1.1A bill for an act1.2relating to education; providing for policy and funding for kindergarten 1.3through grade 12 education including general education, education excellence, 1.4special programs, facilities and technology, accounting, state agencies, pupil 1.5transportation, education finance reform and forecast adjustments; authorizing 1.6rulemaking; requiring reports; appropriating money;amending Minnesota 1.7Statutes 2008, sections 3.303, by adding a subdivision; 11A.16, subdivision 5; 1.816A.125, subdivision 5; 120A.41; 120B.021, subdivision 1; 120B.07; 120B.15; 1.9122A.16; 122A.18, subdivisions 1, 2; 122A.23, subdivision 2; 123B.12; 1.10123B.147, subdivision 3; 123B.53, subdivision 5; 123B.57, as amended; 1.11123B.63, subdivision 3; 123B.75, subdivision 5, by adding a subdivision; 1.12123B.88, subdivision 13; 123B.90, subdivision 3; 123B.92, subdivision 5; 1.13124D.09, subdivision 20; 124D.4531, as amended; 124D.59, subdivision 2; 1.14124D.65, subdivision 5; 125A.03; 125A.21, subdivisions 2, 3, 5, 7; 125A.515, by 1.15adding a subdivision; 125A.69, subdivision 1; 125A.76, subdivision 5; 125A.79, 1.16subdivisions 1, 7; 126C.01, by adding subdivisions; 126C.05, subdivisions 1, 3, 1.175, 6, 8, 16, 17; 126C.10, subdivisions 1, 2, 2a, 3, 4, 6, 13, 13a, 14, 18, by adding 1.18subdivisions; 126C.126; 126C.13, subdivisions 4, 5; 126C.17, subdivisions 1.191, 5, 6, by adding a subdivision; 126C.20; 126C.40, subdivision 1; 126C.54; 1.20127A.30, subdivision 2; 127A.42, subdivision 2; 127A.43; 127A.441; 127A.45, 1.21subdivisions 2, 3, 13, by adding subdivisions; 127A.51; 157.15, by adding a 1.22subdivision; 169.447, subdivision 2a; 171.321, subdivision 2; Minnesota Statutes 1.232009 Supplement, sections 16A.152, subdivision 2, as amended; 120B.023, 1.24subdivision 2; 120B.30, subdivisions 1, 1a, 3, 4, by adding a subdivision; 1.25120B.35, subdivision 3; 120B.36, subdivision 1; 122A.09, subdivision 4; 1.26122A.40, subdivision 8; 122A.41, subdivision 5; 123B.143, subdivision 1; 1.27123B.54; 123B.92, subdivision 1; 124D.10, subdivisions 3, 4, 4a, 6a, 11, 23; 1.28125A.02, subdivision 1; 125A.091, subdivision 7; 125A.63, subdivisions 2, 4, 5; 1.29126C.41, subdivision 2; 126C.44; 157.16, subdivision 3; 171.02, subdivision 2b; 1.30256B.0625, subdivision 26; Laws 2009, chapter 79, article 5, section 60; Laws 1.312009, chapter 96, article 2, sections 64; 67, subdivisions 14, 17; article 4, section 1.3212, subdivision 3; article 5, section 13, subdivision 4; proposing coding for new 1.33law in Minnesota Statutes, chapters 120B; 121A; 122A; 123A; 123B; 124D; 1.34125A; 126C; repealing Minnesota Statutes 2008, sections 122A.24; 123B.54; 1.35123B.57, subdivisions 3, 4, 5; 123B.591; 125A.54; 125A.76, subdivision 4; 1.36125A.79, subdivision 6; 126C.10, subdivisions 2b, 13a, 13b, 24, 25, 26, 27, 28, 1.3729, 30, 31, 31a, 31b, 32, 33, 34, 35, 36; 126C.12; 126C.126; 127A.46; 127A.50.1.38BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:2.1ARTICLE 12.2GENERAL EDUCATION2.3    Section 1. Minnesota Statutes 2008, section 11A.16, subdivision 5, is amended to read:2.4    Subd. 5. Calculation of income. As of the end of each fiscal year, the state 2.5board shall calculate the investment income earned by the permanent school fund. The 2.6investment income earned by the fund shall equal the amount of interest on debt securities 2.7and, dividends on equity securities, and interest earned on certified monthly earnings prior 2.8to the transfer to the Department of Education. Gains and losses arising from the sale of 2.9securities shall be apportioned as follows:2.10(a) If the sale of securities results in a net gain during a fiscal year, the gain shall 2.11be apportioned in equal installments over the next ten fiscal years to offset net losses in 2.12those years. If any portion of an installment is not needed to recover subsequent losses 2.13identified in paragraph (b) it shall be added to the principal of the fund.2.14(b) If the sale of securities results in a net loss during a fiscal year, the net loss shall 2.15be recovered first from the gains in paragraph (a) apportioned to that fiscal year. If these 2.16gains are insufficient, any remaining net loss shall be recovered from interest and dividend 2.17income in equal installments over the following ten fiscal years.2.18    Sec. 2. Minnesota Statutes 2008, section 120B.07, is amended to read:2.19120B.07 EARLY GRADUATION.2.20(a) Notwithstanding any law to the contrary, any secondary school student who has 2.21completed all required courses or standards may, with the approval of the student, the 2.22student's parent or guardian, and local school officials, graduate before the completion 2.23of the school year.2.24(b) General education revenue attributable to the student must be paid as though the 2.25student was in attendance for the entire year unless the student participates in the early 2.26graduation achievement scholarship program under section 120B.08.2.27EFFECTIVE DATE.This section is effective July 1, 2010.2.28    Sec. 3. [120B.08] EARLY GRADUATION ACHIEVEMENT SCHOLARSHIP 2.29PROGRAM.2.30    Subdivision 1.Participation.A student who qualifies for early graduation under 2.31section 120B.07 is eligible to participate in the early graduation achievement scholarship 2.32program.3.1    Subd. 2.Scholarship amounts.A student who participates in the early graduation 3.2achievement scholarship program is eligible for a scholarship of $2,500 if the student 3.3qualifies for graduation one semester early, $5,000 if the student qualifies for graduation 3.4two semesters early, or $7,500 if the student qualifies for graduation three or more 3.5semesters early.3.6    Subd. 3.Scholarship uses.An early graduation achievement scholarship may be 3.7used at any accredited institution of higher education.3.8    Subd. 4.Application.A qualifying student may apply to the commissioner of 3.9education for an early graduation achievement scholarship. The application must be in 3.10the form and manner specified by the commissioner. Upon verification of the qualifying 3.11student's course completion necessary for graduation, the department must issue the 3.12student a certificate showing the student's scholarship amount.3.13    Subd. 5.Enrollment verification.A student who qualifies under this section 3.14and enrolls in an accredited higher education institution must submit a form to the 3.15commissioner verifying the student's enrollment in the higher education institution and the 3.16tuition charges for that semester. Within 15 days of receipt of a student's enrollment and 3.17tuition verification form, the commissioner must issue a scholarship check to the student in 3.18the lesser of the tuition amount for that semester or the maximum amount of the student's 3.19early graduation achievement scholarship. A student may continue to submit enrollment 3.20verification forms to the commissioner until the student has used the full amount of the 3.21student's graduation achievement scholarship.3.22    Subd. 6.General education money transferred.The commissioner must transfer 3.23the amounts necessary to fund the early graduation achievement scholarships from the 3.24general education aid appropriation for that year.3.25EFFECTIVE DATE.This section is effective for fiscal years 2011 and later.3.26    Sec. 4. Minnesota Statutes 2008, section 123B.63, subdivision 3, is amended to read:3.27    Subd. 3. Capital project levy referendum.(a) A district may levy the local tax 3.28rate approved by a majority of the electors voting on the question to provide funds for 3.29an approved project. The election must take place no more than five years before the 3.30estimated date of commencement of the project. The referendum must be held on a date 3.31set by the board. A referendum for a project not receiving a positive review and comment 3.32by the commissioner under section 
