1.1 	A bill for an act
1.2 	relating to education; providing for prekindergarten through grade 12 education, 
1.3 	including general education, education excellence, special programs, facilities 
1.4 	and technology, nutrition and accounting, libraries, early childhood education, 
1.5 	self-sufficiency and lifelong learning, and early childhood education; authorizing 
1.6 	rulemaking;amending Minnesota Statutes 2006, sections 16A.152, subdivision 
1.7 	2; 119A.52; 119A.535; 120A.05, by adding a subdivision; 120A.22, subdivision 
1.8 	7; 120B.15; 120B.30; 122A.16; 123B.143, subdivision 1; 123B.36, subdivision 
1.9 	1; 123B.37, subdivision 1; 123B.63, subdivision 3; 123B.79, by adding a 
1.10 	subdivision; 123B.92, subdivision 3; 124D.02, subdivision 1; 124D.095, 
1.11 	subdivision 3; 124D.10, subdivisions 4, 23a, 24; 124D.4531, subdivisions 
1.12 	1, 3; 124D.531, subdivision 4; 124D.55; 124D.84, subdivision 1; 125A.11, 
1.13 	subdivision 1; 125A.14; 125A.75, subdivisions 1, 4; 125A.76, subdivision 
1.14 	2; 125A.79, subdivision 8; 126C.13, subdivision 4; 126C.21, subdivision 5; 
1.15 	127A.441; 127A.47, subdivision 7; 127A.49, subdivision 2; 134.31, by adding 
1.16 	a subdivision; proposing coding for new law in Minnesota Statutes, chapters 
1.17 	119A; 124D; repealing Minnesota Statutes 2006, sections 124D.06; 124D.175; 
1.18 	124D.531, subdivision 5; 124D.62; 125A.10; 125A.75, subdivision 6.
1.19 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.20 	ARTICLE 1
1.21 	GENERAL EDUCATION

1.22 	Section 1. Minnesota Statutes 2006, section 16A.152, subdivision 2, is amended to 
1.23 	read:
1.24 		Subd. 2.Additional revenues; priority. (a) If on the basis of a forecast of general 
1.25 	fund revenues and expenditures, the commissioner of finance determines that there will be 
1.26 	a positive unrestricted budgetary general fund balance at the close of the biennium, the 
1.27 	commissioner of finance must allocate money to the following accounts and purposes in 
1.28 	priority order:
2.1 	(1) the cash flow account established in subdivision 1 until that account reaches 
2.2 	$350,000,000;
2.3 	(2) the budget reserve account established in subdivision 1a until that account 
2.4 	reaches $653,000,000;
2.5 	(3) the amount necessary to increase the aid payment schedule for school district 
2.6 	aids and credits payments in section 127A.45 to not more than 90 percent rounded to the 
2.7 	nearest tenth of a percent without exceeding the amount available and with any remaining 
2.8 	funds deposited in the budget reserve; and
2.9 	(4) the amount necessary to restore all or a portion of the net aid reductions under 
2.10 	section 127A.441 and to reduce the property tax revenue recognition shift under section 
2.11 	123B.75, subdivision 5, paragraph (c) (b), and Laws 2003, First Special Session chapter 
2.12 	9, article 5, section 34, as amended by Laws 2003, First Special Session chapter 23, 
2.13 	section 20, by the same amount.
2.14 	(b) The amounts necessary to meet the requirements of this section are appropriated 
2.15 	from the general fund within two weeks after the forecast is released or, in the case of 
2.16 	transfers under paragraph (a), clauses (3) and (4), as necessary to meet the appropriations 
2.17 	schedules otherwise established in statute.
2.18 	(c) To the extent that a positive unrestricted budgetary general fund balance is 
2.19 	projected, appropriations under this section must be made before section 16A.1522 takes 
2.20 	effect.
2.21 	(d) The commissioner of finance shall certify the total dollar amount of the 
2.22 	reductions under paragraph (a), clauses (3) and (4), to the commissioner of education. The 
2.23 	commissioner of education shall increase the aid payment percentage and reduce the 
2.24 	property tax shift percentage by these amounts and apply those reductions to the current 
2.25 	fiscal year and thereafter.

2.26 	Sec. 2. Minnesota Statutes 2006, section 126C.13, subdivision 4, is amended to read:
2.27 		Subd. 4.General education aid. (a) For fiscal year 2006, a district's general 
2.28 	education aid is the sum of the following amounts:
2.29 	(1) general education revenue, excluding equity revenue, total operating capital, and 
2.30 	transition revenue;
2.31 	(2) operating capital aid according to section 126C.10, subdivision 13b;
2.32 	(3) equity aid according to section 126C.10, subdivision 30;
2.33 	(4) transition aid according to section 126C.10, subdivision 33;
2.34 	(5) shared time aid according to section 126C.01, subdivision 7;
2.35 	(6) referendum aid according to section 126C.17; and
3.1 	(7) online learning aid according to section 124D.096.
3.2 	(b) For fiscal year 2007 2008 and later, a district's general education aid is the sum of 
3.3 	the following amounts:
3.4 	(1) general education revenue, excluding equity revenue, total operating capital 
3.5 	revenue, alternative teacher compensation revenue, and transition revenue;
3.6 	(2) operating capital aid under section 126C.10, subdivision 13b;
3.7 	(3) equity aid under section 126C.10, subdivision 30;
3.8 	(4) alternative teacher compensation aid under section 126C.10, subdivision 36;
3.9 	(5) transition aid under section 126C.10, subdivision 33;
3.10 	(6) shared time aid under section 126C.01, subdivision 7;
3.11 	(7) referendum aid under section 126C.17, subdivisions 7 and 7a; and
3.12 	(8) online learning aid according to section 124D.096.

3.13 	Sec. 3. Minnesota Statutes 2006, section 126C.21, subdivision 5, is amended to read:
3.14 		Subd. 5.Adjustment for failure to meet federal maintenance of effort. (a) The 
3.15 	general education aid paid to a school district or charter school that failed to meet federal 
3.16 	special education maintenance of effort for the previous fiscal year must be reduced by the 
3.17 	amount that must be paid to the federal government due to the shortfall. 
3.18 	(b) The general education aid paid to school districts that were members of a 
3.19 	cooperative that failed to meet federal special education maintenance of effort must be 
3.20 	reduced by the amount that must be paid to the federal government due to the shortfall. 
3.21 	The commissioner must apportion the aid reduction amount the member school districts 
3.22 	based on each district's individual shortfall in maintaining effort, and on each member 
3.23 	district's proportionate share of any shortfall in expenditures made by the cooperative. 
3.24 	Each district's proportionate share of shortfall in expenditures made by the cooperative 
3.25 	must be calculated using the adjusted marginal pupil units of each member school district.
3.26 	(c) The amounts recovered under this subdivision shall be paid to the federal 
3.27 	government to meet the state's obligations resulting from the district's or , charter school's, 
3.28 	or cooperative's failure to meet federal special education maintenance of effort.

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

3.30 	Sec. 4. Minnesota Statutes 2006, section 127A.441, is amended to read:
3.31 	127A.441 AID REDUCTION; LEVY REVENUE RECOGNITION CHANGE.
3.32 	Each year, the state aids payable to any school district for that fiscal year that are 
3.33 	recognized as revenue in the school district's general and community service funds shall 
4.1 	be adjusted by an amount equal to (1) the amount the district recognized as revenue for the 
4.2 	prior fiscal year pursuant to section 123B.75, subdivision 5, paragraph (b) or (c), minus (2) 
4.3 	the amount the district recognized as revenue for the current fiscal year pursuant to section 
4.4 	123B.75, subdivision 5, paragraph (c) (b). For purposes of making the aid adjustments 
4.5 	under this section, the amount the district recognizes as revenue for either the prior fiscal 
4.6 	year or the current fiscal year pursuant to section 123B.75, subdivision 5, paragraph (b) 
4.7 	or (c), shall not include any amount levied pursuant to section 124D.86, subdivision 4, 
4.8 	for school districts receiving revenue under sections 124D.86, subdivision 3, clauses (1), 
4.9 	(2), and (3); 126C.41, subdivisions 1, 2, and 3, paragraphs (b), (c), and (d); 126C.43, 
4.10 	subdivision 2; 126C.457; and 126C.48, subdivision 6. Payment from the permanent 
4.11 	school fund shall not be adjusted pursuant to this section. The school district shall be 
4.12 	notified of the amount of the adjustment made to each payment pursuant to this section. 

4.13 	Sec. 5. Minnesota Statutes 2006, section 127A.49, subdivision 2, is amended to read:
4.14 		Subd. 2.Abatements. Whenever by virtue of chapter 278, sections 270C.86, 
4.15 	375.192, or otherwise, the net tax capacity or referendum market value of any district for 
4.16 	any taxable year is changed after the taxes for that year have been spread by the county 
4.17 	auditor and the local tax rate as determined by the county auditor based upon the original 
4.18 	net tax capacity is applied upon the changed net tax capacities, the county auditor shall, 
4.19 	prior to February 1 of each year, certify to the commissioner of education the amount of 
4.20 	any resulting net revenue loss that accrued to the district during the preceding year. Each 
4.21 	year, the commissioner shall pay an abatement adjustment to the district in an amount 
4.22 	calculated according to the provisions of this subdivision. This amount shall be deducted 
4.23 	from the amount of the levy authorized by section 126C.46. The amount of the abatement 
4.24 	adjustment must be the product of:
4.25 	(1) the net revenue loss as certified by the county auditor, times
4.26 	(2) the ratio of:
4.27 	(i) the sum of the amounts of the district's certified levy in the third preceding year 
4.28 	according to the following:
4.29 	(A) section 123B.57, if the district received health and safety aid according to that 
4.30 	section for the second preceding year;
4.31 	(B) section 124D.20, if the district received aid for community education programs 
4.32 	according to that section for the second preceding year;
4.33 	(C) section 124D.135, subdivision 3, if the district received early childhood family 
4.34 	education aid according to section 124D.135 for the second preceding year; and
5.1 	(D) section 126C.17, subdivision 6, if the district received referendum equalization 
5.2 	aid according to that section for the second preceding year; to
5.3 	(ii) the total amount of the district's certified levy in the third preceding December, 
5.4 	plus or minus auditor's adjustments.

5.5 	Sec. 6. REVISOR'S INSTRUCTION.
 5.6 	In Minnesota Statutes, the revisor of statutes shall correct any incorrect cross 
5.7 	references resulting from the repeal of Minnesota Statutes, section 124D.06.

