. 26. Minnesota Statutes 2004, section 122A.12,
65.9 	subdivision 2, is amended to read:
65.10 		Subd. 2.Terms; compensation; removal; administration;
65.11 	reimbursement. (a) Membership terms, removal of members, and
65.12 	the filling of membership vacancies are as provided in section
65.13 	214.09.  The terms of the initial board members must be
65.14 	determined by lot as follows:
65.15 	(1) three members must be appointed for terms that expire
65.16 	August 1, 2002;
65.17 	(2) three members must be appointed for terms that expire
65.18 	August 1, 2003; and
65.19 	(3) four members must be appointed for terms that expire
65.20 	August 1, 2004.
65.21 	Members shall not receive the daily payment under section
65.22 	214.09, subdivision 3.  The public employer of a member shall
65.23 	not reduce the member's compensation or benefits for the
65.24 	member's absence from employment when engaging in the business
65.25 	of the board.  The provision of staff, administrative services,
65.26 	and office space; the review and processing of complaints; the
65.27 	setting of fees; the selection and duties of an executive
65.28 	secretary to serve the board; and other provisions relating to
65.29 	board operations are as provided in chapter 214.  Fiscal year
65.30 	and reporting requirements are as provided in sections 214.07
65.31 	and 214.08.
65.32 	(b) The board may reimburse local school districts for the
65.33 	cost of a substitute teacher employed when a regular teacher is
65.34 	providing professional assistance to the state by serving on the
65.35 	board or on a committee or task force appointed by the board.

65.36 	Sec. 27. Minnesota Statutes 2004, section 122A.18,
66.1 	subdivision 2a, is amended to read:
66.2 		Subd. 2a.Reading strategies.  (a) All colleges and
66.3 	universities approved by the Board of Teaching to prepare
66.4 	persons for classroom teacher licensure must include in their
66.5 	teacher preparation programs reading best practices that enable
66.6 	classroom teacher licensure candidates to know how to teach
66.7 	reading, such as phonics or other research-based best practices
66.8 	in reading, consistent with section 122A.06, subdivision 4, that
66.9 	enable the licensure candidate to know how to teach reading in
66.10 	the candidate's content areas.
66.11 	(b) Board-approved teacher preparation programs for
66.12 	teachers of elementary education must require instruction in the
66.13 	application of comprehensive, scientifically based, and balanced
66.14 	reading instruction programs.that:
66.15 	(1) teach students to read using foundational knowledge,
66.16 	practices, and strategies consistent with section 122A.06,
66.17 	subdivision 4, so that all students will achieve continuous
66.18 	progress in reading; and 
66.19 	(2) teach specialized instruction in reading strategies,
66.20 	interventions, and remediations that enable students of all ages
66.21 	and proficiency levels to become proficient readers.

66.22 	Sec. 28. Minnesota Statutes 2004, section 122A.40,
66.23 	subdivision 5, is amended to read:
66.24 		Subd. 5.Probationary period.  (a) The first three
66.25 	consecutive years of a teacher's first teaching experience in
66.26 	Minnesota in a single district is deemed to be a probationary
66.27 	period of employment, and after completion thereof, the
66.28 	probationary period in each district in which the teacher is
66.29 	thereafter employed shall be one year.  The school board must
66.30 	adopt a plan for written evaluation of teachers during the
66.31 	probationary period.  Evaluation must occur at least three times
66.32 	each year for a teacher performing services on 120 or more
66.33 	school days, at least two times each year for a teacher
66.34 	performing services on 60 to 119 school days, and at least one
66.35 	time each year for a teacher performing services on fewer than
66.36 	60 school days.  Days devoted to parent-teacher conferences,
67.1 	teachers' workshops, and other staff development opportunities
67.2 	and days on which a teacher is absent from school must not be
67.3 	included in determining the number of school days on which a
67.4 	teacher performs services.  Except as otherwise provided in
67.5 	paragraph (b), during the probationary period any annual
67.6 	contract with any teacher may or may not be renewed as the
67.7 	school board shall see fit.  However, the board must give any
67.8 	such teacher whose contract it declines to renew for the
67.9 	following school year written notice to that effect before July
67.10 	1.  If the teacher requests reasons for any nonrenewal of a
67.11 	teaching contract, the board must give the teacher its reason in
67.12 	writing, including a statement that appropriate supervision was
67.13 	furnished describing the nature and the extent of such
67.14 	supervision furnished the teacher during the employment by the
67.15 	board, within ten days after receiving such request.  The school
67.16 	board may, after a hearing held upon due notice, discharge a
67.17 	teacher during the probationary period for cause, effective
67.18 	immediately, under section 122A.44.
67.19 	(b) A board must discharge a probationary teacher,
67.20 	effective immediately, upon receipt of notice under section
67.21 	122A.20, subdivision 1, paragraph (b), that the teacher's
67.22 	license has been revoked due to a conviction for child abuse or
67.23 	sexual abuse.
67.24 	(c) A probationary teacher must complete at least 60 days
67.25 	of teaching service each year during the probationary period.
67.26 	Days devoted to parent-teacher conferences, teachers' workshops,
67.27 	and other staff development opportunities and days on which a
67.28 	teacher is absent from school do not count as days of teaching
67.29 	service under this paragraph.
67.30 	(d) A probationary teacher whose first three years of
67.31 	consecutive employment is interrupted for active military
67.32 	service and who promptly resumes teaching consistent with
67.33 	federal reemployment timelines for uniformed service personnel
67.34 	under United States Code, title 38, section 4312(e), is
67.35 	considered to have a consecutive teaching experience for
67.36 	purposes of paragraph (a).
68.1 	
EFFECTIVE DATE. Paragraph (c) of this section is
68.2 	effective July 1, 2005.  Paragraph (d) of this section is
68.3 	retroactively effective from September 10, 2001, and applies to
68.4 	those probationary teachers absent for active military service
68.5 	beginning on September 10, 2001, or later.

68.6 	Sec. 29. Minnesota Statutes 2004, section 122A.41,
68.7 	subdivision 2, is amended to read:
68.8 		Subd. 2.Probationary period; discharge or demotion. (a) 
68.9 	All teachers in the public schools in cities of the first class
68.10 	during the first three years of consecutive employment shall be
68.11 	deemed to be in a probationary period of employment during which
68.12 	period any annual contract with any teacher may, or may not, be
68.13 	renewed as the school board, after consulting with the peer
68.14 	review committee charged with evaluating the probationary
68.15 	teachers under subdivision 3, shall see fit.  The school site
68.16 	management team or the school board if there is no school site
68.17 	management team, shall adopt a plan for a written evaluation of
68.18 	teachers during the probationary period according to subdivision
68.19 	3.  Evaluation by the peer review committee charged with
68.20 	evaluating probationary teachers under subdivision 3 shall occur
68.21 	at least three times each year for a teacher performing services
68.22 	on 120 or more school days, at least two times each year for a
68.23 	teacher performing services on 60 to 119 school days, and at
68.24 	least one time each year for a teacher performing services on
68.25 	fewer than 60 school days.  Days devoted to parent-teacher
68.26 	conferences, teachers' workshops, and other staff development
68.27 	opportunities and days on which a teacher is absent from school
68.28 	shall not be included in determining the number of school days
68.29 	on which a teacher performs services.  The school board may,
68.30 	during such probationary period, discharge or demote a teacher
68.31 	for any of the causes as specified in this code.  A written
68.32 	statement of the cause of such discharge or demotion shall be
68.33 	given to the teacher by the school board at least 30 days before
68.34 	such removal or demotion shall become effective, and the teacher
68.35 	so notified shall have no right of appeal therefrom.
68.36 	(b) A probationary teacher must complete at least 60 days
69.1 	of teaching service each year during the probationary period.
69.2 	Days devoted to parent-teacher conferences, teachers' workshops,
69.3 	and other staff development opportunities and days on which a
69.4 	teacher is absent from school do not count as days of teaching
69.5 	service under this paragraph.
69.6 	(c) A probationary teacher whose first three years of
69.7 	consecutive employment is interrupted for active military
69.8 	service and who promptly resumes teaching consistent with
69.9 	federal reemployment timelines for uniformed service personnel
69.10 	under United States Code, title 38, section 4312(e), is
69.11 	considered to have a consecutive teaching experience for
69.12 	purposes of paragraph (a).
69.13 	
EFFECTIVE DATE. Paragraph (b) of this section is
69.14 	effective July 1, 2005.  Paragraph (c) of this section is
69.15 	retroactively effective from September 10, 2001, and applies to
69.16 	those probationary teachers absent for active military service
69.17 	beginning on September 10, 2001, or later.

69.18 	Sec. 30. Minnesota Statutes 2004, section 122A.41,
69.19 	subdivision 5a, is amended to read:
69.20 		Subd. 5a.Probationary period for principals hired
69.21 	internally.  A board and the exclusive representative of the
69.22 	school principals in the district may negotiate a plan for a
69.23 	probationary period of up to two school years for licensed
69.24 	teachers employed by the board who are subsequently employed by
69.25 	the board as a licensed school principal or assistant principal
69.26 	and an additional probationary period of up to two years for
69.27 	licensed assistant principals employed by the board who are
69.28 	subsequently employed by the board as a licensed school
69.29 	principal.
69.30 	
EFFECTIVE DATE. This section is effective August 1, 2005.

69.31 	Sec. 31. Minnesota Statutes 2004, section 122A.41,
69.32 	subdivision 14, is amended to read:
69.33 		Subd. 14.Services terminated by discontinuance or lack
69.34 	of pupils; preference given.  (a) A teacher whose services are
69.35 	terminated on account of discontinuance of position or lack of
69.36 	pupils must receive first consideration for other positions in
70.1 	the district for which that teacher is qualified.  In the event
70.2 	it becomes necessary to discontinue one or more positions, in
70.3 	making such discontinuance, teachers must be discontinued in any
70.4 	department in the inverse order in which they were employed,
70.5 	unless a board and the exclusive representative of teachers in
70.6 	the district negotiate a plan providing otherwise.
70.7 	(b) Notwithstanding the provisions of clause (a), a teacher
70.8 	is not entitled to exercise any seniority when that exercise
70.9 	results in that teacher being retained by the district in a
70.10 	field for which the teacher holds only a provisional license, as
70.11 	defined by the Board of Teaching, unless that exercise of
70.12 	seniority results in the termination of services, on account of
70.13 	discontinuance of position or lack of pupils, of another teacher
70.14 	who also holds a provisional license in the same field.  The
70.15 	provisions of this clause do not apply to vocational education
70.16 	licenses.
70.17 	(c) Notwithstanding the provisions of clause (a), a teacher
70.18 	must not be reinstated to a position in a field in which the
70.19 	teacher holds only a provisional license, other than a
70.20 	vocational education license, while another teacher who holds a
70.21 	nonprovisional license in the same field is available for
70.22 	reinstatement.
70.23 	
EFFECTIVE DATE. This section is effective August 1, 2005.

70.24 	Sec. 32. Minnesota Statutes 2004, section 122A.413, is
70.25 	amended to read:
70.26 	122A.413 EDUCATIONAL IMPROVEMENT PLAN.
70.27 		Subdivision 1.Qualifying plan. A district may develop
70.28 	an educational improvement plan for the purpose of qualifying
70.29 	for alternative teacher compensation aid the professional
70.30 	compensation initiative under sections 122A.414 and
70.31 	122A.415 section 122A.4142.  The plan must include measures for
70.32 	improving school district, school site, teacher, and individual
70.33 	student performance.
70.34 		Subd. 2.Plan components. The educational improvement
70.35 	plan must be approved by the school board and have at least
70.36 	these elements:
71.1 	(1) assessment and evaluation tools to measure student
71.2 	performance and progress;
71.3 	(2) performance goals and benchmarks for improvement;
71.4 	(3) measures of student attendance and completion rates;
71.5 	(4) a rigorous professional development system, consistent
71.6 	with section 122A.60,that is aligned with educational
71.7 	improvement, designed to achieve teaching quality improvement,
71.8 	and consistent with clearly defined research-based standards;
71.9 	(5) measures of student, family, and community involvement
71.10 	and satisfaction;
71.11 	(6) a data system about students and their academic
71.12 	progress that provides parents and the public with
71.13 	understandable information; and 
71.14 	(7) a teacher induction and mentoring program for
71.15 	probationary teachers that provides continuous learning and
71.16 	sustained teacher support.  The process for developing the plan
71.17 	must involve district teachers ; and 
71.18 	(8) substantial teacher participation in developing the
71.19 	plan, including teachers selected by the exclusive
71.20 	representative of the teachers.
71.21 		Subd. 3.School site accountability. A district that
71.22 	develops a plan under subdivisions 1 and 2 must ensure that each
71.23 	school site develops a board-approved educational improvement
71.24 	plan that is aligned with the district educational improvement
71.25 	plan under subdivision 2 and developed with teacher
71.26 	participation consistent with subdivision 2, clause (8).  While
71.27 	a site plan must be consistent with the district educational
71.28 	improvement plan, it may establish performance goals and
71.29 	benchmarks that meet or exceed those of the district. The
71.30 	process for developing the plan must involve site teachers.

71.31 	Sec. 33. [122A.4142] PROFESSIONAL COMPENSATION
71.32 	INITIATIVE.
71.33 		Subdivision 1.Professional compensation agreement. A
71.34 	school district and the exclusive representative of the teachers
71.35 	may adopt, by agreement, professional compensation under
71.36 	subdivision 2 to provide incentives to attract and retain
72.1 	high-quality teachers and instructional staff, encourage
72.2 	high-quality teachers to accept difficult assignments, encourage
72.3 	teachers to improve their knowledge and skills, and support
72.4 	teachers' roles in improving students' educational achievement.
72.5 		Subd. 2.Eligibility. (a) To be eligible to participate
72.6 	in the professional compensation initiative in fiscal year 2006,
72.7 	a school district must comply with the conditions stated in
72.8 	paragraph (b) or with the following conditions:
72.9 	(1) submit to the department a letter of intent executed by
72.10 	the school district and the exclusive representative of the
72.11 	teachers to complete planning for and satisfy the conditions for
72.12 	participation in fiscal year 2007 and later;
72.13 	(2) reserve at least two percent of basic revenue for staff
72.14 	development purposes consistent with sections 122A.60 and
72.15 	122A.61, subdivision 1; and 
72.16 	(3) commit to spending at least the additional one percent
72.17 	of basic revenue available through participation in the
72.18 	professional compensation initiative for staff development
72.19 	supporting the development of a district educational improvement
72.20 	plan and site-based educational improvement plan under section
72.21 	122A.413 and for developing the professional compensation
72.22 	agreement under this section.
72.23 	(b) To be eligible to participate in the professional
72.24 	compensation initiative in fiscal year 2007 and later, a school
72.25 	district must submit to the department:
72.26 	(1) a districtwide or site-based educational improvement
72.27 	plan as described in section 122A.413; and 
72.28 	(2) an executed collective bargaining agreement that
72.29 	contains at least the following elements:
72.30 	(i) a description of the conditions or actions necessary
72.31 	for career advancement and additional compensation;
72.32 	(ii) compensation provisions that base at least 60 percent
72.33 	of any increase in compensation on performance and not on years
72.34 	of service or the attainment of additional education or
72.35 	training;
72.36 	(iii) career advancement options for teachers retaining
73.1 	primary roles in student instruction, including staff
73.2 	development activities, and for other members of the bargaining
73.3 	unit;
73.4 	(iv) incentives for teachers' continuous improvement in
73.5 	content knowledge, pedagogy, and use of best practices;
73.6 	(v) an objective evaluation program, including classroom or
73.7 	performance observation, that is aligned with the district's or
73.8 	site's educational improvement plan, and is a component of
73.9 	determining performance;
73.10 	(vi) provisions preventing any teacher's compensation from
73.11 	being reduced as a result of implementing professional
73.12 	compensation for teachers;
73.13 	(vii) provisions enabling any teacher in the district, if
73.14 	professional compensation for teachers is applied districtwide,
73.15 	or at a site, if professional compensation for teachers applies
73.16 	only to a site, to participate in professional compensation for
73.17 	teachers without limitations by quota or other restrictions;
73.18 	(viii) provisions encouraging collaboration among teachers
73.19 	rather than competition; and 
73.20 	(ix) provisions for participation by all teachers in a
73.21 	district, all teachers at a site, or at least 25 percent of the
73.22 	teachers in a district.
73.23 	(c) An agreement may contain different compensation
73.24 	provisions for separate classifications of employees.
73.25 		Subd. 3.Commissioner approval. (a) Before concluding a
73.26 	collective bargaining agreement, a district may submit a
73.27 	proposed agreement and educational improvement plan for review,
73.28 	comment, and preliminary approval by the commissioner.  If the
73.29 	plan and agreement are executed in the same form as
73.30 	preliminarily approved by the commissioner, the plan and
73.31 	agreement must be approved without further review.
73.32 	(b) The application to the commissioner must contain a
73.33 	formally adopted collective bargaining agreement, memorandum of
73.34 	understanding, or other binding agreement that implements the
73.35 	professional compensation initiative consistent with this
73.36 	section.
74.1 	(c) The commissioner's approval must be based on the
74.2 	requirements established in subdivision 2.  If the commissioner
74.3 	does not approve an application, the notice to the school
74.4 	district must provide details regarding the commissioner's
74.5 	reason for rejecting the application.
74.6 		Subd. 4.Professional compensation revenue. (a)
74.7 	Professional compensation revenue for a school district that
74.8 	qualifies for participation under subdivision 2, paragraph (a),
74.9 	equals one percent of basic revenue, under section 126C.10,
74.10 	subdivision 2.
74.11 	(b) For participation in fiscal year 2007 and later, the
74.12 	school district's application must be approved by the
74.13 	commissioner under subdivision 3.
74.14 	(c) Professional compensation revenue for a qualifying
74.15 	school district, site, or portion of a district or school site
74.16 	that qualifies for participation under subdivision 2, paragraph
74.17 	(b), is as follows:
74.18 	(1) for a school district in which the school board and the
74.19 	exclusive representative of the teachers agree to place all
74.20 	teachers in the district in the professional compensation for
74.21 	teachers initiative, revenue equals one percent of the
74.22 	district's basic revenue for the fiscal year; or if a site only
74.23 	is participating, the portion of one percent attributable to the
74.24 	site's number of pupils enrolled on October 1 of the previous
74.25 	fiscal year; or 
74.26 	(2) for a district in which the school board and the
74.27 	exclusive representative of the teachers agree that at least 25
74.28 	percent of the district's licensed teachers will participate in
74.29 	the professional compensation initiative revenue equals one
74.30 	percent of basic revenue for the fiscal year multiplied by the
74.31 	percentage of participating teachers.
74.32 		Subd. 5.Percentage of teachers. For purposes of
74.33 	subdivision 4, the percentage of teachers participating in the
74.34 	professional compensation initiative equals the ratio of the
74.35 	number of licensed teachers who are working at least 60 percent
74.36 	of a full-time teacher's hours and agree to participate in the
75.1 	initiative to the total number of licensed teachers who are
75.2 	working at least 60 percent of a full-time teacher's hours.
75.3 		Subd. 6.Revenue timing. Districts or sites with
75.4 	approved applications must receive professional compensation
75.5 	revenue for each school year that the district or site
75.6 	participates in the initiative and is in compliance with the
75.7 	conditions for participation.
75.8 		Subd. 7.Basic revenue. A school district that qualifies
75.9 	for participation in the professional compensation initiative
75.10 	under subdivision 2, paragraph (b), may use the two percent of
75.11 	basic revenue that would otherwise be reserved under section
75.12 	122A.61 for compliance with the professional compensation
75.13 	agreement under this section.  If fewer than all of the licensed
75.14 	teachers in the district participate in the initiative, the
75.15 	amount of the two percent that may be used for the initiative
75.16 	equals the two percent multiplied by the percentage of licensed
75.17 	teachers participating in the initiative.
75.18 		Subd. 8.Participation. If a district and bargaining
75.19 	unit do not participate in the professional compensation
75.20 	initiatives in fiscal year 2006, they may elect to participate
75.21 	in subsequent years.  The requirements for participation in the
75.22 	first year are the requirements described for fiscal year 2006.
75.23 	
EFFECTIVE DATE. This section is effective for fiscal year
75.24 	2006 and thereafter.

75.25 	Sec. 34. [122A.4143] CLOSED CONTRACT.
75.26 	A district and the exclusive representative of the teachers
75.27 	may agree jointly to reopen a collective bargaining agreement
75.28 	for the sole purpose of entering into a professional
75.29 	compensation system consistent with section 122A.4142 and an
75.30 	educational improvement plan under section 122A.413.

75.31 	EFFECTIVE DATE. This section is effective for fiscal year
75.32 	2006 and later.

75.33 	Sec. 35. [122A.4144] PROFESSIONAL COMPENSATION PILOT SITE
75.34 	AID.
75.35 		Subdivision 1.Aid amount. (a) A school district that
75.36 	received revenue under Minnesota Statutes 2004, section
76.1 	122A.415, or meets the eligibility conditions of section
76.2 	122A.4142, subdivision 1, paragraph (b), and submits an
76.3 	application approved by the commissioner is eligible for
76.4 	professional compensation pilot site aid.  The commissioner must
76.5 	consider only applications submitted jointly by a school
76.6 	district and the exclusive representative of the teachers for
76.7 	participation in the program.  The application must contain a
76.8 	formally adopted collective bargaining agreement, memorandum of
76.9 	understanding, or other binding agreement that implements a
76.10 	professional compensation pay system consistent with the
76.11 	eligibility conditions of section 122A.4142, subdivision 2,
76.12 	paragraph (b), and includes all teachers in a district, all
76.13 	teachers at a school site, or at least 25 percent of the
76.14 	teachers in a district.  The commissioner, in approving
76.15 	applications, may give preference to applications involving
76.16 	entire districts or sites or to applications that align measures
76.17 	of teacher performance with student academic achievement and
76.18 	progress under section 122A.4142.
76.19 	(b) Professional compensation aid for a qualifying school
76.20 	district, site, or portion of a district or school site is as
76.21 	follows:
76.22 	(1) for a school district in which the school board and the
76.23 	exclusive representative of the teachers agree to place all
76.24 	teachers in the district or at the site on the alternative
76.25 	compensation schedule, alternative compensation aid equals $150
76.26 	times the district's or the site's number of pupils enrolled on
76.27 	October 1 of the previous fiscal year; or 
76.28 	(2) for a district in which the school board and the
76.29 	exclusive representative of the teachers agree that at least 25
76.30 	percent of the district's licensed teachers will be paid on the
76.31 	alternative compensation schedule, alternative compensation aid
76.32 	equals $150 times the percentage of participating teachers times
76.33 	the district's number of pupils enrolled as of October 1 of the
76.34 	previous fiscal year.
76.35 		Subd. 2.Percentage of teachers. For purposes of this
76.36 	section, the percentage of teachers participating in the teacher
77.1 	professional pay system equals the ratio of the number of
77.2 	licensed teachers who are working at least 60 percent of a
77.3 	full-time teacher's hours and agree to participate in the
77.4 	teacher professional pay system to the total number of licensed
77.5 	teachers who are working at least 60 percent of a full-time
77.6 	teacher's hours.
77.7 		Subd. 3.Aid timing. (a) Districts or sites with
77.8 	approved applications must receive alternative compensation aid
77.9 	for each school year that the district or site participates in
77.10 	the program as described in this subdivision.  Districts or
77.11 	sites with applications received by the commissioner before June
77.12 	1 of the first year of a two-year contract shall receive
77.13 	alternative compensation aid for both years of the contract.
77.14 	Districts or sites with applications received by the
77.15 	commissioner after June 1 of the first year of a two-year
77.16 	contract shall receive alternative compensation aid only for the
77.17 	second year of the contract.  A qualifying district or site that
77.18 	received alternative compensation aid for the previous fiscal
77.19 	year must receive at least an amount equal to the lesser of the
77.20 	amount it received for the previous fiscal year or its
77.21 	proportionate share of the previous year's appropriation if the
77.22 	district or site submits a timely application and the
77.23 	commissioner determines that the district or site continues to
77.24 	implement an alternative teacher professional pay system,
77.25 	consistent with its application under this section.  The
77.26 	commissioner must approve initial applications for school
77.27 	districts qualifying under subdivision 1, paragraph (b), clause
77.28 	(1), by January 15 of each year.  If any money remains, the
77.29 	commissioner must approve aid amounts for school districts
77.30 	qualifying under subdivision 1, paragraph (b), clause (2), by
77.31 	February 15 of each year.
77.32 	(b) The commissioner shall select applicants that qualify
77.33 	for this program, notify school districts and school sites about
77.34 	the program, develop and disseminate application materials, and
77.35 	carry out other activities needed to implement this section.
77.36 	
EFFECTIVE DATE. This section is effective for revenue for
78.1 	fiscal year 2006 and later.

78.2 	Sec. 36. Minnesota Statutes 2004, section 122A.60,
78.3 	subdivision 1, is amended to read:
78.4 		Subdivision 1.Staff development committee.  A school
78.5 	board must use the revenue authorized in section 122A.61 for
78.6 	in-service education for programs under section 120B.22,
78.7 	subdivision 2, or for staff development plans under this
78.8 	section.  The board must establish an advisory staff development
78.9 	committee to develop the plan, assist site professional
78.10 	development teams in developing a site plan consistent with the
78.11 	goals of the plan, and evaluate staff development efforts at the
78.12 	site level.  A majority of the advisory committee and the site
78.13 	professional development team must be teachers representing
78.14 	various grade levels, subject areas, and special education.  The
78.15 	advisory committee must also include nonteaching staff, parents,
78.16 	and administrators. Districts must report staff development
78.17 	results and expenditures to the commissioner in the form and
78.18 	manner determined by the commissioner.  The expenditure report
78.19 	must include expenditures by the board for district level
78.20 	activities and expenditures made by the staff.  The report must
78.21 	provide a breakdown of expenditures for (1) curriculum
78.22 	development and programs, (2) in-service education, workshops,
78.23 	and conferences, and (3) the cost of teachers or substitute
78.24 	teachers for staff development purposes.  Within each of these
78.25 	categories, the report must also indicate whether the
78.26 	expenditures were incurred at the district level or the school
78.27 	site level, and whether the school site expenditures were made
78.28 	possible by the grants to school sites that demonstrate
78.29 	exemplary use of allocated staff development revenue.  These
78.30 	expenditures are to be reported using the UFARS system.  The
78.31 	commissioner shall report the staff development expenditure data
78.32 	to the education committees of the legislature by February 15
78.33 	each year.

78.34 	Sec. 37. Minnesota Statutes 2004, section 122A.60, is
78.35 	amended by adding a subdivision to read:
78.36 		Subd. 1a.Effective staff development activities. Staff
79.1 	development activities must:
79.2 	(1) focus on the school classroom and research-based
79.3 	strategies that improve student learning;
79.4 	(2) provide opportunities for teachers to practice and
79.5 	improve their skills over time;
79.6 	(3) provide opportunities for teachers to use data to
79.7 	increase student achievement as part of their daily work;
79.8 	(4) enhance teacher content knowledge and instructional
79.9 	skills;
79.10 	(5) align with state and local academic standards; and 
79.11 	(6) provide opportunities to build professional
79.12 	relationships, foster collaboration among principals and staff
79.13 	who provide instruction, and provide opportunities for
79.14 	teacher-to-teacher mentoring.
79.15 	Staff development activities may include curriculum development
79.16 	and curriculum training programs, and activities that provide
79.17 	teachers and other members of site-based teams training to
79.18 	enhance team performance.  In addition, the school district may
79.19 	implement other staff development activities as required by law
79.20 	and those associated with professional teacher compensation
79.21 	models.  Release time provided for teachers to supervise
79.22 	students on field trips and school activities, or independent
79.23 	tasks not associated with enhancing the teacher's knowledge and
79.24 	skills, such as preparing report cards, calculating grades, or
79.25 	organizing classroom materials, may not be counted as staff
79.26 	development time that is financed with staff development
79.27 	reserved revenue under section 122A.61.

79.28 	Sec. 38. Minnesota Statutes 2004, section 122A.60, is
79.29 	amended by adding a subdivision to read:
79.30 		Subd. 4.Staff development report. (a) By October 15 of
79.31 	each year, the district and site staff development committees
79.32 	shall write and submit a report of staff development activities
79.33 	and expenditures for the previous year, in the form and manner
79.34 	determined by the commissioner.  The report must include
79.35 	assessment and evaluation data indicating progress toward
79.36 	district and site staff development goals based on teaching and
80.1 	learning outcomes, including the percentage of teachers and
80.2 	other staff involved in instruction participating in effective
80.3 	staff development activities under subdivision 3.
80.4 	(b) The report must provide a breakdown of expenditures for:
80.5 	(1) curriculum development and curriculum training
80.6 	programs; and 
80.7 	(2) staff development training models, workshops, and
80.8 	conferences, and the cost of releasing teachers or providing
80.9 	substitute teachers for staff development purposes.
80.10 	The report must also include whether the expenditures were
80.11 	incurred at the district level or the school site level, and
80.12 	whether the school site expenditures were made possible by
80.13 	grants to school sites that demonstrate exemplary use of
80.14 	allocated staff development revenue.  These expenditures must be
80.15 	reported using the uniform financial and accounting and
80.16 	reporting standards.
80.17 	(c) The commissioner shall report the staff development
80.18 	progress and expenditure data to the house of representatives
80.19 	and senate committees having jurisdiction over education by
80.20 	February 15 each year.