         123B.71 must be approved by at least 60 percent of 3.33the voters at the election. 3.34(b) The referendum may be called by the school board and may be held: 4.1    (1) separately, before an election for the issuance of obligations for the project 4.2under chapter 475; or4.3    (2) in conjunction with an election for the issuance of obligations for the project 4.4under chapter 475; or4.5    (3) notwithstanding section 
         475.59, as a conjunctive question authorizing both the 4.6capital project levy and the issuance of obligations for the project under chapter 475. Any 4.7obligations authorized for a project may be issued within five years of the date of the 4.8election. 4.9    (c) The ballot must provide a general description of the proposed project, state the 4.10estimated total cost of the project, state whether the project has received a positive or 4.11negative review and comment from the commissioner, state the maximum amount of the 4.12capital project levy as a percentage of net tax capacity, state the amount that will be raised 4.13by that local tax rate in the first year it is to be levied, and state the maximum number of 4.14years that the levy authorization will apply.4.15    The ballot must contain a textual portion with the information required in this 4.16section and a question stating substantially the following:4.17    "Shall the capital project levy proposed by the board of .......... School District 4.18No. .......... be approved?"4.19    If approved, the amount provided by the approved local tax rate applied to the net 4.20tax capacity for the year preceding the year the levy is certified may be certified for the 4.21number of years, not to exceed ten, approved.4.22(d) If the authority for an existing project is expiring and the district is proposing 4.23a new project at the same maximum tax rate, the general description on the ballot may 4.24state that the capital project levy is being renewed and that the tax rate is not being 4.25increased from the previous year's rate and the notice required under section 276.60, may 4.26be modified to read: "BY VOTING YES ON THIS BALLOT QUESTION, YOU ARE 4.27VOTING TO EXTEND THE AUTHORITY FOR AN EXPIRING CAPITAL PROJECT 4.28AT THE SAME TAX RATE."4.29    (e) In the event a conjunctive question proposes to authorize both the capital project 4.30levy and the issuance of obligations for the project, appropriate language authorizing the 4.31issuance of obligations must also be included in the question.4.32    (f) The district must notify the commissioner of the results of the referendum.4.33EFFECTIVE DATE.This section is effective for referenda conducted on or after 4.34July 1, 2010.4.35    Sec. 5. Minnesota Statutes 2008, section 124D.09, subdivision 20, is amended to read:5.1    Subd. 20. Textbooks; materials. All textbooks and equipment provided to a pupil, 5.2and paid for under subdivision 13, are the property of the pupil's postsecondary institution. 5.3Each pupil is required to return all textbooks and equipment to the postsecondary 5.4institution after the course has ended. The postsecondary institution may bill the pupil for 5.5any textbooks and equipment that are not promptly returned by the student.5.6EFFECTIVE DATE.This section is effective July 1, 2010.5.7    Sec. 6. Minnesota Statutes 2008, section 125A.79, subdivision 1, is amended to read:5.8    Subdivision 1. Definitions. For the purposes of this section, the definitions in this 5.9subdivision apply.5.10    (a) "Unreimbursed special education cost" means the sum of the following:5.11    (1) expenditures for teachers' salaries, contracted services, supplies, equipment, and 5.12transportation services eligible for revenue under section 
         125A.76; plus5.13    (2) expenditures for tuition bills received under sections 
         125A.03 to 
         125A.24 and 5.14125A.65
          for services eligible for revenue under section 
         125A.76, subdivision 2; minus5.15    (3) revenue for teachers' salaries, contracted services, supplies, equipment, and 5.16transportation services under section 
         125A.76; minus5.17    (4) tuition receipts under sections 
         125A.03 to 
         125A.24 and 
         125A.65 for services 5.18eligible for revenue under section 
         125A.76, subdivision 2.5.19    (b) "General revenue" for a school district means the sum of the general education 5.20revenue according to section 
         126C.10, subdivision 1, excluding alternative teacher 5.21compensation revenue, plus the total qualifying referendum revenue specified in paragraph 5.22(e) minus transportation sparsity revenue minus total operating capital revenue. "General 5.23revenue" for a charter school means the sum of the general education revenue according to 5.24section 124D.11, subdivision 1, and transportation revenue according to section 124D.11, 5.25subdivision 2, excluding alternative teacher compensation revenue, minus referendum 5.26equalization aid minus transportation sparsity revenue minus operating capital revenue.5.27    (c) "Average daily membership" has the meaning given it in section 
         126C.05.5.28    (d) "Program growth factor" means 
         1.02 for fiscal year 2012 and later.5.29    (e) "Total qualifying referendum revenue" means two-thirds of the district's total 5.30referendum revenue as adjusted according to section 127A.47, subdivision 7, paragraphs 5.31(a) to (c), for fiscal year 2006, one-third of the district's total referendum revenue for fiscal 5.32year 2007, and none of the district's total referendum revenue for fiscal year 2008 and later.5.33EFFECTIVE DATE.This section is effective the day following final enactment.6.1    Sec. 7. Minnesota Statutes 2008, section 126C.10, subdivision 2a, is amended to read:6.2    Subd. 2a. Extended time revenue. (a) A school district's extended time revenue 6.3is equal to the product of $4,601 (1) the formula allowance for that year minus $523,6.4and (2) the sum of the adjusted marginal cost pupil units of the district for each pupil in 6.5average daily membership in excess of 1.0 and less than 1.2 according to section 
         126C.05, 6.6subdivision 8