5.8 	Sec. 7.  REPEALER.
 5.9 	Minnesota Statutes 2006, section 124D.06, is repealed.

5.10 	ARTICLE 2
5.11 	EDUCATION EXCELLENCE

5.12 	Section 1. Minnesota Statutes 2006, section 120A.22, subdivision 7, is amended to 
5.13 	read:
5.14 		Subd. 7.Education records. (a) A district or charter school from which a student 
5.15 	is transferring must transmit the student's educational records, within ten business days 
5.16 	of a request, to the district, charter school, or nonpublic school in which the student 
5.17 	is enrolling. Districts and charter schools must make reasonable efforts to determine 
5.18 	the district, charter school, or nonpublic school in which a transferring student is next 
5.19 	enrolling in order to comply with this subdivision.
5.20 	(b) A closed charter school must transfer the student's educational records, within 
5.21 	ten business days of the school's closure, to the student's school district of residence 
5.22 	where the records must be retained unless the records are otherwise transferred under 
5.23 	this subdivision.
5.24 	(c) A school district or charter school that transmits a student's educational records 
5.25 	to another school district or other educational entity, charter school, or nonpublic school
5.26 	to which the student is transferring must include in the transmitted records information 
5.27 	about any formal suspension, expulsion, and exclusion disciplinary action taken as a result 
5.28 	of any incident in which the student possessed or used a dangerous weapon under sections 
5.29 	121A.40 to 121A.56. The district or charter school must provide notice to a student and 
5.30 	the student's parent or guardian that formal disciplinary records will be transferred as 
5.31 	part of the student's educational record, in accordance with data practices under chapter 
5.32 	13 and the Family Educational Rights and Privacy Act of 1974, United States Code, 
5.33 	title 20, section 1232(g).
6.1 	(c) (d) Notwithstanding section 138.17, a principal or chief administrative officer 
6.2 	must remove from a student's educational record and destroy a probable cause notice 
6.3 	received under section 260B.171, subdivision 5, or paragraph (d), if one year has elapsed 
6.4 	since the date of the notice and the principal or chief administrative officer has not 
6.5 	received a disposition or court order related to the offense described in the notice. This 
6.6 	paragraph does not apply if the student no longer attends the school when this one-year 
6.7 	period expires. 
6.8 	(d) (e) A principal or chief administrative officer who receives a probable cause 
6.9 	notice under section 260B.171, subdivision 5, or a disposition or court order, must include 
6.10 	a copy of that data in the student's educational records if they are transmitted to another 
6.11 	school, unless the data are required to be destroyed under paragraph (c) or section 121A.75. 

6.12 	Sec. 2. Minnesota Statutes 2006, section 120B.15, is amended to read:
6.13 	120B.15 GIFTED AND TALENTED STUDENTS PROGRAMS.
6.14 	(a) School districts may identify students, locally develop programs, provide 
6.15 	staff development, and evaluate programs to provide gifted and talented students with 
6.16 	challenging educational programs.
6.17 	(b) School districts may adopt guidelines for assessing and identifying students for 
6.18 	participation in gifted and talented programs. The guidelines should include the use of:
6.19 	(1) multiple and objective criteria; and
6.20 	(2) assessments and procedures that are valid and reliable, fair, and based on current 
6.21 	theory and research.
6.22 	(c) School districts must adopt policies and procedures for the academic acceleration 
6.23 	of gifted and talented students. These policies and procedures must include how the 
6.24 	district will:
6.25 	(1) assess a student's readiness and motivation for acceleration; and
6.26 	(2) match the level, complexity, and pace of the curriculum to a student to achieve 
6.27 	the best type of academic acceleration for that student.

6.28 	Sec. 3. Minnesota Statutes 2006, section 120B.30, is amended to read:
6.29 	120B.30 STATEWIDE TESTING AND REPORTING SYSTEM.
6.30 		Subdivision 1.Statewide testing. (a) The commissioner, with advice from experts 
6.31 	with appropriate technical qualifications and experience and stakeholders, consistent with 
6.32 	subdivision 1a, shall include in the comprehensive assessment system, for each grade 
6.33 	level to be tested, state-constructed tests developed from and aligned with the state's 
6.34 	required academic standards under section 120B.021 and administered annually to all 
7.1 	students in grades 3 through 8 and at the high school level. A state-developed test in a 
7.2 	subject other than writing, developed after the 2002-2003 school year, must include both 
7.3 	machine-scoreable and constructed response questions. The commissioner shall establish 
7.4 	one or more months during which schools shall administer the tests to students each 
7.5 	school year. For students enrolled in grade 8 before the 2005-2006 school year, only 
7.6 	Minnesota basic skills tests in reading, mathematics, and writing shall fulfill students' 
7.7 	basic skills testing requirements for a passing state notation. The passing scores of the 
7.8 	state basic skills tests in reading and mathematics are the equivalent of:
7.9 	(1) 70 percent correct for students entering grade 9 in 1996; and
7.10 	(2) 75 percent correct for students entering grade 9 in 1997 and thereafter, as based 
7.11 	on the first uniform test administration of February 1998.
7.12 	(b) For students enrolled in grade 8 in the 2005-2006 school year and later, only 
7.13 	the Minnesota Comprehensive Assessments Second Edition (MCA-IIs) in reading, 
7.14 	mathematics, and writing following options shall fulfill students' academic standard state 
7.15 	graduation test requirements.:
7.16 	(1) for reading and mathematics:
7.17 	(i) obtaining an achievement level equivalent to or greater than proficient as 
7.18 	determined through a standard setting process on the Minnesota comprehensive 
7.19 	assessments in grade 10 for reading and grade 11 for mathematics or achieving a passing 
7.20 	score as determined through a standard setting process on the graduation-required 
7.21 	assessment for diploma in grade 10 for reading and grade 11 for mathematics or 
7.22 	subsequent retests;
7.23 	(ii) achieving a passing score as determined through a standard setting process on the 
7.24 	state-identified language proficiency test in reading and the mathematics test for English 
7.25 	language learners or the graduation-required assessment for diploma equivalent of those 
7.26 	assessments for students designated as English language learners;
7.27 	(iii) achieving an individual passing score on the graduation-required assessment 
7.28 	for diploma as determined by appropriate state guidelines for students with an individual 
7.29 	education plan or 504 plan;
7.30 	(iv) obtaining achievement level equivalent to or greater than proficient as 
7.31 	determined through a standard setting process on the state-identified alternate assessment 
7.32 	or assessments in grade 10 for reading and grade 11 for mathematics for students with 
7.33 	an individual education plan; or
7.34 	(v) achieving an individual passing score on the state-identified alternate assessment 
7.35 	or assessments as determined by appropriate state guidelines for students with an 
7.36 	individual education plan; and
8.1 	(2) for writing:
8.2 	(i) achieving a passing score on the graduation-required assessment for diploma;
8.3 	(ii) achieving a passing score as determined through a standard setting process on 
8.4 	the state-identified language proficiency test in writing for students designated as English 
8.5 	language learners;
8.6 	(iii) achieving an individual passing score on the graduation-required assessment 
8.7 	for diploma as determined by appropriate state guidelines for students with an individual 
8.8 	education plan or 504 plan; or
8.9 	(iv) achieving an individual passing score on the state-identified alternate assessment 
8.10 	or assessments as determined by appropriate state guidelines for students with an 
8.11 	individual education plan.
8.12 	The commissioner shall establish rules for the proper implementation, 
8.13 	administration, and public review of the state graduation tests.
8.14 	(b) (c) The third 3rd through 8th grade and high school level test results shall 
8.15 	be available to districts for diagnostic purposes affecting student learning and district 
8.16 	instruction and curriculum, and for establishing educational accountability. The 
8.17 	commissioner must disseminate to the public the test results upon receiving those results.
8.18 	(c) (d) State tests must be constructed and aligned with state academic standards. The 
8.19 	testing process and the order of administration shall be determined by the commissioner. 
8.20 	The statewide results shall be aggregated at the site and district level, consistent with 
8.21 	subdivision 1a.
8.22 	(d) (e) In addition to the testing and reporting requirements under this section, the 
8.23 	commissioner shall include the following components in the statewide public reporting 
8.24 	system:
8.25 	(1) uniform statewide testing of all students in grades 3 through 8 and at the high 
8.26 	school level that provides technically sound accommodations, alternate assessments, or
8.27 	exemptions consistent with applicable federal law, only with parent or guardian approval, 
8.28 	for those very few students for whom the student's individual education plan team under 
8.29 	sections 125A.05 and 125A.06, determines that the general statewide test is inappropriate 
8.30 	for a student is incapable of taking a statewide test, or for a limited English proficiency 
8.31 	student under section 124D.59, subdivision 2, if the student has been in the United States 
8.32 	for fewer than three years;
8.33 	(2) educational indicators that can be aggregated and compared across school 
8.34 	districts and across time on a statewide basis, including average daily attendance, high 
8.35 	school graduation rates, and high school drop-out rates by age and grade level;
8.36 	(3) students' scores state results on the American College Test; and
9.1 	(4) state results from participation in the National Assessment of Educational 
9.2 	Progress so that the state can benchmark its performance against the nation and other 
9.3 	states, and, where possible, against other countries, and contribute to the national effort 
9.4 	to monitor achievement.
9.5 	(e) Districts must report exemptions under paragraph (d), clause (1), to the 
9.6 	commissioner consistent with a format provided by the commissioner.
9.7 		Subd. 1a.Statewide and local assessments; results. (a) The commissioner must 
9.8 	develop reading, mathematics, and science assessments aligned with state academic 
9.9 	standards that districts and sites must use to monitor student growth toward achieving 
9.10 	those standards. The commissioner must not develop statewide assessments for academic 
9.11 	standards in social studies, health and physical education, and the arts. The commissioner 
9.12 	must require:
9.13 	(1) annual reading and mathematics assessments in grades 3 through 8 and at the 
9.14 	high school level for the 2005-2006 school year and later; and
9.15 	(2) annual science assessments in one grade in the grades 3 through 5 span, the 
9.16 	grades 6 through 9 span, and a life sciences assessment in the grades 10 through 12 span 
9.17 	for the 2007-2008 school year and later.
9.18 	(b) The commissioner must ensure that all statewide tests administered to elementary 
9.19 	and secondary students measure students' academic knowledge and skills and not students' 
9.20 	values, attitudes, and beliefs.
9.21 	(c) Reporting of assessment results must:
9.22 	(1) provide timely, useful, and understandable information on the performance of 
9.23 	individual students, schools, school districts, and the state;
9.24 	(2) include, by the 2006-2007 school year, a value-added component to measure 
9.25 	student achievement growth over time; and
9.26 	(3)(i) for students enrolled in grade 8 before the 2005-2006 school year, determine 
9.27 	whether students have met the state's basic skills requirements; and
9.28 	(ii) for students enrolled in grade 8 in the 2005-2006 school year and later, determine 
9.29 	whether students have met the state's academic standards.
9.30 	(d) Consistent with applicable federal law and subdivision 1, paragraph (d), clause 
9.31 	(1), the commissioner must include technically sound accommodations or alternative 
9.32 	assessments for the very few students with disabilities for whom statewide assessments 
9.33 	are inappropriate and for students with limited English proficiency.
9.34 	(e) A school, school district, and charter school must administer statewide 
9.35 	assessments under this section, as the assessments become available, to evaluate student 
9.36 	progress in achieving the academic standards. If a state assessment is not available, a 
10.1 	school, school district, and charter school must determine locally if a student has met 
10.2 	the required academic standards. A school, school district, or charter school may use a 
10.3 	student's performance on a statewide assessment as one of multiple criteria to determine 
10.4 	grade promotion or retention. A school, school district, or charter school may use a high 
10.5 	school student's performance on a statewide assessment as a percentage of the student's 
10.6 	final grade in a course, or place a student's assessment score on the student's transcript.
10.7 		Subd. 2.Department of Education assistance. The Department of Education 
10.8 	shall contract for professional and technical services according to competitive bidding 
10.9 	procedures under chapter 16C for purposes of this section.
10.10 		Subd. 3.Reporting. The commissioner shall report test data publicly and to 
10.11 	stakeholders, including the three performance baselines performance achievement levels
10.12 	developed from students' unweighted mean test scores in each tested subject and a listing of 
10.13 	demographic factors that strongly correlate with student performance. The commissioner 
10.14 	shall also report data that compares performance results among school sites, school 
10.15 	districts, Minnesota and other states, and Minnesota and other nations. The commissioner 
10.16 	shall disseminate to schools and school districts a more comprehensive report containing 
10.17 	testing information that meets local needs for evaluating instruction and curriculum.
10.18 		Subd. 4.Access to tests. The commissioner must adopt and publish a policy 
10.19 	to provide public and parental access for review of basic skills tests, Minnesota 
10.20 	Comprehensive Assessments, or any other such statewide test and assessment. Upon 
10.21 	receiving a written request, the commissioner must make available to parents or guardians 
10.22 	a copy of their student's actual answer sheet responses to the test questions to be reviewed 
10.23 	by the parent.