80.21 	Sec. 39. Minnesota Statutes 2004, section 122A.61,
80.22 	subdivision 1, is amended to read:
80.23 		Subdivision 1.Staff development revenue.  A district is
80.24 	required to reserve an amount equal to at least two percent of
80.25 	the basic revenue under section 126C.10, subdivision 2, for
80.26 	in-service education for programs under section 120B.22,
80.27 	subdivision 2, for staff development plans, including plans for
80.28 	challenging instructional activities and experiences under
80.29 	section 122A.60, and for curriculum development and programs,
80.30 	other in-service education, teachers' workshops, teacher
80.31 	conferences, the cost of substitute teachers staff development
80.32 	purposes, preservice and in-service education for special
80.33 	education professionals and paraprofessionals, and other related
80.34 	costs for staff development efforts. A district may annually
80.35 	waive the requirement to reserve their basic revenue under this
80.36 	section if a majority vote of the licensed teachers in the
81.1 	district and a majority vote of the school board agree to a
81.2 	resolution to waive the requirement.A district in statutory
81.3 	operating debt is exempt from reserving basic revenue according
81.4 	to this section.  Districts may expend an additional amount of
81.5 	unreserved revenue for staff development based on their needs.
81.6 	With the exception of amounts reserved for staff development
81.7 	from revenues allocated directly to school sites, the board must
81.8 	initially allocate 50 percent of the reserved revenue to each
81.9 	school site in the district on a per teacher basis, which must
81.10 	be retained by the school site until used.  The board may retain
81.11 	25 percent to be used for district wide staff development
81.12 	efforts.  The remaining 25 percent of the revenue must be used
81.13 	to make grants to school sites for best practices methods.  A
81.14 	grant may be used for any purpose authorized under section
81.15 	120B.22, subdivision 2, 122A.60, or for the costs of curriculum
81.16 	development and programs, other in-service education, teachers'
81.17 	workshops, teacher conferences, substitute teachers for staff
81.18 	development purposes, and other staff development efforts, and
81.19 	determined by the site professional development team.  The site
81.20 	professional development team must demonstrate to the school
81.21 	board the extent to which staff at the site have met the
81.22 	outcomes of the program.  The board may withhold a portion of
81.23 	initial allocation of revenue if the staff development outcomes
81.24 	are not being met. A school district that participates in the
81.25 	professional compensation initiative may, but is not required
81.26 	to, reserve revenue under this section, except to the extent the
81.27 	school district agrees to reserve or use revenue as a condition
81.28 	of participation in the initiative.

81.29 	Sec. 40. [122A.628] SCHOOLS MENTORING SCHOOLS REGIONAL
81.30 	SITES.
81.31 		Subdivision 1.Program. The commissioner of education
81.32 	shall select up to four school districts, or partnerships of
81.33 	school districts, for the purpose of assisting other school
81.34 	districts in the region with the development of thorough and
81.35 	effective teacher mentoring programs.  The commissioner shall
81.36 	use geographic balance and proven teacher induction programs as
82.1 	criteria when selecting the sites.  One site must include the
82.2 	Brainerd teacher support system, which has been cited by the
82.3 	Minnesota Board of Teaching as a model program and was one of
82.4 	only six programs in the nation to be recognized for the 2004
82.5 	NEA-Saturn/UAW partnership award.  The sites shall be known as
82.6 	schools mentoring schools regional sites.
82.7 	The sites shall provide high quality mentoring assistance
82.8 	programs and services to other nearby school districts for the
82.9 	development of effective systems of support for new teachers.
82.10 	The sites shall offer coaching/mentor training, in-class
82.11 	observation training, and train-the-teacher opportunities for
82.12 	teams of participating teachers.  The sites shall use their
82.13 	recognized experience and methods to equip schools to work with
82.14 	their own new and beginning teachers.  The commissioner shall
82.15 	review and report annually to the legislature on the operation
82.16 	of each training center.
82.17 		Subd. 2.Revenue. A school district that is selected to
82.18 	participate in the schools mentoring schools program under this
82.19 	section may utilize its professional compensation revenue under
82.20 	section 122A.4142, subdivision 4, to pay regional training sites
82.21 	for staff development and training services.

82.22 	Sec. 41. [122A.74] PRINCIPALS' LEADERSHIP INSTITUTE.
82.23 		Subdivision 1.Establishment. (a) The commissioner of
82.24 	education may contract with the regents of the University of
82.25 	Minnesota to establish a Principals' Leadership Institute to
82.26 	provide professional development to school principals by:
82.27 	(1) creating a network of leaders in the educational and
82.28 	business communities to communicate current and future trends in
82.29 	leadership techniques;
82.30 	(2) helping to create a vision for the school that is
82.31 	aligned with the community and district priorities; and 
82.32 	(3) developing strategies to retain highly qualified
82.33 	teachers.
82.34 	(b) The University of Minnesota must cooperate with
82.35 	participating members of the business community to provide
82.36 	funding and content for the institute.
83.1 	(c) Participants must agree to attend the Principals'
83.2 	Leadership Institute for four weeks during the academic summer.
83.3 	(d) The Principals' Leadership Institute must incorporate
83.4 	program elements offered by leadership programs at the
83.5 	University of Minnesota and program elements used by the
83.6 	participating members of the business community to enhance
83.7 	leadership within their businesses.
83.8 		Subd. 2.Method of selection and requirements. (a) The
83.9 	board of each school district in the state may select a
83.10 	principal, upon the recommendation of the district's
83.11 	superintendent and based on the principal's leadership
83.12 	potential, to attend the institute.
83.13 	(b) The school board shall forward its list of recommended
83.14 	participants to the commissioner of education by February 1 each
83.15 	year.  In addition, a principal may submit an application
83.16 	directly to the commissioner by February 1.  The commissioner of
83.17 	education shall notify the school board, the principal
83.18 	candidates, and the University of Minnesota of the principals
83.19 	selected to participate in the Principals' Leadership Institute
83.20 	each year.

83.21 	Sec. 42. Minnesota Statutes 2004, section 123B.02, is
83.22 	amended by adding a subdivision to read:
83.23 		Subd. 14a.Employee recognition. A school board may
83.24 	establish and operate an employee recognition program for
83.25 	district employees, including teachers, and may expend funds as
83.26 	necessary to achieve the objectives of the program.  The
83.27 	employee recognition program shall not include monetary awards.

83.28 	Sec. 43. Minnesota Statutes 2004, section 123B.02, is
83.29 	amended by adding a subdivision to read:
83.30 		Subd. 22.Rewards. A school board may offer a reward to
83.31 	persons who provide accurate and reliable information that leads
83.32 	to the apprehension and arrest of a person who has committed a
83.33 	crime against school district property, students, employees or
83.34 	volunteers, or school board members.
83.35 	
EFFECTIVE DATE. This section is effective the day
83.36 	following final enactment.

84.1 	Sec. 44. Minnesota Statutes 2004, section 123B.04,
84.2 	subdivision 1, is amended to read:
84.3 		Subdivision 1.Definition.  "Education site" means a
84.4 	separate facility.  A program within a facility or within a
84.5 	district is an education site if the school board recognizes it
84.6 	as a site.

84.7 	Sec. 45. Minnesota Statutes 2004, section 123B.04,
84.8 	subdivision 2, is amended to read:
84.9 		Subd. 2.Agreement.  (a) Either the school board or the
84.10 	school site decision-making team may request that the school
84.11 	board enter into an agreement with a school site decision-making
84.12 	team concerning Upon the request of 60 percent of the licensed
84.13 	employees of a site or a school site decision-making team, the
84.14 	school board shall enter into discussions to reach an agreement
84.15 	concerning the governance, management, or control of the
84.16 	school.  A school site decision-making team may include the
84.17 	school principal, teachers in the school or their designee,
84.18 	other employees in the school, parents of pupils in the school,
84.19 	representatives of pupils in the school, or other members in the
84.20 	community. For purposes of formation of a new site, a school
84.21 	site decision-making team may be a team of teachers that is
84.22 	recognized by the board as a site.The school site
84.23 	decision-making team shall include the school principal or other
84.24 	person having general control and supervision of the school.
84.25 	The site decision-making team must reflect the diversity of the
84.26 	education site. No more than At least one-half of the members
84.27 	shall be employees of the district, unless an employee is the
84.28 	parent of a student enrolled in the school site, in which case
84.29 	the employee may elect to serve as a parent member of the site
84.30 	team.
84.31 	(b) School site decision-making agreements must delegate
84.32 	powers, duties, and broad management responsibilities to site
84.33 	teams and involve staff members, students as appropriate, and
84.34 	parents in decision making.
84.35 	(c) An agreement shall include a statement of powers,
84.36 	duties, responsibilities, and authority to be delegated to and
85.1 	within the site.
85.2 	(d) An agreement may include:
85.3 	(1) an achievement contract according to subdivision 4;
85.4 	(2) a mechanism to allow principals, a site leadership
85.5 	team,or other persons having general control and supervision of
85.6 	the school, to make decisions regarding how financial and
85.7 	personnel resources are best allocated at the site and from whom
85.8 	goods or services are purchased;
85.9 	(3) a mechanism to implement parental involvement programs
85.10 	under section 124D.895 and to provide for effective parental
85.11 	communication and feedback on this involvement at the site
85.12 	level;
85.13 	(4) a provision that would allow the team to determine who
85.14 	is hired into licensed and nonlicensed positions;
85.15 	(5) a provision that would allow teachers to choose the
85.16 	principal or other person having general control;
85.17 	(6) an amount of revenue allocated to the site under
85.18 	subdivision 3; and
85.19 	(7) any other powers and duties determined appropriate by
85.20 	the board.
85.21 	The school board of the district remains the legal employer
85.22 	under clauses (4) and (5).
85.23 	(e) Any powers or duties not delegated to the school site
85.24 	management team in the school site management agreement shall
85.25 	remain with the school board.
85.26 	(f) Approved agreements shall be filed with the
85.27 	commissioner.  If a school board denies a request or the school
85.28 	site and school board fail to reach an agreement to enter into a
85.29 	school site management agreement, it the school board shall
85.30 	provide a copy of the request and the reasons for its denial to
85.31 	the commissioner.

85.32 	Sec. 46. Minnesota Statutes 2004, section 123B.88, is
85.33 	amended by adding a subdivision to read:
85.34 		Subd. 3a.Pupil transportation safety committee. (a) A
85.35 	school board may establish a pupil transportation safety
85.36 	committee.  The chair of the pupil transportation safety
86.1 	committee is the district's school transportation safety
86.2 	director.  The school board shall appoint the other members of
86.3 	the pupil transportation safety committee.  Membership may
86.4 	include parents, school bus drivers, representatives of school
86.5 	bus companies, local law enforcement officials, other school
86.6 	district staff, and representatives from other units of local
86.7 	government.
86.8 	(b) The duties of the pupil transportation safety committee
86.9 	include:  (1) reviewing and recommending changes to the
86.10 	district's pupil transportation safety policy required under
86.11 	subdivision 1; and (2) developing a comprehensive plan for the
86.12 	safe transportation of students who face hazardous
86.13 	transportation conditions.  The comprehensive hazardous
86.14 	transportation plan shall consider safety factors including the
86.15 	types of roads that students must cross, the speed of traffic on
86.16 	those roads, the age of the students, and any other factors as
86.17 	determined by the committee.
86.18 	(c) The pupil transportation safety committee must hold at
86.19 	least one public meeting before adopting its comprehensive plan
86.20 	for transporting students who face hazardous transportation
86.21 	conditions.
86.22 	(d) Any recommended changes to the district's pupil
86.23 	transportation safety policy and the comprehensive plan for
86.24 	hazardous transportation must be submitted to the school board.
86.25 	
EFFECTIVE DATE. This section is effective the day
86.26 	following final enactment.

86.27 	Sec. 47. Minnesota Statutes 2004, section 124D.081, is
86.28 	amended to read:
86.29 	124D.081  FIRST-GRADE PREPAREDNESS ALL-DAY KINDERGARTEN 
86.30 	PROGRAM.
86.31 		Subdivision 1.Purpose. The purposes of the first-grade
86.32 	preparedness all-day kindergarten program are to ensure that
86.33 	every child has the opportunity before first grade to develop
86.34 	the skills and abilities necessary to read and succeed in school
86.35 	and to reduce the underlying causes that create a need for
86.36 	compensatory revenue.
87.1 		Subd. 2.Qualifying district. A school district may
87.2 	receive first-grade preparedness all-day kindergarten revenue
87.3 	for qualifying school sites if, consistent with subdivision 5,
87.4 	the school board approves a resolution requiring the district to
87.5 	provide services to all children located in a qualifying school
87.6 	site attendance area.
87.7 		Subd. 3.Qualifying school site. (a) The commissioner
87.8 	shall rank all school sites with kindergarten programs that do
87.9 	not exclusively serve students under sections 125A.03 to
87.10 	125A.24, and 125A.65.  The ranking must be from highest to
87.11 	lowest based on the site's free and reduced lunch count as a
87.12 	percent of the fall enrollment using the preceding October 1
87.13 	enrollment data.  Once a school site is calculated to be
87.14 	eligible, it remains eligible for the duration of the pilot
87.15 	program, unless the site's ranking falls below the state average
87.16 	for elementary schools.  For each school site, the percentage
87.17 	used to calculate the ranking must be the greater of (1) the
87.18 	percent of the fall kindergarten enrollment receiving free and
87.19 	reduced lunch, or (2) the percent of the total fall enrollment
87.20 	receiving free and reduced lunch.  The list of ranked sites must
87.21 	be separated into the following geographic areas:  Minneapolis
87.22 	district, St. Paul district, suburban Twin Cities districts in
87.23 	the seven-county metropolitan area, and school districts in
87.24 	greater Minnesota.
87.25 	(b) The commissioner shall establish a process and
87.26 	timelines to qualify school sites for the next school year.
87.27 	School sites must be qualified in each geographic area from the
87.28 	list of ranked sites until the estimated revenue available for
87.29 	this program has been allocated.  The total estimated revenue
87.30 	must be distributed to qualified school sites in each geographic
87.31 	area as follows:  25 percent for Minneapolis sites, 25 percent
87.32 	for St. Paul sites, 25 percent for suburban Twin Cities sites,
87.33 	and 25 percent for greater Minnesota.
87.34 		Subd. 4.Program. A qualifying school site must develop
87.35 	its first-grade preparedness all-day kindergarten program in
87.36 	collaboration with other providers of school readiness and child
88.1 	development services.  A school site must offer a full-day
88.2 	kindergarten program to participating children who are five
88.3 	years of age or older for the full school day every day, a
88.4 	program for participating children who are four years old, or a
88.5 	combination of both.  The program may offer as an option to
88.6 	families home visits and other practices as appropriate, and may
88.7 	provide such services with the consent of the parent or
88.8 	guardian.  Program providers must ensure that the program
88.9 	supplements existing school readiness and child development
88.10 	programs and complements the services provided with compensatory
88.11 	revenue.  Where possible, individuals receiving assistance under
88.12 	a family assistance plan can meet the work activity requirement
88.13 	of the plan by participating in a first-grade preparedness an
88.14 	all-day kindergarten program as a volunteer.
88.15 		Subd. 5.Extended day requirements. The board of a
88.16 	qualifying school district must develop and approve a plan to
88.17 	provide extended day services to serve as many children as
88.18 	possible.  To accept children whose families participate in
88.19 	child care assistance programs under section 119B.03 or 119B.05,
88.20 	and to meet the requirements of section 245A.03, subdivision 2,
88.21 	the board must formally approve the first-grade preparedness 
88.22 	all-day kindergarten program.  All revenue received under
88.23 	subdivision 6 must be allocated to the qualifying school sites
88.24 	within the district.
88.25 		Subd. 6.preparedness revenue. (a) A qualifying school
88.26 	district is eligible for first-grade preparedness all-day
88.27 	kindergarten revenue equal to the basic formula allowance for
88.28 	that year times the number of children five years of age or
88.29 	older enrolled in a kindergarten program at the site on October
88.30 	1 of the previous year times .53.
88.31 	(b) This revenue must supplement and not replace
88.32 	compensatory revenue that the district uses for the same or
88.33 	similar purposes under chapters 120B, 123A, 123B, 124D, 126C,
88.34 	and 127A.
88.35 	(c) A pupil enrolled in the first grade preparedness 
88.36 	all-day kindergarten program at a qualifying school site is
89.1 	eligible for transportation under section 123B.88, subdivision 1.
89.2 	(d) First grade preparedness All-day kindergarten revenue
89.3 	paid to a charter school for which a school district is
89.4 	providing transportation according to section 124D.10,
89.5 	subdivision 16, shall be decreased by an amount equal to the
89.6 	product of the formula allowance according to section 126C.10,
89.7 	subdivision 2, times .0485 times the pupil units calculated
89.8 	according to paragraph (a).  This amount shall be paid to the
89.9 	school district for transportation costs.
89.10 		Subd. 9.Reserve account. First grade preparedness 
89.11 	All-day kindergarten revenue must be placed in a reserve account
89.12 	within the general fund and may only be used for first grade
89.13 	preparedness all-day kindergarten programs at qualifying school
89.14 	sites.

89.15 	Sec. 48. Minnesota Statutes 2004, section 124D.09,
89.16 	subdivision 12, is amended to read:
89.17 		Subd. 12.Credits.  A pupil may enroll in a course under
89.18 	this section for either secondary credit or postsecondary
89.19 	credit.  At the time a pupil enrolls in a course, the pupil
89.20 	shall designate whether the course is for secondary or
89.21 	postsecondary credit.  A pupil taking several courses may
89.22 	designate some for secondary credit and some for postsecondary
89.23 	credit.  A pupil must not audit a course under this section.
89.24 	A district shall grant academic credit to a pupil enrolled
89.25 	in a course for secondary credit if the pupil successfully
89.26 	completes the course.  Seven quarter or four semester college
89.27 	credits equal at least one full year of high school credit.
89.28 	Fewer college credits may be prorated.  A district must also
89.29 	grant academic credit to a pupil enrolled in a course for
89.30 	postsecondary credit if secondary credit is requested by a
89.31 	pupil.  If no comparable course is offered by the district, the
89.32 	district must, as soon as possible, notify the commissioner, who
89.33 	shall determine the number of credits that shall be granted to a
89.34 	pupil who successfully completes a course.  If a comparable
89.35 	course is offered by the district, the school board shall grant
89.36 	a comparable number of credits to the pupil.  If there is a
90.1 	dispute between the district and the pupil regarding the number
90.2 	of credits granted for a particular course, the pupil may appeal
90.3 	the board's decision to the commissioner.  The commissioner's
90.4 	decision regarding the number of credits shall be final.
90.5 	The secondary credits granted to a pupil must be counted
90.6 	toward the graduation requirements and subject area requirements
90.7 	of the district.  Evidence of successful completion of each
90.8 	course and secondary credits granted must be included in the
90.9 	pupil's secondary school record.  A pupil shall provide the
90.10 	school with a copy of the pupil's grade in each course taken for
90.11 	secondary credit under this section.  Upon the request of a
90.12 	pupil, the pupil's secondary school record must also include
90.13 	evidence of successful completion and credits granted for a
90.14 	course taken for postsecondary credit.  In either case, the
90.15 	record must indicate that the credits were earned at a
90.16 	postsecondary institution.
90.17 	If a pupil enrolls in a postsecondary institution after
90.18 	leaving secondary school, the postsecondary institution must
90.19 	award postsecondary credit for any course successfully completed
90.20 	for secondary credit at that institution.  Other postsecondary
90.21 	institutions may award, after a pupil leaves secondary school,
90.22 	postsecondary credit for any courses successfully completed
90.23 	under this section.  An institution may not charge a pupil for
90.24 	the award of credit.
90.25 	The Board of Trustees of the Minnesota State Colleges and
90.26 	Universities and the Board of Regents of the University of
90.27 	Minnesota must, and private nonprofit and proprietary
90.28 	postsecondary institutions, should award postsecondary credit
90.29 	for any successfully completed courses in a program certified by
90.30 	the National Alliance of Concurrent Enrollment Partnerships
90.31 	offered according to an agreement under subdivision 10.

90.32 	Sec. 49. Minnesota Statutes 2004, section 124D.11,
90.33 	subdivision 6, is amended to read:
90.34 		Subd. 6.Other aid, grants, revenue.  (a) A charter
90.35 	school is eligible to receive other aids, grants, and revenue
90.36 	according to chapters 120A to 129C, as though it were a district.
91.1 	(b) Notwithstanding paragraph (a), a charter school may not
91.2 	receive aid, a grant, or revenue if a levy is required to obtain
91.3 	the money, or if the aid, grant, or revenue is a replacement of
91.4 	levy revenue,except as otherwise provided in this section.
91.5 	(c) Federal aid received by the state must be paid to the
91.6 	school, if it qualifies for the aid as though it were a school
91.7 	district.
91.8 	(d) A charter school may receive money from any source for
91.9 	capital facilities needs.  In the year-end report to the
91.10 	commissioner of education, the charter school shall report the
91.11 	total amount of funds received from grants and other outside
91.12 	sources.

91.13 	Sec. 50. Minnesota Statutes 2004, section 124D.66,
91.14 	subdivision 3, is amended to read:
91.15 		Subd. 3.Eligible services.  (a) Assurance of mastery
91.16 	programs may provide direct instructional services to an
91.17 	eligible pupil, or a group of eligible pupils, under the
91.18 	following conditions in paragraphs (b) to (d).
91.19 	(b) Instruction may be provided at one or more grade levels
91.20 	from kindergarten to grade 8 and for students in grades 9
91.21 	through 12 who were enrolled in grade 8 before the 2005-2006
91.22 	school year and have failed the basic skills tests, or were
91.23 	enrolled in grade 8 in the 2005-2006 school year and later and
91.24 	who have failed the Minnesota Comprehensive Assessments
91.25 	(MCA-IIs) in reading, mathematics, or writing as required for
91.26 	high school graduation under section 120B.02.  If an assessment
91.27 	of pupils' needs within a district demonstrates that the
91.28 	eligible pupils in grades kindergarten to grade 8 are being
91.29 	appropriately served, a district may serve eligible pupils in
91.30 	grades 9 to 12.
91.31 	(c) Instruction must be provided under the supervision of
91.32 	the eligible pupil's regular classroom teacher.  Instruction may
91.33 	be provided by the eligible pupil's classroom teacher, by
91.34 	another teacher, by a team of teachers, or by an education
91.35 	assistant or aide.  A special education teacher may provide
91.36 	instruction, but instruction that is provided under this section
92.1 	is not eligible for aid under section 125A.76.
92.2 	(d) The instruction that is provided must differ from the
92.3 	initial instruction the pupil received in the regular classroom
92.4 	setting.  The instruction may differ by presenting different
92.5 	curriculum than was initially presented in the regular classroom
92.6 	or by presenting the same curriculum:
92.7 	(1) at a different rate or in a different sequence than it
92.8 	was initially presented;
92.9 	(2) using different teaching methods or techniques than
92.10 	were used initially; or
92.11 	(3) using different instructional materials than were used
92.12 	initially.

92.13 	Sec. 51. Minnesota Statutes 2004, section 124D.74,
92.14 	subdivision 1, is amended to read:
92.15 		Subdivision 1.Program described.  American Indian
92.16 	education programs are programs in public elementary and
92.17 	secondary schools, nonsectarian nonpublic, community,
92.18 	tribal, charter,or alternative schools enrolling American
92.19 	Indian children designed to:
92.20 	(1) support postsecondary preparation for pupils;
92.21 	(2) support the academic achievement of American Indian
92.22 	students with identified focus to improve reading and mathematic
92.23 	skills;
92.24 	(3) make the curriculum more relevant to the needs,
92.25 	interests, and cultural heritage of American Indian pupils;
92.26 	(4) provide positive reinforcement of the self-image of
92.27 	American Indian pupils;
92.28 	(5) develop intercultural awareness among pupils, parents,
92.29 	and staff; and
92.30 	(6) supplement, not supplant, state and federal educational
92.31 	and cocurricular programs.
92.32 	Program components may include:  development of support
92.33 	components for students in the areas of academic achievement,
92.34 	retention, and attendance; development of support components for
92.35 	staff, including in-service training and technical assistance in
92.36 	methods of teaching American Indian pupils; research projects,
93.1 	including experimentation with and evaluation of methods of
93.2 	relating to American Indian pupils; provision of personal and
93.3 	vocational counseling to American Indian pupils; modification of
93.4 	curriculum, instructional methods, and administrative procedures
93.5 	to meet the needs of American Indian pupils; and supplemental
93.6 	instruction in American Indian language, literature, history,
93.7 	and culture.  Districts offering programs may make contracts for
93.8 	the provision of program components by establishing cooperative
93.9 	liaisons with tribal programs and American Indian social service
93.10 	agencies.  These programs may also be provided as components of
93.11 	early childhood and family education programs.

93.12 	Sec. 52. Minnesota Statutes 2004, section 124D.81,
93.13 	subdivision 1, is amended to read:
93.14 		Subdivision 1.Grants; procedures.  Each fiscal year the
93.15 	commissioner of education must make grants to no fewer than six
93.16 	American Indian education programs.  At least three programs
93.17 	must be in urban areas and at least three must be on or near
93.18 	reservations.  The board of a local district, a participating
93.19 	school or a group of boards may develop a proposal for grants in
93.20 	support of American Indian education programs.  Proposals may
93.21 	provide for contracts for the provision of program components by
93.22 	nonsectarian nonpublic, community, tribal, charter,or
93.23 	alternative schools.  The commissioner shall prescribe the form
93.24 	and manner of application for grants, and no grant shall be made
93.25 	for a proposal not complying with the requirements of sections
93.26 	124D.71 to 124D.82. The commissioner must submit all proposals
93.27 	to the state Advisory Committee on American Indian Education
93.28 	Programs for its recommendations concerning approval,
93.29 	modification, or disapproval and the amounts of grants to
93.30 	approved programs.

93.31 	Sec. 53. Minnesota Statutes 2004, section 124D.84,
93.32 	subdivision 1, is amended to read:
93.33 		Subdivision 1.Awards.  The commissioner, with the advice
93.34 	and counsel of the Minnesota Indian Education Committee,may
93.35 	award scholarships to any Minnesota resident student who is of
93.36 	one-fourth or more Indian ancestry, who has applied for other
94.1 	existing state and federal scholarship and grant programs, and
94.2 	who, in the opinion of the commissioner, has the capabilities to
94.3 	benefit from further education.  Scholarships must be for
94.4 	accredited degree programs in accredited Minnesota colleges or
94.5 	universities or for courses in accredited Minnesota business,
94.6 	technical, or vocational schools.  Scholarships may also be
94.7 	given to students attending Minnesota colleges that are in
94.8 	candidacy status for obtaining full accreditation, and are
94.9 	eligible for and receiving federal financial aid programs.
94.10 	Students are also eligible for scholarships when enrolled as
94.11 	students in Minnesota higher education institutions that have
94.12 	joint programs with other accredited higher education
94.13 	institutions.  Scholarships shall be used to defray the total
94.14 	cost of education including tuition, incidental fees, books,
94.15 	supplies, transportation, other related school costs and the
94.16 	cost of board and room and shall be paid directly to the college
94.17 	or school concerned where the student receives federal financial
94.18 	aid.  The total cost of education includes all tuition and fees
94.19 	for each student enrolling in a public institution and the
94.20 	portion of tuition and fees for each student enrolling in a
94.21 	private institution that does not exceed the tuition and fees at
94.22 	a comparable public institution.  Each student shall be awarded
94.23 	a scholarship based on the total cost of the student's education
94.24 	and a federal standardized need analysis.  Applicants are
94.25 	encouraged to apply for all other sources of financial aid. The
94.26 	amount and type of each scholarship shall be determined through
94.27 	the advice and counsel of the Minnesota Indian education
94.28 	committee.
94.29 	When an Indian student satisfactorily completes the work
94.30 	required by a certain college or school in a school year the
94.31 	student is eligible for additional scholarships, if additional
94.32 	training is necessary to reach the student's educational and
94.33 	vocational objective.  Scholarships may not be given to any
94.34 	Indian student for more than five years of study without special
94.35 	recommendation of the Minnesota Indian Education Committee.