         , if the district has extended time average daily membership in the current 6.7year. 6.8(b) A school district's extended time revenue may be used for extended day 6.9programs, extended week programs, summer school, and other programming authorized 6.10under the learning year program.6.11EFFECTIVE DATE.This section is effective for revenue for fiscal years 2011 6.12and later.6.13    Sec. 8. Minnesota Statutes 2008, section 126C.10, subdivision 13a, is amended to read:6.14    Subd. 13a. Operating capital levy. To obtain operating capital revenue for fiscal 6.15year 2007 and later, a district may levy an amount not more than the product of its 6.16operating capital revenue for the fiscal year times the lesser of one or the ratio of its 6.17adjusted net tax capacity per adjusted marginal cost pupil unit to the operating capital 6.18equalizing factor. The operating capital equalizing factor equals $22,222 for fiscal year 6.192006, and $10,700 for fiscal year years  2007 through 2011, $10,915 for fiscal year 2012, 6.20and $11,029 for fiscal years 2013 and later.6.21EFFECTIVE DATE.This section is effective for fiscal years 2012 and later.6.22    Sec. 9. Minnesota Statutes 2008, section 126C.10, subdivision 14, is amended to read:6.23    Subd. 14. Uses of total operating capital revenue. Total operating capital revenue 6.24may be used only for the following purposes:6.25(1) to acquire land for school purposes;6.26(2) to acquire or construct buildings for school purposes;6.27(3) to rent or lease buildings, including the costs of building repair or improvement 6.28that are part of a lease agreement;6.29(4) to improve and repair school sites and buildings, and equip or reequip school 6.30buildings with permanent attached fixtures, including library media centers;6.31(5) for a surplus school building that is used substantially for a public nonschool 6.32purpose;7.1(6) to eliminate barriers or increase access to school buildings by individuals with a 7.2disability;7.3(7) to bring school buildings into compliance with the State Fire Code adopted 7.4according to chapter 299F;7.5(8) to remove asbestos from school buildings, encapsulate asbestos, or make 7.6asbestos-related repairs;7.7(9) to clean up and dispose of polychlorinated biphenyls found in school buildings;7.8(10) to clean up, remove, dispose of, and make repairs related to storing heating fuel 7.9or transportation fuels such as alcohol, gasoline, fuel oil, and special fuel, as defined 7.10in section 
         296A.01; 7.11(11) for energy audits for school buildings and to modify buildings if the audit 7.12indicates the cost of the modification can be recovered within ten years;7.13(12) to improve buildings that are leased according to section 
         123B.51, subdivision 4; 7.14(13) to pay special assessments levied against school property but not to pay 7.15assessments for service charges;7.16(14) to pay principal and interest on state loans for energy conservation according to 7.17section 
         216C.37 or loans made under the Douglas J. Johnson Economic Protection Trust 7.18Fund Act according to sections 
         298.292 to 
         298.298; 7.19(15) to purchase or lease interactive telecommunications equipment;7.20(16) by board resolution, to transfer money into the debt redemption fund to: (i) 7.21pay the amounts needed to meet, when due, principal and interest payments on certain 7.22obligations issued according to chapter 475; or (ii) pay principal and interest on debt 7.23service loans or capital loans according to section 
         126C.70; 7.24(17) to pay operating capital-related assessments of any entity formed under a 7.25cooperative agreement between two or more districts;7.26(18) to purchase or lease computers and related materials, copying machines, 7.27telecommunications equipment, and other noninstructional equipment;7.28(19) to purchase or lease assistive technology or equipment for instructional 7.29programs;7.30(20) to purchase textbooks;7.31(21) to purchase new and replacement library media resources or technology;7.32(22) to purchase vehicles;7.33(23) to purchase or lease telecommunications equipment, computers, and related 7.34equipment for integrated information management systems for:7.35(i) managing and reporting learner outcome information for all students under a 7.36results-oriented graduation rule;8.1(ii) managing student assessment, services, and achievement information required 8.2for students with individual education plans; and8.3(iii) other classroom information management needs; and8.4(24) to pay personnel costs directly related to the acquisition, operation, and 8.5maintenance of telecommunications systems, computers, related equipment, and network 8.6and applications software; and8.7(25) to pay the costs directly associated with closing a school facility, including 8.8moving and storage costs.8.9EFFECTIVE DATE.This section is effective the day following final enactment.8.10    Sec. 10. Minnesota Statutes 2008, section 126C.126, is amended to read:8.11126C.126 REALLOCATING GENERAL EDUCATION REVENUE FOR 8.12ALL-DAY KINDERGARTEN AND PREKINDERGARTEN.8.13    (a) In order to provide additional revenue for an optional all-day kindergarten 8.14program, a district may reallocate general education revenue attributable to 12th grade 8.15students who have graduated early under section 
         120B.07 and who do not participate in 8.16the early graduation achievement scholarship program under section 120B.08. 8.17    (b) A school district may spend general education revenue on extended time 8.18kindergarten and prekindergarten programs.8.19EFFECTIVE DATE.This section is effective for fiscal years 2011 and later.8.20    Sec. 11. Minnesota Statutes 2008, section 126C.17, is amended by adding a subdivision 8.21to read:8.22    Subd. 9a.Renewal by school board.Notwithstanding the election requirements of 8.23subdivision 9, a school board may renew an expiring referendum by board action if:8.24(1) the per pupil amount of the referendum is the same as the amount expiring;8.25(2) the term of the renewed referendum is no longer than the initial term approved 8.26by the voters; and8.27(3) the school board has adopted a written resolution authorizing the renewal after 8.28holding a meeting and allowing public testimony on the proposed renewal.8.29EFFECTIVE DATE.This section is effective July 1, 2010.8.30    Sec. 12. Minnesota Statutes 2008, section 126C.20, is amended to read:8.31126C.20 ANNUAL GENERAL EDUCATION AID APPROPRIATION.9.1There is annually appropriated from the general fund to the department the amount 9.2necessary for general education aid under section 126C.13 and the early graduation 9.3achievement scholarship program under section 120B.08. This amount must be reduced 9.4by the amount of any money specifically appropriated for the same purpose in any year 9.5from any state fund.9.6EFFECTIVE DATE.This section is effective for fiscal years 2011 and later.9.7    Sec. 13. Minnesota Statutes 2009 Supplement, section 126C.41, subdivision 2, is 9.8amended to read:9.9    Subd. 2. Retired employee health benefits. (a) A district may levy an amount up 9.10to the amount the district is required by the collective bargaining agreement in effect 9.11on March 30, 1992, to pay for health insurance or unreimbursed medical expenses for 9.12licensed and nonlicensed employees who have terminated services in the employing 9.13district and withdrawn from active teaching service or other active service, as applicable, 9.14before July 1, 1992, and to pay for health insurance or unreimbursed medical expenses 9.15for licensed and nonlicensed employees who have terminated services in the employing 9.16district and withdrawn from active teaching service or other active service, as applicable 9.17before July 1, 1998, only if a sunset clause is in effect for the current collective bargaining 9.18agreement. The total amount of the levy each year may not exceed $600,000.9.19(b) In addition to the levy authority granted under paragraph (a), a school district 9.20may levy for other postemployment benefits expenses actually paid during the previous 9.21fiscal year. For purposes of this subdivision, "postemployment benefits" means benefits 9.22giving rise to a liability under Statement No. 45 of the Government Accounting Standards 9.23Board. A district seeking levy authority under this subdivision must:9.24(1) create or have created an