10.24 	Sec. 4. Minnesota Statutes 2006, section 122A.16, is amended to read:
10.25 	122A.16 HIGHLY QUALIFIED TEACHER DEFINED.
10.26 	(a) A qualified teacher is one holding a valid license, under this chapter, to perform 
10.27 	the particular service for which the teacher is employed in a public school.
10.28 	(b) For the purposes of the federal No Child Left Behind Act, a highly qualified 
10.29 	teacher is one who holds a valid license under this chapter to perform the particular service 
10.30 	for which the teacher is employed in a public school or who meets the requirements of a 
10.31 	highly objective uniform state standard of evaluation (HOUSSE) means a teacher who: 
10.32 	(1) has obtained full state certification or passed the state teacher licensing 
10.33 	examination and holds a license to teach in the state;
10.34 	(2) does not have certification or licensure requirements waived on an emergency, 
10.35 	temporary, or provisional basis; 
11.1 	(3) holds a minimum of a bachelor's degree; and 
11.2 	(4) has demonstrated subject matter competency in each of the core academic 
11.3 	subjects in which the teacher teaches as defined by the federal No Child Left Behind Act.
11.4 	All Minnesota teachers teaching in a core academic subject area, as defined by the 
11.5 	federal No Child Left Behind Act, in which they are not fully licensed may complete the 
11.6 	following HOUSSE process in the core subject area for which the teacher is requesting 
11.7 	highly qualified status by completing an application, in the form and manner described by 
11.8 	the commissioner, that includes:
11.9 	(1) documentation of student achievement as evidenced by norm-referenced test 
11.10 	results that are objective and psychometrically valid and reliable;
11.11 	(2) evidence of local, state, or national activities, recognition, or awards for 
11.12 	professional contribution to achievement;
11.13 	(3) description of teaching experience in the teachers' core subject area in a public 
11.14 	school under a waiver, variance, limited license or other exception; nonpublic school; and 
11.15 	postsecondary institution;
11.16 	(4) test results from the Praxis II content test;
11.17 	(5) evidence of advanced certification from the National Board for Professional 
11.18 	Teaching Standards;
11.19 	(6) evidence of the successful completion of course work or pedagogy courses; and
11.20 	(7) evidence of the successful completion of high quality professional development 
11.21 	activities.
11.22 	Districts must assign a school administrator to serve as a HOUSSE reviewer to 
11.23 	meet with teachers under this paragraph and, where appropriate, certify the teachers' 
11.24 	applications. Teachers satisfy the definition of highly qualified when the teachers receive 
11.25 	at least 100 of the total number of points used to measure the teachers' content expertise 
11.26 	under clauses (1) to (7). Teachers may acquire up to 50 points only in any one clause (1) 
11.27 	to (7). Teachers may use the HOUSSE process to satisfy the definition of highly qualified 
11.28 	for more than one subject area.
11.29 	(c) Achievement of the HOUSSE criteria is not equivalent to a license. A teacher 
11.30 	must obtain permission from the Board of Teaching in order to teach in a public school
11.31 	Subject matter competency to meet federal highly qualified teacher requirements is 
11.32 	determined by the state in compliance with the Elementary and Secondary Education Act, 
11.33 	United States Code, title 20, section 7801(23), and Individuals with Disabilities Education 
11.34 	Improvement Act, United States Code, title 20, section 1401(10).

11.35 	Sec. 5. Minnesota Statutes 2006, section 123B.143, subdivision 1, is amended to read:
12.1 		Subdivision 1.Contract; duties. All districts maintaining a classified secondary 
12.2 	school must employ a superintendent who shall be an ex officio nonvoting member of the 
12.3 	school board. The authority for selection and employment of a superintendent must be 
12.4 	vested in the board in all cases. An individual employed by a board as a superintendent 
12.5 	shall have an initial employment contract for a period of time no longer than three years 
12.6 	from the date of employment. Any subsequent employment contract must not exceed a 
12.7 	period of three years. A board, at its discretion, may or may not renew an employment 
12.8 	contract. A board must not, by action or inaction, extend the duration of an existing 
12.9 	employment contract. Beginning 365 days prior to the expiration date of an existing 
12.10 	employment contract, a board may negotiate and enter into a subsequent employment 
12.11 	contract to take effect upon the expiration of the existing contract. A subsequent contract 
12.12 	must be contingent upon the employee completing the terms of an existing contract. If a 
12.13 	contract between a board and a superintendent is terminated prior to the date specified in 
12.14 	the contract, the board may not enter into another superintendent contract with that same 
12.15 	individual that has a term that extends beyond the date specified in the terminated contract. 
12.16 	A board may terminate a superintendent during the term of an employment contract for any 
12.17 	of the grounds specified in section 122A.40, subdivision 9 or 13. A superintendent shall 
12.18 	not rely upon an employment contract with a board to assert any other continuing contract 
12.19 	rights in the position of superintendent under section 122A.40. Notwithstanding the 
12.20 	provisions of sections 122A.40, subdivision 10 or 11, 123A.32, 123A.75, or any other law 
12.21 	to the contrary, no individual shall have a right to employment as a superintendent based 
12.22 	on order of employment in any district. If two or more districts enter into an agreement for 
12.23 	the purchase or sharing of the services of a superintendent, the contracting districts have 
12.24 	the absolute right to select one of the individuals employed to serve as superintendent 
12.25 	in one of the contracting districts and no individual has a right to employment as the 
12.26 	superintendent to provide all or part of the services based on order of employment in a 
12.27 	contracting district. The superintendent of a district shall perform the following: 
12.28 	(1) visit and supervise the schools in the district, report and make recommendations 
12.29 	about their condition when advisable or on request by the board;
12.30 	(2) recommend to the board employment and dismissal of teachers;
12.31 	(3) superintend school grading practices and examinations for promotions;
12.32 	(4) make reports required by the commissioner; and
12.33 	(5) by January 10, submit an annual report to the commissioner in a manner 
12.34 	prescribed by the commissioner, in consultation with school districts, identifying the 
12.35 	expenditures that the district requires to ensure an 80 percent student passage rate on the 
12.36 	basic standards test taken in the eighth grade, identifying the highest student passage 
13.1 	rate the district expects it will be able to attain on the basic standards test by grade 12, 
13.2 	the amount of expenditures that the district requires to attain the targeted student passage 
13.3 	rate, and how much the district is cross-subsidizing programs with special education, basic 
13.4 	skills, and general education revenue; and
13.5 	(6) perform other duties prescribed by the board.

13.6 	Sec. 6. Minnesota Statutes 2006, section 123B.92, subdivision 3, is amended to read:
13.7 		Subd. 3.Alternative attendance programs. (a) A district that enrolls nonresident 
13.8 	pupils in programs under sections 124D.03, 124D.06, 124D.08, 123A.05 to 123A.08, 
13.9 	and 124D.68, must provide authorized transportation to the pupil within the attendance 
13.10 	area for the school that the pupil attends at the same level of service that is provided to 
13.11 	resident pupils within the attendance area. The resident district need not provide or pay for 
13.12 	transportation between the pupil's residence and the district's border. 
13.13 	(b) A district may provide transportation to allow a student who attends a high-need 
13.14 	English language learner program and who resides within the transportation attendance 
13.15 	area of the program to continue in the program until the student completes the highest 
13.16 	grade level offered by the program.

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

13.18 	Sec. 7. Minnesota Statutes 2006, section 124D.095, subdivision 3, is amended to read:
13.19 		Subd. 3.Authorization; notice; limitations on enrollment. (a) A student may 
13.20 	apply to an online learning provider to enroll in online learning. A student age 17 or 
13.21 	younger must have the written consent of a parent or guardian to apply. No school district 
13.22 	or charter school may prohibit a student from applying to enroll in online learning. An 
13.23 	online learning provider that accepts a student under this section must, within ten days, 
13.24 	notify the student and the enrolling district if the enrolling district is not the online learning 
13.25 	provider. The notice must report the student's course or program and hours of instruction.
13.26 	(b) An online learning student must notify the enrolling district at least 30 calendar 
13.27 	days before taking an online learning course or program if the enrolling district is not 
13.28 	providing the online learning. An online learning provider must notify the commissioner 
13.29 	that it is delivering online learning and report the number of online learning students it is 
13.30 	accepting and the online learning courses and programs it is delivering.
13.31 	(c) An online learning provider may limit enrollment if the provider's school board 
13.32 	or board of directors adopts by resolution specific standards for accepting and rejecting 
13.33 	students' applications. Student applications may not be rejected for criteria listed in 
13.34 	section 124D.03, subdivision 6.
14.1 	(d) An enrolling district may reduce an online learning student's regular classroom 
14.2 	instructional membership in proportion to the student's membership in online learning 
14.3 	courses.