94.36 	Sec. 54. [127A.095] IMPLEMENTATION OF NO CHILD LEFT
95.1 	BEHIND ACT.
95.2 		Subdivision 1.Continued implementation. The Department
95.3 	of Education shall continue to implement the federal No Child
95.4 	Left Behind Act, Public Law 107-110, without interruption.
95.5 		Subd. 2.No child left behind review. (a) The
95.6 	legislature states its intention to require the Department of
95.7 	Education to conduct a comprehensive review of the consolidated
95.8 	state plan submitted by the state to the federal Department of
95.9 	Education on implementing the No Child Left Behind Act.  The
95.10 	Minnesota Department of Education shall review and seek waivers
95.11 	under paragraph (b).  If the Department of Education is unable
95.12 	to obtain waivers under paragraph (b), it should make a
95.13 	recommendation in its report under paragraph (b) about whether
95.14 	the state should opt out of the No Child Left Behind Act.
95.15 	(b) The commissioner shall report to the house of
95.16 	representatives and senate committees having jurisdiction over
95.17 	kindergarten through grade 12 education policy and finance by
95.18 	April 1, 2006, whether the department has:
95.19 	(1) received approval from the federal Department of
95.20 	Education to allow the state to develop a plan using multiple
95.21 	measures including value-added measurement of student
95.22 	achievement in addition to relying on standardized test results
95.23 	to evaluate school and student performance for the purpose of
95.24 	determining adequate yearly progress;
95.25 	(2) received approval from the federal Department of
95.26 	Education to allow the state to average three years of data for
95.27 	the purposes of identifying a school for improvement;
95.28 	(3) developed a plan and model legislation to ensure that
95.29 	if an adequate yearly progress determination was made in error,
95.30 	that the error will not adversely affect the school's or school
95.31 	district's sanction status in subsequent years.  The department
95.32 	must have a policy in place to correct errors to accountability
95.33 	reports;
95.34 	(4) reported the additional costs for state fiscal years
95.35 	2006 to 2009 that the No Child Left Behind Act imposes on the
95.36 	state, the state's school districts, and charter schools that
96.1 	are in excess of costs associated with the Improving America's
96.2 	Schools Act of 1994, Public Law 103-382;
96.3 	(5) received approval from the federal Department of
96.4 	Education to allow the state to use No Child Left Behind Act
96.5 	money to provide supplemental education services only in the
96.6 	academic subject area that causes a school to miss adequate
96.7 	yearly progress;
96.8 	(6) received approval from the federal Department of
96.9 	Education to exclude from sanctions schools that have not made
96.10 	adequate yearly progress solely due to a subgroup of students
96.11 	with disabilities not testing at a proficient level;
96.12 	(7) received approval from the federal Department of
96.13 	Education to exclude from sanctions a school that is classified
96.14 	as not having made adequate yearly progress solely due to
96.15 	different subgroups testing below proficient levels for at least
96.16 	two consecutive years;
96.17 	(8) received approval from the federal Department of
96.18 	Education to identify a school as not making adequate yearly
96.19 	progress only after missing the adequate yearly progress targets
96.20 	in the same subject and subgroup for two consecutive years;
96.21 	(9) received approval from the federal Department of
96.22 	Education to identify a district as in need of improvement only
96.23 	after missing the adequate yearly progress target in the same
96.24 	subject across multiple grade spans for two consecutive years;
96.25 	(10) received approval from the federal Department of
96.26 	Education to limit the score of a student within multiple
96.27 	subgroups to the one subgroup that is the smallest subgroup in
96.28 	which that student is a part of when calculating adequate yearly
96.29 	progress;
96.30 	(11) implemented a uniform financial reporting system for
96.31 	school districts to report costs related to implementing No
96.32 	Child Left Behind Act requirements, including the costs of
96.33 	complying with sanctions;
96.34 	(12) received approval from the federal Department of
96.35 	Education to determine the percentage of the special education
96.36 	students that would be best educated based on out-of-level
97.1 	standards and tested accordingly based on an individual
97.2 	education plan; and 
97.3 	(13) received approval from the federal Department of
97.4 	Education to determine when to hold schools accountable for
97.5 	including a student with limited English proficiency in adequate
97.6 	yearly progress calculations.
97.7 		Subd. 3.Department of finance certification. If the
97.8 	commissioner of education has not received approval from the
97.9 	federal Department of Education regarding the conditions in
97.10 	subdivision 2, paragraph (b), the commissioner of finance shall
97.11 	certify and report to the legislature beginning January 1, 2007,
97.12 	and each year thereafter, the amount of federal revenue, if any,
97.13 	that may be withheld by the federal government as a result of a
97.14 	potential state decision to discontinue implementation of the No
97.15 	Child Left Behind Act.  The report shall also specify the
97.16 	intended purpose of the federal revenue and the amount of
97.17 	revenue that may be withheld from the state, each school
97.18 	district, and each charter school in each fiscal year.
97.19 	
EFFECTIVE DATE. This section is effective the day
97.20 	following final enactment.

97.21 	Sec. 55. [129C.105] BOARD MEETINGS BY TELEPHONE OR OTHER
97.22 	ELECTRONIC MEANS.
97.23 	(a) Notwithstanding section 13D.01 and if complying with
97.24 	section 13D.02 is impractical, the Board of the Perpich Center
97.25 	for Arts Education may conduct a meeting of its members by
97.26 	telephone or other electronic means when:
97.27 	(1) all members of the board participating in the meeting,
97.28 	wherever the members' physical locations, can hear one another
97.29 	and all discussion and testimony;
97.30 	(2) members of the public present at the regular meeting
97.31 	location of the board can hear all discussion and testimony and
97.32 	all votes of members of the board;
97.33 	(3) at least one member of the board is physically present
97.34 	at the regular meeting location; and 
97.35 	(4) all votes are conducted by roll call, so each member's
97.36 	vote on each issue can be identified and recorded.
98.1 	(b) Each member of the board participating in a meeting by
98.2 	telephone or other electronic means is considered present at the
98.3 	meeting for purposes of determining a quorum and participating
98.4 	in all proceedings.
98.5 	(c) If telephone or other electronic means is used to
98.6 	conduct a meeting, the board, to the extent practical, shall
98.7 	allow a person to monitor the meeting electronically from a
98.8 	remote location.  The board may require the person making such a
98.9 	connection to pay for documented marginal costs that the board
98.10 	incurs as a result of the additional connection.
98.11 	(d) If telephone or other electronic means is used to
98.12 	conduct a regular, special, or emergency meeting, the board
98.13 	shall provide notice of the regular meeting location, of the
98.14 	fact that some members may participate by telephone or other
98.15 	electronic means, and of the provisions of paragraph (c).  The
98.16 	timing and method of providing notice is governed by section
98.17 	13D.04.

98.18 	EFFECTIVE DATE. This section is effective the day
98.19 	following final enactment.

98.20 	Sec. 56. Minnesota Statutes 2004, section 179A.03,
98.21 	subdivision 14, is amended to read:
98.22 		Subd. 14.Public employee or employee.  "Public employee"
98.23 	or "employee" means any person appointed or employed by a public
98.24 	employer except:
98.25 	(a) elected public officials;
98.26 	(b) election officers;
98.27 	(c) commissioned or enlisted personnel of the Minnesota
98.28 	National Guard;
98.29 	(d) emergency employees who are employed for emergency work
98.30 	caused by natural disaster;
98.31 	(e) part-time employees whose service does not exceed the
98.32 	lesser of 14 hours per week or 35 percent of the normal work
98.33 	week in the employee's appropriate unit;
98.34 	(f) employees whose positions are basically temporary or
98.35 	seasonal in character and:  (1) are not for more than 67 working
98.36 	days in any calendar year; or (2) are not for more than 100
99.1 	working days in any calendar year and the employees are under
99.2 	the age of 22, are full-time students enrolled in a nonprofit or
99.3 	public educational institution prior to being hired by the
99.4 	employer, and have indicated, either in an application for
99.5 	employment or by being enrolled at an educational institution
99.6 	for the next academic year or term, an intention to continue as
99.7 	students during or after their temporary employment;
99.8 	(g) employees providing services for not more than two
99.9 	consecutive quarters to the Board of Trustees of the Minnesota
99.10 	State Colleges and Universities under the terms of a
99.11 	professional or technical services contract as defined in
99.12 	section 16C.08, subdivision 1;
99.13 	(h) employees of charitable hospitals as defined by section
99.14 	179.35, subdivision 3;
99.15 	(i) full-time undergraduate students employed by the school
99.16 	which they attend under a work-study program or in connection
99.17 	with the receipt of financial aid, irrespective of number of
99.18 	hours of service per week;
99.19 	(j) an individual who is employed for less than 300 hours
99.20 	in a fiscal year as an instructor in an adult vocational
99.21 	education program;
99.22 	(k) an individual hired by the Board of Trustees of the
99.23 	Minnesota State Colleges and Universities to teach one course
99.24 	for three or fewer credits for one semester in a year;
99.25 	(l) with respect to court employees:
99.26 	(1) personal secretaries to judges;
99.27 	(2) law clerks;
99.28 	(3) managerial employees;
99.29 	(4) confidential employees; and
99.30 	(5) supervisory employees.
99.31 	The following individuals are public employees regardless
99.32 	of the exclusions of clauses (e) and (f):
99.33 	(i) an employee hired by a school district or the Board of
99.34 	Trustees of the Minnesota State Colleges and Universities except
99.35 	at the university established in section 136F.13 or for
99.36 	community services or community education instruction offered on
100.1 	a noncredit basis:  (A) to replace an absent teacher or faculty
100.2 	member who is a public employee, where the replacement employee
100.3 	is employed more than 30 working days as a replacement for that
100.4 	teacher or faculty member; or (B) to take a teaching position
100.5 	created due to increased enrollment, curriculum expansion,
100.6 	courses which are a part of the curriculum whether offered
100.7 	annually or not, or other appropriate reasons; and 
100.8 	(ii) an employee hired for a position under clause (f)(1)
100.9 	if that same position has already been filled under clause
100.10 	(f)(1) in the same calendar year and the cumulative number of
100.11 	days worked in that same position by all employees exceeds 67
100.12 	calendar days in that year.  For the purpose of this paragraph,
100.13 	"same position" includes a substantially equivalent position if
100.14 	it is not the same position solely due to a change in the
100.15 	classification or title of the position; and 
100.16 	(iii) an early childhood family education teacher employed
100.17 	by a school district.
100.18 	
EFFECTIVE DATE. This section is effective July 1, 2005.

100.19 	Sec. 57. Minnesota Statutes 2004, section 260C.201,
100.20 	subdivision 1, is amended to read:
100.21 		Subdivision 1.Dispositions.  (a) If the court finds that
100.22 	the child is in need of protection or services or neglected and
100.23 	in foster care, it shall enter an order making any of the
100.24 	following dispositions of the case:
100.25 	(1) place the child under the protective supervision of the
100.26 	responsible social services agency or child-placing agency in
100.27 	the home of a parent of the child under conditions prescribed by
100.28 	the court directed to the correction of the child's need for
100.29 	protection or services:
100.30 	(i) the court may order the child into the home of a parent
100.31 	who does not otherwise have legal custody of the child, however,
100.32 	an order under this section does not confer legal custody on
100.33 	that parent;
100.34 	(ii) if the court orders the child into the home of a
100.35 	father who is not adjudicated, he must cooperate with paternity
100.36 	establishment proceedings regarding the child in the appropriate
101.1 	jurisdiction as one of the conditions prescribed by the court
101.2 	for the child to continue in his home;
101.3 	(iii) the court may order the child into the home of a
101.4 	noncustodial parent with conditions and may also order both the
101.5 	noncustodial and the custodial parent to comply with the
101.6 	requirements of a case plan under subdivision 2; or
101.7 	(2) transfer legal custody to one of the following:
101.8 	(i) a child-placing agency; or
101.9 	(ii) the responsible social services agency.  In placing a
101.10 	child whose custody has been transferred under this paragraph,
101.11 	the agencies shall make an individualized determination of how
101.12 	the placement is in the child's best interests using the
101.13 	consideration for relatives and the best interest factors in
101.14 	section 260C.212, subdivision 2, paragraph (b); or
101.15 	(3) if the child has been adjudicated as a child in need of
101.16 	protection or services because the child is in need of special
101.17 	services or care to treat or ameliorate a physical or mental
101.18 	disability, the court may order the child's parent, guardian, or
101.19 	custodian to provide it.  The court may order the child's health
101.20 	plan company to provide mental health services to the child.
101.21 	Section 62Q.535 applies to an order for mental health services
101.22 	directed to the child's health plan company.  If the health
101.23 	plan, parent, guardian, or custodian fails or is unable to
101.24 	provide this treatment or care, the court may order it
101.25 	provided.  Absent specific written findings by the court that
101.26 	the child's disability is the result of abuse or neglect by the
101.27 	child's parent or guardian, the court shall not transfer legal
101.28 	custody of the child for the purpose of obtaining special
101.29 	treatment or care solely because the parent is unable to provide
101.30 	the treatment or care.  If the court's order for mental health
101.31 	treatment is based on a diagnosis made by a treatment
101.32 	professional, the court may order that the diagnosing
101.33 	professional not provide the treatment to the child if it finds
101.34 	that such an order is in the child's best interests; or
101.35 	(4) if the court believes that the child has sufficient
101.36 	maturity and judgment and that it is in the best interests of
102.1 	the child, the court may order a child 16 years old or older to
102.2 	be allowed to live independently, either alone or with others as
102.3 	approved by the court under supervision the court considers
102.4 	appropriate, if the county board, after consultation with the
102.5 	court, has specifically authorized this dispositional
102.6 	alternative for a child.
102.7 	(b) If the child was adjudicated in need of protection or
102.8 	services because the child is a runaway or habitual truant, the
102.9 	court may order any of the following dispositions in addition to
102.10 	or as alternatives to the dispositions authorized under
102.11 	paragraph (a):
102.12 	(1) counsel the child or the child's parents, guardian, or
102.13 	custodian;
102.14 	(2) place the child under the supervision of a probation
102.15 	officer or other suitable person in the child's own home under
102.16 	conditions prescribed by the court, including reasonable rules
102.17 	for the child's conduct and the conduct of the parents,
102.18 	guardian, or custodian, designed for the physical, mental, and
102.19 	moral well-being and behavior of the child; or with the consent
102.20 	of the commissioner of corrections, place the child in a group
102.21 	foster care facility which is under the commissioner's
102.22 	management and supervision;
102.23 	(3) subject to the court's supervision, transfer legal
102.24 	custody of the child to one of the following:
102.25 	(i) a reputable person of good moral character.  No person
102.26 	may receive custody of two or more unrelated children unless
102.27 	licensed to operate a residential program under sections 245A.01
102.28 	to 245A.16; or
102.29 	(ii) a county probation officer for placement in a group
102.30 	foster home established under the direction of the juvenile
102.31 	court and licensed pursuant to section 241.021;
102.32 	(4) require the child to pay a fine of up to $100.  The
102.33 	court shall order payment of the fine in a manner that will not
102.34 	impose undue financial hardship upon the child;
102.35 	(5) require the child to participate in a community service
102.36 	project;
103.1 	(6) order the child to undergo a chemical dependency
103.2 	evaluation and, if warranted by the evaluation, order
103.3 	participation by the child in a drug awareness program or an
103.4 	inpatient or outpatient chemical dependency treatment program;
103.5 	(7) if the court believes that it is in the best interests
103.6 	of the child and or of public safety that the child's driver's
103.7 	license or instruction permit be canceled, the court may order
103.8 	the commissioner of public safety to cancel the child's license
103.9 	or permit for any period up to the child's 18th birthday.  If
103.10 	the child does not have a driver's license or permit, the court
103.11 	may order a denial of driving privileges for any period up to
103.12 	the child's 18th birthday.  The court shall forward an order
103.13 	issued under this clause to the commissioner, who shall cancel
103.14 	the license or permit or deny driving privileges without a
103.15 	hearing for the period specified by the court.  At any time
103.16 	before the expiration of the period of cancellation or denial,
103.17 	the court may, for good cause, order the commissioner of public
103.18 	safety to allow the child to apply for a license or permit, and
103.19 	the commissioner shall so authorize;
103.20 	(8) order that the child's parent or legal guardian deliver
103.21 	the child to school at the beginning of each school day for a
103.22 	period of time specified by the court; or
103.23 	(9) require the child to perform any other activities or
103.24 	participate in any other treatment programs deemed appropriate
103.25 	by the court.
103.26 	To the extent practicable, the court shall enter a
103.27 	disposition order the same day it makes a finding that a child
103.28 	is in need of protection or services or neglected and in foster
103.29 	care, but in no event more than 15 days after the finding unless
103.30 	the court finds that the best interests of the child will be
103.31 	served by granting a delay.  If the child was under eight years
103.32 	of age at the time the petition was filed, the disposition order
103.33 	must be entered within ten days of the finding and the court may
103.34 	not grant a delay unless good cause is shown and the court finds
103.35 	the best interests of the child will be served by the delay.
103.36 	(c) If a child who is 14 years of age or older is
104.1 	adjudicated in need of protection or services because the child
104.2 	is a habitual truant and truancy procedures involving the child
104.3 	were previously dealt with by a school attendance review board
104.4 	or county attorney mediation program under section 260A.06 or
104.5 	260A.07, the court shall order a cancellation or denial of
104.6 	driving privileges under paragraph (b), clause (7), for any
104.7 	period up to the child's 18th birthday.
104.8 	(d) In the case of a child adjudicated in need of
104.9 	protection or services because the child has committed domestic
104.10 	abuse and been ordered excluded from the child's parent's home,
104.11 	the court shall dismiss jurisdiction if the court, at any time,
104.12 	finds the parent is able or willing to provide an alternative
104.13 	safe living arrangement for the child, as defined in Laws 1997,
104.14 	chapter 239, article 10, section 2.
104.15 	(e) When a parent has complied with a case plan ordered
104.16 	under subdivision 6 and the child is in the care of the parent,
104.17 	the court may order the responsible social services agency to
104.18 	monitor the parent's continued ability to maintain the child
104.19 	safely in the home under such terms and conditions as the court
104.20 	determines appropriate under the circumstances.
104.21 	Sec. 58.  2005 S.F. No. 1879, article 3, section 3,
104.22 	subdivision 24, if enacted, is amended to read:
104.23 		Subd. 24.Best practices seminars. For best practices
104.24 	seminars and other professional development capacity building
104.25 	activities that assure proficiency in teaching and
104.26 	implementation of graduation rule standards:
104.27 	$1,000,000     .....     2006
104.28 	$1,000,000     .....     2007
104.29 	$400,000 each year is for a grant to the Minnesota
104.30 	Humanities Commission.
104.31 	$150,000 each year is for a grant to the Minnesota
104.32 	Historical Society.
104.33 	$250,000 each year is for a grant to Special School
104.34 	District No. 6, South St. Paul, for the IB program expansion to
104.35 	the elementary and middle school years.
104.36 	$200,000 each year is for a grant to A Chance to Grow/New
105.1 	Visions for the Minnesota Learning Resource Center's
105.2 	comprehensive training program for education professionals
105.3 	charged with helping children acquire basic reading and
105.4 	mathematic skills.
105.5 	Sec. 59.  2005 S.F. No. 1879, article 3, section 3,
105.6 	subdivision 25, if enacted, is amended to read:
105.7 		Subd. 25.alternative teacher professional compensation
105.8 	for teachers. For alternative teacher professional compensation
105.9 	for teachers aid established under Minnesota Statutes, sections
105.10 	122A.413 to 122A.415section 122A.4142:
105.11 	$ 3,700,000 8,700,000.....     2006
105.12 	$ 3,700,000 8,700,000.....     2007
105.13 	If the appropriations under this subdivision are
105.14 	insufficient to fund all program participants, a participant may
105.15 	receive less than the maximum per pupil amount available under
105.16 	Minnesota Statutes, section 122A.415 122A.4142, subdivision 1 
105.17 	4.  A qualifying district or site receiving alternative teacher 
105.18 	professional compensation for teacher funding under this
105.19 	subdivision may use the funding it receives to leverage
105.20 	additional funds from a national program for enhancing teacher
105.21 	professionalism. Grantees who received revenue in fiscal year
105.22 	2005 under Minnesota Statutes 2004, sections 122A.413 to
105.23 	122A.415 shall receive revenue in fiscal years 2006 and 2007
105.24 	under Minnesota Statutes, section 122A.4142.
105.25 	Sec. 60.  2005 S.F. No. 1879, article 3, section 3,
105.26 	subdivision 26, if enacted, is amended to read:
105.27 		Subd. 26.youthworks youth works program. For funding
105.28 	youthworks youth works programs under Minnesota Statutes,
105.29 	sections 124D.37 to 124D.45:
105.30 	$  900,000     .....     2006
105.31 	$  900,000     .....     2007
105.32 	A grantee organization may provide health and child care
105.33 	coverage to the dependents of each participant enrolled in a
105.34 	full-time youth works program to the extent such coverage is not
105.35 	otherwise available.
105.36 	Sec. 61.  2005 S.F. No. 1879, article 3, section 3,
106.1 	subdivision 27, if enacted, is amended to read:
106.2 		Subd. 27.Student organizations. For student
106.3 	organizations:
106.4 	$625,000 $725,000.....     2006
106.5 	$625,000 $725,000.....     2007
106.6 	(a) $40,000 each year is for student organizations serving
106.7 	health occupations.
106.8 	(b) $37,500 each year is for student organizations serving
106.9 	service occupations.
106.10 	(c) $88,000 each year is for student organizations serving
106.11 	trade and industry occupations.
106.12 	(d) $84,000 each year is for student organizations serving
106.13 	business occupations.
106.14 	(e) $130,500 each year is for student organizations serving
106.15 	agriculture occupations.
106.16 	(f) $125,000 each year is for student organizations serving
106.17 	family and consumer science occupations.
106.18 	(g) $95,000 each year is for student organizations serving
106.19 	marketing occupations.
106.20 	Sec. 62.  2005 S.F. No. 1879, article 3, section 3,
106.21 	subdivision 29, if enacted, is amended to read:
106.22 		Subd. 29.Collaborative urban educator. For the
106.23 	collaborative urban educator program:
106.24 	$ 528,000 550,000.....     2006
106.25 	$ 528,000 550,000.....     2007
106.26 	Sec. 63.  2005 S.F. No. 1879, article 3, section 3,
106.27 	subdivision 31, if enacted, is amended to read:
106.28 		Subd. 31.first grade preparedness all-day kindergarten.
 106.29 	For first grade preparedness grants all-day kindergarten under
106.30 	Minnesota Statutes, section 124D.081:
106.31 	$7,250,000     .....     2006
106.32 	$7,250,000     .....     2007

106.33 	Sec. 64. COLLEGE PREPARATION STANDARDS.
 106.34 	(a) The Higher Education Advisory Council must convene a
106.35 	working group to develop standards describing the skills and
106.36 	knowledge a high school graduate must have at entry into
107.1 	postsecondary education in order to successfully graduate from
107.2 	college.  The standards must, to the extent possible, be
107.3 	applicable for all postsecondary education but may describe
107.4 	differences in the skills and knowledge necessary for success in
107.5 	different higher education institutions and programs.  The
107.6 	standards need not be comprehensive but must, at a minimum, be
107.7 	the essential skills and knowledge that will enable a student to
107.8 	succeed in college.  The Higher Education Services Office must
107.9 	provide staff for the working group.
107.10 	(b) The Higher Education Advisory Council must submit the
107.11 	standards to the commissioner of education no later than January
107.12 	15, 2006.  No later than March 15, 2006, the commissioner of
107.13 	education must report, to the chairs of the legislative
107.14 	committees with jurisdiction over kindergarten through grade 12
107.15 	education policy and finance and higher education policy and
107.16 	finance, its recommendations regarding the changes, if any, that
107.17 	must be made in Minnesota's academic standards in order to
107.18 	ensure that Minnesota high school graduates meet the college
107.19 	readiness standards established by the Higher Education Advisory
107.20 	Council.
107.21 	(c) The Higher Education Advisory Council must invite the
107.22 	University of Minnesota, Minnesota State Colleges and
107.23 	Universities, representatives of private colleges, and other
107.24 	private postsecondary institutions, to participate in the
107.25 	working group and may invite other individuals or entities to
107.26 	participate.  The Higher Education Advisory Council and its
107.27 	working group may collaborate with the Minnesota P-16 Education
107.28 	Partnership in developing the college readiness standards.

107.29 	Sec. 65. MINNESOTA COMPREHENSIVE ASSESSMENTS; RULES.
 107.30 	The commissioner of education shall adopt rules on or
107.31 	before January 1, 2005, to implement the Minnesota Comprehensive
107.32 	Assessments Second Edition (MCA-IIs) in reading, mathematics,
107.33 	and writing.  For purposes of state and local high school
107.34 	graduation requirements, the rules must include criteria
107.35 	enabling school districts to:
107.36 	(1) appropriately accommodate a student who fails but seeks
108.1 	to pass the Minnesota Comprehensive Assessments Second Edition;
108.2 	and 
108.3 	(2) exempt a disabled student, consistent with the
108.4 	student's individualized education plan, or an English language
108.5 	learner from the Minnesota Comprehensive Assessments Second
108.6 	Edition or administer an alternative assessment either to a
108.7 	disabled student, consistent with the student's individualized
108.8 	education plan, or to an English language learner.

108.9 	Sec. 66. ADAPTIVE COMPUTER-BASED ASSESSMENT.
 108.10 	The commissioner of education shall include the cost of
108.11 	developing an adaptive computer-based assessment within the
108.12 	budget for statewide testing, including the Minnesota
108.13 	comprehensive assessments and value-added testing.  If an
108.14 	additional appropriation is necessary to develop the
108.15 	computer-based assessment, the commissioner shall request that
108.16 	the legislature include the required appropriation in a
108.17 	subsequent budget.

108.18 	Sec. 67. HEALTH AND PHYSICAL EDUCATION MODEL BENCHMARKS.
 108.19 	By July 1, 2006, the commissioner of education must
108.20 	transmit to school districts model kindergarten through grade 12
108.21 	health and physical education benchmarks developed by the
108.22 	department's health and physical education quality teaching
108.23 	network.

108.24 	Sec. 68. RULES FOR SUPPLEMENTAL SERVICE PROVIDERS.
 108.25 	The commissioner of education must amend Minnesota Rules,
108.26 	part 3512.5400, relating to supplemental service providers to
108.27 	include outcome standards.  The commissioner must include in the
108.28 	amended rules criteria to remove an education service provider
108.29 	from the listing of approved service providers if they fail to
108.30 	meet the outcome standards.

108.31 	Sec. 69. MODEL POLICY; INTIMIDATION AND BULLYING.
 108.32 	The commissioner of education shall work with the Minnesota
108.33 	School Boards Association to develop a model policy that
108.34 	prohibits intimidating and bullying as required in Minnesota
108.35 	Statutes, section 121A.0695, subdivision 2.

108.36 	Sec. 70. SCHOOL FINANCE STUDY.
 109.1 	(a) The commissioner of education must contract with an
109.2 	independent contractor that has extensive experience working
109.3 	with various states on education finance systems to continue and
109.4 	complete the work done by the governor's education funding task
109.5 	force included in the June 2004 report, Investing in Our
109.6 	Future.  The commissioner must contract with a firm other than
109.7 	the consulting firm performing services for and submitting a
109.8 	report on behalf of the governor's education funding task force.
109.9 	(b) The contractor must:
109.10 	(1) conduct an in-depth analysis of the governor's
109.11 	education funding task force report, Investing in Our Future,
109.12 	dated June 2004, focusing on the data produced by the
109.13 	professional judgment panel study included in the report;
109.14 	(2) convene a meeting in Minnesota to help gather any
109.15 	necessary additional data that is not contained in the
109.16 	governor's task force report or to further validate some of the
109.17 	report's existing data;
109.18 	(3) determine the dollar value of an instructional services
109.19 	allocation, including cost estimates for each school district
109.20 	adjusting the allocation for individual student and school
109.21 	district characteristics; and 
109.22 	(4) conduct outreach and support to explain its findings to
109.23 	appropriate officials in Minnesota.
109.24 	(c) In addition to the requirements in paragraph (b), the
109.25 	contractor must analyze data from Minnesota school districts
109.26 	that have proven to be successful in educating students to meet
109.27 	the state's academic standards.  The contractor must use a
109.28 	statistical analysis to help explain differences in spending
109.29 	across school districts while controlling for student
109.30 	performance.
109.31 	(d) The commissioner must report on the findings on the
109.32 	contract to the legislative committees having jurisdiction over
109.33 	kindergarten through grade 12 finance before December 15, 2005.