actuarial liability to pay postemployment benefits to 9.25employees or officers after their termination of service;9.26(2) have a sunset clause in effect for the current collective bargaining agreement as 9.27required by paragraph (a); and9.28(3) apply for the authority in the form and manner required by the commissioner 9.29of education.9.30If the total levy authority requested under this paragraph exceeds the amount established 9.31in paragraph (c), the commissioner must proportionately reduce each district's maximum 9.32levy authority under this subdivision. The commissioner may subsequently adjust each 9.33district's levy authority under this subdivision so long as the total levy authority does not 9.34exceed the maximum levy authority for that year.10.1(c) The maximum levy authority under paragraph (b) must not exceed the following 10.2amounts:10.3(1) $9,242,000 for taxes payable in 2010;10.4(2) $29,863,000 for taxes payable in 2011; and10.5(3) for taxes payable in 2012 and later, the maximum levy authority must not exceed 10.6the sum of the previous year's authority and $14,000,000.10.7    Sec. 14. Minnesota Statutes 2009 Supplement, section 126C.44, is amended to read:10.8126C.44 SAFE SCHOOLS LEVY.10.9    (a) Each district may make a levy on all taxable property located within the district 10.10for the purposes specified in this section. The maximum amount which may be levied 10.11for all costs under this section shall be equal to $30 multiplied by the district's adjusted 10.12marginal cost pupil units for the school year. The proceeds of the levy must be reserved and 10.13used for directly funding the following purposes or for reimbursing the cities and counties 10.14who contract with the district for the following purposes: (1) to pay the costs incurred for 10.15the salaries, benefits, and transportation costs of peace officers and sheriffs for liaison in 10.16services in the district's schools; (2) to pay the costs for a drug abuse prevention program 10.17as defined in section 
         609.101, subdivision 3, paragraph (e), in the elementary schools; 10.18(3) to pay the costs for a gang resistance education training curriculum in the district's 10.19schools; (4) to pay the costs for security in the district's schools and on school property; (5) 10.20to pay the costs for other crime prevention, drug abuse, student and staff safety, voluntary 10.21opt-in suicide prevention tools, and violence prevention measures taken by the school 10.22district; or (6) to pay costs for licensed school counselors, licensed school nurses, licensed 10.23school social workers, licensed school psychologists, and licensed alcohol and chemical 10.24dependency counselors to help provide early responses to problems. For expenditures 10.25under clause (1), the district must initially attempt to contract for services to be provided 10.26by peace officers or sheriffs with the police department of each city or the sheriff's 10.27department of the county within the district containing the school receiving the services. If 10.28a local police department or a county sheriff's department does not wish to provide the 10.29necessary services, the district may contract for these services with any other police or 10.30sheriff's department located entirely or partially within the school district's boundaries.10.31    (b) A school district that is a member of an intermediate school district may 10.32include in its authority under this section the costs associated with safe schools activities 10.33authorized under paragraph (a) for intermediate school district programs. This authority 10.34must not exceed $10 times the adjusted marginal cost pupil units of the member districts. 11.1This authority is in addition to any other authority authorized under this section. Revenue 11.2raised under this paragraph must be transferred to the intermediate school district.11.3    (c) A school district must set aside at least $3 per adjusted marginal cost pupil 11.4unit of the safe schools levy proceeds for the purposes authorized under paragraph (a), 11.5clause (6). The district must annually certify either that: (1) its total spending on services 11.6provided by the employees listed in paragraph (a), clause (6), is not less than the sum of 11.7its expenditures for these purposes, excluding amounts spent under this section, in the 11.8previous year plus the amount spent under this section; or (2) that the district's full-time 11.9equivalent number of employees listed in paragraph (a), clause (6), is not less than the 11.10number for the previous year; or (3) that the district's full-time equivalent number of 11.11employees listed in paragraph (a), clause (6), including those provided through a special 11.12education cooperative, intermediate school district, or education district, is not less than 11.13the number for the previous year.11.14EFFECTIVE DATE.This section is effective the day following final enactment.11.15ARTICLE 211.16EDUCATION EXCELLENCE11.17    Section 1. Minnesota Statutes 2008, section 120A.41, is amended to read:11.18120A.41 LENGTH OF SCHOOL YEAR; DAYS OF INSTRUCTION.11.19A school board's annual school calendar must include at least the number of days11.20of student instruction the board formally adopted as its school calendar at the beginning of 11.21the 1996-1997 school year 425 hours of instruction for a kindergarten student without a 11.22disability, 935 hours of instruction for a student in grades 1 through 6, and 1,020 hours of 11.23instruction for a student in grades 7 through 12, not including summer school.11.24EFFECTIVE DATE.This section is effective for the 2010-2011 school year and 11.25later.11.26    Sec. 2. Minnesota Statutes 2008, section 120B.021, subdivision 1, is amended to read:11.27    Subdivision 1. Required academic standards. The following subject areas are 11.28required for statewide accountability:11.29    (1) language arts;11.30    (2) mathematics;11.31    (3) science;12.1    (4) social studies, including history, geography, economics, and government and 12.2citizenship;12.3(5) physical education;12.4    (6) health and physical education, for which locally developed academic standards 12.5apply; and12.6    (6)(7) the arts, for which statewide or locally developed academic standards apply, 12.7as determined by the school district. Public elementary and middle schools must offer at 12.8least three and require at least two of the following four arts areas: dance; music; theater; 12.9and visual arts. Public high schools must offer at least three and require at least one of the 12.10following five arts areas: media arts; dance; music; theater; and visual arts.12.11    The commissioner must submit proposed standards in science and social studies to 12.12the legislature by February 1, 2004.12.13For purposes of applicable federal law, the academic standards for language arts, 12.14mathematics, and science apply to all public school students, except the very few students 12.15with extreme cognitive or physical impairments for whom an individualized education 12.16plan team has determined that the required academic standards are inappropriate. 12.17An individualized education plan team that makes this determination must establish 12.18alternative standards.12.19    A school district, no later than the 2007-2008 school year, must adopt graduation 12.20requirements that meet or exceed state graduation requirements established in law or 12.21rule. A school district that incorporates these state graduation requirements before the 12.222007-2008 school year must provide students who enter the 9th grade in or before 12.23the 2003-2004 school year the opportunity to earn a diploma based on existing locally 12.24established graduation requirements in effect when the students entered the 9th grade. 12.25District efforts to develop, implement, or improve instruction or curriculum as a result 12.26of the provisions of this section must be consistent with sections 