14.4 	Sec. 8. Minnesota Statutes 2006, section 124D.10, subdivision 4, is amended to read:
14.5 		Subd. 4.Formation of school. (a) A sponsor may authorize one or more licensed 
14.6 	teachers under section 122A.18, subdivision 1, to operate a charter school subject to 
14.7 	approval by the commissioner. A board must vote on charter school application for 
14.8 	sponsorship no later than 90 days after receiving the application. After 90 days, the 
14.9 	applicant may apply to the commissioner. If a board elects not to sponsor a charter school, 
14.10 	the applicant may appeal the board's decision to the commissioner who may elect to assist 
14.11 	the applicant in finding an eligible sponsor. The school must be organized and operated as 
14.12 	a cooperative under chapter 308A or nonprofit corporation under chapter 317A and the 
14.13 	provisions under the applicable chapter shall apply to the school except as provided in this 
14.14 	section. Notwithstanding sections 465.717 and 465.719, a school district may create a 
14.15 	corporation for the purpose of creating a charter school.
14.16 	(b) Before the operators may form and operate a school, the sponsor must file an 
14.17 	affidavit with the commissioner stating its intent to authorize a charter school. The 
14.18 	affidavit must state the terms and conditions under which the sponsor would authorize a 
14.19 	charter school and how the sponsor intends to oversee the fiscal and student performance 
14.20 	of the charter school and to comply with the terms of the written contract between the 
14.21 	sponsor and the charter school board of directors under subdivision 6. The commissioner 
14.22 	must approve or disapprove the sponsor's proposed authorization within 90 days of 
14.23 	receipt of the affidavit. Failure to obtain commissioner approval precludes a sponsor from 
14.24 	authorizing the charter school that was the subject of the affidavit.
14.25 	(c) The operators authorized to organize and operate a school, before entering into 
14.26 	a contract or other agreement for professional or other services, goods, or facilities, 
14.27 	must incorporate as a cooperative under chapter 308A or as a nonprofit corporation 
14.28 	under chapter 317A and must establish a board of directors composed of at least five 
14.29 	members until a timely election for members of the charter school board of directors is 
14.30 	held according to the school's articles and bylaws. A charter school board of directors 
14.31 	must be composed of at least five members. Any staff members who are employed at the 
14.32 	school, including teachers providing instruction under a contract with a cooperative, and 
14.33 	all parents of children enrolled in the school may participate in the election for members 
14.34 	of the school's board of directors. Licensed teachers employed at the school, including 
14.35 	teachers providing instruction under a contract with a cooperative, must be a majority 
15.1 	of the members of the board of directors before the school completes its third year of 
15.2 	operation, unless the commissioner waives the requirement for a majority of licensed 
15.3 	teachers on the board. Board of director meetings must comply with chapter 13D.
15.4 	(d) The granting or renewal of a charter by a sponsoring entity must not be 
15.5 	conditioned upon the bargaining unit status of the employees of the school.
15.6 	(e) A sponsor may authorize the operators of a charter school to expand the 
15.7 	operation of the charter school to additional sites or to add additional grades at the school 
15.8 	beyond those described in the sponsor's application as approved by the commissioner only 
15.9 	after submitting a supplemental application to the commissioner in a form and manner 
15.10 	prescribed by the commissioner. The supplemental application must provide evidence that:
15.11 	(1) the expansion of the charter school is supported by need and projected enrollment;
15.12 	(2) the charter school is fiscally sound;
15.13 	(3) the sponsor supports the expansion; and
15.14 	(4) the building of the additional site meets all health and safety requirements to 
15.15 	be eligible for lease aid.
15.16 	(f) The commissioner annually must provide timely financial management training 
15.17 	to newly elected members of a charter school board of directors and ongoing training to 
15.18 	other members of a charter school board of directors. Training must address ways to:
15.19 	(1) proactively assess opportunities for a charter school to maximize all available 
15.20 	revenue sources;
15.21 	(2) establish and maintain complete, auditable records for the charter school;
15.22 	(3) establish proper filing techniques;
15.23 	(4) document formal actions of the charter school, including meetings of the charter 
15.24 	school board of directors;
15.25 	(5) properly manage and retain charter school and student records;
15.26 	(6) comply with state and federal payroll record-keeping requirements; and
15.27 	(7) address other similar factors that facilitate establishing and maintaining complete 
15.28 	records on the charter school's operations.

15.29 	Sec. 9. Minnesota Statutes 2006, section 124D.10, subdivision 23a, is amended to read:
15.30 		Subd. 23a.Related party lease costs. (a) A charter school is prohibited from 
15.31 	entering a lease of real property with a related party as defined in this subdivision 26, unless 
15.32 	the lessor is a nonprofit corporation under chapter 317A or a cooperative under chapter 
15.33 	308A, and the lease cost is reasonable under section 124D.11, subdivision 4, clause (1). 
15.34 	(b) For purposes of this subdivision section and section 124D.11:
16.1 	(1) A "related party" is an affiliate or close relative of the other party in question, an 
16.2 	affiliate of a close relative, or a close relative of an affiliate.
16.3 	(2) "Affiliate" means a person that directly, or indirectly through one or more 
16.4 	intermediaries, controls, or is controlled by, or is under common control with, another 
16.5 	person.
16.6 	(3) "Close relative" means an individual whose relationship by blood, marriage, or 
16.7 	adoption to another individual is no more remote than first cousin.
16.8 	(4) "Person" means an individual or entity of any kind.
16.9 	(5) "Control" includes the terms "controlling," "controlled by," and "under common 
16.10 	control with" and means the possession, direct or indirect, of the power to direct or cause 
16.11 	the direction of the management, operations, or policies of a person, whether through the 
16.12 	ownership of voting securities, by contract, or otherwise.
16.13 	(c) A lease of real property to be used for a charter school, not excluded in paragraph 
16.14 	(b) (a), must contain the following statement: "This lease is subject to Minnesota Statutes, 
16.15 	section 124D.10, subdivision 23a." 
16.16 	(d) If a charter school enters into as lessee a lease with a related party and the 
16.17 	charter school subsequently closes, the commissioner has the right to recover from the 
16.18 	lessor any lease payments in excess of those that are reasonable under section 124D.11, 
16.19 	subdivision 4, clause (1). 

16.20 	Sec. 10. Minnesota Statutes 2006, section 124D.10, subdivision 24, is amended to read:
16.21 		Subd. 24.Pupil enrollment upon nonrenewal or termination of charter school 
16.22 	contract. If a contract is not renewed or is terminated according to subdivision 23, a 
16.23 	pupil who attended the school, siblings of the pupil, or another pupil who resides in the 
16.24 	same place as the pupil may enroll in the resident district or may submit an application 
16.25 	to a nonresident district according to section 124D.03 at any time. Applications and 
16.26 	notices required by section 124D.03 must be processed and provided in a prompt 
16.27 	manner. The application and notice deadlines in section 124D.03 do not apply under 
16.28 	these circumstances. The closed charter school must transfer the student's educational 
16.29 	records to the student's school district of residence where the records must be retained or 
16.30 	transferred under section 122A.22, subdivision 7.

16.31 	Sec. 11. Minnesota Statutes 2006, section 124D.4531, subdivision 1, is amended to 
16.32 	read:
17.1 		Subdivision 1.Career and technical levy. (a) A district with a career and technical 
17.2 	program approved under this section for the fiscal year in which the levy is certified 
17.3 	may levy an amount equal to the lesser of:
17.4 	(1) $80 times the district's average daily membership served in grades 10 through 12 
17.5 	for the fiscal year in which the levy is certified; or
17.6 	(2) 25 percent of approved expenditures in the fiscal year in which the levy is 
17.7 	certified for the following:
17.8 	(i) salaries paid to essential, licensed personnel providing direct instructional 
17.9 	services to students in that fiscal year for services rendered in the district's approved 
17.10 	career and technical education programs;
17.11 	(ii) contracted services provided by a public or private agency other than a Minnesota 
17.12 	school district or cooperative center under subdivision 7;
17.13 	(iii) necessary travel between instructional sites by licensed career and technical 
17.14 	education personnel;
17.15 	(iv) necessary travel by licensed career and technical education personnel for 
17.16 	vocational student organization activities held within the state for instructional purposes;
17.17 	(v) curriculum development activities that are part of a five-year plan for 
17.18 	improvement based on program assessment;
17.19 	(vi) necessary travel by licensed career and technical education personnel for 
17.20 	noncollegiate credit-bearing professional development; and
17.21 	(vii) specialized vocational instructional supplies.
17.22 	(b) Up to ten percent of a district's career and technical levy may be spent on 
17.23 	equipment purchases. Districts using the career and technical levy for equipment 
17.24 	purchases must report to the department on the improved learning opportunities for 
17.25 	students that result from the investment in equipment.
17.26 	(c) The district must recognize the full amount of this levy as revenue for the fiscal 
17.27 	year in which it is certified.

17.28 	Sec. 12. Minnesota Statutes 2006, section 124D.4531, subdivision 3, is amended to 
17.29 	read:
17.30 		Subd. 3.Levy guarantee. Notwithstanding subdivision 1, the career and technical 
17.31 	education levy for a district is not less than the lesser of:
17.32 	(1) the district's career and technical education levy authority for the previous 
17.33 	fiscal year; or
17.34 	(2) 100 percent of the approved expenditures for career and technical programs 
17.35 	included in subdivision 1, paragraph (b) (a), for the fiscal year in which the levy is certified.