109.34 	EFFECTIVE DATE. This section is effective the day
109.35 	following final enactment.

109.36 	Sec. 71. EVALUATING THE EDUCATIONAL IMPACT OF FEDERAL AND
110.1 	STATE TESTS ON KINDERGARTEN THROUGH GRADE 12 STUDENTS.
 110.2 	(a) The Office of Educational Accountability under
110.3 	Minnesota Statutes, section 120B.31, subdivision 3, must
110.4 	evaluate the educational impact of the federal No Child Left
110.5 	Behind Act and other state and federal laws requiring school
110.6 	districts to administer tests to kindergarten through grade 12
110.7 	students.  The evaluation at least must include:
110.8 	(1) potential educational costs to kindergarten through
110.9 	grade 12 public school students through the 2013-2014 school
110.10 	year of complying with testing requirements;
110.11 	(2) educational factors that may increase or decrease the
110.12 	educational costs identified under clause (1);
110.13 	(3) the impact of testing requirements on the statewide
110.14 	accountability system, teacher training and employment, and
110.15 	curriculum development; and 
110.16 	(4) the relationship between the testing requirements,
110.17 	postsecondary entrance requirements, and the expectations of the
110.18 	business community regarding the educational preparation of new
110.19 	high school graduates seeking employment.
110.20 	The Office of Educational Accountability, at its
110.21 	discretion, may include additional areas for evaluation.
110.22 	(b) In preparing this evaluation, the Office of Educational
110.23 	Accountability must select a sample of school districts to
110.24 	explore in depth the areas listed in paragraph (a).  The school
110.25 	districts must be of varying sizes and geographical locations,
110.26 	and must include some districts with schools designated by the
110.27 	state Department of Education as "needing improvement" under the
110.28 	No Child Left Behind Act.  The Office of Educational
110.29 	Accountability must contact school officials, employees of
110.30 	postsecondary institutions, and representatives of business
110.31 	communities from throughout the state to collect information and
110.32 	perceptions related to the evaluation.  State and local entities
110.33 	must cooperate with and assist the Office of Educational
110.34 	Accountability with this evaluation at the request of the Office
110.35 	of Educational Accountability.
110.36 	(c) The Office of Educational Accountability must submit
111.1 	the evaluation in writing to the chairs of the house of
111.2 	representatives and senate committees having jurisdiction over
111.3 	kindergarten through grade 12 education policy and finance by
111.4 	February 15, 2006.

111.5 	EFFECTIVE DATE. This section is effective the day
111.6 	following final enactment.

111.7 	Sec. 72. LICENSED STUDENT SUPPORT SERVICES.
 111.8 		Subdivision 1.Access to services. School districts and
111.9 	the Department of Education shall work to provide for students'
111.10 	educational achievement, to provide for student safety, and to
111.11 	enhance student physical, emotional, and social well-being by
111.12 	providing access to licensed student support services, such as
111.13 	licensed school nurses, licensed school counselors, licensed
111.14 	school social workers, licensed alcohol and drug abuse
111.15 	counselors, and licensed school psychologists.
111.16 		Subd. 2.Funding. School districts and the Department of
111.17 	Education shall explore opportunities for obtaining additional
111.18 	funds to improve students' access to needed licensed student
111.19 	support services including, at least, medical assistance
111.20 	reimbursements, local collaborative time study funds, federal
111.21 	funds, public health funds, and specifically designated funds.
111.22 		Subd. 3.Improving access. School districts and the
111.23 	Department of Education must consider nationally recommended
111.24 	licensed staff-to-student ratios, work loads, and best practices
111.25 	when working to improve student access to needed licensed
111.26 	student support services.

111.27 	Sec. 73. BOARD OF TEACHING REPORT.
 111.28 	By January 16, 2006, the Board of Teaching, in consultation
111.29 	with the Department of Education and other education
111.30 	stakeholders, must prepare and submit to the house of
111.31 	representatives and senate committees having jurisdiction over
111.32 	kindergarten through grade 12 education policy and finance
111.33 	proposed licensure requirements for teachers of
111.34 	interdisciplinary curriculum to facilitate learning in
111.35 	state-approved innovative schools and programs.

111.36 	Sec. 74. PROFESSIONAL COMPENSATION FOR TEACHERS TASK
112.1 	FORCE.
 112.2 	The commissioner of education must convene a task force on
112.3 	professional compensation models for teachers.  The commissioner
112.4 	shall report the task force findings to the legislative
112.5 	committees having jurisdiction over kindergarten through grade
112.6 	12 education funding and policy issues by December 16, 2006.
112.7 	The task force must recommend a professional compensation model
112.8 	designed to improve teacher performance and student
112.9 	achievement.  The task force must recommend a method to
112.10 	transition from the current pilot alternative compensation sites
112.11 	to a statewide program, including recommendations for funding a
112.12 	statewide program.

112.13 	Sec. 75. APPROPRIATIONS.
 112.14 		Subdivision 1.Department of education. The sums
112.15 	indicated in this section are appropriated from the general fund
112.16 	to the Department of Education for the fiscal years designated.
112.17 		Subd. 2.Improved school finance system contract. For a
112.18 	contract to follow up on the work of the governor's education
112.19 	funding task force:
112.20 	$  175,000 .....2006 
112.21 		Subd. 3.Staff development state match. For the state
112.22 	match for staff development under Minnesota Statutes, section
112.23 	122A.61:
112.24 	$45,939,000 .....2006 
112.25 	$47,883,000 .....2007 
112.26 	Special School District No. 6, South St. Paul, may use its
112.27 	state match to implement its elementary and middle school
112.28 	international baccalaureate program expansion.
112.29 		Subd. 4.Professional compensation for teachers task
112.30 	force. For the professional compensation for teachers task
112.31 	force:
112.32 	$  200,000 .....2006 
112.33 	$  200,000 .....2007 

112.34 	Sec. 76. REPEALER.
 112.35 	Minnesota Statutes 2004, sections 121A.23; 122A.414; and
112.36 	122A.415, are repealed.

113.1 	ARTICLE 3
113.2 	SPECIAL PROGRAMS

113.3 	Section 1. Minnesota Statutes 2004, section 121A.66,
113.4 	subdivision 5, is amended to read:
113.5 		Subd. 5.Emergency.  "Emergency" means a situation in
113.6 	which immediate intervention is necessary to protect a pupil or
113.7 	other individual from physical injury or to prevent serious 
113.8 	property damage.

113.9 	Sec. 2. Minnesota Statutes 2004, section 121A.66, is
113.10 	amended by adding a subdivision to read:
113.11 		Subd. 6.Positive behavioral interventions and
113.12 	supports. "Positive behavioral interventions and supports"
113.13 	means those strategies used to improve the school environment
113.14 	and teach pupils skills likely to increase pupil ability to
113.15 	exhibit appropriate behaviors.

113.16 	Sec. 3. Minnesota Statutes 2004, section 121A.66, is
113.17 	amended by adding a subdivision to read:
113.18 		Subd. 7.Time-out. "Time-out" means:
113.19 	(1) a contingent observation, which is not a regulated
113.20 	intervention, and involves instructing the pupil to leave the
113.21 	school activity during the school day and not participate for a
113.22 	period of time, but to observe the activity and listen to the
113.23 	discussion from a time-out area within the same setting;
113.24 	(2) an exclusionary time-out, which is not a regulated
113.25 	intervention, and involves instructing the pupil to leave the
113.26 	school activity during the school day and not participate in or
113.27 	observe the classroom activity, but to go to another area from
113.28 	which the pupil may leave; or 
113.29 	(3) a locked time-out, which is a regulated intervention,
113.30 	and involves involuntarily removing the pupil from the school
113.31 	activity during the school day and placing the pupil in a
113.32 	specially designed and continuously supervised isolation room
113.33 	that the pupil is prevented from leaving.

113.34 	Sec. 4. Minnesota Statutes 2004, section 121A.67, is
113.35 	amended to read:
113.36 	121A.67 AVERSIVE AND DEPRIVATION PROCEDURES.
114.1 		Subdivision 1.Rules. The commissioner, after
114.2 	consultation with interested parent organizations and advocacy
114.3 	groups, the Minnesota Administrators for Special Education, the
114.4 	Minnesota Association of School Administrators, Education
114.5 	Minnesota, the Minnesota School Boards Association, the
114.6 	Minnesota Police Officers Association, a representative of a
114.7 	bargaining unit that represents paraprofessionals, the
114.8 	Elementary School Principals Association, and the Secondary
114.9 	School Principals Association,must adopt amend rules governing
114.10 	the use of aversive and deprivation procedures by school
114.11 	district employees or persons under contract with a school
114.12 	district.  The rules must:
114.13 	(1) promote the use of positive approaches behavioral
114.14 	interventions and supports and must not encourage or require the
114.15 	use of aversive or deprivation procedures;
114.16 	(2) require that planned application of aversive and
114.17 	deprivation procedures only be a part of an instituted after
114.18 	completing a functional behavior assessment and developing a
114.19 	behavior intervention plan that is included in or maintained
114.20 	with the individual education plan;
114.21 	(3) require parents or guardians to be notified after the
114.22 	use of educational personnel to notify a parent or guardian of a
114.23 	pupil with an individual education plan on the same day aversive
114.24 	or deprivation procedures are used in an emergency or in writing
114.25 	within two school days if district personnel are unable to
114.26 	provide same-day notice;
114.27 	(4) establish health and safety standards for the use of
114.28 	locked time-out procedures that require a safe environment,
114.29 	continuous monitoring of the child, ventilation, and adequate
114.30 	space, a locking mechanism that disengages automatically when
114.31 	not continuously engaged by school personnel, and full
114.32 	compliance with state and local fire and building codes,
114.33 	including state rules on time-out rooms; and 
114.34 	(5) contain a list of prohibited procedures;
114.35 	(6) consolidate and clarify provisions related to behavior
114.36 	intervention plans;
115.1 	(7) require school districts to register with the
115.2 	commissioner any room used for locked time-out, which the
115.3 	commissioner must monitor by making announced and unannounced
115.4 	on-site visits;
115.5 	(8) place a student in locked time-out only if the
115.6 	intervention is:
115.7 	(i) part of the comprehensive behavior intervention plan
115.8 	that is included in or maintained with the student's individual
115.9 	education plan, and the plan uses positive behavioral
115.10 	interventions and supports, and data support its continued use;
115.11 	or 
115.12 	(ii) used in an emergency for the duration of the emergency
115.13 	only; and 
115.14 	(9) require a providing school district or cooperative to
115.15 	establish an oversight committee composed of at least one member
115.16 	with training in behavioral analysis and other appropriate
115.17 	education personnel to annually review aggregate data regarding
115.18 	the use of aversive and deprivation procedures.
115.19 		Subd. 2.Removal by peace officer. If a pupil who has an
115.20 	individual education plan is restrained or removed from a
115.21 	classroom, school building, or school grounds by a peace officer
115.22 	at the request of a school administrator or a school staff
115.23 	person during the school day twice in a 30-day period, the
115.24 	pupil's individual education program team must meet to determine
115.25 	if the pupil's individual education plan is adequate or if
115.26 	additional evaluation is needed.
115.27 	
EFFECTIVE DATE. Subdivision 1 of this section is
115.28 	effective the day following final enactment.

115.29 	Sec. 5. Minnesota Statutes 2004, section 122A.15, is
115.30 	amended by adding a subdivision to read:
115.31 		Subd. 3.Student support services advisory committee;
115.32 	district plan. (a) A student support services advisory
115.33 	committee composed of ten members selected by the commissioner
115.34 	is established under section 15.059.  The commissioner must
115.35 	select one committee member from each of the following
115.36 	organizations:
116.1 	(1) the Minnesota Department of Education;
116.2 	(2) the Minnesota School Boards Association;
116.3 	(3) the Minnesota Association of School Administrators;
116.4 	(4) the Minnesota School Social Work Association;
116.5 	(5) the School Nurse Organization of Minnesota;
116.6 	(6) the Minnesota School Psychologists Association;
116.7 	(7) the Minnesota School Counselors Association;
116.8 	(8) the Minnesota Association of Resources for Recovery and
116.9 	Chemical Health;
116.10 	(9) the Minnesota Administrators for Special Education; and 
116.11 	(10) the Minnesota Parent Teachers Association.
116.12 	(b) The committee must:
116.13 	(1) establish a method for identifying student needs that
116.14 	are barriers to learning;
116.15 	(2) identify alternatives for integrating student support
116.16 	services into public schools;
116.17 	(3) recommend support staff to student ratios and best
116.18 	practices for providing student support services premised on
116.19 	evidence-based practice;
116.20 	(4) identify the substance and extent of the work that
116.21 	student support services staff are trained and licensed to
116.22 	provide and the characteristics of the student populations they
116.23 	serve;
116.24 	(5) recommend how school districts can most appropriately
116.25 	integrate student support services into the education program;
116.26 	and 
116.27 	(6) recommend public and nonpublic revenue sources that
116.28 	school districts can use to fund student support services
116.29 	including, among other sources, medical assistance
116.30 	reimbursements, private health insurance, local collaborative
116.31 	time study funds, federal funds, public health funds, and
116.32 	specifically designated funds such as school safety levies and
116.33 	district general funds, among other funds.
116.34 	(c) The committee must consider the oral and written
116.35 	testimony of school district personnel and parents and students
116.36 	in complying with paragraph (b).  The committee must submit
117.1 	periodic recommendations about student support services to the
117.2 	commissioner and to the committees of the legislature having
117.3 	jurisdiction over birth to age 21 education policy and budget
117.4 	issues.  The commissioner must consider the committee's
117.5 	recommendations in deciding whether to develop and maintain a
117.6 	model district plan for student support services.  If the
117.7 	commissioner develops and maintains a model plan, the
117.8 	commissioner also must decide whether to transmit the plan to
117.9 	school districts, whether to require the districts to adopt and
117.10 	maintain a district plan for providing student support services
117.11 	that meets the criteria recommended by the advisory committee,
117.12 	and whether to require the districts to submit the plan for
117.13 	biennial review.
117.14 	(d) Notwithstanding section 15.059, subdivision 5, the
117.15 	committee expires on June 30, 2016.
117.16 	
EFFECTIVE DATE. This section is effective the day
117.17 	following final enactment and applies to the 2006-2007 school
117.18 	year and later.

117.19 	Sec. 6. Minnesota Statutes 2004, section 123B.92,
117.20 	subdivision 1, is amended to read:
117.21 		Subdivision 1.Definitions.  For purposes of this section
117.22 	and section 125A.76, the terms defined in this subdivision have
117.23 	the meanings given to them.
117.24 	(a) "Actual expenditure per pupil transported in the
117.25 	regular and excess transportation categories" means the quotient
117.26 	obtained by dividing:
117.27 	(1) the sum of:
117.28 	(i) all expenditures for transportation in the regular
117.29 	category, as defined in paragraph (b), clause (1), and the
117.30 	excess category, as defined in paragraph (b), clause (2), plus
117.31 	(ii) an amount equal to one year's depreciation on the
117.32 	district's school bus fleet and mobile units computed on a
117.33 	straight line basis at the rate of 15 percent per year for
117.34 	districts operating a program under section 124D.128 for grades
117.35 	1 to 12 for all students in the district and 12-1/2 percent per
117.36 	year for other districts of the cost of the fleet, plus
118.1 	(iii) an amount equal to one year's depreciation on the
118.2 	district's type three school buses, as defined in section
118.3 	169.01, subdivision 6, clause (5), which must be used a majority
118.4 	of the time for pupil transportation purposes, computed on a
118.5 	straight line basis at the rate of 20 percent per year of the
118.6 	cost of the type three school buses by:
118.7 	(2) the number of pupils eligible for transportation in the
118.8 	regular category, as defined in paragraph (b), clause (1), and
118.9 	the excess category, as defined in paragraph (b), clause (2).
118.10 	(b) "Transportation category" means a category of
118.11 	transportation service provided to pupils as follows:
118.12 	(1) Regular transportation is:
118.13 	(i) transportation to and from school during the regular
118.14 	school year for resident elementary pupils residing one mile or
118.15 	more from the public or nonpublic school they attend, and
118.16 	resident secondary pupils residing two miles or more from the
118.17 	public or nonpublic school they attend, excluding desegregation
118.18 	transportation and noon kindergarten transportation; but with
118.19 	respect to transportation of pupils to and from nonpublic
118.20 	schools, only to the extent permitted by sections 123B.84 to
118.21 	123B.87;
118.22 	(ii) transportation of resident pupils to and from language
118.23 	immersion programs;
118.24 	(iii) transportation of a pupil who is a custodial parent
118.25 	and that pupil's child between the pupil's home and the child
118.26 	care provider and between the provider and the school, if the
118.27 	home and provider are within the attendance area of the school;
118.28 	(iv) transportation to and from or board and lodging in
118.29 	another district, of resident pupils of a district without a
118.30 	secondary school; and
118.31 	(v) transportation to and from school during the regular
118.32 	school year required under subdivision 3 for nonresident
118.33 	elementary pupils when the distance from the attendance area
118.34 	border to the public school is one mile or more, and for
118.35 	nonresident secondary pupils when the distance from the
118.36 	attendance area border to the public school is two miles or
119.1 	more, excluding desegregation transportation and noon
119.2 	kindergarten transportation.
119.3 	For the purposes of this paragraph, a district may
119.4 	designate a licensed day care facility, respite care facility,
119.5 	the residence of a relative, or the residence of a person chosen
119.6 	by the pupil's parent or guardian as the home of a pupil for
119.7 	part or all of the day, if requested by the pupil's parent or
119.8 	guardian, and if that facility or residence is within the
119.9 	attendance area of the school the pupil attends.
119.10 	(2) Excess transportation is:
119.11 	(i) transportation to and from school during the regular
119.12 	school year for resident secondary pupils residing at least one
119.13 	mile but less than two miles from the public or nonpublic school
119.14 	they attend, and transportation to and from school for resident
119.15 	pupils residing less than one mile from school who are
119.16 	transported because of extraordinary traffic, drug, or crime
119.17 	hazards; and
119.18 	(ii) transportation to and from school during the regular
119.19 	school year required under subdivision 3 for nonresident
119.20 	secondary pupils when the distance from the attendance area
119.21 	border to the school is at least one mile but less than two
119.22 	miles from the public school they attend, and for nonresident
119.23 	pupils when the distance from the attendance area border to the
119.24 	school is less than one mile from the school and who are
119.25 	transported because of extraordinary traffic, drug, or crime
119.26 	hazards.
119.27 	(3) Desegregation transportation is transportation within
119.28 	and outside of the district during the regular school year of
119.29 	pupils to and from schools located outside their normal
119.30 	attendance areas under a plan for desegregation mandated by the
119.31 	commissioner or under court order.
119.32 	(4) "Transportation services for pupils with disabilities"
119.33 	is:
119.34 	(i) transportation of pupils with disabilities who cannot
119.35 	be transported on a regular school bus between home or a respite
119.36 	care facility and school;
120.1 	(ii) necessary transportation of pupils with disabilities
120.2 	from home or from school to other buildings, including centers
120.3 	such as developmental achievement centers, hospitals, and
120.4 	treatment centers where special instruction or services required
120.5 	by sections 125A.03 to 125A.24, 125A.26 to 125A.48, and 125A.65
120.6 	are provided, within or outside the district where services are
120.7 	provided;
120.8 	(iii) necessary transportation for resident pupils with
120.9 	disabilities required by sections 125A.12, and 125A.26 to
120.10 	125A.48;
120.11 	(iv) board and lodging for pupils with disabilities in a
120.12 	district maintaining special classes;
120.13 	(v) transportation from one educational facility to another
120.14 	within the district for resident pupils enrolled on a
120.15 	shared-time basis in educational programs, and necessary
120.16 	transportation required by sections 125A.18, and 125A.26 to
120.17 	125A.48, for resident pupils with disabilities who are provided
120.18 	special instruction and services on a shared-time basis or if
120.19 	resident pupils are not transported, the costs of necessary
120.20 	travel between public and private schools or neutral
120.21 	instructional sites by essential personnel employed by the
120.22 	district's program for children with a disability;
120.23 	(vi) transportation for resident pupils with disabilities
120.24 	to and from board and lodging facilities when the pupil is
120.25 	boarded and lodged for educational purposes; and
120.26 	(vii) services described in clauses (i) to (vi), when
120.27 	provided for pupils with disabilities in conjunction with a
120.28 	summer instructional program that relates to the pupil's
120.29 	individual education plan or in conjunction with a learning year
120.30 	program established under section 124D.128.
120.31 	For purposes of computing special education base revenue
120.32 	under section 125A.76, subdivision 2, the cost of providing
120.33 	transportation for children with disabilities includes (A) the
120.34 	additional cost of transporting a homeless student from a
120.35 	temporary nonshelter home in another district to the school of
120.36 	origin, or a formerly homeless student from a permanent home in
121.1 	another district to the school of origin but only through the
121.2 	end of the academic year; and (B) depreciation on district-owned
121.3 	school buses purchased after July 1, 2005, and used primarily
121.4 	for transportation of pupils with disabilities, calculated
121.5 	according to paragraph (a), clauses (ii) and (iii).
121.6 	Depreciation costs included in the disabled transportation
121.7 	category must be excluded in calculating the actual expenditure
121.8 	per pupil transported in the regular and excess transportation
121.9 	categories according to paragraph (a).
121.10 	(5) "Nonpublic nonregular transportation" is:
121.11 	(i) transportation from one educational facility to another
121.12 	within the district for resident pupils enrolled on a
121.13 	shared-time basis in educational programs, excluding
121.14 	transportation for nonpublic pupils with disabilities under
121.15 	clause (4);
121.16 	(ii) transportation within district boundaries between a
121.17 	nonpublic school and a public school or a neutral site for
121.18 	nonpublic school pupils who are provided pupil support services
121.19 	pursuant to section 123B.44; and
121.20 	(iii) late transportation home from school or between
121.21 	schools within a district for nonpublic school pupils involved
121.22 	in after-school activities.
121.23 	(c) "Mobile unit" means a vehicle or trailer designed to
121.24 	provide facilities for educational programs and services,
121.25 	including diagnostic testing, guidance and counseling services,
121.26 	and health services.  A mobile unit located off nonpublic school
121.27 	premises is a neutral site as defined in section 123B.41,
121.28 	subdivision 13.

121.29 	Sec. 7. Minnesota Statutes 2004, section 124D.11,
121.30 	subdivision 5, is amended to read:
121.31 		Subd. 5.Special education aid. (a) Except as provided
121.32 	in subdivision 2, special education aid must be paid to a
121.33 	charter school according to section 125A.76, as though it were a
121.34 	school district.
121.35 	(b) For fiscal year 2006,the charter school may charge
121.36 	tuition to the district of residence as follows:
122.1 	(1) if the charter school does not receive general
122.2 	education revenue on behalf of the student according to
122.3 	subdivision 1, tuition shall be charged as provided in section
122.4 	125A.11.; or 
122.5 	(2) if the charter school receives general education
122.6 	revenue on behalf of the student according to subdivision 1,
122.7 	tuition shall be charged as provided in section 127A.47,
122.8 	subdivision 7, paragraph (d).
122.9 	(c) For fiscal year 2007 and later, the special education
122.10 	aid paid to the charter school shall be adjusted as follows:
122.11 	(1) if the charter school does not receive general
122.12 	education revenue on behalf of the student according to
122.13 	subdivision 1, the aid shall be adjusted as provided in section
122.14 	125A.11; or 
122.15 	(2) if the charter school receives general education
122.16 	revenue on behalf of the student according to subdivision 1, the
122.17 	aid shall be adjusted as provided in section 127A.47,
122.18 	subdivision 7, paragraph (d).
122.19 	(d) Notwithstanding paragraphs (b) and (c), sections
122.20 	125A.11 and 127A.47, subdivision 7, paragraph (d), for charter
122.21 	schools where fewer than 30 percent of enrolled students receive
122.22 	special education and related services, the tuition calculations
122.23 	or aid adjustments must be based on the lesser of the charter
122.24 	school's or the resident district's actual special education
122.25 	cost per service hour for the student's primary disability area,
122.26 	or grouping of disability areas used by the school for tuition
122.27 	billing.  For fiscal year 2006, the charter school may submit a
122.28 	tuition bill in an amount equal to 70 percent of its remaining
122.29 	unreimbursed special education costs to the commissioner.  For
122.30 	fiscal year 2007 and later, the commissioner must calculate the
122.31 	remaining unreimbursed special education costs.  The
122.32 	commissioner must reimburse the charter school in an amount
122.33 	equal to 70 percent of the school's remaining unreimbursed
122.34 	special education costs from the charter school special
122.35 	education reimbursement account according to section 125A.795.

122.36 	Sec. 8. [124D.4531] CAREER AND TECHNICAL LEVY.
123.1 		Subdivision 1.Career and technical levy. (a) A district
123.2 	with a career and technical program approved under this section
123.3 	for the fiscal year in which the levy is certified may levy an
123.4 	amount equal to the lesser of:
123.5 	(1) $80 times the district's average daily membership in
123.6 	grades 10 through 12 for the fiscal year in which the levy is
123.7 	certified; or 
123.8 	(2) 25 percent of approved expenditures in the fiscal year
123.9 	in which the levy is certified for the following:
123.10 	(i) salaries paid to essential, licensed personnel
123.11 	providing direct instructional services to students in that
123.12 	fiscal year for services rendered in the district's approved
123.13 	career and technical education programs;
123.14 	(ii) contracted services provided by a public or private
123.15 	agency other than a Minnesota school district or cooperative
123.16 	center under subdivision 7;
123.17 	(iii) necessary travel between instructional sites by
123.18 	licensed career and technical education personnel;
123.19 	(iv) necessary travel by licensed career and technical
123.20 	education personnel for vocational student organization
123.21 	activities held within the state for instructional purposes;
123.22 	(v) curriculum development activities that are part of a
123.23 	five-year plan for improvement based on program assessment;
123.24 	(vi) necessary travel by licensed career and technical
123.25 	education personnel for noncollegiate credit-bearing
123.26 	professional development; and 
123.27 	(vii) specialized vocational instructional supplies.
123.28 	(b) Up to ten percent of a district's career and technical
123.29 	levy may be spent on equipment purchases.  Districts using the
123.30 	career and technical levy for equipment purchases must report to
123.31 	the department on the improved learning opportunities for
123.32 	students that result from the investment in equipment.
123.33 	(c) The district must recognize the full amount of this
123.34 	levy as revenue for the fiscal year in which it is certified.
123.35 		Subd. 2.Allocation from cooperative centers and
123.36 	intermediate districts. For purposes of this section, a
124.1 	cooperative center or an intermediate district must allocate its
124.2 	approved expenditures for career and technical education
124.3 	programs among participating districts.
124.4 		Subd. 3.Levy guarantee. Notwithstanding subdivision 1,
124.5 	the career and technical education levy for a district is not
124.6 	less than the lesser of:
124.7 	(1) the district's career and technical education levy
124.8 	authority for the previous fiscal year; or 
124.9 	(2) 100 percent of the approved expenditures for career and
124.10 	technical programs included in subdivision 1, paragraph (b), for
124.11 	the fiscal year in which the levy is certified.
124.12 		Subd. 4.District reports. Each district or cooperative
124.13 	center must report data to the department for all career and
124.14 	technical education programs as required by the department to
124.15 	implement the career and technical levy formula.
124.16 	
EFFECTIVE DATE. This section is effective for taxes
124.17 	payable in 2009.

124.18 	Sec. 9. Minnesota Statutes 2004, section 124D.59,
124.19 	subdivision 2, is amended to read:
124.20 		Subd. 2.Pupil of limited english proficiency.  (a)
124.21 	"Pupil of limited English proficiency" means a pupil in
124.22 	kindergarten through grade 12 who meets the following
124.23 	requirements:
124.24 	(1) the pupil, as declared by a parent or guardian first
124.25 	learned a language other than English, comes from a home where
124.26 	the language usually spoken is other than English, or usually
124.27 	speaks a language other than English; and
124.28 	(2) the pupil is determined by developmentally appropriate
124.29 	measures, which might include observations, teacher judgment,
124.30 	parent recommendations, or developmentally appropriate
124.31 	assessment instruments, to lack the necessary English skills to
124.32 	participate fully in classes taught in English.
124.33 	(b) Notwithstanding paragraph (a), a pupil in grades 4
124.34 	through 12 who was enrolled in a Minnesota public school on the
124.35 	dates during the previous school year when a commissioner
124.36 	provided assessment that measures the pupil's emerging academic
125.1 	English was administered, shall not be counted as a pupil of
125.2 	limited English proficiency in calculating limited English
125.3 	proficiency pupil units under section 126C.05, subdivision 17,
125.4 	and shall not generate state limited English proficiency aid
125.5 	under section 124D.65, subdivision 5, unless the pupil scored
125.6 	below the state cutoff score on an assessment measuring emerging
125.7 	academic English provided by the commissioner during the
125.8 	previous school year.
125.9 	(c) Notwithstanding paragraphs (a) and (b), a pupil in
125.10 	kindergarten through grade 12 shall not be counted as a pupil of
125.11 	limited English proficiency in calculating limited English
125.12 	proficiency pupil units under section 126C.05, subdivision 17,
125.13 	and shall not generate state limited English proficiency aid
125.14 	under section 124D.65, subdivision 5, if:
125.15 	(1) the pupil is not enrolled during the current fiscal
125.16 	year in an educational program for pupils of limited English
125.17 	proficiency in accordance with sections 124D.58 to 124D.64; or
125.18 	(2) the pupil has generated five seven or more years of
125.19 	average daily membership in Minnesota public schools since July
125.20 	1, 1996.
125.21 	
EFFECTIVE DATE. This section is effective for revenue for
125.22 	fiscal years 2006 and 2007 if the basic formula allowance under
125.23 	Minnesota Statutes, section 126C.10, subdivision 2, does not
125.24 	grow by at least three and one-half percent each year, excluding
125.25 	roll-ins.