         120B.10, 
         120B.11, 12.27and 
         120B.20. 12.28    The commissioner must include the contributions of Minnesota American Indian 12.29tribes and communities as they relate to the academic standards during the review and 12.30revision of the required academic standards.12.31EFFECTIVE DATE.This section is effective the day following final enactment 12.32and applies to all school districts and charter schools beginning in the 2012-2013 school 12.33year and later. A school district or charter school is strongly encouraged to implement 12.34state physical education standards in an earlier school year than the 2012-2013 school 12.35year if it has adopted physical education standards equivalent to the standards developed 13.1by the National Association for Sport and Physical Education under section 39 on the 13.2effective date of this act, or if it is scheduled to undertake the periodic review of its local 13.3physical education standards under Minnesota Statutes, section 120B.023, subdivision 2, 13.4paragraph (g), in a school year before the 2012-2013 school year, it is strongly encouraged 13.5to implement state physical education standards consistent with section 39 in an earlier 13.6school year.13.7    Sec. 3. Minnesota Statutes 2009 Supplement, section 120B.023, subdivision 2, is 13.8amended to read:13.9    Subd. 2. Revisions and reviews required. (a) The commissioner of education must 13.10revise and appropriately embed technology and information literacy standards consistent 13.11with recommendations from school media specialists into the state's academic standards 13.12and graduation requirements and implement a review cycle for state academic standards 13.13and related benchmarks, consistent with this subdivision. During each review cycle, the 13.14commissioner also must examine the alignment of each required academic standard and 13.15related benchmark with the knowledge and skills students need for college readiness and 13.16advanced work in the particular subject area.13.17(b) The commissioner in the 2006-2007 school year must revise and align the state's 13.18academic standards and high school graduation requirements in mathematics to require 13.19that students satisfactorily complete the revised mathematics standards, beginning in the 13.202010-2011 school year. Under the revised standards:13.21(1) students must satisfactorily complete an algebra I credit by the end of eighth 13.22grade; and13.23(2) students scheduled to graduate in the 2014-2015 school year or later must 13.24satisfactorily complete an algebra II credit or its equivalent.13.25The commissioner also must ensure that the statewide mathematics assessments 13.26administered to students in grades 3 through 8 and 11 are aligned with the state academic 13.27standards in mathematics, consistent with section 
         120B.30, subdivision 1, paragraph 13.28(b). The commissioner must implement a review of the academic standards and related 13.29benchmarks in mathematics beginning in the 2015-2016 school year.13.30(c) The commissioner in the 2007-2008 school year must revise and align the state's 13.31academic standards and high school graduation requirements in the arts to require that 13.32students satisfactorily complete the revised arts standards beginning in the 2010-2011 13.33school year. The commissioner must implement a review of the academic standards and 13.34related benchmarks in arts beginning in the 2016-2017 school year.14.1(d) The commissioner in the 2008-2009 school year must revise and align the state's 14.2academic standards and high school graduation requirements in science to require that 14.3students satisfactorily complete the revised science standards, beginning in the 2011-2012 14.4school year. Under the revised standards, students scheduled to graduate in the 2014-2015 14.5school year or later must satisfactorily complete a chemistry or physics credit. The 14.6commissioner must implement a review of the academic standards and related benchmarks 14.7in science beginning in the 2017-2018 school year.14.8(e) The commissioner in the 2009-2010 school year must revise and align the state's 14.9academic standards and high school graduation requirements in language arts to require 14.10that students satisfactorily complete the revised language arts standards beginning in the 14.112012-2013 school year. The commissioner must implement a review of the academic 14.12standards and related benchmarks in language arts beginning in the 2018-2019 school year.14.13(f) The commissioner in the 2010-2011 school year must revise and align the state's 14.14academic standards and high school graduation requirements in social studies to require 14.15that students satisfactorily complete the revised social studies standards beginning in the 14.162013-2014 school year. The commissioner must implement a review of the academic 14.17standards and related benchmarks in social studies beginning in the 2019-2020 school year.14.18(g) School districts and charter schools must revise and align local academic 14.19standards and high school graduation requirements in health, physical education, world 14.20languages, and career and technical education to require students to complete the revised 14.21standards beginning in a school year determined by the school district or charter school. 14.22School districts and charter schools must formally establish a periodic review cycle for 14.23the academic standards and related benchmarks in health, physical education, world 14.24languages, and career and technical education.14.25(h) The commissioner in the 2013-2014 school year and later must use the good 14.26cause exemption under section 14.388, subdivision 1, clause (3), to amend the rules 14.27governing state physical education standards to conform the state standards to changes in 14.28the standards developed by the National Association for Sport and Physical Education. 