18.1 	Sec. 13. [124D.645] MULTIRACIAL DIVERSITY.
18.2 	(a) Notwithstanding other law or rule to the contrary, and in order to effectively 
18.3 	meet students' educational needs and foster parents' meaningful participation in their 
18.4 	children's education, a school district may apply to the commissioner for a waiver from 
18.5 	the requirement to maintain racial balance within a district school if the racial imbalance 
18.6 	in that school results from:
18.7 	(1) the enrollment of protected multiracial students and the proportion of enrolled 
18.8 	multiracial students reflects the proportion of multiracial students who reside in the school 
18.9 	attendance area or who are enrolled in the grade levels served by the district; or
18.10 	(2) the enrollment of limited English proficiency students in a transition program 
18.11 	that includes an intensive English component.
18.12 	The commissioner must grant the waiver if the district in which the school is located 
18.13 	offers the multiracial students or the limited English proficiency students, as appropriate, 
18.14 	the option of enrolling in another school with the requisite racial balance, and the students' 
18.15 	parents choose not to pursue that option.
18.16 	(b) This section is effective for the 2006-2007 through 2010-2011 school years or 
18.17 	until amended rules are adopted under Minnesota Rules, chapter 3535, pertaining to racial 
18.18 	diversity, whichever comes first.

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

18.20 	Sec. 14. Minnesota Statutes 2006, section 124D.84, subdivision 1, is amended to read:
18.21 		Subdivision 1.Awards. The commissioner may award shall establish procedures for 
18.22 	the distribution of scholarships to any Minnesota resident student who is of one-fourth or 
18.23 	more Indian ancestry, who has applied for other existing state and federal scholarship and 
18.24 	grant programs, and who, in the opinion of the commissioner, based upon postsecondary 
18.25 	institution recommendations, has the capabilities to benefit from further education. 
18.26 	Scholarships must be for accredited degree programs in accredited Minnesota colleges 
18.27 	or universities or for courses in accredited Minnesota business, technical, or vocational 
18.28 	schools. Scholarships may also be given to students attending Minnesota colleges that 
18.29 	are in candidacy status for obtaining full accreditation, and are eligible for and receiving 
18.30 	federal financial aid programs. Students are also eligible for scholarships when enrolled 
18.31 	as students in Minnesota higher education institutions that have joint programs with 
18.32 	other accredited higher education institutions. Scholarships shall be used to defray the 
18.33 	total cost of education including tuition, incidental fees, books, supplies, transportation, 
18.34 	other related school costs and the cost of board and room and shall be paid directly to the 
18.35 	college or school concerned where the student receives federal financial aid. The total cost 
19.1 	of education includes all tuition and fees for each student enrolling in a public institution 
19.2 	and the portion of tuition and fees for each student enrolling in a private institution that 
19.3 	does not exceed the tuition and fees at a comparable public institution. Each student 
19.4 	shall be awarded a scholarship based on the total cost of the student's education and
19.5 	a federal standardized need analysis after application of federal Pell money, state grant 
19.6 	money, and other scholarships. Depending upon students' unmet needs, the Minnesota 
19.7 	Indian scholarship program may award up to the current federal Pell grant allowable 
19.8 	maximum student award per school year. Applicants are encouraged to apply for all other 
19.9 	sources of financial aid.
19.10 	When an Indian student satisfactorily completes the work required by a certain 
19.11 	college or school in a school year the student is eligible for additional scholarships, if 
19.12 	additional training is necessary to reach the student's educational and vocational objective. 
19.13 	Scholarships may not be given to any Indian student for more than five years of study at 
19.14 	the undergraduate level and five years at the graduate level. Students may acquire only 
19.15 	one degree per level and one terminal degree.

19.16 	Sec. 15. REVISOR'S INSTRUCTION.
 19.17 	In Minnesota Statutes, the revisor of statutes shall codify Minnesota Statutes, 
19.18 	section 124D.10, subdivision 23a, paragraph (b), as Minnesota Statutes, section 124D.10, 
19.19 	subdivision 26.

19.20 	Sec. 16.  REPEALER.
 19.21 	Minnesota Statutes 2006, section 124D.62, is repealed.

19.22 	ARTICLE 3
19.23 	SPECIAL PROGRAMS

19.24 	Section 1. Minnesota Statutes 2006, section 125A.11, subdivision 1, is amended to read:
19.25 		Subdivision 1.Nonresident tuition rate; other costs. (a) For fiscal year 2006, 
19.26 	when a school district provides instruction and services outside the district of residence, 
19.27 	board and lodging, and any tuition to be paid, shall be paid by the district of residence. 
19.28 	The tuition rate to be charged for any child with a disability, excluding a pupil for whom 
19.29 	tuition is calculated according to section 127A.47, subdivision 7, paragraph (d), must be 
19.30 	the sum of (1) the actual cost of providing special instruction and services to the child 
19.31 	including a proportionate amount for special transportation and unreimbursed building 
19.32 	lease and debt service costs for facilities used primarily for special education, plus (2) 
19.33 	the amount of general education revenue and referendum aid attributable to the pupil, 
20.1 	minus (3) the amount of special education aid for children with a disability received 
20.2 	on behalf of that child, minus (4) if the pupil receives special instruction and services 
20.3 	outside the regular classroom for more than 60 percent of the school day, the amount of 
20.4 	general education revenue and referendum aid, excluding portions attributable to district 
20.5 	and school administration, district support services, operations and maintenance, capital 
20.6 	expenditures, and pupil transportation, attributable to that pupil for the portion of time 
20.7 	the pupil receives special instruction and services outside of the regular classroom. If 
20.8 	the boards involved do not agree upon the tuition rate, either board may apply to the 
20.9 	commissioner to fix the rate. Notwithstanding chapter 14, the commissioner must then set 
20.10 	a date for a hearing or request a written statement from each board, giving each board 
20.11 	at least ten days' notice, and after the hearing or review of the written statements the 
20.12 	commissioner must make an order fixing the tuition rate, which is binding on both school 
20.13 	districts. General education revenue and referendum equalization aid attributable to a 
20.14 	pupil must be calculated using the resident district's average general education revenue 
20.15 	and referendum revenue equalization aid per adjusted pupil unit.
20.16 	(b) For fiscal year 2007 and later, when a school district provides special instruction 
20.17 	and services for a pupil with a disability as defined in section 125A.02 outside the district 
20.18 	of residence, excluding a pupil for whom an adjustment to special education aid is 
20.19 	calculated according to section 127A.47, subdivision 7, paragraph (e), special education 
20.20 	aid paid to the resident district must be reduced by an amount equal to (1) the actual 
20.21 	cost of providing special instruction and services to the pupil, including a proportionate 
20.22 	amount for special transportation and unreimbursed building lease and debt service 
20.23 	costs for facilities used primarily for special education, plus (2) the amount of general 
20.24 	education revenue and referendum equalization aid attributable to that pupil, minus (3) 
20.25 	the amount of special education aid for children with a disability received on behalf of 
20.26 	that child, minus (4) if the pupil receives special instruction and services outside the 
20.27 	regular classroom for more than 60 percent of the school day, the amount of general 
20.28 	education revenue and referendum equalization aid, excluding portions attributable to 
20.29 	district and school administration, district support services, operations and maintenance, 
20.30 	capital expenditures, and pupil transportation, attributable to that pupil for the portion of 
20.31 	time the pupil receives special instruction and services outside of the regular classroom. 
20.32 	General education revenue and referendum equalization aid attributable to a pupil must be 
20.33 	calculated using the resident district's average general education revenue and referendum 
20.34 	equalization aid per adjusted pupil unit. Special education aid paid to the district or 
20.35 	cooperative providing special instruction and services for the pupil must be increased 
20.36 	by the amount of the reduction in the aid paid to the resident district. Amounts paid 
21.1 	to cooperatives under this subdivision and section 127A.47, subdivision 7, shall be 
21.2 	recognized and reported as revenues and expenditures on the resident school district's 
21.3 	books of account under sections 123B.75 and 123B.76. If the resident district's special 
21.4 	education aid is insufficient to make the full adjustment, the remaining adjustment shall be 
21.5 	made to other state aid due to the district.
21.6 	(c) Notwithstanding paragraphs (a) and (b) and section 127A.47, subdivision 7, 
21.7 	paragraphs (d) and (e), a charter school where more than 30 percent of enrolled students 
21.8 	receive special education and related services, a care and treatment site approved under 
21.9 	section 125A.515, an intermediate district, a special education cooperative, or a school 
21.10 	district that served as the applicant agency for a group of school districts for federal 
21.11 	special education aids for fiscal year 2006 may apply to the commissioner for authority to 
21.12 	charge the resident district an additional amount to recover any remaining unreimbursed 
21.13 	costs of serving pupils with a disability. The application must include a description of the 
21.14 	costs and the calculations used to determine the unreimbursed portion to be charged to the 
21.15 	resident district. Amounts approved by the commissioner under this paragraph must be 
21.16 	included in the tuition billings or aid adjustments under paragraph (a) or (b), or section 
21.17 	127A.47, subdivision 7, paragraph (d) or (e), as applicable.
21.18 	(d) For purposes of this subdivision and section 127A.47, subdivision 7, paragraphs 
21.19 	(d) and (e), "general education revenue and referendum aid" means the sum of the general 
21.20 	education revenue according to section 126C.10, subdivision 1, excluding alternative 
21.21 	teacher compensation revenue, plus the referendum aid according to section 126C.17, 
21.22 	subdivision 7, as adjusted according to section 127A.47, subdivision 7, paragraphs (a) 
21.23 	to (c).

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

21.25 	Sec. 2. Minnesota Statutes 2006, section 125A.14, is amended to read:
21.26 	125A.14 SUMMER PROGRAMS EXTENDED SCHOOL YEAR.
21.27 	A district may provide summer programsextended school year services for children 
21.28 	with a disability living within the district and nonresident children temporarily placed in 
21.29 	the district pursuant to section 125A.15 or 125A.16. Prior to March 31 or 30 days after the 
21.30 	child with a disability is placed in the district, whichever is later, the providing district 
21.31 	shall give notice to the district of residence of any nonresident children temporarily placed 
21.32 	in the district pursuant to section 125A.15 or 125A.16, of its intention to provide these 
21.33 	programs. Notwithstanding any contrary provisions in sections 125A.15 and 125A.16, the 
21.34 	district providing the special instruction and services must apply for special education 
22.1 	aid for the summer program extended school year services. The unreimbursed actual cost 
22.2 	of providing the program for nonresident children with a disability, including the cost of 
22.3 	board and lodging, may be billed to the district of the child's residence and must be paid 
22.4 	by the resident district. Transportation costs must be paid by the district responsible 
22.5 	for providing transportation pursuant to section 125A.15 or 125A.16 and transportation 
22.6 	aid must be paid to that district. 

22.7 	Sec. 3. Minnesota Statutes 2006, section 125A.75, subdivision 1, is amended to read:
22.8 		Subdivision 1.Travel aid. The state must pay each district one-half of the sum 
22.9 	actually expended by a district, based on mileage, for necessary travel of essential 
22.10 	personnel providing home-based or community-based services to children with a disability 
22.11 	under age five and their families.