125.26 	Sec. 10. Minnesota Statutes 2004, section 125A.11,
125.27 	subdivision 1, is amended to read:
125.28 		Subdivision 1.Nonresident tuition rate; other costs.
 125.29 	(a) For fiscal year 2006,when a school district provides
125.30 	instruction and services outside the district of residence,
125.31 	board and lodging, and any tuition to be paid, shall be paid by
125.32 	the district of residence, except as provided in subdivision 4.
125.33 	The tuition rate to be charged for any child with a disability,
125.34 	excluding a pupil for whom tuition is calculated according to
125.35 	section 127A.47, subdivision 7, paragraph (d),must be the sum
125.36 	of (1) the actual cost of providing special instruction and
126.1 	services to the child including a proportionate amount
126.2 	for capital outlay and debt service but not including any amount
126.3 	for special transportation and unreimbursed building lease and
126.4 	debt service costs for facilities used primarily for special
126.5 	education, plus (2) the amount of general education revenue and
126.6 	referendum aid attributable to the pupil, minus (3) the amount
126.7 	of special education aid for children with a disability received
126.8 	on behalf of that child, minus (4) if the pupil receives special
126.9 	instruction and services outside the regular classroom for more
126.10 	than 60 percent of the school day, the amount of general
126.11 	education revenue and referendum aid, excluding portions
126.12 	attributable to district and school administration, district
126.13 	support services, operations and maintenance, capital
126.14 	expenditures, and pupil transportation, attributable to that
126.15 	pupil for the portion of time the pupil receives instruction in
126.16 	the regular classroom.  If the boards involved do not agree upon
126.17 	the tuition rate, either board may apply to the commissioner to
126.18 	fix the rate. Notwithstanding chapter 14,the commissioner must
126.19 	then set a date for a hearing or request a written statement
126.20 	from each board, giving each board at least ten days' notice,
126.21 	and after the hearing or review of the written statements the
126.22 	commissioner must make an order fixing the tuition rate, which
126.23 	is binding on both school districts. General education revenue
126.24 	and referendum aid attributable to a pupil must be calculated
126.25 	using the resident district's average general education and
126.26 	referendum revenue per adjusted pupil unit.
126.27 	(b) For fiscal year 2007 and later, when a school district
126.28 	provides special instruction and services for a pupil with a
126.29 	disability as defined in section 125A.02 outside the district of
126.30 	residence, excluding a pupil for whom an adjustment to special
126.31 	education aid is calculated according to section 127A.47,
126.32 	subdivision 7, paragraph (e), special education aid paid to the
126.33 	resident district must be reduced by an amount equal to (1) the
126.34 	actual cost of providing special instruction and services to the
126.35 	pupil, including a proportionate amount for special
126.36 	transportation and unreimbursed building lease and debt service
127.1 	costs for facilities used primarily for special education, plus
127.2 	(2) the amount of general education revenue and referendum aid
127.3 	attributable to that pupil, minus (3) the amount of special
127.4 	education aid for children with a disability received on behalf
127.5 	of that child, minus (4) if the pupil receives special
127.6 	instruction and services outside the regular classroom for more
127.7 	than 60 percent of the school day, the amount of general
127.8 	education revenue and referendum aid, excluding portions
127.9 	attributable to district and school administration, district
127.10 	support services, operations and maintenance, capital
127.11 	expenditures, and pupil transportation, attributable to that
127.12 	pupil for the portion of time the pupil receives instruction in
127.13 	the regular classroom.  General education revenue and referendum
127.14 	aid attributable to a pupil must be calculated using the
127.15 	resident district's average general education revenue and
127.16 	referendum aid per adjusted pupil unit.  If the resident
127.17 	district's special education aid is insufficient to make the
127.18 	full adjustment, the remaining adjustment shall be made to other
127.19 	state aid due to the district.
127.20 	
EFFECTIVE DATE. This section is effective July 1, 2005,
127.21 	for revenue for fiscal year 2006.

127.22 	Sec. 11. Minnesota Statutes 2004, section 125A.24, is
127.23 	amended to read:
127.24 	125A.24 PARENT ADVISORY COUNCILS.
127.25 	In order to increase the involvement of parents of children
127.26 	with disabilities in district policy making and decision making,
127.27 	school districts must have a special education advisory council
127.28 	that is incorporated into the district's special education
127.29 	system plan.
127.30 	(1) This advisory council may be established either for
127.31 	individual districts or in cooperation with other districts who
127.32 	are members of the same special education cooperative.
127.33 	(2) A district may set up this council as a subgroup of an
127.34 	existing board, council, or committee.
127.35 	(3) At least half of the designated council members must be
127.36 	parents of students with a disability. The council must include
128.1 	at least one member who is a parent of a nonpublic school
128.2 	student with a disability or an employee of a nonpublic school
128.3 	if a nonpublic school is located in the district.  Each local
128.4 	council must meet no less than once each year.The number of
128.5 	members, frequency of meetings, and operational procedures are
128.6 	to be locally determined.

128.7 	Sec. 12. Minnesota Statutes 2004, section 125A.28, is
128.8 	amended to read:
128.9 	125A.28 STATE INTERAGENCY COORDINATING COUNCIL.
128.10 	An Interagency Coordinating Council of at least 17, but not
128.11 	more than 25 members is established, in compliance with Public
128.12 	Law 102-119, section 682.  The members must be appointed by the
128.13 	governor.  Council members must elect the council chair.  The
128.14 	representative of the commissioner may not serve as the chair.
128.15 	The council must be composed of at least five parents, including
128.16 	persons of color, of children with disabilities under age 12,
128.17 	including at least three parents of a child with a disability
128.18 	under age seven, five representatives of public or private
128.19 	providers of services for children with disabilities under age
128.20 	five, including a special education director, county social
128.21 	service director, local Head Start director, and a community
128.22 	health services or public health nursing administrator, one
128.23 	member of the senate, one member of the house of
128.24 	representatives, one representative of teacher preparation
128.25 	programs in early childhood-special education or other
128.26 	preparation programs in early childhood intervention, at least
128.27 	one representative of advocacy organizations for children with
128.28 	disabilities under age five, one physician who cares for young
128.29 	children with special health care needs, one representative each
128.30 	from the commissioners of commerce, education, health, human
128.31 	services, a representative from the state agency responsible for
128.32 	child care, and a representative from Indian health services or
128.33 	a tribal council.  Section 15.059, subdivisions 2 to 5, apply to
128.34 	the council.  The council must meet at least quarterly.
128.35 	The council must address methods of implementing the state
128.36 	policy of developing and implementing comprehensive,
129.1 	coordinated, multidisciplinary interagency programs of early
129.2 	intervention services for children with disabilities and their
129.3 	families.
129.4 	The duties of the council include recommending policies to
129.5 	ensure a comprehensive and coordinated system of all state and
129.6 	local agency services for children under age five with
129.7 	disabilities and their families.  The policies must address how
129.8 	to incorporate each agency's services into a unified state and
129.9 	local system of multidisciplinary assessment practices,
129.10 	individual intervention plans, comprehensive systems to find
129.11 	children in need of services, methods to improve public
129.12 	awareness, and assistance in determining the role of interagency
129.13 	early intervention committees.
129.14 	By September 1 On the date that Minnesota Part C Annual
129.15 	Performance Report is submitted to the federal Office of Special
129.16 	Education, the council must recommend to the governor and the
129.17 	commissioners of education, health, human services, commerce,
129.18 	and employment and economic development policies for a
129.19 	comprehensive and coordinated system.
129.20 	Notwithstanding any other law to the contrary, the State
129.21 	Interagency Coordinating Council expires on June 30, 2005 2009.

129.22 	Sec. 13. Minnesota Statutes 2004, section 125A.51, is
129.23 	amended to read:
129.24 	125A.51 PLACEMENT OF CHILDREN WITHOUT DISABILITIES;
129.25 	EDUCATION AND TRANSPORTATION.
129.26 	The responsibility for providing instruction and
129.27 	transportation for a pupil without a disability who has a
129.28 	short-term or temporary physical or emotional illness or
129.29 	disability, as determined by the standards of the commissioner,
129.30 	and who is temporarily placed for care and treatment for that
129.31 	illness or disability, must be determined as provided in this
129.32 	section.
129.33 	(a) The school district of residence of the pupil is the
129.34 	district in which the pupil's parent or guardian resides.
129.35 	(b) When parental rights have been terminated by court
129.36 	order, the legal residence of a child placed in a residential or
130.1 	foster facility for care and treatment is the district in which
130.2 	the child resides.
130.3 	(c) Before the placement of a pupil for care and treatment,
130.4 	the district of residence must be notified and provided an
130.5 	opportunity to participate in the placement decision.  When an
130.6 	immediate emergency placement is necessary and time does not
130.7 	permit resident district participation in the placement
130.8 	decision, the district in which the pupil is temporarily placed,
130.9 	if different from the district of residence, must notify the
130.10 	district of residence of the emergency placement within 15 days
130.11 	of the placement.
130.12 	(d) When a pupil without a disability is temporarily placed
130.13 	for care and treatment in a day program and the pupil continues
130.14 	to live within the district of residence during the care and
130.15 	treatment, the district of residence must provide instruction
130.16 	and necessary transportation to and from the treatment facility
130.17 	for the pupil.  Transportation shall only be provided by the
130.18 	district during regular operating hours of the district.  The
130.19 	district may provide the instruction at a school within the
130.20 	district of residence, at the pupil's residence, or in the case
130.21 	of a placement outside of the resident district, in the district
130.22 	in which the day treatment program is located by paying tuition
130.23 	to that district.  The district of placement may contract with a
130.24 	facility to provide instruction by teachers licensed by the
130.25 	state Board of Teaching.
130.26 	(e) When a pupil without a disability is temporarily placed
130.27 	in a residential program for care and treatment, the district in
130.28 	which the pupil is placed must provide instruction for the pupil
130.29 	and necessary transportation while the pupil is receiving
130.30 	instruction, and in the case of a placement outside of the
130.31 	district of residence, the nonresident district must bill the
130.32 	district of residence for the actual cost of providing the
130.33 	instruction for the regular school year and for summer school,
130.34 	excluding transportation costs.
130.35 	(f) Notwithstanding paragraph (e), if the pupil is homeless
130.36 	and placed in a public or private homeless shelter, then the
131.1 	district that enrolls the pupil under section 127A.47,
131.2 	subdivision 2, shall provide the transportation, unless the
131.3 	district that enrolls the pupil and the district in which the
131.4 	pupil is temporarily placed agree that the district in which the
131.5 	pupil is temporarily placed shall provide transportation.When
131.6 	a pupil without a disability is temporarily placed in a
131.7 	residential program outside the district of residence, the
131.8 	administrator of the court placing the pupil must send timely
131.9 	written notice of the placement to the district of residence.
131.10 	The district of placement may contract with a residential
131.11 	facility to provide instruction by teachers licensed by the
131.12 	state Board of Teaching. For purposes of this section, the state
131.13 	correctional facilities operated on a fee-for-service basis are
131.14 	considered to be residential programs for care and treatment.
131.15 	(f) (g) The district of residence must include the pupil in
131.16 	its residence count of pupil units and pay tuition as provided
131.17 	in section 123A.488 to the district providing the instruction.
131.18 	Transportation costs must be paid by the district providing the
131.19 	transportation and the state must pay transportation aid to that
131.20 	district.  For purposes of computing state transportation aid,
131.21 	pupils governed by this subdivision must be included in the
131.22 	disabled transportation category if the pupils cannot be
131.23 	transported on a regular school bus route without special
131.24 	accommodations.

131.25 	Sec. 14. Minnesota Statutes 2004, section 125A.76,
131.26 	subdivision 1, is amended to read:
131.27 		Subdivision 1.Definitions.  For the purposes of this
131.28 	section, the definitions in this subdivision apply.
131.29 	(a) "Base year" for fiscal year 1998 and later fiscal years
131.30 	means the second fiscal year preceding the fiscal year for which
131.31 	aid will be paid.
131.32 	(b) "Basic revenue" has the meaning given it in section
131.33 	126C.10, subdivision 2.  For the purposes of computing basic
131.34 	revenue pursuant to this section, each child with a disability
131.35 	shall be counted as prescribed in section 126C.05, subdivision 1.
131.36 	(c) "Essential personnel" means teachers, cultural
132.1 	liaisons, related services, and support services staff providing
132.2 	direct services to students.  Essential personnel may also
132.3 	include special education paraprofessionals or clericals
132.4 	providing support to teachers and students by preparing
132.5 	paperwork and making arrangements related to special education
132.6 	compliance requirements, including parent meetings and
132.7 	individual education plans.
132.8 	(d) "Average daily membership" has the meaning given it in
132.9 	section 126C.05.
132.10 	(e) "Program growth factor" means 1.046 for fiscal year
132.11 	2003, and ;1.0 for fiscal year years 2004, 2005, and 2006;
132.12 	1.042 for fiscal year 2007; and 1.046 for fiscal year 2008 and
132.13 	later.
132.14 	
EFFECTIVE DATE. This section is effective for revenue for
132.15 	fiscal year 2006.

132.16 	Sec. 15. Minnesota Statutes 2004, section 125A.76,
132.17 	subdivision 3, is amended to read:
132.18 		Subd. 3.Adjusted special education base revenue.  For
132.19 	fiscal year 1997 2006 and later, a district's adjusted special
132.20 	education base revenue equals the district's special education
132.21 	base revenue times the ratio of the district's average daily
132.22 	membership unduplicated count of students with an individual
132.23 	education plan for the current school year to the district's
132.24 	average daily membership unduplicated count of students with an
132.25 	individual education plan for the base year.
132.26 	
EFFECTIVE DATE. This section is effective for revenue for
132.27 	fiscal year 2006.

132.28 	Sec. 16. Minnesota Statutes 2004, section 125A.76,
132.29 	subdivision 4, is amended to read:
132.30 		Subd. 4.State total special education aid.  The state
132.31 	total special education aid for fiscal year 2004 equals
132.32 	$530,642,000.  The state total special education aid for fiscal
132.33 	year 2005 equals $529,164,000. The state total special
132.34 	education aid for fiscal year 2006 equals $528,846,000.The
132.35 	state total special education aid for later fiscal years equals:
132.36 	(1) the state total special education aid for the preceding
133.1 	fiscal year; times
133.2 	(2) the program growth factor; times
133.3 	(3) the ratio of the state total average daily membership
133.4 	for the current fiscal year to the state total average daily
133.5 	membership for the preceding fiscal year.
133.6 	
EFFECTIVE DATE. This section is effective for revenue for
133.7 	fiscal year 2006.

133.8 	Sec. 17. Minnesota Statutes 2004, section 125A.79,
133.9 	subdivision 1, is amended to read:
133.10 		Subdivision 1.Definitions.  For the purposes of this
133.11 	section, the definitions in this subdivision apply.
133.12 	(a) "Unreimbursed special education cost" means the sum of
133.13 	the following:
133.14 	(1) expenditures for teachers' salaries, contracted
133.15 	services, supplies, equipment, and transportation services
133.16 	eligible for revenue under section 125A.76; plus
133.17 	(2) expenditures for tuition bills received under sections
133.18 	125A.03 to 125A.24 and 125A.65 for services eligible for revenue
133.19 	under section 125A.76, subdivision 2; minus
133.20 	(3) revenue for teachers' salaries, contracted services,
133.21 	supplies, and equipment under section 125A.76; minus
133.22 	(4) tuition receipts under sections 125A.03 to 125A.24 and
133.23 	125A.65 for services eligible for revenue under section 125A.76,
133.24 	subdivision 2.
133.25 	(b) "General revenue" means for fiscal year 1996, the sum
133.26 	of the general education revenue according to section 126C.10,
133.27 	subdivision 1, as adjusted according to section 127A.47,
133.28 	subdivision 7, plus the total referendum revenue according to
133.29 	section 126C.17, subdivision 4.  For fiscal years 1997 and
133.30 	later,"General revenue" means the sum of the general education
133.31 	revenue according to section 126C.10, subdivision 1, as adjusted
133.32 	according to section 127A.47, subdivisions 7 and 8, plus the
133.33 	total referendum revenue minus transportation sparsity revenue
133.34 	minus total operating capital revenue.
133.35 	(c) "Average daily membership" has the meaning given it in
133.36 	section 126C.05.
134.1 	(d) "Program growth factor" means 1.02 for fiscal year
134.2 	2003, and ;1.0 for fiscal year years 2004 and 2005;and 1.02
134.3 	for fiscal year 2006 and later.
134.4 	
EFFECTIVE DATE. This section is effective for revenue for
134.5 	fiscal year 2006.

134.6 	Sec. 18. Minnesota Statutes 2004, section 125A.79,
134.7 	subdivision 6, is amended to read:
134.8 		Subd. 6.State total special education excess cost aid.
 134.9 	The state total special education excess cost aid for fiscal
134.10 	year 2004 equals $92,067,000.  The state total special education
134.11 	aid for fiscal year 2005 equals $91,811,000. The state total
134.12 	special education excess cost aid for fiscal year 2006 equals
134.13 	$91,784,000.The state total special education excess cost aid
134.14 	for fiscal year 2006 2007 and later fiscal years equals:
134.15 	(1) the state total special education excess cost aid for
134.16 	the preceding fiscal year; times
134.17 	(2) the program growth factor; times
134.18 	(3) the ratio of the state total average daily membership
134.19 	for the current fiscal year to the state total average daily
134.20 	membership for the preceding fiscal year;
134.21 	(4) all less the amount transferred into the charter school
134.22 	special education reimbursement account under section 125A.795.
134.23 	
EFFECTIVE DATE. This section is effective for revenue for
134.24 	fiscal year 2006.

134.25 	Sec. 19. [125A.795] CHARTER SCHOOL SPECIAL EDUCATION
134.26 	REIMBURSEMENT ACCOUNT.
134.27 		Subdivision 1.Account created. The charter school
134.28 	special education reimbursement account is created in the state
134.29 	general fund.
134.30 		Subd. 2.Revenue. The estimated amount necessary to pay
134.31 	for the state share of net unreimbursed special education costs
134.32 	of charter school pupils with a disability is transferred from
134.33 	the appropriation for special education excess cost aid to the
134.34 	charter school special education reimbursement account.
134.35 		Subd. 3.Review. The commissioner of education must
134.36 	examine the tuition bills from charter schools and may adjust
135.1 	the bills in the same manner as authorized under section 125A.80.
135.2 	
EFFECTIVE DATE. This section is effective July 1, 2005,
135.3 	for revenue for fiscal year 2006.

135.4 	Sec. 20. Minnesota Statutes 2004, section 126C.40,
135.5 	subdivision 1, is amended to read:
135.6 		Subdivision 1.To lease building or land.  (a) When an
135.7 	independent or a special school district or a group of
135.8 	independent or special school districts finds it economically
135.9 	advantageous to rent or lease a building or land for any
135.10 	instructional purposes or for school storage or furniture
135.11 	repair, and it determines that the operating capital revenue
135.12 	authorized under section 126C.10, subdivision 13, is
135.13 	insufficient for this purpose, it may apply to the commissioner
135.14 	for permission to make an additional capital expenditure levy
135.15 	for this purpose.  An application for permission to levy under
135.16 	this subdivision must contain financial justification for the
135.17 	proposed levy, the terms and conditions of the proposed lease,
135.18 	and a description of the space to be leased and its proposed use.
135.19 	(b) The criteria for approval of applications to levy under
135.20 	this subdivision must include:  the reasonableness of the price,
135.21 	the appropriateness of the space to the proposed activity, the
135.22 	feasibility of transporting pupils to the leased building or
135.23 	land, conformity of the lease to the laws and rules of the state
135.24 	of Minnesota, and the appropriateness of the proposed lease to
135.25 	the space needs and the financial condition of the district.
135.26 	The commissioner must not authorize a levy under this
135.27 	subdivision in an amount greater than 90 percent of the cost to
135.28 	the district of renting or leasing a building or land for
135.29 	approved purposes.  The proceeds of this levy must not be used
135.30 	for custodial or other maintenance services.  A district may not
135.31 	levy under this subdivision for the purpose of leasing or
135.32 	renting a district-owned building or site to itself.
135.33 	(c) For agreements finalized after July 1, 1997, a district
135.34 	may not levy under this subdivision for the purpose of leasing:
135.35 	(1) a newly constructed building used primarily for regular
135.36 	kindergarten, elementary, or secondary instruction; or (2) a
136.1 	newly constructed building addition or additions used primarily
136.2 	for regular kindergarten, elementary, or secondary instruction
136.3 	that contains more than 20 percent of the square footage of the
136.4 	previously existing building.
136.5 	(d) Notwithstanding paragraph (b), a district may levy
136.6 	under this subdivision for the purpose of leasing or renting a
136.7 	district-owned building or site to itself only if the amount is
136.8 	needed by the district to make payments required by a lease
136.9 	purchase agreement, installment purchase agreement, or other
136.10 	deferred payments agreement authorized by law, and the levy
136.11 	meets the requirements of paragraph (c).  A levy authorized for
136.12 	a district by the commissioner under this paragraph may be in
136.13 	the amount needed by the district to make payments required by a
136.14 	lease purchase agreement, installment purchase agreement, or
136.15 	other deferred payments agreement authorized by law, provided
136.16 	that any agreement include a provision giving the school
136.17 	districts the right to terminate the agreement annually without
136.18 	penalty.
136.19 	(e) The total levy under this subdivision for a district
136.20 	for any year must not exceed $90 times the resident pupil units
136.21 	for the fiscal year to which the levy is attributable.
136.22 	(f) For agreements for which a review and comment have been
136.23 	submitted to the Department of Education after April 1, 1998,
136.24 	the term "instructional purpose" as used in this subdivision
136.25 	excludes expenditures on stadiums.
136.26 	(g) The commissioner of education may authorize a school
136.27 	district to exceed the limit in paragraph (e) if the school
136.28 	district petitions the commissioner for approval.  The
136.29 	commissioner shall grant approval to a school district to exceed
136.30 	the limit in paragraph (e) for not more than five years if the
136.31 	district meets the following criteria:
136.32 	(1) the school district has been experiencing pupil
136.33 	enrollment growth in the preceding five years;
136.34 	(2) the purpose of the increased levy is in the long-term
136.35 	public interest;
136.36 	(3) the purpose of the increased levy promotes colocation
137.1 	of government services; and
137.2 	(4) the purpose of the increased levy is in the long-term
137.3 	interest of the district by avoiding over construction of school
137.4 	facilities.
137.5 	(h) A school district that is a member of an intermediate
137.6 	school district may include in its authority under this section
137.7 	90 percent of the costs associated with leases of administrative
137.8 	and classroom space for intermediate school district programs.
137.9 	This authority must not exceed $22.50 times the adjusted
137.10 	marginal cost pupil units of the member districts.  This
137.11 	authority is in addition to any other authority authorized under
137.12 	this section.
137.13 	(i) In addition to the allowable capital levies in
137.14 	paragraph (a), a district that is a member of the "Technology
137.15 	and Information Education Systems" data processing joint board,
137.16 	that finds it economically advantageous to enter into a lease
137.17 	purchase agreement for a building for a group of school
137.18 	districts or special school districts for staff development
137.19 	purposes, may levy for its portion of lease costs attributed to
137.20 	the district within the total levy limit in paragraph (e).
137.21 	(j) A school district that is a member of the Wright
137.22 	Technical Center may include in its authority under this section
137.23 	90 percent of the costs associated with leases of administrative
137.24 	and classroom space at the Wright Technical Center.  This
137.25 	authority must not exceed $22.50 times the adjusted marginal
137.26 	cost pupil units of the member districts.  This authority may be
137.27 	in addition to any other authority authorized under this section.

137.28 	Sec. 21. Minnesota Statutes 2004, section 126C.457, is
137.29 	amended to read:
137.30 	126C.457 CAREER AND TECHNICAL LEVY.
137.31 	For taxes payable in 2006, 2007, and 2008,a school
137.32 	district may levy an amount equal to the greater of (1) $10,000,
137.33 	or (2) the district's fiscal year 2001 entitlement for career
137.34 	and technical aid under Minnesota Statutes 2000, section
137.35 	124D.453.  The district must recognize the full amount of this
137.36 	levy as revenue for the fiscal year in which it is certified.
138.1 	Revenue received under this section must be reserved and used
138.2 	only for career and technical programs.

138.3 	Sec. 22. [127A.21] STATE COORDINATOR FOR WORLD
138.4 	LANGUAGES.
138.5 	(a) The commissioner of education shall designate a
138.6 	full-time state coordinator for world languages education within
138.7 	the Department of Education by July 1, 2005.  The commissioner
138.8 	shall seek input from the Quality Teaching Network before
138.9 	designating or hiring the coordinator who must have classroom
138.10 	experience teaching world languages.  The coordinator, at a
138.11 	minimum, shall:
138.12 	(1) survey school districts in the state to:
138.13 	(i) identify the types of existing world language programs
138.14 	and exemplary model extended world languages programs; and 
138.15 	(ii) in consultation with Minnesota postsecondary
138.16 	institutions, identify and address staff development needs of
138.17 	current world language teachers and preservice teachers;
138.18 	(2) identify successful extended world language programs
138.19 	from other states;
138.20 	(3) establish guidelines for a variety of model extended
138.21 	world languages programs;
138.22 	(4) research and recommend the funding necessary to
138.23 	implement various models of extended world languages programs in
138.24 	different languages; and 
138.25 	(5) support and monitor, using the most recent information
138.26 	available, current world languages programs.
138.27 	(b) For the purposes of this section, "extended world
138.28 	languages program" means a world languages program:
138.29 	(1) with a sequence of consecutive years in any of
138.30 	kindergarten through grade 12, including, for example, sequences
138.31 	of kindergarten through grade 12, grades 5 through 12, and
138.32 	grades 7 through 12; and 
138.33 	(2) based on professionally recognized proficiency
138.34 	guidelines, and which incorporates current best practices for
138.35 	world language programs.