14.29Directions to the commissioner to embed technology and information literacy standards 14.30under paragraph (a) and other requirements related to state academic standards under 14.31this chapter do not apply.14.32EFFECTIVE DATE.This section is effective the day following final enactment 14.33and applies to all school districts and charter schools beginning in the 2012-2013 school 14.34year and later, except that paragraph (h) applies beginning in the 2013-2014 school year 14.35and later. A school district or charter school is strongly encouraged to implement state 14.36physical education standards in an earlier school year than the 2012-2013 school year if it 15.1has adopted physical education standards equivalent to the standards developed by the 15.2National Association for Sport and Physical Education under section 39 on the effective 15.3date of this act, or if it is scheduled to undertake the periodic review of its local physical 15.4education standards under paragraph (g) in a school year before the 2012-2013 school 15.5year, it is strongly encouraged to implement state physical education standards consistent 15.6with section 39 in an earlier school year.15.7    Sec. 4. Minnesota Statutes 2008, section 120B.15, is amended to read:15.8120B.15 GIFTED AND TALENTED STUDENTS PROGRAMS.15.9    (a) School districts and charter schools may identify students, locally develop 15.10programs addressing instructional and affective needs, provide staff development, and 15.11evaluate programs to provide gifted and talented students with challenging and appropriate 15.12educational programs.15.13    (b) School districts and charter schools may adopt guidelines for assessing and 15.14identifying students for participation in gifted and talented programs. The guidelines 15.15should include the use of:15.16    (1) multiple and objective criteria; and15.17    (2) assessments and procedures that are valid and reliable, fair, and based on 15.18current theory and research addressing the use of tools and methods that are sensitive to 15.19underrepresented groups, including, but not limited to, students who are low income, 15.20minority, gifted and learning disabled, and English language learners.15.21    (c) School districts and charter schools must adopt procedures for the academic 15.22acceleration of gifted and talented students. These procedures must include how the 15.23district will:15.24    (1) assess a student's readiness and motivation for acceleration; and15.25    (2) match the level, complexity, and pace of the curriculum to a student to achieve 15.26the best type of academic acceleration for that student.15.27    Sec. 5. [120B.21] MENTAL HEALTH EDUCATION.15.28The legislature encourages districts to provide instruction in mental health for 15.29students in grades 7 through 12. Instruction must be aligned with local health standards 15.30and integrated into a district's existing programs, curriculum, or the general school 15.31environment. The commissioner of education, in consultation with mental health 15.32organizations, shall provide assistance to districts including:15.33(1) age-appropriate model learning activities for grades 7 through 12 that address 15.34mental health components of the National Health Education Standards and the benchmarks 16.1developed by the department's quality teaching network in health and best practices in 16.2mental health education; and16.3(2) a directory of resources for planning and implementing age-appropriate mental 16.4health curriculum and instruction in grades 7 through 12.16.5    Sec. 6. Minnesota Statutes 2009 Supplement, section 120B.30, subdivision 1, is 16.6amended to read:16.7    Subdivision 1. Statewide testing.  (a) The commissioner, with advice from experts 16.8with appropriate technical qualifications and experience and stakeholders, consistent with 16.9subdivision 1a, shall include in the comprehensive assessment system, for each grade 16.10level to be tested, state-constructed tests developed from and to be computer-adaptive 16.11reading and mathematics assessments for general education students that are aligned 16.12with the state's required academic standards under section 
         120B.021, include multiple 16.13choice questions, and be administered annually to all students in grades 3 through 8. 16.14State-developed high school tests aligned with the state's required academic standards 16.15under section 
         120B.021 and administered to all high school students in a subject other 16.16than writing must include multiple choice questions. The commissioner shall establish 16.17one or more months during which schools shall administer the tests to students each 16.18school year. For students enrolled in grade 8 before the 2005-2006 school year, Minnesota 16.19basic skills tests in reading, mathematics, and writing shall fulfill students' basic skills 16.20testing requirements for a passing state notation. The passing scores of basic skills tests in 16.21reading and mathematics are the equivalent of 75 percent correct for students entering 16.22grade 9 based on the first uniform test administered in February 1998. Students who have 16.23not successfully passed a Minnesota basic skills test by the end of the 2011-2012 school 16.24year must pass the graduation-required assessments for diploma under paragraph (b).16.25(b) The state assessment system must be aligned to the most recent revision of 16.26academic standards as described in section 
         120B.023 in the following manner:16.27(1) mathematics;16.28(i) grades 3 through 8 beginning in the 2010-2011 school year; and16.29(ii) high school level beginning in the 2013-2014 2014-2015 school year;16.30(2) science; grades 5 and 8 and at the high school level beginning in the 2011-2012 16.31school year; and16.32(3) language arts and reading; grades 3 through 8 and high school level beginning in 16.33the 2012-2013 school year.16.34    (c) For students enrolled in grade 8 in the 2005-2006 school year and later, only the 16.35following options shall fulfill students' state graduation test requirements:17.1    (1) for reading and mathematics:17.2    (i) obtaining an achievement level equivalent to or greater than proficient as 17.3determined through a standard setting process on the Minnesota comprehensive 17.4assessments in grade 10 for reading and grade 11 for mathematics or achieving a passing 17.5score as determined through a standard setting process on the graduation-required 17.6assessment for diploma in grade 10 for reading and grade 11 for mathematics or 17.7subsequent retests;17.8    (ii) achieving a passing score as determined through a standard setting process on the 17.9state-identified language proficiency test in reading and the mathematics test for English 17.10language learners or the graduation-required assessment for diploma equivalent of those 17.11assessments for students designated as English language learners;17.12    (iii) achieving an individual passing score on the graduation-required assessment 17.13for diploma as determined by appropriate state guidelines for students with an individual 17.14education plan or 504 plan;17.15    (iv) obtaining achievement level equivalent to or greater than proficient as 17.16determined through a standard setting process on the state-identified alternate assessment 17.17or assessments in grade 10 for reading and grade 11 for mathematics for students with 17.18an individual education plan; or17.19    (v) achieving an individual passing score on the state-identified alternate assessment 17.20or assessments as determined by appropriate state guidelines for students with an 17.21individual education plan; and17.22    (2) for writing:17.23    (i) achieving a passing score on the graduation-required assessment for diploma;17.24    (ii) achieving a passing score as determined through a standard setting process on 17.25the state-identified language proficiency test in writing for students designated as English 17.26language learners;17.27    (iii) achieving an individual passing score on the graduation-required assessment 17.28for diploma as determined by appropriate state guidelines for students with an individual 17.29education plan or 504 plan; or17.30    (iv) achieving an individual passing score on the state-identified alternate assessment 17.31or assessments as determined by appropriate state guidelines for students with an 17.32individual education plan.17.33    (d) Students enrolled in grade 8 in any school year from the 2005-2006 school 17.34year to the 2009-2010 school year who do