22.12 	Sec. 4. Minnesota Statutes 2006, section 125A.75, subdivision 4, is amended to read:
22.13 		Subd. 4.Program and aid approval. Before June 1 of each year, each district 
22.14 	providing special instruction and services to children with a disability must submit to 
22.15 	the commissioner an application for approval of these programs and their budgets for 
22.16 	the next fiscal year. The application must include an enumeration of the costs proposed 
22.17 	as eligible for state aid pursuant to this section and of the estimated number and grade 
22.18 	level of children with a disability in the district who will receive special instruction and 
22.19 	services during the regular school year and in summer school programs during the next 
22.20 	fiscal year. The application must also include any other information deemed necessary by 
22.21 	the commissioner for the calculation of state aid and for the evaluation of the necessity 
22.22 	of the program, the necessity of the personnel to be employed in the program, for 
22.23 	determining the amount which the program will receive from grants from federal funds, 
22.24 	or special grants from other state sources, and the program's compliance with the rules 
22.25 	and standards of the Department of Education. The commissioner shall review each 
22.26 	application to determine whether the program and the personnel to be employed in the 
22.27 	program are actually necessary and essential to meet the district's obligation to provide 
22.28 	special instruction and services to children with a disability pursuant to sections 125A.03
22.29 	to 125A.24, 125A.259 to 125A.48, and 125A.65. The commissioner shall not approve aid 
22.30 	pursuant to this section for any program or for the salary of any personnel determined to 
22.31 	be unnecessary or unessential on the basis of this review. The commissioner may withhold 
22.32 	all or any portion of the aid for programs which receive grants from federal funds, or 
22.33 	special grants from other state sources. By August 31 the commissioner shall approve, 
22.34 	disapprove, or modify each application, and notify each applying district of the action 
23.1 	and of the estimated amount of aid for the programs. The commissioner shall provide 
23.2 	procedures for districts to submit additional applications for program and budget approval 
23.3 	during the fiscal year, for programs needed to meet any substantial changes in the needs 
23.4 	of children with a disability in the district. Notwithstanding the provisions of section 
23.5 	127A.42, the commissioner may modify or withdraw the program or aid approval and 
23.6 	withhold aid pursuant to this section without proceeding according to section 127A.42
23.7 	at any time the commissioner determines that the program does not comply with rules 
23.8 	of the Department of Education or that any facts concerning the program or its budget 
23.9 	differ from the facts in the district's approved application. 

23.10 	Sec. 5. Minnesota Statutes 2006, section 125A.76, subdivision 2, is amended to read:
23.11 		Subd. 2.Special education base revenue. (a) The special education base revenue 
23.12 	equals the sum of the following amounts computed using base year data:
23.13 	(1) 68 percent of the salary of each essential person employed in the district's 
23.14 	program for children with a disability during the fiscal year, whether the person is 
23.15 	employed by one or more districts or a Minnesota correctional facility operating on a 
23.16 	fee-for-service basis;
23.17 	(2) for the Minnesota State Academy for the Deaf or the Minnesota State Academy 
23.18 	for the Blind, 68 percent of the salary of each instructional aide assigned to a child 
23.19 	attending the academy, if that aide is required by the child's individual education plan;
23.20 	(3) for special instruction and services provided to any pupil by contracting with 
23.21 	public, private, or voluntary agencies other than school districts, in place of special 
23.22 	instruction and services provided by the district, 52 percent of the difference between 
23.23 	the amount of the contract and the amount of the basic revenue, as defined in section 
23.24 	126C.10, subdivision 2, special education aid, and any other aid earned on behalf of the 
23.25 	childthe general education revenue, excluding basic skills revenue and alternative teacher 
23.26 	compensation revenue, and referendum equalization aid attributable to a pupil, calculated 
23.27 	using the resident district's average general education revenue and referendum equalization 
23.28 	aid per adjusted pupil unit for the fraction of the school day the pupil receives services 
23.29 	under the contract. This includes children who are residents of the state, receive services 
23.30 	under section 125A.76, subdivisions 1 and 2, and are placed in a care and treatment facility 
23.31 	by court action in a state that does not have a reciprocity agreement with the commissioner 
23.32 	under section 125A.155 as provided for in section 125A.79, subdivision 8; 
23.33 	(4) for special instruction and services provided to any pupil by contracting for 
23.34 	services with public, private, or voluntary agencies other than school districts, that are 
24.1 	supplementary to a full educational program provided by the school district, 52 percent of 
24.2 	the amount of the contract for that pupil;
24.3 	(5) for supplies and equipment purchased or rented for use in the instruction of 
24.4 	children with a disability, an amount equal to 47 percent of the sum actually expended by 
24.5 	the district, or a Minnesota correctional facility operating on a fee-for-service basis, but 
24.6 	not to exceed an average of $47 in any one school year for each child with a disability 
24.7 	receiving instruction;
24.8 	(6) for fiscal years 1997 and later, special education base revenue shall include 
24.9 	amounts under clauses (1) to (5) for special education summer programs provided during 
24.10 	the base year for that fiscal year; and
24.11 	(7) for fiscal years 1999 and later, the cost of providing transportation services for 
24.12 	children with disabilities under section 123B.92, subdivision 1, paragraph (b), clause (4). 
24.13 	The department shall establish procedures through the uniform financial accounting 
24.14 	and reporting system to identify and track all revenues generated from third-party billings 
24.15 	as special education revenue at the school district level; include revenue generated from 
24.16 	third-party billings as special education revenue in the annual cross-subsidy report; and 
24.17 	exclude third-party revenue from calculation of excess cost aid to the districts.
24.18 	(b) If requested by a school district operating a special education program during 
24.19 	the base year for less than the full fiscal year, or a school district in which is located a 
24.20 	Minnesota correctional facility operating on a fee-for-service basis for less than the full 
24.21 	fiscal year, the commissioner may adjust the base revenue to reflect the expenditures 
24.22 	that would have occurred during the base year had the program been operated for the 
24.23 	full fiscal year.
24.24 	(c) Notwithstanding paragraphs (a) and (b), the portion of a school district's base 
24.25 	revenue attributable to a Minnesota correctional facility operating on a fee-for-service 
24.26 	basis during the facility's first year of operating on a fee-for-service basis shall be 
24.27 	computed using current year data.

24.28 	Sec. 6. Minnesota Statutes 2006, section 125A.79, subdivision 8, is amended to read:
24.29 		Subd. 8.Out-of-state tuition. For children who are residents of the state, receive 
24.30 	services under section 125A.76, subdivisions 1 and 2, and are placed in a care and 
24.31 	treatment facility by court action in a state that does not have a reciprocity agreement 
24.32 	with the commissioner under section 125A.155, the resident school district shall submit 
24.33 	the balance of the tuition bills, minus the amount of the basic revenue, as defined by 
24.34 	section 126C.10, subdivision 2, of the district for the child and the general education 
24.35 	revenue, excluding basic skills revenue and alternative teacher compensation revenue, 
25.1 	and referendum equalization aid attributable to the pupil, calculated using the resident 
25.2 	district's average general education revenue and referendum equalization aid per adjusted 
25.3 	pupil unit minus  the special education aid, and any other aid earned on behalf of the child
25.4 	contracted services base revenue attributable to the pupil. 

25.5 	Sec. 7. Minnesota Statutes 2006, section 127A.47, subdivision 7, is amended to read:
25.6 		Subd. 7.Alternative attendance programs. The general education aid and special 
25.7 	education aid for districts must be adjusted for each pupil attending a nonresident district 
25.8 	under sections 123A.05 to 123A.08, 124D.03, 124D.06, 124D.08, and 124D.68. The 
25.9 	adjustments must be made according to this subdivision.
25.10 	(a) General education aid paid to a resident district must be reduced by an amount 
25.11 	equal to the referendum equalization aid attributable to the pupil in the resident district.
25.12 	(b) General education aid paid to a district serving a pupil in programs listed in this 
25.13 	subdivision must be increased by an amount equal to the referendum equalization aid 
25.14 	attributable to the pupil in the nonresident district.
25.15 	(c) If the amount of the reduction to be made from the general education aid of the 
25.16 	resident district is greater than the amount of general education aid otherwise due the 
25.17 	district, the excess reduction must be made from other state aids due the district.
25.18 	(d) For fiscal year 2006, the district of residence must pay tuition to a district or an 
25.19 	area learning center, operated according to paragraph (f), providing special instruction and 
25.20 	services to a pupil with a disability, as defined in section 125A.02, or a pupil, as defined in 
25.21 	section 125A.51, who is enrolled in a program listed in this subdivision. The tuition must 
25.22 	be equal to (1) the actual cost of providing special instruction and services to the pupil, 
25.23 	including a proportionate amount for special transportation and unreimbursed building 
25.24 	lease and debt service costs for facilities used primarily for special education, minus (2) if 
25.25 	the pupil receives special instruction and services outside the regular classroom for more 
25.26 	than 60 percent of the school day, the amount of general education revenue and referendum 
25.27 	equalization aid attributable to that pupil for the portion of time the pupil receives special 
25.28 	instruction and services outside of the regular classroom, excluding portions attributable to 
25.29 	district and school administration, district support services, operations and maintenance, 
25.30 	capital expenditures, and pupil transportation, minus (3) special education aid attributable 
25.31 	to that pupil, that is received by the district providing special instruction and services. 
25.32 	For purposes of this paragraph, general education revenue and referendum equalization 
25.33 	aid attributable to a pupil must be calculated using the serving district's average general 
25.34 	education revenue and referendum equalization aid per adjusted pupil unit.
26.1 	(e) For fiscal year 2007 and later, special education aid paid to a resident district 
26.2 	must be reduced by an amount equal to (1) the actual cost of providing special instruction 
26.3 	and services, including special transportation and unreimbursed building lease and debt 
26.4 	service costs for facilities used primarily for special education, for a pupil with a disability, 
26.5 	as defined in section 125A.02, or a pupil, as defined in section 125A.51, who is enrolled 
26.6 	in a program listed in this subdivision, minus (2) if the pupil receives special instruction 
26.7 	and services outside the regular classroom for more than 60 percent of the school day, 
26.8 	the amount of general education revenue and referendum equalization aid attributable 
26.9 	to that pupil for the portion of time the pupil receives special instruction and services 
26.10 	outside of the regular classroom, excluding portions attributable to district and school 
26.11 	administration, district support services, operations and maintenance, capital expenditures, 
26.12 	and pupil transportation, minus (3) special education aid attributable to that pupil, that is 
26.13 	received by the district providing special instruction and services. For purposes of this 
26.14 	paragraph, general education revenue and referendum equalization aid attributable to a 
26.15 	pupil must be calculated using the serving district's average general education revenue 
26.16 	and referendum equalization aid per adjusted pupil unit. Special education aid paid to the 
26.17 	district or cooperative providing special instruction and services for the pupil, or to the 
26.18 	fiscal agent district for a cooperative, must be increased by the amount of the reduction 
26.19 	in the aid paid to the resident district. If the resident district's special education aid is 
26.20 	insufficient to make the full adjustment, the remaining adjustment shall be made to other 
26.21 	state aids due to the district.
26.22 	(f) An area learning center operated by a service cooperative, intermediate district, 
26.23 	education district, or a joint powers cooperative may elect through the action of the 
26.24 	constituent boards to charge the resident district tuition for pupils rather than to have the 
26.25 	general education revenue paid to a fiscal agent school district. Except as provided in 
26.26 	paragraph (d) or (e), the district of residence must pay tuition equal to at least 90 percent 
26.27 	of the district average general education revenue per pupil unit minus an amount equal to 
26.28 	the product of the formula allowance according to section 126C.10, subdivision 2, times 
26.29 	.0485, calculated without basic skills revenue and transportation sparsity revenue, times 
26.30 	the number of pupil units for pupils attending the area learning center, plus the amount of 
26.31 	compensatory revenue generated by pupils attending the area learning center.