138.36 	Sec. 23. Minnesota Statutes 2004, section 127A.47,
139.1 	subdivision 7, is amended to read:
139.2 		Subd. 7.Alternative attendance programs.  The general
139.3 	education aid and special education aid for districts must be
139.4 	adjusted for each pupil attending a nonresident district under
139.5 	sections 123A.05 to 123A.08, 124D.03, 124D.06, 124D.08, and
139.6 	124D.68.  The adjustments must be made according to this
139.7 	subdivision.
139.8 	(a) General education aid paid to a resident district must
139.9 	be reduced by an amount equal to the referendum equalization aid
139.10 	attributable to the pupil in the resident district.
139.11 	(b) General education aid paid to a district serving a
139.12 	pupil in programs listed in this subdivision must be increased
139.13 	by an amount equal to the referendum equalization aid
139.14 	attributable to the pupil in the nonresident district.
139.15 	(c) If the amount of the reduction to be made from the
139.16 	general education aid of the resident district is greater than
139.17 	the amount of general education aid otherwise due the district,
139.18 	the excess reduction must be made from other state aids due the
139.19 	district.
139.20 	(d) For fiscal year 2006,the district of residence must
139.21 	pay tuition to a district or an area learning center, operated
139.22 	according to paragraph (e) (f), providing special instruction
139.23 	and services to a pupil with a disability, as defined in section
139.24 	125A.02, or a pupil, as defined in section 125A.51, who is
139.25 	enrolled in a program listed in this subdivision.  The tuition
139.26 	must be equal to (1) the actual cost of providing special
139.27 	instruction and services to the pupil, including a proportionate
139.28 	amount for debt service and for capital expenditure facilities
139.29 	and equipment, and debt service but not including any amount for 
139.30 	special transportation and unreimbursed building lease and debt
139.31 	service costs for facilities used primarily for special
139.32 	education, minus (2) if the pupil receives special instruction
139.33 	and services outside the regular classroom for more than 60
139.34 	percent of the school day,the amount of general education
139.35 	revenue and referendum aid attributable to that pupil for the
139.36 	portion of time the pupil receives special instruction and
140.1 	services outside of the regular classroom, excluding portions
140.2 	attributable to district and school administration, district
140.3 	support services, operations and maintenance, capital
140.4 	expenditures, and pupil transportation, minus (3) special
140.5 	education aid but not including any amount for transportation,
140.6 	attributable to that pupil, that is received by the district
140.7 	providing special instruction and services. For purposes of
140.8 	this paragraph, general education revenue and referendum aid
140.9 	attributable to a pupil must be calculated using the serving
140.10 	district's average general education revenue and referendum aid
140.11 	per adjusted pupil unit.
140.12 	(e) For fiscal year 2007 and later, special education aid
140.13 	paid to a resident district must be reduced by an amount equal
140.14 	to (1) the actual cost of providing special instruction and
140.15 	services, including special transportation and unreimbursed
140.16 	building lease and debt service costs for facilities used
140.17 	primarily for special education, for a pupil with a disability,
140.18 	as defined in section 125A.02, or a pupil, as defined in section
140.19 	125A.51, who is enrolled in a program listed in this
140.20 	subdivision, minus (2) if the pupil receives special instruction
140.21 	and services outside the regular classroom for more than 60
140.22 	percent of the school day, the amount of general education
140.23 	revenue and referendum aid attributable to that pupil for the
140.24 	portion of time the pupil receives special instruction and
140.25 	services outside of the regular classroom, excluding portions
140.26 	attributable to district and school administration, district
140.27 	support services, operations and maintenance, capital
140.28 	expenditures, and pupil transportation, minus (3) special
140.29 	education aid attributable to that pupil, that is received by
140.30 	the district providing special instruction and services.  For
140.31 	purposes of this paragraph, general education revenue and
140.32 	referendum aid attributable to a pupil must be calculated using
140.33 	the serving district's average general education revenue and
140.34 	referendum aid per adjusted pupil unit.  Special education aid
140.35 	paid to the district providing special instruction and services
140.36 	for the pupil, or to the fiscal agent district for a
141.1 	cooperative, must be increased by the amount of the reduction in
141.2 	the aid paid to the resident district.  If the resident
141.3 	district's special education aid is insufficient to make the
141.4 	full adjustment, the remaining adjustment shall be made to other
141.5 	state aids due to the district.
141.6 	(f) An area learning center operated by a service
141.7 	cooperative, intermediate district, education district, or a
141.8 	joint powers cooperative may elect through the action of the
141.9 	constituent boards to charge the resident district tuition for
141.10 	pupils rather than to have the general education revenue paid to
141.11 	a fiscal agent school district.  Except as provided in paragraph
141.12 	(d) or (e), the district of residence must pay tuition equal to
141.13 	at least 90 percent of the district average general education
141.14 	revenue per pupil unit minus an amount equal to the product of
141.15 	the formula allowance according to section 126C.10, subdivision
141.16 	2, times .0485 for fiscal year 2006, and .0458 for fiscal year
141.17 	2007 and later fiscal years, calculated without basic skills
141.18 	revenue and transportation sparsity revenue, times the number of
141.19 	pupil units for pupils attending the area learning center, plus
141.20 	the amount of compensatory revenue generated by pupils attending
141.21 	the area learning center.

141.22 	Sec. 24. Minnesota Statutes 2004, section 134.31, is
141.23 	amended by adding a subdivision to read:
141.24 		Subd. 6.Advisory committee. The commissioner shall
141.25 	appoint an advisory committee of five members to advise the
141.26 	staff of the Minnesota Library for the Blind and Physically
141.27 	Handicapped on long-range plans and library services.  Members
141.28 	shall be people who use the library.  Section 15.059 governs
141.29 	this committee except that the committee shall not expire.
141.30 	Sec. 25.  2005 Senate File No. 1879, article 3, section 3,
141.31 	subdivision 32, if enacted, is amended to read:
141.32 		Subd. 32.Special education; regular. For special
141.33 	education aid under Minnesota Statutes, section 125A.75:
141.34 	$528,846,000   .....     2006
141.35 	$ 527,446,000 546,111,000.....     2007
141.36 	The 2006 appropriation includes $83,078,000 for 2005 and
142.1 	$445,768,000 for 2006.
142.2 	The 2007 appropriation includes $83,019,000 for 2006 and
142.3 	$ 444,427,000 463,092,000 for 2007.
142.4 	Sec. 26.  2005 Senate File No. 1879, article 3, section 3,
142.5 	subdivision 35, if enacted, is amended to read:
142.6 		Subd. 35.Special education; excess costs. For excess
142.7 	cost aid under Minnesota Statutes, section 125A.79, subdivision
142.8 	7:
142.9 	$91,784,000    .....     2006
142.10 	$ 91,595,000 93,430,000.....     2007
142.11 	The 2006 appropriation includes $37,455,000 for 2005 and
142.12 	$54,329,000 for 2006.
142.13 	The 2007 appropriation includes $ 37,417,000 39,252,000 for
142.14 	2006 and $54,178,000 for 2007.
142.15 	Sec. 27.  2005 Senate File No. 1879, article 3, section 3,
142.16 	subdivision 36, if enacted, is amended to read:
142.17 		Subd. 36.Litigation costs for special education. For
142.18 	paying the costs a district incurs under Minnesota Statutes,
142.19 	section 125A.75, subdivision 8:
142.20 	$ 17,000 0.....     2006
142.21 	$ 17,000 0.....     2007

142.22 	Sec. 28. EMINENCE CREDENTIALING.
 142.23 		Subdivision 1.Goal. It is the goal of the state to
142.24 	support the teaching and revitalization of the Dakota and
142.25 	Anishinaabe languages.  The Native Language Eminence
142.26 	Credentialing Task Force is created to achieve this goal.
142.27 		Subd. 2.Membership. The Native Language Eminence
142.28 	Credentialing Task Force consists of the following members:
142.29 	(1) four members representing public schools with large
142.30 	Native American populations appointed by the commissioner of
142.31 	education;
142.32 	(2) one member appointed by each federally recognized
142.33 	Indian tribe in the state;
142.34 	(3) one member appointed by each institution of higher
142.35 	education that trains credentialed Dakota and Anishinaabe
142.36 	language teachers;
143.1 	(4) one member representing the Minnesota Historical
143.2 	Society;
143.3 	(5) the chair of the state Indian Affairs Council; and 
143.4 	(6) three native speakers of the Anishinaabe language and
143.5 	three native speakers of the Dakota language, all appointed by
143.6 	the Dakota Ojibwe Language Revitalization Alliance.
143.7 		Subd. 3.Administration. (a) The Native Language
143.8 	Eminence Credentialing Task Force is governed by Minnesota
143.9 	Statutes, section 15.059.
143.10 	(b) The task force shall elect a chair from its
143.11 	membership.  The commissioner of education shall provide staff
143.12 	and administrative support for the task force.
143.13 		Subd. 4.Duties. The task force shall review and
143.14 	recommend changes to the eminence credentials for teachers of
143.15 	the Dakota and Anishinaabe languages in order to increase the
143.16 	number of fluent "first speakers" who can teach the language and
143.17 	the number of teachers of the Dakota and Anishinaabe languages
143.18 	by considering and addressing the following:
143.19 	(1) whether a rating system should be developed that
143.20 	includes separate ratings for fluency of the spoken language,
143.21 	writing and reading skills in language, and specifying which
143.22 	dialect of the Anishinaabe and Dakota languages is being spoken;
143.23 	(2) whether a strategy for determining the level of fluency
143.24 	should be developed;
143.25 	(3) consistency of evaluation of language fluency;
143.26 	(4) identifying issues between tribal authority and state
143.27 	law around strategies of language revitalization; and 
143.28 	(5) a strategy to provide affordable and accessible
143.29 	language and culture credentials throughout Minnesota.
143.30 		Subd. 5.Report. The task force shall submit a report to
143.31 	the legislature by January 15, 2006, to fulfill the duties of
143.32 	the task force.
143.33 		Subd. 6.Expiration. The task force expires upon
143.34 	submission of the report on January 15, 2006.

143.35 	Sec. 29. TASK FORCE ON DELIVERY OF SPECIAL EDUCATION TO
143.36 	NONPUBLIC SCHOOL STUDENTS BY PUBLIC SCHOOL DISTRICTS.
 144.1 		Subdivision 1.Purpose; establishment. With the
144.2 	congressional reauthorization of the federal Individuals with
144.3 	Disabilities Education Act, a task force on the delivery of
144.4 	special education services to nonpublic school students by
144.5 	public school districts shall be established to compare and
144.6 	evaluate how the individual needs of each child are being met,
144.7 	if services are provided in the least restrictive environment,
144.8 	and whether best practices and program efficiencies are being
144.9 	used in the specific areas of transportation, location of
144.10 	services, and shared time aid.
144.11 		Subd. 2.Members. The governor shall appoint the members
144.12 	of the task force from each of the following:
144.13 	(1) two members from the Department of Education, one
144.14 	representing special education programs and policy and one
144.15 	representing district finances;
144.16 	(2) two special education teachers with one member from a
144.17 	public school and one member from a nonpublic school;
144.18 	(3) two special education administrators with one member
144.19 	from a public school and one member from a nonpublic school;
144.20 	(4) two members with one from each of two special education
144.21 	advocacy organizations;
144.22 	(5) two parents of children receiving special education
144.23 	services with one member from a public school and one member
144.24 	from a nonpublic school;
144.25 	(6) two elementary school principals with one member from a
144.26 	public school and one member from a nonpublic school;
144.27 	(7) two superintendents with one member from a public
144.28 	school district and one member from a nonpublic school district;
144.29 	(8) two school business officials with one from a public
144.30 	school and one from a nonpublic school; and 
144.31 	(9) two school board officials with one from a public
144.32 	school and one from a nonpublic school.
144.33 	The task force may select additional members to work on the
144.34 	task force.  The commissioner of education shall provide
144.35 	necessary materials and assistance.
144.36 		Subd. 3.Report. The task force shall submit a report by
145.1 	January 15, 2006, to the house of representatives and senate
145.2 	committees having jurisdiction over education on the delivery of
145.3 	special education services to nonpublic school students by
145.4 	public school districts, to compare and evaluate how the
145.5 	individual needs of each child are being met in the least
145.6 	restrictive environment, and whether best practices and program
145.7 	efficiencies are being used.
145.8 		Subd. 4.Expiration. This section expires January 31,
145.9 	2006.
145.10 	
EFFECTIVE DATE. This section is effective the day
145.11 	following final enactment.

145.12 	Sec. 30. APPROPRIATIONS.
 145.13 		Subdivision 1.Department of education. The sums
145.14 	indicated in this section are appropriated from the general fund
145.15 	to the Department of Education for the fiscal years designated.
145.16 		Subd. 2.Nonpublic student special education task force.
 145.17 	For funding of a task force on delivery of special education to
145.18 	nonpublic school students by public school districts:
145.19 	$50,000 .....2006 
145.20 		Subd. 3.Native language eminence credentialing task
145.21 	force. For funding of a task force to support the teaching and
145.22 	revitalization of the Dakota and Anishinaabe languages:
145.23 	$102,000 .....2006 

145.24 	Sec. 31. REPEALER.
 145.25 	Minnesota Statutes 2004, section 125A.75, subdivision 8, is
145.26 	repealed.

145.27 	ARTICLE 4
145.28 	TECHNOLOGY, FACILITIES, AND ACCOUNTING

145.29 	Section 1. Minnesota Statutes 2004, section 123B.42, is
145.30 	amended by adding a subdivision to read:
145.31 		Subd. 1a.Curriculum; electronic components. A school
145.32 	district that provides curriculum to resident students that has
145.33 	both physical and electronic components must make the electronic
145.34 	component accessible to a resident student in a home school in
145.35 	compliance with sections 120A.22 and 120A.24 at the request of
145.36 	the student or the student's parent or guardian, provided that
146.1 	the district does not incur more than an incidental cost as a
146.2 	result of providing access electronically.

146.3 	Sec. 2. Minnesota Statutes 2004, section 123B.492, is
146.4 	amended to read:
146.5 	123B.492 SUPERVISED COMPETITIVE HIGH SCHOOL DIVING.
146.6 	Notwithstanding Minnesota Rules, part 4717.3750, any pool
146.7 	built before January 1, 1987, that was used for a one-meter
146.8 	board high school diving program during the 2000-2001 school
146.9 	year may be used for supervised competitive one-meter board high
146.10 	school diving.  Schools and school districts are strongly
146.11 	encouraged to use a pool for supervised competitive high school
146.12 	diving that meets the requirements of Minnesota Rules, part
146.13 	4717.3750.  A school or district using a pool for
146.14 	supervised training practice for competitive high school
146.15 	diving for either training practice or competition that does not
146.16 	meet the requirements of Minnesota Rules, part 4717.3750, must
146.17 	provide appropriate notice to parents and participants as to the
146.18 	type of variance from Minnesota Rules and risk it may present.

146.19 	Sec. 3. Minnesota Statutes 2004, section 123B.54, as
146.20 	amended by 2005 S. F. No. 1879, article 3, section 1, if
146.21 	enacted, is amended to read:
146.22 	123B.54 DEBT SERVICE APPROPRIATION.
146.23 	(a) $22,942,000 $22,282,000 in fiscal year 2008 and
146.24 	$21,942,000 $21,182,000 in fiscal year 2009 and later are
146.25 	appropriated from the general fund to the commissioner of
146.26 	education for payment of debt service equalization aid under
146.27 	section 123B.53.
146.28 	(b) The appropriations in paragraph (a) must be reduced by
146.29 	the amount of any money specifically appropriated for the same
146.30 	purpose in any year from any state fund.

146.31 	Sec. 4. [123B.715] ACOUSTICAL PERFORMANCE CRITERIA.
146.32 	School districts are encouraged to consider the American
146.33 	National Standards Institute acoustical performance criteria
146.34 	design requirements and guidelines for schools of the maximum
146.35 	background noise level and reverberation times when designing a
146.36 	new building or remodeling an existing building.

147.1 	Sec. 5. Minnesota Statutes 2004, section 124D.095,
147.2 	subdivision 2, is amended to read:
147.3 		Subd. 2.Definitions.  For purposes of this section, the
147.4 	following terms have the meanings given them.
147.5 	(a) "Online learning" is an interactive course or program
147.6 	that delivers instruction from a teacher to a student by
147.7 	computer; is combined with other traditional delivery methods
147.8 	that include frequent student assessment and may include actual
147.9 	teacher contact time; and meets or exceeds state academic
147.10 	standards.
147.11 	(b) "Online learning provider" is a school district, an
147.12 	intermediate school district,an organization of two or more
147.13 	school districts operating under a joint powers agreement, or a
147.14 	charter school located in Minnesota that provides online
147.15 	learning to students.
147.16 	(c) "Student" is a Minnesota resident enrolled in a school
147.17 	under section 120A.22, subdivision 4, in kindergarten through
147.18 	grade 12.
147.19 	(d) "Online learning student" is a student enrolled in an
147.20 	online learning course or program delivered by an online
147.21 	provider under paragraph (b).
147.22 	(e) "Enrolling district" means the school district or
147.23 	charter school in which a student is enrolled under section
147.24 	120A.22, subdivision 4, for purposes of compulsory attendance.

147.25 	Sec. 6. Minnesota Statutes 2004, section 124D.095,
147.26 	subdivision 4, is amended to read:
147.27 		Subd. 4.Online learning parameters.  (a) An online
147.28 	learning student must receive academic credit for completing the
147.29 	requirements of an online learning course or program.  Secondary
147.30 	credits granted to an online learning student must be counted
147.31 	toward the graduation and credit requirements of the enrolling
147.32 	district.  The enrolling district must apply the same graduation
147.33 	requirements to all students, including online learning
147.34 	students, and must continue to provide nonacademic services to
147.35 	online learning students.  If a student completes an online
147.36 	learning course or program that meets or exceeds a graduation
148.1 	standard or grade progression requirement at the enrolling
148.2 	district, that standard or requirement is met.  The enrolling
148.3 	district must use the same criteria for accepting online
148.4 	learning credits or courses as it does for accepting credits or
148.5 	courses for transfer students under section 124D.03, subdivision
148.6 	9.  The enrolling district may reduce the teacher contact time
148.7 	of an online learning student in proportion to the number of
148.8 	online learning courses the student takes from an online
148.9 	learning provider that is not the enrolling district.
148.10 	(b) An online learning student may:
148.11 	(1) enroll during a single school year in a maximum of 12
148.12 	semester-long courses or their equivalent delivered by an online
148.13 	learning provider or the enrolling district;
148.14 	(2) complete course work at a grade level that is different
148.15 	from the student's current grade level; and
148.16 	(3) enroll in additional courses with the online learning
148.17 	provider under a separate agreement that includes terms for
148.18 	payment of any tuition or course fees.
148.19 	(c) A student with a disability may enroll in an online
148.20 	learning course or program if the student's IEP team determines
148.21 	that online learning is appropriate education for the student.
148.22 	(d) An online learning student has the same access to the
148.23 	computer hardware and education software available in a school
148.24 	as all other students in the enrolling district.  An online
148.25 	learning provider must assist an online learning student whose
148.26 	family qualifies for the education tax credit under section
148.27 	290.0674 to acquire computer hardware and educational software
148.28 	for online learning purposes.
148.29 	(e) An enrolling district may offer online learning to its
148.30 	enrolled students.  Such online learning does not generate
148.31 	online learning funds under this section.  An enrolling district
148.32 	that offers online learning only to its enrolled students is not
148.33 	subject to the reporting requirements or review criteria under
148.34 	subdivision 7.  A teacher with a Minnesota license must assemble
148.35 	and deliver instruction to enrolled students receiving online
148.36 	learning from an enrolling district. The delivery of
149.1 	instruction occurs when the student interacts with the computer
149.2 	or the teacher and receives ongoing assistance and assessment of
149.3 	learning.The instruction may include curriculum developed by
149.4 	persons other than a teacher with a Minnesota license.
149.5 	(f) An online learning provider that is not the enrolling
149.6 	district is subject to the reporting requirements and review
149.7 	criteria under subdivision 7.  A teacher with a Minnesota
149.8 	license must assemble and deliver instruction to online learning
149.9 	students. The delivery of instruction occurs when the student
149.10 	interacts with the computer or the teacher and receives ongoing
149.11 	assistance and assessment of learning.The instruction may
149.12 	include curriculum developed by persons other than a teacher
149.13 	with a Minnesota license.  Unless the commissioner grants a
149.14 	waiver, a teacher providing online learning instruction must not
149.15 	instruct more than 40 students in any one online learning course
149.16 	or program.

149.17 	Sec. 7. Minnesota Statutes 2004, section 124D.095,
149.18 	subdivision 8, is amended to read:
149.19 		Subd. 8.Financial arrangements.  (a) For a student
149.20 	enrolled in an online learning course, the department must
149.21 	calculate average daily membership and make payments according
149.22 	to this subdivision.
149.23 	(b) The initial online learning average daily membership
149.24 	equals 1/12 for each semester course or a proportionate amount
149.25 	for courses of different lengths.  The adjusted online learning
149.26 	average daily membership equals the initial online learning
149.27 	average daily membership times .88.
149.28 	(c) No online learning average daily membership shall be
149.29 	generated if:  (1) the student does not complete the online
149.30 	learning course, or (2) the student is enrolled in online
149.31 	learning provided by the enrolling district and the student was
149.32 	either enrolled in a Minnesota public school for the school year
149.33 	before the school year in which the student first enrolled in
149.34 	online learning, or the student is enrolled in an instructional
149.35 	program in which at least 40 percent of the total instructional
149.36 	time takes place in the school's facilities.  For students
150.1 	enrolled in online learning according to clause (2), the
150.2 	department shall calculate average daily membership according to
150.3 	section 126C.05, subdivision 8.
150.4 	(d) Online learning average daily membership under this
150.5 	subdivision for a student currently enrolled in a Minnesota
150.6 	public school and who was enrolled in a Minnesota public school
150.7 	for the school year before the school year in which the student
150.8 	first enrolled in online learning shall be used only for
150.9 	computing average daily membership according to section 126C.05,
150.10 	subdivision 19, paragraph (a), clause (ii) (2), and for
150.11 	computing online learning aid according to section 126C.24 
150.12 	124D.096.
150.13 	(e) Online learning average daily membership under this
150.14 	subdivision for students not included in paragraph (c) or (d)
150.15 	shall be used only for computing average daily membership
150.16 	according to section 126C.05, subdivision 19, paragraph (a),
150.17 	clause (ii) (2), and for computing payments under paragraphs (f)
150.18 	and (g).
150.19 	(f) Subject to the limitations in this subdivision, the
150.20 	department must pay an online learning provider an amount equal
150.21 	to the product of the adjusted online learning average daily
150.22 	membership for students under paragraph (e) times the student
150.23 	grade level weighting under section 126C.05, subdivision 1,
150.24 	times the formula allowance.
150.25 	(g) The department must pay each online learning provider
150.26 	100 percent of the amount in paragraph (f) within 45 days of
150.27 	receiving final enrollment and course completion information
150.28 	each quarter or semester.
150.29 	
EFFECTIVE DATE. This section is effective the day
150.30 	following final enactment.

150.31 	Sec. 8. Minnesota Statutes 2004, section 124D.095, is
150.32 	amended by adding a subdivision to read:
150.33 		Subd. 10.Online learning advisory council. (a) An
150.34 	online learning advisory council is established under section
150.35 	15.059, except that the term for each council member shall be
150.36 	three years.  The advisory council is composed of 12 members
151.1 	from throughout the state who have demonstrated experience with
151.2 	or interest in online learning.  The members of the council
151.3 	shall be appointed by the commissioner.  The advisory council
151.4 	shall bring to the attention of the commissioner any matters
151.5 	related to online learning and provide input to the department
151.6 	in matters related, but not restricted, to:
151.7 	(1) quality assurance;
151.8 	(2) teacher qualifications;
151.9 	(3) program approval;
151.10 	(4) special education;
151.11 	(5) attendance;
151.12 	(6) program design and requirements; and 
151.13 	(7) fair and equal access to programs.
151.14 	(b) The online learning advisory council under this
151.15 	subdivision expires June 30, 2008.

151.16 	Sec. 9. [125B.26] TELECOMMUNICATIONS/INTERNET ACCESS
151.17 	EQUITY AID.
151.18 		Subdivision 1.Costs to be submitted. (a) A district or
151.19 	charter school shall submit its actual
151.20 	telecommunications/Internet access costs for the previous fiscal
151.21 	year, adjusted for any e-rate revenue received, to the
151.22 	department by August 15 of each year as prescribed by the
151.23 	commissioner.  Costs eligible for reimbursement under this
151.24 	program are limited to the following:
151.25 	(1) ongoing or recurring telecommunications/Internet access
151.26 	costs associated with Internet access, data lines, and video
151.27 	links providing:
151.28 	(i) the equivalent of one data line, video link, or
151.29 	integrated data/video link that relies on a transport medium
151.30 	that operates at a minimum speed of 1.544 megabytes per second
151.31 	(T1) for each elementary school, middle school, or high school
151.32 	under section 120A.05, subdivisions 9, 11, and 13, including the
151.33 	recurring telecommunications line lease costs and ongoing
151.34 	Internet access service fees; or 
151.35 	(ii) the equivalent of one data line or video circuit, or
151.36 	integrated data/video link that relies on a transport medium
152.1 	that operates at a minimum speed of 1.544 megabytes per second
152.2 	(T1) for each district, including recurring telecommunications
152.3 	line lease costs and ongoing Internet access service fees;
152.4 	(2) recurring costs of contractual or vendor-provided
152.5 	maintenance on the school district's wide area network to the
152.6 	point of presence at the school building up to the router,
152.7 	codec, or other service delivery equipment located at the point
152.8 	of presence termination at the school or school district;
152.9 	(3) recurring costs of cooperative, shared arrangements for
152.10 	regional delivery of telecommunications/Internet access between
152.11 	school districts, postsecondary institutions, and public
152.12 	libraries including network gateways, peering points, regional
152.13 	network infrastructure, Internet2 access, and network support,
152.14 	maintenance, and coordination; and 
152.15 	(4) service provider installation fees for installation of
152.16 	new telecommunications lines or increased bandwidth.
152.17 	(b) Costs not eligible for reimbursement under this program
152.18 	include:
152.19 	(1) recurring costs of school district staff providing
152.20 	network infrastructure support;
152.21 	(2) recurring costs associated with voice and standard
152.22 	telephone service;
152.23 	(3) costs associated with purchase of network hardware,
152.24 	telephones, computers, or other peripheral equipment needed to
152.25 	deliver telecommunications access to the school or school
152.26 	district;
152.27 	(4) costs associated with laying fiber for
152.28 	telecommunications access;
152.29 	(5) costs associated with wiring school or school district
152.30 	buildings;
152.31 	(6) costs associated with purchase, installation, or
152.32 	purchase and installation of Internet filtering; and 
152.33 	(7) costs associated with digital content, including online
152.34 	learning or distance learning programming, and information
152.35 	databases.
152.36 		Subd. 2.E-rates. To be eligible for aid under this
153.1 	section, a district or charter school is required to file an
153.2 	e-rate application either separately or through its
153.3 	telecommunications access cluster and have a current technology
153.4 	plan on file with the department.  Discounts received on
153.5 	telecommunications expenditures shall be reflected in the costs
153.6 	submitted to the department for aid under this section.
153.7 		Subd. 3.Reimbursement criteria. The commissioner shall
153.8 	develop criteria for approving costs submitted by organized
153.9 	school districts and charter schools under subdivision 1.
153.10 		Subd. 4.District aid. For fiscal year 2006 and later, a
153.11 	district or charter school's Internet access equity aid equals
153.12 	the district or charter school's approved cost for the previous
153.13 	fiscal year according to subdivision 1 exceeding $15 times the
153.14 	district's adjusted marginal cost pupil units for the previous
153.15 	fiscal year or no reduction if the district is part of an
153.16 	organized telecommunications access cluster.  Equity aid must be
153.17 	distributed to the telecommunications access cluster for
153.18 	districts that are members of the cluster or to individual
153.19 	districts and charter schools not part of a telecommunications
153.20 	access cluster.
153.21 		Subd. 5.Telecommunications/internet access services for
153.22 	nonpublic schools. (a) Districts shall provide each year upon
153.23 	formal request by or on behalf of a nonpublic school, not
153.24 	including home schools, located in that district or area,
153.25 	ongoing or recurring telecommunications access services to the
153.26 	nonpublic school either through existing district providers or
153.27 	through separate providers.
153.28 	(b) The amount of district aid for telecommunications
153.29 	access services for each nonpublic school under this subdivision
153.30 	equals the lesser of:
153.31 	(1) 90 percent of the nonpublic school's approved cost for
153.32 	the previous fiscal year according to subdivision 1 exceeding
153.33 	$10 for fiscal year 2006 and later times the number of weighted
153.34 	pupils enrolled at the nonpublic school as of October 1 of the
153.35 	previous school year; or 
153.36 	(2) the product of the district's aid per pupil unit
154.1 	according to subdivision 4 times the number of weighted pupils
154.2 	enrolled at the nonpublic school as of October 1 of the previous
154.3 	school year.
154.4 	(c) For purposes of this subdivision, nonpublic school
154.5 	pupils shall be weighted by grade level using the weighting
154.6 	factors defined in section 126C.05, subdivision 1.
154.7 	(d) Each year, a district providing services under
154.8 	paragraph (a) may claim up to five percent of the aid determined
154.9 	in paragraph (b) for costs of administering this subdivision.
154.10 	No district may expend an amount for these telecommunications
154.11 	access services which exceeds the amount allocated under this
154.12 	subdivision.  The nonpublic school is responsible for the
154.13 	Internet access costs not covered by this section.
154.14 	(e) At the request of a nonpublic school, districts may
154.15 	allocate the amount determined in paragraph (b) directly to the
154.16 	nonpublic school to pay for or offset the nonpublic school's
154.17 	costs for telecommunications access services; however, the
154.18 	amount allocated directly to the nonpublic school may not exceed
154.19 	the actual amount of the school's ongoing or recurring
154.20 	telecommunications access costs.
154.21 		Subd. 6.Severability. If any portion of this section is
154.22 	found by a court to be unconstitutional, the remaining portions
154.23 	of the section shall remain in effect.
154.24 	
EFFECTIVE DATE. This section is effective for revenue for
154.25 	fiscal year 2006.