not pass the mathematics graduation-required 17.35assessment for diploma under paragraph (b) are eligible to receive a high school diploma 17.36with a passing state notation if they:18.1(1) complete with a passing score or grade all state and local coursework and credits 18.2required for graduation by the school board granting the students their diploma;18.3(2) participate in district-prescribed academic remediation in mathematics; and18.4    (3) fully participate in at least two retests of the mathematics GRAD test or until 18.5they pass the mathematics GRAD test, whichever comes first. A school, district, or 18.6charter school must place on the high school transcript a student's highestcurrent pass 18.7status for each subject that has a required graduation assessment score for each of the 18.8following assessments on the student's high school transcript: the mathematics Minnesota 18.9Comprehensive Assessment, reading Minnesota Comprehensive Assessment, and writing 18.10Graduation-Required Assessment for Diploma, and when applicable, the mathematics 18.11Graduation-Required Assessment for Diploma and reading Graduation-Required 18.12Assessment for Diploma.18.13In addition, the school board granting the students their diplomas may formally 18.14decide to include a notation of high achievement on the high school diplomas of those 18.15graduating seniors who, according to established school board criteria, demonstrate 18.16exemplary academic achievement during high school.18.17(e) The 3rd through 8th grade computer-adaptive assessments and high school test 18.18results shall be available to districts for diagnostic purposes affecting student learning and 18.19district instruction and curriculum, and for establishing educational accountability. The 18.20commissioner must disseminate to the public the computer-adaptive assessments and high 18.21school test results upon receiving those results.18.22    (f) The 3rd through 8th grade computer-adaptive assessments and high school tests 18.23must be aligned with state academic standards. The commissioner shall determine the 18.24testing process and the order of administration. The statewide results shall be aggregated 18.25at the site and district level, consistent with subdivision 1a.18.26    (g) In addition to the testing and reporting requirements under this section, the 18.27commissioner shall include the following components in the statewide public reporting 18.28system:18.29    (1) uniform statewide testing of all students in grades 3 through 8 and at the high 18.30school level that provides appropriate, technically sound accommodations or alternate 18.31assessments;18.32    (2) educational indicators that can be aggregated and compared across school 18.33districts and across time on a statewide basis, including average daily attendance, high 18.34school graduation rates, and high school drop-out rates by age and grade level;18.35    (3) state results on the American College Test; and19.1    (4) state results from participation in the National Assessment of Educational 19.2Progress so that the state can benchmark its performance against the nation and other 19.3states, and, where possible, against other countries, and contribute to the national effort 19.4to monitor achievement.19.5(h) Notwithstanding other law to the contrary, the commissioner must not sign a 19.6memorandum of understanding, agree to participate in a consortium or partnership, or 19.7enter into any other agreement with any other state to develop shared common assessments 19.8of K-12 academic standards without first receiving specific legislative authorization.19.9EFFECTIVE DATE.Paragraph (h) is effective the day following final enactment, 19.10and applies to agreements entered into after the effective date of this act. Requirements for 19.11using computer-adaptive mathematics assessments for grades 3 through 8 apply in the 19.122011-2012 school year and later and requirements for using computer-adaptive reading 19.13assessments for grades 3 through 8 apply in the 2013-2014 school year and later.19.14    Sec. 7. Minnesota Statutes 2009 Supplement, section 120B.30, subdivision 1a, is 19.15amended to read:19.16    Subd. 1a. Statewide and local assessments; results. (a) For purposes of this 19.17section, the following definitions have the meanings given them.19.18(1) "Computer-adaptive assessments" means fully adaptive assessments or partially 19.19adaptive assessments.19.20(2) "Fully adaptive assessments" include test items that are on-grade level and items 19.21that may be above or below a student's grade level.19.22(3) "Partially adaptive assessments" include two portions of test items, where one 19.23portion is limited to on-grade level test items and a second portion includes test items that 19.24are on-grade level or above or below a student's grade level.19.25(4) "On-grade level" test items contain subject area content that is aligned to state 19.26academic standards for the grade level of the student taking the assessment.19.27(5) "Above-grade level" test items contain subject area content that is above the grade 19.28level of the student taking the assessment and are considered aligned with state academic 19.29standards to the extent they are aligned with content represented in state academic 19.30standards above the grade level of the student taking the assessment. Notwithstanding 19.31the student's grade level, administering above-grade level test items to a student does not 19.32violate the requirement that state assessments must be aligned with state standards.19.33(6) "Below-grade level" test items contain subject area content that is below 19.34the grade level of the student taking the test and are considered aligned with state 19.35academic standards to the extent they are aligned with content represented in state 20.1academic standards below the student's current grade level. Notwithstanding the student's 20.2grade level, administering below-grade level test items to a student does not violate the 20.3requirement that state assessments must be aligned with state standards.20.4(b) The commissioner must use fully adaptive assessments to the extent no net loss 20.5of federal and state funds occurs as a result of using these assessments. If a net loss of 20.6federal and state funds were to occur under this subdivision, then the commissioner must 20.7use partially adaptive assessments to meet existing federal educational accountability 20.8requirements.20.9(c) For purposes of conforming with existing federal educational accountability 20.10requirements, the commissioner must develop and implement computer-adaptive reading 20.11and mathematics assessments for grades 3 through 8, state-developed high school 20.12reading and mathematics tests aligned with state academic standards, and science 20.13assessments under clause (2) that districts and sites must use to monitor student growth 20.14toward achieving those standards. In developing and implementing computer-adaptive 20.15assessments, the commissioner must allow for paper-and-pencil tests that are the 20.16equivalent of computer-adaptive assessments under this section to the extent these tests 20.17are needed to accommodate the technology capacity of individual school districts. The 20.18commissioner must not develop statewide assessments for academic standards in social 20.19studies, health and physical education, and the arts. The commissioner must require:20.20    (1) annual computer-adaptive