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

26.33 	Sec. 8.  REPEALER.
 26.34 	Minnesota Statutes 2006, sections 125A.10; and 125A.75, subdivision 6, are 
26.35 	repealed.

27.1 	ARTICLE 4
27.2 	FACILITIES AND TECHNOLOGY

27.3 	Section 1. Minnesota Statutes 2006, section 123B.63, subdivision 3, is amended to read:
27.4 		Subd. 3.Capital project levy referendum. A district may levy the local tax 
27.5 	rate approved by a majority of the electors voting on the question to provide funds for 
27.6 	an approved project. The election must take place no more than five years before the 
27.7 	estimated date of commencement of the project. The referendum must be held on a date 
27.8 	set by the board. A referendum for a project not receiving a positive review and comment 
27.9 	by the commissioner under section 123B.71 must be approved by at least 60 percent of the 
27.10 	voters at the election. The referendum may be called by the school board and may be held: 
27.11 	(1) separately, before an election for the issuance of obligations for the project 
27.12 	under chapter 475; or
27.13 	(2) in conjunction with an election for the issuance of obligations for the project 
27.14 	under chapter 475; or
27.15 	(3) notwithstanding section 475.59, as a conjunctive question authorizing both the 
27.16 	capital project levy and the issuance of obligations for the project under chapter 475. Any 
27.17 	obligations authorized for a project may be issued within five years of the date of the 
27.18 	election. 
27.19 	The ballot must provide a general description of the proposed project, state the 
27.20 	estimated total cost of the project, state whether the project has received a positive or 
27.21 	negative review and comment from the commissioner, state the maximum amount of the 
27.22 	capital project levy as a percentage of net tax capacity, state the amount that will be raised 
27.23 	by that local tax rate in the first year it is to be levied, and state the maximum number of 
27.24 	years that the levy authorization will apply.
27.25 	The ballot must contain a textual portion with the information required in this 
27.26 	section and a question stating substantially the following:
27.27 	"Shall the capital project levy proposed by the board of .......... School District 
27.28 	No. .......... be approved?"
27.29 	If approved, the amount provided by the approved local tax rate applied to the net 
27.30 	tax capacity for the year preceding the year the levy is certified may be certified for the 
27.31 	number of years, not to exceed ten, approved.
27.32 	In the event a conjunctive question proposes to authorize both the capital project 
27.33 	levy and the issuance of obligations for the project, appropriate language authorizing the 
27.34 	issuance of obligations must also be included in the question.
27.35 	The district must notify the commissioner of the results of the referendum.

28.1 	ARTICLE 5
28.2 	NUTRITION AND ACCOUNTING

28.3 	Section 1. Minnesota Statutes 2006, section 123B.79, is amended by adding a 
28.4 	subdivision to read:
28.5 		Subd. 9.Elimination of reserve accounts. A school board shall eliminate all 
28.6 	reserve accounts established in the school district's general fund under Minnesota Statutes 
28.7 	before July 1, 2006, for which no specific authority remains in statute as of June 30, 
28.8 	2007. Any balance in the district's reserved for bus purchases account as of June 30, 
28.9 	2007, shall be transferred to the reserved account for operating capital in the school 
28.10 	district's general fund. Any balance in other reserved accounts established in the school 
28.11 	district's general fund under Minnesota Statutes before July 1, 2006, for which no specific 
28.12 	authority remains in statute as of June 30, 2007, shall be transferred to the school district's 
28.13 	unreserved general fund balance. A school board may, upon adoption of a resolution by 
28.14 	the school board, establish a designated account for any program for which a reserved 
28.15 	account has been eliminated.

28.16 	EFFECTIVE DATE. This section is effective June 30, 2007.

28.17 	ARTICLE 6
28.18 	LIBRARIES

28.19 	Section 1. Minnesota Statutes 2006, section 134.31, is amended by adding a 
28.20 	subdivision to read:
28.21 		Subd. 4a.Services to the blind and physically handicapped. The Minnesota 
28.22 	Department of Education shall provide specialized services to the blind and physically 
28.23 	handicapped through the Minnesota Library for the Blind and Physically Handicapped 
28.24 	under a cooperative plan with the National Library Services for the Blind and Physically 
28.25 	Handicapped of the Library of Congress.

28.26 	ARTICLE 7
28.27 	EARLY CHILDHOOD EDUCATION

28.28 	Section 1. Minnesota Statutes 2006, section 119A.52, is amended to read:
28.29 	119A.52 DISTRIBUTION OF APPROPRIATION.
28.30 	(a) The commissioner of education must distribute money appropriated for that 
28.31 	purpose to federally designated Head Start programs to expand services and to serve 
29.1 	additional low-income children. Migrant and Indian reservation programs must be initially 
29.2 	allocated money based on the programs' share of federal funds. The remaining money 
29.3 	must be initially allocated to the remaining local agencies based equally on the agencies' 
29.4 	share of federal funds and on the proportion of eligible children in the agencies' service 
29.5 	area who are not currently being served. A Head Start grantee program must be funded 
29.6 	at a per child rate equal to its contracted, federally funded base level at the start of the 
29.7 	fiscal year. In allocating funds under this paragraph, the commissioner of education 
29.8 	must assure that each Head Start program in existence in 1993 is allocated no less 
29.9 	funding in any fiscal year than was allocated to that program in fiscal year 1993. Before 
29.10 	paying money to the programs, the commissioner must notify each program of its initial 
29.11 	allocation, how the money must be used, and the number of low-income children to be 
29.12 	served with the allocation based upon the federally funded per child rate. Each program 
29.13 	must present a plan under section 119A.535. For any grantee program that cannot utilize 
29.14 	its full allocation at the beginning of the fiscal year, the commissioner must reduce the 
29.15 	allocation proportionately. Money available after the initial allocations are reduced must 
29.16 	be redistributed to eligible grantees programs.
29.17 	(b) The commissioner must develop procedures to make payments to programs 
29.18 	based upon the number of children reported to be enrolled during the required time 
29.19 	period of program operations. Enrollment is defined by federal Head Start regulations. 
29.20 	The procedures must include a reporting schedule, corrective action plan requirements, 
29.21 	and financial consequences to be imposed on programs that do not meet full enrollment 
29.22 	after the period of corrective action. Programs reporting chronic underenrollment, as 
29.23 	defined by the commissioner, will have their subsequent program year allocation reduced 
29.24 	proportionately. Funds made available by prorating payments and allocations to programs 
29.25 	with reported underenrollment will be made available to the extent funds exist to fully 
29.26 	enrolled Head Start programs through a form and manner prescribed by the department.

29.27 	Sec. 2. Minnesota Statutes 2006, section 119A.535, is amended to read:
29.28 	119A.535 APPLICATION REQUIREMENTS.
29.29 	Eligible Head Start organizations must submit a plan to the department for approval 
29.30 	on a form and in the manner prescribed by the commissioner. The plan must include:
29.31 	(1) the estimated number of low-income children and families the program will be 
29.32 	able to serve;
29.33 	(2) a description of the program design and service delivery area which meets the 
29.34 	needs of and encourages access by low-income working families;
30.1 	(3) a program design that ensures fair and equitable access to Head Start services for 
30.2 	all populations and parts of the service area;
30.3 	(4) a plan for coordinating services to maximize assistance for child care costs 
30.4 	available to families under chapter 119B providing Head Start services in conjunction with 
30.5 	full-day child care programs to minimize child transitions, increase program intensity and 
30.6 	duration, and improve child and family outcomes as required in section 119A.541; and
30.7 	(5) identification of regular Head Start, early Head Start, full-day services provided 
30.8 	in child care settings as required by section 119A.541, and innovative services based 
30.9 	upon demonstrated needs to be provided.

30.10 	Sec. 3. [119A.541] FULL-DAY REQUIREMENTS.
30.11 	The commissioner must require the following phase-in of full-day services in 
30.12 	licensed child care centers or family child care homes as defined in chapter 245A:
30.13 	(1) by fiscal year 2009, every program must provide Head Start services in at least 
30.14 	one full-day child care center or family child care home;
30.15 	(2) by fiscal year 2011, every program must provide Head Start services in at least 
30.16 	one full-day child care setting in each of the counties served by the program; and
30.17 	(3) by fiscal year 2013, a minimum of 50 percent of state-funded enrollment must be 
30.18 	provided through agreements with licensed full-day child care programs.
30.19 	If licensed child care providers do not exist in a necessary geographic area, choose 
30.20 	not to participate, or cannot meet the federal Head Start performance standards after 
30.21 	sufficient opportunity, Head Start programs may choose to establish the full-day services 
30.22 	as a part of their own program model or request exemption from this requirement from 
30.23 	the commissioner.

30.24 	Sec. 4. Minnesota Statutes 2006, section 120A.05, is amended by adding a subdivision 
30.25 	to read:
30.26 		Subd. 9a.Full-day kindergarten. "Full-day kindergarten" means an academic 
30.27 	program that prepares pupils to enter first grade the following school year, is provided 
30.28 	for a minimum of 850 hours in a school year, includes curriculum and instruction under 
30.29 	section 120B.11, and aligns with academic standards under section 120B.021, subdivision 
30.30 	1. Learning activities provided as a part of a community education program are not 
30.31 	full-day kindergarten.