154.26 	Sec. 10. Minnesota Statutes 2004, section 126C.17,
154.27 	subdivision 11, is amended to read:
154.28 		Subd. 11.Referendum date.  (a) Except for a referendum
154.29 	held under paragraph (b) or (d), any referendum under this
154.30 	section held on a day other than the first Tuesday after the
154.31 	first Monday in November must be conducted by mail in accordance
154.32 	with section 204B.46.  Notwithstanding subdivision 9, paragraph
154.33 	(b), to the contrary, in the case of a referendum conducted by
154.34 	mail under this paragraph, the notice required by subdivision 9,
154.35 	paragraph (b), must be prepared and delivered by first-class
154.36 	mail at least 20 days before the referendum.
155.1 	(b) In addition to the referenda allowed in subdivision 9,
155.2 	clause (a), the commissioner may grant authority to a district
155.3 	to hold a referendum on a different day if the district is in
155.4 	statutory operating debt and has an approved plan or has
155.5 	received an extension from the department to file a plan to
155.6 	eliminate the statutory operating debt.
155.7 	(c) The commissioner must approve, deny, or modify each
155.8 	district's request for a referendum levy on a different day
155.9 	within 60 days of receiving the request from a district.
155.10 	(d) In addition to the referenda allowed in subdivision 9,
155.11 	paragraph (a), a district may hold a referendum on the same day
155.12 	as a district election for a facility under chapter 475 if the
155.13 	referendum is directly related to the operating costs of the
155.14 	proposed facility except for licensed personnel costs.
155.15 	
EFFECTIVE DATE. This section is effective for referenda
155.16 	held on or after July 1, 2005.

155.17 	Sec. 11. Minnesota Statutes 2004, section 126C.63,
155.18 	subdivision 5, is amended to read:
155.19 		Subd. 5.Levy.  "Levy" means a district's net debt
155.20 	service levy after the reduction of debt service equalization
155.21 	aid under section 123B.53, subdivision 6.  For taxes payable in
155.22 	2003 and later, each district's maximum effort debt service levy
155.23 	for purposes of subdivision 8, must be reduced by an equal
155.24 	number of percentage points if the commissioner of finance
155.25 	determines that the levy reduction will not result in a payment
155.26 	from the general fund in the state treasury according to section
155.27 	16A.641, as would be required under section 126C.72, subdivision
155.28 	3.  A district's levy that is adjusted under this section must
155.29 	not be reduced below 30.1 25 percent of the district's adjusted
155.30 	net tax capacity.

155.31 	Sec. 12. Minnesota Statutes 2004, section 126C.63,
155.32 	subdivision 8, is amended to read:
155.33 		Subd. 8.Maximum effort debt service levy.  (a) "Maximum
155.34 	effort debt service levy" means the lesser of:
155.35 	(1) a levy in whichever of the following amounts is
155.36 	applicable:
156.1 	(i) in any district receiving a debt service loan for a
156.2 	debt service levy payable in 2002 and thereafter, or granted a
156.3 	capital loan after January 1, 2002, a levy in total dollar
156.4 	amount computed at a rate of 40 32 percent of adjusted net tax
156.5 	capacity for taxes payable in 2002 and thereafter;
156.6 	(ii) in any district receiving a debt service loan for a
156.7 	debt service levy payable in 2001 or earlier, or granted a
156.8 	capital loan before January 2, 2001 2002, a levy in a total
156.9 	dollar amount computed at a rate of 32 28 percent of adjusted
156.10 	net tax capacity for taxes payable in 2002 and thereafter; or
156.11 	(2) a levy in any district for which a capital loan was
156.12 	approved prior to August 1, 1981, a levy in a total dollar
156.13 	amount equal to the sum of the amount of the required debt
156.14 	service levy and an amount which when levied annually will in
156.15 	the opinion of the commissioner be sufficient to retire the
156.16 	remaining interest and principal on any outstanding loans from
156.17 	the state within 30 years of the original date when the capital
156.18 	loan was granted.
156.19 	(b) The board in any district affected by the provisions of
156.20 	paragraph (a), clause (2), may elect instead to determine the
156.21 	amount of its levy according to the provisions of paragraph (a),
156.22 	clause (1).  If a district's capital loan is not paid within 30
156.23 	years because it elects to determine the amount of its levy
156.24 	according to the provisions of paragraph (a), clause (2), the
156.25 	liability of the district for the amount of the difference
156.26 	between the amount it levied under paragraph (a), clause (2),
156.27 	and the amount it would have levied under paragraph (a), clause
156.28 	(1), and for interest on the amount of that difference, must not
156.29 	be satisfied and discharged pursuant to Minnesota Statutes 1988,
156.30 	or an earlier edition of Minnesota Statutes if applicable,
156.31 	section 124.43, subdivision 4.

156.32 	Sec. 13. Minnesota Statutes 2004, section 128C.12,
156.33 	subdivision 1, is amended to read:
156.34 		Subdivision 1.Dues and events revenue. (a) The state
156.35 	auditor annually must examine the accounts of, and audit all
156.36 	money paid to, the State High School League by its members.  The
157.1 	audit must include financial and compliance issues.  The state
157.2 	auditor audit must also audit include all money derived from any
157.3 	event sponsored by the league. League audits must include
157.4 	audits of administrative regions of the league.  The league and
157.5 	its administrative regions may not contract with private
157.6 	auditors.  The scope of the state auditor's examinations of the
157.7 	league must be agreed upon by the board and the state auditor,
157.8 	provided that all requirements of this section must be met.
157.9 	(b) The administrative regions of the league may contract
157.10 	with the state auditor or with a private certified public
157.11 	accountant for the audit required by this section.  If the audit
157.12 	is performed by a private certified public accountant, the state
157.13 	auditor may require additional information from the private
157.14 	certified public accountant as the state auditor deems in the
157.15 	public interest.  The state auditor may accept the audit or make
157.16 	additional examinations as the state auditor deems to be in the
157.17 	public interest.

157.18 	Sec. 14. Minnesota Statutes 2004, section 128C.12,
157.19 	subdivision 3, is amended to read:
157.20 		Subd. 3.Copies.  The state auditor board must file
157.21 	copies of the financial and compliance audit report with the
157.22 	commissioner of education and the director of the Legislative
157.23 	Reference Library.

157.24 	Sec. 15. Minnesota Statutes 2004, section 128D.11,
157.25 	subdivision 9, is amended to read:
157.26 		Subd. 9.Net debt defined.  The net debt of the school
157.27 	district for the purposes of this limitation is the amount of
157.28 	bonds less the amount of all money and the face value of all
157.29 	securities then held as a sinking fund for the payment of such
157.30 	bonds, and shall not include school aid and tax anticipation
157.31 	certificates of indebtedness not in default or bonds issued to
157.32 	pay pension fund liabilities under section 475.52, subdivision 6.

157.33 	Sec. 16. Minnesota Statutes 2004, section 475.61,
157.34 	subdivision 4, is amended to read:
157.35 		Subd. 4.Surplus funds.  (a) All such taxes shall be
157.36 	collected and remitted to the municipality by the county
158.1 	treasurer as other taxes are collected and remitted, and shall
158.2 	be used only for payment of the obligations on account of which
158.3 	levied or to repay advances from other funds used for such
158.4 	payments, except that any surplus remaining in the debt service
158.5 	fund when the obligations and interest thereon are paid may be
158.6 	appropriated to any other general purpose by the municipality.
158.7 	However, for obligations authorized before July 1, 2005,the
158.8 	amount of any surplus remaining in the debt service fund of a
158.9 	school district when the obligations and interest thereon are
158.10 	paid shall be used to reduce the general fund levy levies 
158.11 	authorized pursuant to chapters 122A, 123A, 123B, 124D, and 126C
158.12 	and the state aids authorized pursuant to chapters 122A, 123A,
158.13 	123B, 124D, 125A, 126C, and 127A. For obligations authorized on
158.14 	July 1, 2005, or thereafter, the amount of any surplus remaining
158.15 	in the debt service fund of a school district when the
158.16 	obligations and interest thereon are paid in full may be
158.17 	appropriated to any other general purpose by the school district
158.18 	without any reduction in state aid or levies or may be used to
158.19 	reduce the general fund levies authorized under chapters 122A,
158.20 	123A, 123B, 124D, and 126C, and the state aids authorized under
158.21 	chapters 122A, 123A, 123B, 124D, 125A, 126C, and 127A.
158.22 	(b) If the district qualified for second tier debt service
158.23 	equalization aid in the last year that it qualified for debt
158.24 	service equalization aid, the reduction to state aids equals the
158.25 	lesser of (1) the amount of the surplus times the ratio of the
158.26 	district's second tier debt service equalization aid to the
158.27 	district's second tier debt service equalization revenue for the
158.28 	last year that the district qualified for debt service
158.29 	equalization aid; or (2) the district's cumulative amount of
158.30 	debt service equalization aid.
158.31 	(c) If the district did not qualify for second tier debt
158.32 	service equalization aid in the last year that it qualified for
158.33 	debt service equalization aid, the reduction to state aids
158.34 	equals the lesser of (1) the amount of the surplus times the
158.35 	ratio of the district's debt service equalization aid to the
158.36 	district's debt service equalization revenue for the last year
159.1 	that the district qualified for debt service equalization aid;
159.2 	or (2) the district's cumulative amount of debt service
159.3 	equalization aid.
159.4 	(d) The reduction to the general fund levy levies equals
159.5 	the total amount of the surplus minus the reduction to state
159.6 	aids.

159.7 	Sec. 17. Laws 1996, chapter 412, article 5, section 24, is
159.8 	amended to read:

159.9 	Sec. 24. BONDS PAID FROM TACONITE PRODUCTION TAX
159.10 	REVENUES.
 159.11 		Subdivision 1.Refunding bonds. The appropriation of
159.12 	funds from the distribution of taconite production tax revenues
159.13 	to the taconite environmental protection tax fund and the
159.14 	northeast Minnesota economic protection fund made by Laws 1988,
159.15 	chapter 718, article 7, sections 62 and 63, Laws 1989, chapter
159.16 	329, article 5, section 20, Laws 1990, chapter 604, article 8,
159.17 	section 13, Laws 1992, chapter 499, article 5, section 29, and
159.18 	by sections 18 to 20 Laws 1996, chapter 412, article 5, sections
159.19 	20 to 22, and Laws 2000, chapter 489, article 5, sections 24 to
159.20 	26, shall continue to apply to bonds issued under Minnesota
159.21 	Statutes, chapter 475, to refund bonds originally issued
159.22 	pursuant to those chapters.
159.23 		Subd. 2.Local payments. School districts that are
159.24 	required in Laws 1988, chapter 718, article 7, sections 62 and
159.25 	63, Laws 1989, chapter 329, article 5, section 20, Laws 1990,
159.26 	chapter 604, article 8, section 13, Laws 1992, chapter 499,
159.27 	article 5, section 29, and by sections 18 to 20 Laws 1996,
159.28 	chapter 412, article 5, sections 20 to 22, and Laws 2000,
159.29 	chapter 489, article 5, sections 24 to 26, to impose levies to
159.30 	pay debt service on the bonds issued under those provisions to
159.31 	the extent the principal and interest on the bonds is not paid
159.32 	by distributions from the taconite environmental protection fund
159.33 	and the northeast Minnesota economic protection trust, may pay
159.34 	their portion of the principal and interest from any funds
159.35 	available to them.  To the extent a school district uses funds
159.36 	other than the proceeds of a property tax levy to pay its share
160.1 	of the principal and interest on the bonds, the requirement to
160.2 	impose a property tax to pay the local share does not apply to
160.3 	the school district.
160.4 	
EFFECTIVE DATE. This section is effective the day
160.5 	following final enactment.

160.6 	Sec. 18. Laws 2003, First Special Session chapter 9,
160.7 	article 4, section 29, as amended by Laws 2003, First Special
160.8 	Session chapter 23, section 18, is amended to read:
160.9 	Sec. 29GARAGE LEASE LEVY; SARTELL.
 160.10 	For taxes payable in 2004, 2005, and 2006, and 2007,
160.11 	independent school district No. 740 748, Sartell, may levy up to
160.12 	$107,000 each year and for taxes payable in 2008 may levy up to
160.13 	$67,000 for the purpose of leasing a school bus storage
160.14 	facility.  The department of education shall include this levy
160.15 	in the calculation of eligible building lease levy under
160.16 	Minnesota Statutes, section 126C.40, subdivision 1.  This levy
160.17 	shall not allow the district to exceed the $90 per resident
160.18 	pupil unit cap in that section.  The district is eligible to
160.19 	make this levy only if it sells its current school bus storage
160.20 	site to the city of Sartell and the district may not use this
160.21 	levy as part of a lease purchase agreement to replace its
160.22 	current school bus storage facility.
160.23 	Sec. 19.  2005 S.F. No. 1879, article 3, section 3,
160.24 	subdivision 41, if enacted, is amended to read:
160.25 		Subd. 41.Debt service equalization. For debt service
160.26 	aid according to Minnesota Statutes, section 123B.53,
160.27 	subdivision 6:
160.28 	$25,654,000    .....     2006
160.29 	$ 24,611,000 24,519,000.....     2007
160.30 	The 2006 appropriation includes $4,654,000 for 2005 and
160.31 	$21,000,000 for 2006.
160.32 	The 2007 appropriation includes $3,911,000 for 2006 and
160.33 	$ 20,700,000 20,608,000 for 2007.

160.34 	Sec. 20. HEALTH AND SAFETY REVENUE; GRAND RAPIDS.
 160.35 	Notwithstanding Minnesota Statutes, section 123B.57,
160.36 	subdivision 6, Independent School District No. 318, Grand
161.1 	Rapids, may use health and safety revenue to construct
161.2 	appurtenances used exclusively to house and maintain mechanical
161.3 	air handling systems that maintain the air quality necessary for
161.4 	a healthy environment.

161.5 	Sec. 21. HEALTH AND SAFETY REVENUE; NEW ULM.
 161.6 	Notwithstanding Minnesota Statutes, section 123B.57,
161.7 	subdivision 6, Independent School District No. 88, New Ulm, may
161.8 	use health and safety revenue to construct appurtenances used
161.9 	exclusively to house and maintain mechanical air handling
161.10 	systems that maintain the air quality necessary for a healthy
161.11 	environment.

161.12 	EFFECTIVE DATE. This section is effective retroactively
161.13 	from January 1, 2004.

161.14 	Sec. 22. DISABLED ACCESS LEVY AUTHORITY; EAST GRAND
161.15 	FORKS.
 161.16 	Notwithstanding the time limits established in Minnesota
161.17 	Statutes, section 123B.58, subdivision 3, Independent School
161.18 	District No. 595, East Grand Forks, may levy its remaining
161.19 	disabled access levy authority over five or fewer years.

161.20 	EFFECTIVE DATE. This section is effective the day
161.21 	following final enactment.

161.22 	Sec. 23. LEASE LEVY; ADMINISTRATIVE SPACE, WACONIA.
 161.23 	Independent School District No. 110, Waconia, may lease
161.24 	administrative space under Minnesota Statutes, section 126C.40,
161.25 	subdivision 1, if the district can demonstrate to the
161.26 	commissioner's satisfaction that the administrative space is
161.27 	less expensive than instructional space that the district would
161.28 	otherwise lease.  The commissioner must deny this levy authority
161.29 	unless the district passes a resolution stating its intent to
161.30 	lease instructional space under Minnesota Statutes, section
161.31 	126C.40, subdivision 1, if the commissioner does not grant
161.32 	authority under this section.  The resolution must also certify
161.33 	that a lease of administrative space under this section is less
161.34 	expensive than the district's proposed instructional lease.
161.35 	Levy authority under this section shall not exceed the total
161.36 	levy authority under Minnesota Statutes, section 126C.40,
162.1 	subdivision 1, paragraph (e).

162.2 	EFFECTIVE DATE. This section is effective for revenue for
162.3 	taxes payable in 2006 through 2011.

162.4 	Sec. 24. TAX BASE ADJUSTMENTS, FERTILE-BELTRAMI.
 162.5 	(a) Notwithstanding Minnesota Statutes, section 123B.61,
162.6 	the commissioner of education, when making offsetting levy
162.7 	adjustments between levy categories to ensure that each levy
162.8 	category is positive for Independent School District No. 599,
162.9 	Fertile-Beltrami, shall make such adjustments first between levy
162.10 	categories that are imposed on identical tax bases before making
162.11 	such adjustments between levy categories that are imposed on
162.12 	different tax bases.  The commissioner may make offsetting levy
162.13 	adjustments between the general fund and the debt service fund,
162.14 	if necessary.
162.15 	(b) The commissioner of education must make the offsetting
162.16 	levy adjustments according to the process in paragraph (a) until
162.17 	Independent School District No. 599, Fertile-Beltrami's current
162.18 	referendum authority, under Minnesota Statutes, section 126C.17,
162.19 	expires.

162.20 	Sec. 25. RESIDENTIAL PROGRAM FACILITIES; WORTHINGTON.
 162.21 	Subject to Minnesota Statutes, section 16A.695, Independent
162.22 	School District No. 518, Worthington, may use the facilities
162.23 	provided under Laws 1994, chapter 643, section 14, subdivision
162.24 	8, as amended by Laws 1995, chapter 76, to provide adult foster
162.25 	care or child foster care services licensed by the commissioner
162.26 	of human services or for other special education purposes.

162.27 	EFFECTIVE DATE. This section is effective the day
162.28 	following final enactment.

162.29 	Sec. 26. FUND TRANSFERS.
 162.30 		Subdivision 1.Butterfield. Notwithstanding Minnesota
162.31 	Statutes, section 123B.79 or 123B.80, for calendar years 2005
162.32 	through 2007, on June 30 of each year, Independent School
162.33 	District No. 836, Butterfield, may permanently transfer up to
162.34 	$50,000 from its reserved operating capital account in its
162.35 	general fund to its undesignated general fund balance and
162.36 	$60,000 from its reserved bus purchase account in its general
163.1 	fund to its undesignated general fund balance.  The total amount
163.2 	transferred for the three-year period must not total more than
163.3 	$50,000 from the reserved operating capital account and $60,000
163.4 	from the reserved bus purchase account.
163.5 		Subd. 2.Chokio-alberta. Notwithstanding Minnesota
163.6 	Statutes, section 123B.79 or 123B.80, on June 30, 2005,
163.7 	Independent School District No. 771, Chokio-Alberta, may
163.8 	permanently transfer up to $150,000 from its reserved operating
163.9 	capital account and up to $50,000 from its reserved account for
163.10 	disabled accessibility to the undesignated general fund balance.
163.11 		Subd. 3.Clinton-graceville-beardsley. Notwithstanding
163.12 	Minnesota Statutes, sections 123B.79, 123B.80, and 475.64,
163.13 	subdivision 4, on June 30, 2005, Independent School District No.
163.14 	2888, Clinton-Graceville-Beardsley may permanently transfer up
163.15 	to $244,000 from its reserved for disabled accessibility account
163.16 	to its unrestricted general fund account without making a levy
163.17 	reduction.
163.18 		Subd. 4.Hastings. Notwithstanding Minnesota Statutes,
163.19 	section 123A.27, on June 30, 2005, Independent School District
163.20 	No. 200, Hastings, may permanently transfer up to $300,000 from
163.21 	its reserved account for instructional services from entities
163.22 	formed for cooperative services for special education and
163.23 	secondary vocational programs in its general fund to its
163.24 	unrestricted general fund account.
163.25 		Subd. 5.Lake crystal-wellcome memorial. Notwithstanding
163.26 	Minnesota Statutes, section 123B.79 or 123B.80, on June 30,
163.27 	2005, upon approval of the commissioner of education,
163.28 	Independent School District No. 2071, Lake Crystal-Wellcome
163.29 	Memorial, may permanently transfer up to $133,000 from its
163.30 	reserved account for handicapped access to its undesignated
163.31 	general fund balance.
163.32 	Subd. 6.[M.A.C.C.R.A.Y.] Notwithstanding Minnesota
163.33 	Statutes, section 123B.79 or 123B.80, upon approval of the
163.34 	commissioner of education, on June 30, 2005, Independent School
163.35 	District No. 2180, M.A.C.C.R.A.Y., may permanently transfer up
163.36 	to $230,000 from its reserved account for handicapped access to
164.1 	its undesignated general fund balance.
164.2 		Subd. 7.Mcleod west. Notwithstanding Minnesota
164.3 	Statutes, section 123B.79 or 123B.80, on or before June 30,
164.4 	2007, Independent School District No. 2887, McLeod West, may
164.5 	permanently transfer up to $200,000 from its reserved operating
164.6 	capital account in its general fund to the undesignated fund
164.7 	balance.
164.8 		Subd. 8.Russell. Notwithstanding Minnesota Statutes,
164.9 	section 123B.79 or 123B.80, on June 30, 2005, Independent School
164.10 	District No. 418, Russell, may transfer up to $50,000 from its
164.11 	reserved capital accounts in its general fund to its
164.12 	undesignated fund balance.
164.13 		Subd. 9.Ruthton. Notwithstanding Minnesota Statutes,
164.14 	section 123B.79 or 123B.80, on June 30, 2005, Independent School
164.15 	District No. 584, Ruthton, may permanently transfer up to
164.16 	$140,000 from its reserved for operating capital account to the
164.17 	undesignated general fund balance.
164.18 		Subd. 10.Windom. Notwithstanding Minnesota Statutes,
164.19 	sections 123B.79 and 123B.80, on June 30, 2005, Independent
164.20 	School District No. 177, Windom, may permanently transfer up to
164.21 	$270,000 from its reserved for operating capital account to the
164.22 	undesignated balance in its general fund.
164.23 		Subd. 11.Win-e-mac. Notwithstanding Minnesota Statutes,
164.24 	section 123B.79 or 123B.80, on June 30, 2005, Independent School
164.25 	District No. 2609, Win-E-Mac, may permanently transfer up to
164.26 	$87,000 from its reserved account for disabled accessibility to
164.27 	its reserved operating capital account in its general fund.
164.28 	
EFFECTIVE DATE. This section is effective the day
164.29 	following final enactment.

164.30 	Sec. 27. STUDY OF AVERAGE SCHOOL CONSTRUCTION COSTS.
 164.31 	The commissioner shall submit a report by January 15, 2006,
164.32 	to the house of representatives and senate committees having
164.33 	jurisdiction over education finance on the costs of construction
164.34 	of new school facilities as defined in Minnesota Statutes,
164.35 	section 120A.05, including elementary school, middle school,
164.36 	secondary school, or prekindergarten through grade 12
165.1 	facilities.  The commissioner shall review the ranges in costs
165.2 	per square foot of new school construction that received a
165.3 	positive review and comment during the period July 1, 2002, to
165.4 	June 30, 2005, and shall evaluate the specific reasons for those
165.5 	ranges in costs.

165.6 	Sec. 28. APPROPRIATIONS.
 165.7 		Subdivision 1.Department of education. The sums
165.8 	indicated in this section are appropriated from the general fund
165.9 	to the Department of Education for the fiscal years designated.
165.10 		Subd. 2.Equity in telecommunications access. For equity
165.11 	in telecommunications access:
165.12 	$5,000,000 .....2006 
165.13 	$5,000,000 .....2007 
165.14 	If the appropriation amount is insufficient, the
165.15 	commissioner shall reduce the reimbursement rate in Minnesota
165.16 	Statutes, section 125B.26, subdivisions 4 and 5, and the revenue
165.17 	for the fiscal years 2006 and 2007 shall be prorated.  The base
165.18 	for this program in fiscal year 2008 and later is $10,000,000.
165.19 	Any balance in the first year does not cancel but is available
165.20 	in the second year.
165.21 		Subd. 3.Emergency aid, red lake. For Independent School
165.22 	District No. 38, Red Lake, for onetime emergency aid to repair
165.23 	infrastructure damage to the Red Lake High School as a result of
165.24 	the March 21, 2005, school shooting:
165.25 	$  100,000 .....2006 
165.26 	The school district must submit proposed expenditures for
165.27 	these funds for review and comment approval under Minnesota
165.28 	Statutes, section 123B.71, before the commissioner releases the
165.29 	funds to the district.

165.30 	Sec. 29. REPEALER.
 165.31 	Minnesota Statutes 2004, section 128C.12, subdivision 4, is
165.32 	repealed.

165.33 	EFFECTIVE DATE. This section is effective for revenue for
165.34 	fiscal year 2006.

165.35 	ARTICLE 5
165.36 	NUTRITION

166.1 	Section 1. Minnesota Statutes 2004, section 124D.111,
166.2 	subdivision 1, is amended to read:
166.3 		Subdivision 1.School lunch aid computation.  Each school
166.4 	year, the state must pay districts participating in the national
166.5 	school lunch program the amount of eight ten cents for each full
166.6 	paid, reduced, and free student lunch served to students in the
166.7 	district.

166.8 	Sec. 2. Minnesota Statutes 2004, section 124D.118,
166.9 	subdivision 4, is amended to read:
166.10 		Subd. 4.Reimbursement.  In accordance with program
166.11 	guidelines, the commissioner shall reimburse each participating
166.12 	public or nonpublic school nine 14 cents for each half-pint of
166.13 	milk that is served to kindergarten students and is not part of
166.14 	a school lunch or breakfast reimbursed under section 124D.111 or
166.15 	124D.1158.
166.16 	Sec. 3.  2005 S.F. No. 1879, article 3, section 3,
166.17 	subdivision 43, if enacted, is amended to read:
166.18 		Subd. 43.School lunch. For school lunch aid according
166.19 	to Minnesota Statutes, section 124D.111, and Code of Federal
166.20 	Regulations, title 7, section 210.17:
166.21 	$ 7,748,000 9,585,000.....     2006
166.22 	$ 7,826,000 9,781,000.....     2007
166.23 	Sec. 4.  2005 S.F. No. 1879, article 3, section 3,
166.24 	subdivision 44, if enacted, is amended to read:
166.25 		Subd. 44.Traditional school breakfast; milk for
166.26 	kindergarteners. For traditional school breakfast aid under
166.27 	Minnesota Statutes, section 124D.1158and milk for
166.28 	kindergarteners under Minnesota Statutes, section 124D.118:
166.29 	$ 4,634,000 4,878,000.....     2006
166.30 	$ 4,723,000 4,968,000.....     2007

166.31 	Sec. 5. MILK CONSUMPTION PILOT PROGRAM.
 166.32 	Independent School District No. 11, Anoka-Hennepin, and
166.33 	Independent School District No. 709, Duluth, are each eligible
166.34 	to receive $25,000 in fiscal year 2006 to establish a pilot
166.35 	program to enhance milk consumption in the schools.  The funds
166.36 	must be used by the districts to enhance the attractiveness of
167.1 	consuming milk to students in both the school lunch and a la
167.2 	carte programs, including, at a minimum, improving
167.3 	refrigeration, purchasing products or packaging not previously
167.4 	available, and upgrading quality of products previously
167.5 	supplied.  The pilot program must be implemented during the
167.6 	2005-2006 school year.  Each district must develop a plan to
167.7 	implement the pilot program.  The plan must be developed by
167.8 	district food service personnel, the dairy which is contracted
167.9 	to provide milk to the districts' schools, and representatives
167.10 	of the Midwest Dairy Association and the Midwest Dairy Council.
167.11 	The plan must be submitted to the Department of Education by
167.12 	August 15, 2005.  Additional funds for the program may be sought
167.13 	from interested individuals and organizations.  Each eligible
167.14 	school district must report to the house of representatives and
167.15 	senate committees having jurisdiction over kindergarten through
167.16 	grade 12 education funding and agriculture funding by October
167.17 	15, 2006.  The report should include statistics on the prior
167.18 	year's consumption in the district, the various methods chosen
167.19 	to enhance consumption, and the results of those methods.

167.20 	Sec. 6. APPROPRIATIONS.
 167.21 		Subdivision 1.Department of education. The sums
167.22 	indicated in this section are appropriated from the general fund
167.23 	to the Department of Education for the fiscal years designated.
167.24 		Subd. 2.Milk consumption pilot program. For milk
167.25 	consumption pilot program grants:
167.26 	$  50,000 .....2006 

167.27 	ARTICLE 6
167.28 	STATE AGENCIES

167.29 	Section 1.  2005 S.F. No. 1879, article 3, section 3,
167.30 	subdivision 50, if enacted, is amended to read:
167.31 		Subd. 50.Department. (a) For the Department of
167.32 	Education:
167.33 	$ 21,772,000 21,411,000.....     2006
167.34 	$ 21,772,000 22,646,000.....     2007
167.35 	Any balance in the first year does not cancel but is
167.36 	available in the second year.
168.1 	(b) $260,000 each year is for the Minnesota Children's
168.2 	Museum.
168.3 	(c) $41,000 each year is for the Minnesota Academy of
168.4 	Science.
168.5 	(d) $621,000 each year is for the Board of Teaching.
168.6 	(e) $165,000 each year is for the Board of School
168.7 	Administrators.
168.8 	(f) $29,000 each year is for Minnesota's Washington, D.C.,
168.9 	office None of the amounts appropriated under this subdivision
168.10 	may be used for Minnesota's Washington, D.C., office.
168.11 	(g) None of the amounts appropriated under this subdivision
168.12 	or any federal funds may be used for the communications function
168.13 	within the Office of Finance and Administration.  The Department
168.14 	of Education shall not relocate or rename this function to avoid
168.15 	making this reduction.
168.16 	(h) $128,000 each year is for the funding of a world
168.17 	languages coordinator in the Department of Education.
168.18 	(i) $50,000 in fiscal year 2006 and $75,000 in fiscal year
168.19 	2007 is for the development and distribution to school districts
168.20 	of materials addressing the dangers of methamphetamine.
168.21 	(j) $300,000 in fiscal year 2006 and $1,600,000 in fiscal
168.22 	year 2007 and later are for value-added index assessment model.
168.23 	(k) The base in fiscal year 2008 and later for the
168.24 	Department of Education shall be $22,804,000.
168.25 	Sec. 2.  2005 S.F. No. 1879, article 3, section 4, if
168.26 	enacted, is amended to read:

168.27 	Sec. 3. APPROPRIATIONS; MINNESOTA STATE ACADEMIES.
 168.28 	The sums indicated in this section are appropriated from
168.29 	the general fund to the Minnesota State Academies for the Deaf
168.30 	and the Blind for the fiscal years designated:
168.31 	$ 10,466,000 10,878,000.....     2006
168.32 	$ 10,466,000 10,953,000.....     2007
168.33 	Any balance in the first year does not cancel but is
168.34 	available in the second year.
168.35 	Sec. 4.  2005 S.F. No. 1879, article 3, section 5, if
168.36 	enacted, is amended to read:

169.1 	Sec. 5. APPROPRIATIONS; PERPICH CENTER FOR ARTS
169.2 	EDUCATION.
 169.3 	The sums indicated in this section are appropriated from
169.4 	the general fund to the Perpich Center for Arts Education for
169.5 	the fiscal years designated:
169.6 	$ 6,423,000 6,424,000.....     2006
169.7 	$ 6,423,000 6,422,000.....     2007
169.8 	Any balance in the first year does not cancel but is
169.9 	available in the second year. The base appropriation for fiscal
169.10 	year 2008 and later is $6,672,000.

169.11 	Sec. 6. USE OF FEDERAL FUNDS.
 169.12 		Subdivision 1.Federal grants and aids. The expenditures
169.13 	of federal grants and aids as shown in the biennial budget
169.14 	document and its supplements are approved and appropriated and
169.15 	shall be spent as indicated.
169.16 		Subd. 2.Exceptions. (a) Notwithstanding subdivision 1,
169.17 	the following grants and aids are appropriated as indicated in
169.18 	this section.
169.19 	(b) Ninety-five percent of the improving teacher quality
169.20 	state grant is appropriated for the professional compensation
169.21 	initiative under Minnesota Statutes, section 122A.4142.
169.22 	(c) $200,000 of the twenty-first century community learning
169.23 	centers funds is appropriated to the summit academy for the
169.24 	quantum opportunities program.
169.25 	(d) $500,000 of the improving teacher quality state grant
169.26 	is appropriated for the principals' leadership institute under
169.27 	Minnesota Statutes, section 122A.74.  This appropriation is not
169.28 	available until the commissioner of education has determined
169.29 	that an equal amount has been committed for the operation of the
169.30 	institute from nonstate sources and the programmatic elements
169.31 	are sufficiently reflective of the goals the state has
169.32 	established for principals.

169.33 	ARTICLE 7
169.34 	SCHOOL EMPLOYEE HEALTH INSURANCE

169.35 	Section 1. [62A.662] SCHOOL EMPLOYEE INSURANCE PLAN.
169.36 		Subdivision 1.Definitions. For purposes of this section:
170.1 	(1) "eligible employee" means a person who is insurance
170.2 	eligible under a collective bargaining agreement or under the
170.3 	personnel policy of an eligible employer; and 
170.4 	(2) "eligible employer" means a school district as defined
170.5 	in section 120A.05; a service cooperative as defined in section
170.6 	123A.21; an intermediate district as defined in section 136D.01;
170.7 	a cooperative center for vocational education as defined in
170.8 	section 123A.22; a regional management information center as
170.9 	defined in section 123A.23; an education unit organized under
170.10 	section 471.59; or a charter school organized under section
170.11 	124D.10.
170.12 		Subd. 2.Creation of board. (a) The Minnesota School
170.13 	Employee Insurance Board is created as a public corporation
170.14 	subject to the provisions of chapter 317A, except as otherwise
170.15 	provided in this section.  As provided in section 15.082, the
170.16 	state is not liable for obligations of this public corporation.
170.17 	(b) The board shall create and administer the Minnesota
170.18 	School Employee Insurance Pool as described in this section.
170.19 	(c) Insurance plans and offerings must be effective July 1,
170.20 	2009.
170.21 	(d) If the board does not offer coverage by December 15,
170.22 	2010, the board expires and this section expires on that date.
170.23 		Subd. 3.Board of directors. (a) The School Employee
170.24 	Insurance Board consists of:
170.25 	(1) seven members representing exclusive representatives of
170.26 	eligible employees, appointed by exclusive representatives, as
170.27 	provided in paragraph (b); and 
170.28 	(2) seven members representing eligible employers,
170.29 	appointed by the Minnesota School Boards Association.
170.30 	(b) The seven members of the board who represent statewide
170.31 	affiliates of exclusive representatives of eligible employees
170.32 	are appointed as follows:  four members appointed by Education
170.33 	Minnesota and one member each appointed by the Service Employees
170.34 	International Union, the Minnesota School Employees Association,
170.35 	and American Federation of State, County, and Municipal
170.36 	Employees.
171.1 	(c) Appointing authorities must make their initial
171.2 	appointments no later than August 1, 2005, by filing a notice of
171.3 	the appointment with the commissioner of commerce.  Notices of
171.4 	subsequent appointments must be filed with the board.  An entity
171.5 	entitled to appoint a board member may replace the board member
171.6 	at any time.
171.7 	(d) Board members are eligible for compensation and expense
171.8 	reimbursement under section 15.0575, subdivision 3.
171.9 	(e) The board must arrange for one or more methods of
171.10 	dispute resolution so as to minimize the possibility of
171.11 	deadlocks.
171.12 	(f) The board shall establish governance requirements,
171.13 	including staggered terms, term limits, quorum, a plan of
171.14 	operation, and audit provisions.
171.15 		Subd. 4.Design and nature of plan. (a) Health coverage
171.16 	offered through the Minnesota School Employee Insurance Pool
171.17 	shall be made available by the board to all eligible employees
171.18 	of eligible employers, as defined in subdivision 1.
171.19 	(b) If an eligible employer provides health coverage or
171.20 	money to purchase health coverage to eligible employees, the
171.21 	coverage must be provided or purchased only through the health
171.22 	plans offered by the board.
171.23 	(c) Nothing in this section affects the right of each
171.24 	eligible employer to determine, through collective bargaining
171.25 	under the public employer labor relations act:
171.26 	(1) the employer's eligibility requirements regarding the
171.27 	terms and conditions under which employees, dependents,
171.28 	retirees, and other persons are eligible for health coverage
171.29 	from the employer;
171.30 	(2) how much of the premium charged for the insurance will
171.31 	be paid by the employer and how much will be paid by the
171.32 	eligible person; and 
171.33 	(3) which health plan or plans offered by the board will be
171.34 	made available by the eligible employer.
171.35 	(d) The board must initially offer at least six health
171.36 	plans.  One plan must provide coverage without a deductible and
172.1 	without other enrollee cost-sharing other than reasonable
172.2 	co-payments for nonpreventive care.  One plan must be a high
172.3 	deductible health plan that qualifies under federal law for use
172.4 	with a health savings account.  The other four plans must have
172.5 	levels of enrollee cost-sharing that are between the two plans
172.6 	just described.  The board may establish more than one tier of
172.7 	premium rates for any specific plan.  Plans and premium rates
172.8 	may vary across geographic regions established by the board.
172.9 	The health plans must comply with chapters 62A, 62J, 62M, and
172.10 	62Q, and must provide the optimal combination of coverage, cost,
172.11 	choice, and stability in the judgment of the board.  All health
172.12 	plans offered must be approved by the commissioner of commerce.
172.13 	The board shall investigate the feasibility of offering coverage
172.14 	through more than one health plan company or other network of
172.15 	health care providers.
172.16 	(e) The board must include claims reserves, stabilization
172.17 	reserves, reinsurance, and other features that, in the judgment
172.18 	of the board, will result in long-term stability and solvency of
172.19 	the health plans offered.
172.20 	(f) The board may determine whether the health plans should
172.21 	be fully insured through a health carrier licensed in this
172.22 	state, self-insured, or a combination of those two alternatives.
172.23 	(g) The health plans must include disease management and
172.24 	consumer education, including wellness programs and measures
172.25 	encouraging the wise use of health coverage, to the extent
172.26 	determined to be appropriate by the board.
172.27 	(h) Upon request of the board, health plans that are
172.28 	providing or have provided coverage to employees of eligible
172.29 	employers within two years prior to the effective date of this
172.30 	section, shall provide to the board at no charge nonidentifiable
172.31 	aggregate claims data for that coverage.  The information must
172.32 	include data relating to employee group benefit sets,
172.33 	demographics, and claims experience.  Notwithstanding section
172.34 	13.203, Minnesota service cooperatives must also comply with
172.35 	this paragraph.
172.36 	(i) Effective July 1, 2007, no contract entered into
173.1 	between an eligible employer and an eligible employee or the
173.2 	exclusive representative of an eligible employee shall contain
173.3 	provisions that establish cash payment in lieu of health
173.4 	insurance to an eligible employee if the employee is not
173.5 	receiving such payment on or before June 30, 2007.  Nothing in
173.6 	this section shall prevent any eligible employee who otherwise
173.7 	qualifies for payment of cash in lieu of insurance on June 30,
173.8 	2007, to continue to receive this payment.
173.9 	(j) All premiums paid for health coverage provided by the
173.10 	board must be used by the board solely for the cost of the
173.11 	operation of the board and the benefit of eligible employees and
173.12 	eligible employers in connection with the health coverage
173.13 	offered by the board.
173.14 		Subd. 5.Mcha membership and assessments. The board is a
173.15 	contributing member of the Minnesota Comprehensive Health
173.16 	Association and must pay assessments made by the association on
173.17 	its premium revenues, as provided in section 62E.11, subdivision
173.18 	5, paragraph (b).
173.19 		Subd. 6.Report. The board shall report to the
173.20 	legislature by January 15, 2009, on a final design for the pool
173.21 	that complies with subdivision 4 and on governance requirements
173.22 	for the board, including staggered terms, term limits, quorum,
173.23 	and a plan of operation and audit provisions.  The report must
173.24 	include any legislative changes necessary to ensure conformance
173.25 	with chapters 62A, 62J, 62M, and 62Q.
173.26 		Subd. 7.Periodic evaluation. (a) Beginning January 15,
173.27 	2010, and for the next two years, the board must submit an
173.28 	annual report to the commissioner of commerce and the
173.29 	legislature, in compliance with sections 3.195 and 3.197,
173.30 	summarizing and evaluating the performance of the pool during
173.31 	the previous year of operation.
173.32 	(b) Beginning in 2013 and in each odd-numbered year
173.33 	thereafter, the board must submit to the legislature a biennial
173.34 	report summarizing and evaluating the performance of the pool
173.35 	during the preceding two fiscal years.

173.36 	Sec. 2. Minnesota Statutes 2004, section 62E.02,
174.1 	subdivision 23, is amended to read:
174.2 		Subd. 23.Contributing member.  "Contributing member"
174.3 	means those companies regulated under chapter 62A and offering,
174.4 	selling, issuing, or renewing policies or contracts of accident
174.5 	and health insurance; health maintenance organizations regulated
174.6 	under chapter 62D; nonprofit health service plan corporations
174.7 	regulated under chapter 62C; community integrated service
174.8 	networks regulated under chapter 62N; fraternal benefit
174.9 	societies regulated under chapter 64B; the Minnesota employees
174.10 	insurance program established in section 43A.317, effective July
174.11 	1, 1993; and joint self-insurance plans regulated under chapter
174.12 	62H; and the Minnesota School Employee Insurance Board created
174.13 	under section 62A.662.  For the purposes of determining
174.14 	liability of contributing members pursuant to section 62E.11
174.15 	payments received from or on behalf of Minnesota residents for
174.16 	coverage by a health maintenance organization or , a community
174.17 	integrated service network, or the Minnesota School Employee
174.18 	Insurance Board shall be considered to be accident and health
174.19 	insurance premiums.

174.20 	Sec. 3. Minnesota Statutes 2004, section 62E.10,
174.21 	subdivision 1, is amended to read:
174.22 		Subdivision 1.Creation; tax exemption.  There is
174.23 	established a Comprehensive Health Association to promote the
174.24 	public health and welfare of the state of Minnesota with
174.25 	membership consisting of all insurers; self-insurers;
174.26 	fraternals; joint self-insurance plans regulated under chapter
174.27 	62H; the Minnesota employees insurance program established in
174.28 	section 43A.317, effective July 1, 1993; the Minnesota School
174.29 	Employee Insurance Board created under section 62A.662;health
174.30 	maintenance organizations; and community integrated service
174.31 	networks licensed or authorized to do business in this state.
174.32 	The Comprehensive Health Association is exempt from the taxes
174.33 	imposed under chapter 297I and any other laws of this state and
174.34 	all property owned by the association is exempt from taxation.

174.35 	Sec. 4. Minnesota Statutes 2004, section 62E.11,
174.36 	subdivision 5, is amended to read:
175.1 		Subd. 5.Allocation of losses. (a) Each contributing
175.2 	member of the association shall share the losses due to claims
175.3 	expenses of the comprehensive health insurance plan for plans
175.4 	issued or approved for issuance by the association, and shall
175.5 	share in the operating and administrative expenses incurred or
175.6 	estimated to be incurred by the association incident to the
175.7 	conduct of its affairs.  Claims expenses of the state plan which
175.8 	exceed the premium payments allocated to the payment of benefits
175.9 	shall be the liability of the contributing members.
175.10 	Contributing members shall share in the claims expense of the
175.11 	state plan and operating and administrative expenses of the
175.12 	association in an amount equal to the ratio of the contributing
175.13 	member's total accident and health insurance premium, received
175.14 	from or on behalf of Minnesota residents as divided by the total
175.15 	accident and health insurance premium, received by all
175.16 	contributing members from or on behalf of Minnesota residents,
175.17 	as determined by the commissioner.  Payments made by the state
175.18 	to a contributing member for medical assistance, MinnesotaCare,
175.19 	or general assistance medical care services according to
175.20 	chapters 256, 256B, and 256D shall be excluded when determining
175.21 	a contributing member's total premium.
175.22 	(b) In making the allocation of losses provided in
175.23 	paragraph (a), the association's assessment against the
175.24 	Minnesota School Employee Insurance Board must equal the product
175.25 	of (1) the percentage of premiums assessed against other
175.26 	association members; (2) .3885; and (3) premiums received by the
175.27 	Minnesota School Employee Insurance Board.  For purposes of this
175.28 	calculation, premiums of the board used must be net of rate
175.29 	credits and retroactive rate refunds on the same basis as the
175.30 	premiums of other association members.

175.31 	Sec. 5. Minnesota Statutes 2004, section 297I.05,
175.32 	subdivision 5, is amended to read:
175.33 		Subd. 5.Health maintenance organizations, nonprofit
175.34 	health service plan corporations, and community integrated
175.35 	service networks, and the minnesota school employee insurance
175.36 	board.  (a) Health maintenance organizations, community
176.1 	integrated service networks, and nonprofit health care service
176.2 	plan corporations are exempt from the tax imposed under this
176.3 	section for premiums received in calendar years 2001 to 2003.
176.4 	(b) For calendar years after 2003, a tax is imposed on
176.5 	health maintenance organizations, community integrated service
176.6 	networks, and nonprofit health care service plan corporations.
176.7 	The rate of tax is equal to one percent of gross premiums less
176.8 	return premiums received in the calendar year.
176.9 	(c) A tax is imposed on the Minnesota School Employee
176.10 	Insurance Board under section 62A.662.  The rate of tax is equal
176.11 	to .36 percent of gross premiums less return premiums received
176.12 	in the calendar year.
176.13 	(d) In approving the premium rates as required in sections
176.14 	62L.08, subdivision 8, and 62A.65, subdivision 3, the
176.15 	commissioners of health and commerce shall ensure that any
176.16 	exemption from tax as described in paragraph (a) is reflected in
176.17 	the premium rate.
176.18 	(d) (e) The commissioner shall deposit all revenues,
176.19 	including penalties and interest, collected under this chapter
176.20 	from health maintenance organizations, community integrated
176.21 	service networks, and nonprofit health service plan
176.22 	corporations, and the Minnesota School Employee Insurance Board 
176.23 	in the health care access fund.  Refunds of overpayments of tax
176.24 	imposed by this subdivision must be paid from the health care
176.25 	access fund.  There is annually appropriated from the health
176.26 	care access fund to the commissioner the amount necessary to
176.27 	make any refunds of the tax imposed under this subdivision.

176.28 	Sec. 6. PROGRESS DEPENDENT UPON FUNDING.
 176.29 	The board shall carry out its obligations to the extent
176.30 	permitted by financial and other resources available to the
176.31 	board for that purpose.  The board may seek and accept gifts and
176.32 	grants.

176.33 	Sec. 7. APPROPRIATION; LOAN.
 176.34 	The base appropriation for this program in fiscal year 2008
176.35 	is $3,000,000 to the commissioner of commerce as a loan for
176.36 	start-up costs to the Minnesota School Employee Insurance
177.1 	Board.  The Minnesota School Employee Insurance Board must repay
177.2 	the loan to the general fund in ten equal installments paid at
177.3 	the end of each fiscal year, beginning with the 2010 fiscal year.

177.4 	Sec. 8. EFFECTIVE DATE.
 177.5 	This article is effective for fiscal year 2008 and later.

177.6 	ARTICLE 8
177.7 	TECHNICAL AND CONFORMING AMENDMENTS

177.8 	Section 1. Minnesota Statutes 2004, section 120B.31,
177.9 	subdivision 4, is amended to read:
177.10 		Subd. 4.Statistical adjustments.  In developing policies
177.11 	and assessment processes to hold schools and districts
177.12 	accountable for high levels of academic standards, including the
177.13 	profile of learning under section 120B.021, the commissioner
177.14 	shall aggregate student data over time to report student
177.15 	performance levels measured at the school district, regional, or
177.16 	statewide level.  When collecting and reporting the data, the
177.17 	commissioner shall:  (1) acknowledge the impact of significant
177.18 	demographic factors such as residential instability, the number
177.19 	of single parent families, parents' level of education, and
177.20 	parents' income level on school outcomes; and (2) organize and
177.21 	report the data so that state and local policy makers can
177.22 	understand the educational implications of changes in districts'
177.23 	demographic profiles over time.  Any report the commissioner
177.24 	disseminates containing summary data on student performance must
177.25 	integrate student performance and the demographic factors that
177.26 	strongly correlate with that performance.

177.27 	Sec. 2. Minnesota Statutes 2004, section 121A.41,
177.28 	subdivision 10, is amended to read:
177.29 		Subd. 10.Suspension.  "Suspension" means an action by
177.30 	the school administration, under rules promulgated by the school
177.31 	board, prohibiting a pupil from attending school for a period of
177.32 	no more than ten school days.  If a suspension is longer than
177.33 	five days, the suspending administrator must provide the
177.34 	superintendent with a reason for the longer suspension.  This
177.35 	definition does not apply to dismissal from school for one
177.36 	school day or less, except as provided in federal law for a
178.1 	student with a disability.  Each suspension action may include a
178.2 	readmission plan.  The readmission plan shall include, where
178.3 	appropriate, a provision for implementing alternative
178.4 	educational services upon readmission and may not be used to
178.5 	extend the current suspension.  Consistent with section
178.6 	125A.09 125A.091, subdivision 3 5, the readmission plan must not
178.7 	obligate a parent to provide a sympathomimetic medication for
178.8 	the parent's child as a condition of readmission.  The school
178.9 	administration may not impose consecutive suspensions against
178.10 	the same pupil for the same course of conduct, or incident of
178.11 	misconduct, except where the pupil will create an immediate and
178.12 	substantial danger to self or to surrounding persons or
178.13 	property, or where the district is in the process of initiating
178.14 	an expulsion, in which case the school administration may extend
178.15 	the suspension to a total of 15 days.  In the case of a student
178.16 	with a disability, the student's individual education plan team
178.17 	must meet immediately but not more than ten school days after
178.18 	the date on which the decision to remove the student from the
178.19 	student's current education placement is made.  The individual
178.20 	education plan team and other qualified personnel shall at that
178.21 	meeting:  conduct a review of the relationship between the
178.22 	child's disability and the behavior subject to disciplinary
178.23 	action; and determine the appropriateness of the child's
178.24 	education plan.
178.25 	The requirements of the individual education plan team
178.26 	meeting apply when:
178.27 	(1) the parent requests a meeting;
178.28 	(2) the student is removed from the student's current
178.29 	placement for five or more consecutive days; or
178.30 	(3) the student's total days of removal from the student's
178.31 	placement during the school year exceed ten cumulative days in a
178.32 	school year.  The school administration shall implement
178.33 	alternative educational services when the suspension exceeds
178.34 	five days.  A separate administrative conference is required for
178.35 	each period of suspension.

178.36 	Sec. 3. Minnesota Statutes 2004, section 124D.10,
179.1 	subdivision 8, is amended to read:
179.2 		Subd. 8.State and local requirements.  (a) A charter
179.3 	school shall meet all applicable state and local health and
179.4 	safety requirements.
179.5 	(b) A school sponsored by a school board may be located in
179.6 	any district, unless the school board of the district of the
179.7 	proposed location disapproves by written resolution.
179.8 	(c) A charter school must be nonsectarian in its programs,
179.9 	admission policies, employment practices, and all other
179.10 	operations.  A sponsor may not authorize a charter school or
179.11 	program that is affiliated with a nonpublic sectarian school or
179.12 	a religious institution.
179.13 	(d) Charter schools must not be used as a method of
179.14 	providing education or generating revenue for students who are
179.15 	being home-schooled.
179.16 	(e) The primary focus of a charter school must be to
179.17 	provide a comprehensive program of instruction for at least one
179.18 	grade or age group from five through 18 years of age.
179.19 	Instruction may be provided to people younger than five years
179.20 	and older than 18 years of age.
179.21 	(f) A charter school may not charge tuition.
179.22 	(g) A charter school is subject to and must comply with
179.23 	chapter 363A and section 121A.04.
179.24 	(h) A charter school is subject to and must comply with the
179.25 	Pupil Fair Dismissal Act, sections 121A.40 to 121A.56, and the
179.26 	Minnesota Public School Fee Law, sections 123B.34 to 123B.39.
179.27 	(i) A charter school is subject to the same financial
179.28 	audits, audit procedures, and audit requirements as a district.
179.29 	Audits must be conducted in compliance with generally accepted
179.30 	governmental auditing standards, the Federal Single Audit Act,
179.31 	if applicable, and section 6.65.  A charter school is subject to
179.32 	and must comply with sections 15.054; 118A.01; 118A.02; 118A.03;
179.33 	118A.04; 118A.05; 118A.06; 123B.52, subdivision 5; 471.38;
179.34 	471.391; 471.392; 471.425; 471.87; 471.88, subdivisions 1, 2, 3,
179.35 	4, 5, 6, 12, 13, and 15; 471.881; and 471.89.  The audit must
179.36 	comply with the requirements of sections 123B.75 to 123B.83,
180.1 	except to the extent deviations are necessary because of the
180.2 	program at the school.  Deviations must be approved by the
180.3 	commissioner.  The Department of Education, state auditor, or
180.4 	legislative auditor may conduct financial, program, or
180.5 	compliance audits.  A charter school determined to be in
180.6 	statutory operating debt under sections 123B.81 to 123B.83 must
180.7 	submit a plan under section 123B.81, subdivision 4.
180.8 	(j) A charter school is a district for the purposes of tort
180.9 	liability under chapter 466.
180.10 	(k) A charter school must comply with sections 13.32;
180.11 	120A.22, subdivision 7; 121A.75; and 260B.171, subdivisions 3
180.12 	and 5.
180.13 	(l) A charter school is subject to the Pledge of Allegiance
180.14 	requirement under section 121A.11, subdivision 3.
180.15 	(m) Charter school board of director open meeting
180.16 	requirements are governed according to subdivision 4.

180.17 	Sec. 4. Minnesota Statutes 2004, section 124D.40, is
180.18 	amended to read:
180.19 	124D.40 YOUTH WORKS GRANTS.
180.20 		Subdivision 1.Application. An eligible organization
180.21 	interested in receiving a grant under sections 124D.39 to
180.22 	124D.44 may prepare and submit an application to the commission
180.23 	an application that complies with section 124D.41.
180.24 		Subd. 2.Grant authority. The commission must use any
180.25 	state appropriation and any available federal funds, including
180.26 	any grant received under federal law, to award grants to
180.27 	establish programs for youth works meeting the requirements of
180.28 	section 124D.41.  At least one grant each must be available for
180.29 	a metropolitan proposal, a rural proposal, and a statewide
180.30 	proposal.  If a portion of the suburban metropolitan area is not
180.31 	included in the metropolitan grant proposal, the statewide grant
180.32 	proposal must incorporate at least one suburban metropolitan
180.33 	area.  In awarding grants, the commission may select at least
180.34 	one residential proposal and one nonresidential proposal,
180.35 	provided the proposals meet or exceed the criteria in section
180.36 	124D.41.

181.1 	Sec. 5. Minnesota Statutes 2004, section 127A.41,
181.2 	subdivision 8, is amended to read:
181.3 		Subd. 8.Appropriation transfers.  (a) If a direct
181.4 	appropriation from the general fund to the department for any
181.5 	education aid or grant authorized in this chapter and chapters
181.6 	122A, 123A, 123B, 124D, 125A, 126C, and 134, excluding
181.7 	appropriations under sections 124D.135, 124D.16, 124D.20,
181.8 	124D.21,124D.22, 124D.52, 124D.531, 124D.54,124D.55, and
181.9 	124D.56, exceeds the amount required, the commissioner may
181.10 	transfer the excess to any education aid or grant appropriation
181.11 	that is insufficient.  However, section 126C.20 applies to a
181.12 	deficiency in the direct appropriation for general education
181.13 	aid.  Excess appropriations must be allocated proportionately
181.14 	among aids or grants that have insufficient appropriations.  The
181.15 	commissioner of finance shall make the necessary transfers among
181.16 	appropriations according to the determinations of the
181.17 	commissioner.  If the amount of the direct appropriation for the
181.18 	aid or grant plus the amount transferred according to this
181.19 	subdivision is insufficient, the commissioner shall prorate the
181.20 	available amount among eligible districts.  The state is not
181.21 	obligated for any additional amounts.
181.22 	(b) Transfers for aids paid under section 127A.45,
181.23 	subdivisions 12, paragraph (a), 12a, paragraph (a), and 13,
181.24 	shall be made during the fiscal year after the fiscal year of
181.25 	the entitlement.  Transfers for aids paid under section 127A.45,
181.26 	subdivisions 11, 12, paragraph (b), and 12a, paragraph (b),
181.27 	shall be made during the fiscal year of the appropriation.

181.28 	Sec. 6. Minnesota Statutes 2004, section 127A.45,
181.29 	subdivision 12, is amended to read:
181.30 		Subd. 12.Payment percentage for certain aids.  (a) One
181.31 	hundred percent of the aid for the current fiscal year must be
181.32 	paid for the following aids:  reimbursement for enrollment
181.33 	options transportation, according to sections 124D.03,
181.34 	subdivision 8, 124D.09, subdivision 22, and 124D.10; school
181.35 	lunch aid, according to section 124D.111; hearing impaired
181.36 	support services aid, according to section 124D.57; and Indian
182.1 	postsecondary preparation grants according to section
182.2 	124D.80 124D.81.
182.3 	(b) One hundred percent of the aid for the current fiscal
182.4 	year, based on enrollment in the previous year, must be paid for
182.5 	the first grade preparedness program according to section
182.6 	124D.081.

182.7 	ARTICLE 9
182.8 	EFFECTIVE DATE

182.9 	Section 1. EFFECTIVE DATE.
 182.10 	This act is effective retroactively from July 1, 2005,
182.11 	unless otherwise indicated.