30.32 	Sec. 5. Minnesota Statutes 2006, section 123B.36, subdivision 1, is amended to read:
31.1 		Subdivision 1.School boards may require fees. (a) For purposes of this 
31.2 	subdivision, "home school" means a home school as defined in sections 120A.22 and 
31.3 	120A.24 with five or fewer students receiving instruction. 
31.4 	(b) A school board is authorized to require payment of fees in the following areas:
31.5 	(1) in any program where the resultant product, in excess of minimum requirements 
31.6 	and at the pupil's option, becomes the personal property of the pupil;
31.7 	(2) admission fees or charges for extracurricular activities, where attendance 
31.8 	is optional and where the admission fees or charges a student must pay to attend or 
31.9 	participate in an extracurricular activity is the same for all students, regardless of whether 
31.10 	the student is enrolled in a public or a home school;
31.11 	(3) a security deposit for the return of materials, supplies, or equipment;
31.12 	(4) personal physical education and athletic equipment and apparel, although any 
31.13 	pupil may personally provide it if it meets reasonable requirements and standards relating 
31.14 	to health and safety established by the board;
31.15 	(5) items of personal use or products that a student has an option to purchase such as 
31.16 	student publications, class rings, annuals, and graduation announcements;
31.17 	(6) fees specifically permitted by any other statute, including but not limited to 
31.18 	section 171.05, subdivision 2; provided (i) driver education fees do not exceed the actual 
31.19 	cost to the school and school district of providing driver education, and (ii) the driver 
31.20 	education courses are open to enrollment to persons between the ages of 15 and 18 who 
31.21 	reside or attend school in the school district; 
31.22 	(7) field trips considered supplementary to a district educational program;
31.23 	(8) any authorized voluntary student health and accident benefit plan;
31.24 	(9) for the use of musical instruments owned or rented by the district, a reasonable 
31.25 	rental fee not to exceed either the rental cost to the district or the annual depreciation plus 
31.26 	the actual annual maintenance cost for each instrument;
31.27 	(10) transportation of pupils to and from extracurricular activities conducted at 
31.28 	locations other than school, where attendance is optional;
31.29 	(11) transportation to and from school of pupils living within two miles from school 
31.30 	and all other transportation services not required by law. If a district charges fees for 
31.31 	transportation of pupils, it must establish guidelines for that transportation to ensure that 
31.32 	no pupil is denied transportation solely because of inability to pay;
31.33 	(12) motorcycle classroom education courses conducted outside of regular school 
31.34 	hours; provided the charge must not exceed the actual cost of these courses to the school 
31.35 	district;
32.1 	(13) transportation to and from postsecondary institutions for pupils enrolled under 
32.2 	the postsecondary enrollment options program under section 123B.88, subdivision 22. 
32.3 	Fees collected for this service must be reasonable and must be used to reduce the cost 
32.4 	of operating the route. Families who qualify for mileage reimbursement under section 
32.5 	124D.09, subdivision 22, may use their state mileage reimbursement to pay this fee. If 
32.6 	no fee is charged, districts must allocate costs based on the number of pupils riding the 
32.7 	route; and
32.8 	(14) the unreimbursed cost of a prekindergarten program, or the additional cost 
32.9 	of an optional full-day kindergarten program in a district that also provides a half-time 
32.10 	kindergarten option, except that no fee shall be charged for providing a child with 
32.11 	a disability a free and appropriate public education in accordance with the child's 
32.12 	individualized education program according to section 125A.03. If a district charges fees 
32.13 	for prekindergarten or full-day kindergarten programs, it must establish a reasonable 
32.14 	sliding fee scale but it shall waive the fee for a participant unable to pay. 

32.15 	Sec. 6. Minnesota Statutes 2006, section 123B.37, subdivision 1, is amended to read:
32.16 		Subdivision 1.Boards shall not charge certain fees. (a) A board is not authorized 
32.17 	to charge fees in the following areas:
32.18 	(1) textbooks, workbooks, art materials, laboratory supplies, towels;
32.19 	(2) supplies necessary for participation in any instructional course except as 
32.20 	authorized in sections 123B.36 and 123B.38; 
32.21 	(3) field trips that are required as a part of a basic education program or course;
32.22 	(4) graduation caps, gowns, any specific form of dress necessary for any educational 
32.23 	program, and diplomas;
32.24 	(5) instructional costs for necessary school personnel employed in any course or 
32.25 	educational program required for graduation except as authorized in section 123B.36, 
32.26 	subdivision 1, paragraph (14);
32.27 	(6) library books required to be utilized for any educational course or program;
32.28 	(7) admission fees, dues, or fees for any activity the pupil is required to attend;
32.29 	(8) any admission or examination cost for any required educational course or 
32.30 	program;
32.31 	(9) locker rentals;
32.32 	(10) transportation to and from school of pupils living two miles or more from 
32.33 	school.
32.34 	(b) Notwithstanding paragraph (a), clauses (1) and (6), a board may charge fees 
32.35 	for textbooks, workbooks, and library books, lost or destroyed by students. The board 
33.1 	must annually notify parents or guardians and students about its policy to charge a fee 
33.2 	under this paragraph.

33.3 	Sec. 7. Minnesota Statutes 2006, section 124D.02, subdivision 1, is amended to read:
33.4 		Subdivision 1.Kindergarten instruction. (a) The board may establish and 
33.5 	maintain one or more kindergartens for the instruction of children and after July 1, 1974, 
33.6 	shall provide kindergarten instruction for all eligible children, either in the district or in 
33.7 	another district. All children to be eligible for kindergarten must be at least five years 
33.8 	of age on September 1 of the calendar year in which the school year commences. In 
33.9 	addition all children selected under an early admissions policy established by the school 
33.10 	board may be admitted. Nothing in this section shall prohibit a school district from 
33.11 	establishing Head Start, prekindergarten, or nursery school classes for children below 
33.12 	kindergarten age. Any school board with evidence that providing kindergarten will 
33.13 	cause an extraordinary hardship on the school district may apply to the commissioner of 
33.14 	education for an exception.
33.15 	(b) For purposes of demonstrating the efficacy of integrating early childhood 
33.16 	education and care with early elementary grades, the board and any existing 
33.17 	prekindergarten program, including Head Start or any other relevant public or private 
33.18 	entity, may enter into a written agreement to provide early education for children under a 
33.19 	unified administrative structure that establishes an education continuum for children 
33.20 	during the prekindergarten, kindergarten, and primary school years through at least grade 
33.21 	three. A copy of the agreement must be forwarded to the commissioner of education.
33.22 	(c) The agreement may provide for the creation of a nonprofit corporation or a 
33.23 	charter school to achieve the unified administrative and management structure, and 
33.24 	authorize the payment to that entity of any funds received for children enrolled in the 
33.25 	educational continuum. Tuition, participant fees, or both may be charged for children 
33.26 	not yet in kindergarten. Boards may establish a sliding fee for participation. Fees must 
33.27 	be waived for those without ability to pay.
33.28 	(d) The agreement shall:
33.29 	(1) create a management board that represents the school board, the participating 
33.30 	prekindergarten programs, and other relevant public and private entities;
33.31 	(2) provide for the alignment of curricular approaches, professional development 
33.32 	opportunities, child and student assessment, and program evaluation;
33.33 	(3) provide aligned standards, curriculum, instruction, and assessment within the 
33.34 	framework of research and evaluation of best practices;
33.35 	(4) provide for special education for the children as needed; and
34.1 	(5) not extend beyond ten years, but shall be renewable.

34.2 	Sec. 8.  REPEALER.
 34.3 	Minnesota Statutes 2006, section 124D.175, is repealed.

34.4 	ARTICLE 8
34.5 	SELF-SUFFICIENCY AND LIFELONG LEARNING

34.6 	Section 1. Minnesota Statutes 2006, section 124D.531, subdivision 4, is amended to 
34.7 	read:
34.8 		Subd. 4.Adult basic education program aid limit. (a) Notwithstanding 
34.9 	subdivisions 2 and 3, the total adult basic education aid for a program per prior year 
34.10 	contact hour must not exceed $21 per prior year contact hour computed under subdivision 
34.11 	3, clause (2).
34.12 	(b) For fiscal year 2004, the aid for a program under subdivision 3, clause (2), 
34.13 	adjusted for changes in program membership, must not exceed the aid for that program 
34.14 	under subdivision 3, clause (2), for fiscal year 2003 by more than the greater of eight 
34.15 	percent or $10,000.
34.16 	(c) For fiscal year 2005, the aid for a program under subdivision 3, clause (2), 
34.17 	adjusted for changes in program membership, must not exceed the sum of the aid for that 
34.18 	program under subdivision 3, clause (2), and Laws 2003, First Special Session chapter 9, 
34.19 	article 9, section 8, paragraph (a), for the preceding fiscal year by more than the greater of 
34.20 	eight percent or $10,000.
34.21 	(d) (b) For fiscal year 2006 and later fiscal year 2007, the aid for a program under 
34.22 	subdivision 3, clause (2), adjusted for changes in program membership, must not exceed 
34.23 	the aid for that program under subdivision 3, clause (2), for the first preceding fiscal year 
34.24 	by more than the greater of eight percent or $10,000.
34.25 	(c) For fiscal year 2008 and later, the aid for a program under subdivision 3, 
34.26 	clause (2), adjusted for changes in program membership, must not exceed the aid for 
34.27 	that program under subdivision 3, clause (2), for the first preceding fiscal year by more 
34.28 	than the greater of 11 percent or $14,000.
34.29 	(e) (d) Adult basic education aid is payable to a program for unreimbursed costs 
34.30 	occurring in the program year as defined in section 124D.52, subdivision 3.
34.31 	(f) (e) Any adult basic education aid that is not paid to a program because of the 
34.32 	program aid limitation under paragraph (a) must be added to the state total adult basic 
34.33 	education aid for the next fiscal year under subdivision 1. Any adult basic education aid 
34.34 	that is not paid to a program because of the program aid limitations under paragraph (b), 
35.1 	(c), or (d), must be reallocated among programs by adjusting the rate per contact hour 
35.2 	under subdivision 3, clause (2).

35.3 	Sec. 2. Minnesota Statutes 2006, section 124D.55, is amended to read:
35.4 	124D.55 GENERAL EDUCATION DEVELOPMENT (GED) TEST FEES.
35.5 	The commissioner shall pay 60 percent of the fee that is charged to an eligible 
35.6 	individual for the full battery of a general education development (GED) test, but not 
35.7 	more than $20$40 for an eligible individual.

35.8 	Sec. 3.  REPEALER.
 35.9 	Minnesota Statutes 2006, section 124D.531, subdivision 5, is repealed.