reading and mathematics assessments in grades 3 20.21through 8, and high school reading and mathematics tests; and20.22    (2) annual science assessments in one grade in the grades 3 through 5 span, the 20.23grades 6 through 8 span, and a life sciences assessment in the grades 9 through 12 span, 20.24and the commissioner must not require students to achieve a passing score on high school 20.25science assessments as a condition of receiving a high school diploma.20.26(d) The commissioner must ensure that for annual computer-adaptive assessments:20.27(1) individual student performance data and achievement and summary reports are 20.28available to all schools within three school days of when students take an assessment;20.29(2) growth information is available for each student from the student's first 20.30assessment to each proximate assessment using a constant measurement scale;20.31(3) parents, teachers, and school administrators are able to use elementary and 20.32middle school student performance data to project student achievement in high school;20.33(4) teachers and school administrators are able to use formative information about 20.34students' academic strengths and weaknesses, to the extent it is  available, to improve 20.35student instruction and indicate specific skills and knowledge that should be introduced 21.1and developed for students at given score levels, organized by strands within subject areas, 21.2and aligned to state academic standards; and21.3(5) the maximum number of school districts have the opportunity to replace 21.4district-purchased computer-adaptive assessments with state-developed and state-funded 21.5computer-adaptive assessments.21.6    (b) (e) The commissioner must ensure that all statewide tests administered to 21.7elementary and secondary students measure students' academic knowledge and skills and 21.8not students' values, attitudes, and beliefs.21.9    (c) (f) Reporting of assessment results must:21.10    (1) provide timely, useful, and understandable information on the performance of 21.11individual students, schools, school districts, and the state;21.12    (2) include a value-added growth indicator of student achievement under section 21.13120B.35, subdivision 3
         , paragraph (b); and21.14    (3)(i) for students enrolled in grade 8 before the 2005-2006 school year, determine 21.15whether students have met the state's basic skills requirements; and21.16    (ii) for students enrolled in grade 8 in the 2005-2006 school year and later, determine 21.17whether students have met the state's academic standards.21.18    (d) (g) Consistent with applicable federal law and subdivision 1, paragraph (d), 21.19clause (1), the commissioner must include appropriate, technically sound accommodations 21.20or alternative assessments for the very few students with disabilities for whom statewide 21.21assessments are inappropriate and for students with limited English proficiency.21.22    (e) (h) A school, school district, and charter school must administer statewide 21.23assessments under this section, as the assessments become available, to evaluate student 21.24proficiency in the context of the state's grade level academic standards. If a state 21.25assessment is not available, a school, school district, and charter school must determine 21.26locally if a student has met the required academic standards. A school, school district, 21.27or charter school may use a student's performance on a statewide assessment as one of 21.28multiple criteria to determine grade promotion or retention. A school, school district, or 21.29charter school may use a high school student's performance on a statewide assessment 21.30as a percentage of the student's final grade in a course, or place a student's assessment 21.31score on the student's transcript.21.32EFFECTIVE DATE.Requirements for using computer-adaptive mathematics 21.33assessments for grades 3 through 8 apply in the 2011-2012 school year and later and 21.34requirements for using computer-adaptive reading assessments for grades 3 through 8 21.35apply in the 2013-2014 school year and later.22.1    Sec. 8. Minnesota Statutes 2009 Supplement, section 120B.30, is amended by adding a 22.2subdivision to read:22.3    Subd. 1b.High school algebra end-of-course assessment.(a) Notwithstanding 22.4subdivision 1, the commissioner shall establish a statewide high school algebra 22.5end-of-course assessment for students entering grade 8 in the 2010-2011 school year 22.6and later that provides information on the college and career readiness of Minnesota 22.7students and fulfills federal accountability requirements, consistent with this subdivision 22.8and related rules. For purposes of this subdivision, "college and career readiness" means 22.9the knowledge and skills that a high school graduate needs to do either credit-bearing 22.10coursework at a two-year or four-year college or university or career-track employment 22.11that pays a living wage, provides employment benefits, and offers clear pathways for 22.12advancement through further education and training.22.13(b) This statewide high school algebra end-of-course assessment must conform 22.14with the following:22.15(1) align with the most recently revised academic content standards under section 22.16120B.023, subdivision 2;22.17(2) include both multiple-choice and open-ended items that assess the appropriate 22.18algebra knowledge and skills contained in the state's academic content standards;22.19(3) be designed for computer administration and scoring so that, beginning the 22.20second year a computerized test is administered and as soon as practicable during the 22.21first year a computerized test is administered, the exam results of students who take 22.22computerized tests are available to the school or district within three full school days after 22.23the exam is administered, among other design characteristics;22.24(4) be administered at regular intervals that align with the most common high school 22.25schedules in Minnesota;22.26(5) generate achievement levels established through a professionally recognized 22.27methodology;22.28(6) use achievement level descriptors that define a student's college and career 22.29readiness;22.30(7) comprise 20 percent of the student's overall course grade in the corresponding 22.31course;22.32(8) require a student who does not pass a high school algebra course to (i) 22.33retake the course or complete a district-authorized credit recovery class, (ii) opt, at the 22.34student's election, to retake the end-of-course assessment within a regularly scheduled 22.35administration window, and (iii) have the student select the exam score on the initial test 22.36or the retest to count as the equivalent of 20 percent of the student's overall course grade;23.1(9) allow an eligible student to meet this requirement through an alternative method 23.2that demonstrates the student's college and career readiness:23.3(i) for high school students who transfer into Minnesota from another state where 23.4the algebra course content, as applicable, is of equal or greater rigor, pass that state's high 23.5school course and graduation requirements in algebra, as applicable;23.6(ii) allow a student who has an active individualized education program to achieve a 23.7passing status at an individual level as prescribed by the commissioner;23.8(iii) waive the required exam for a high school student who is an English language 23.9learner under section 124D.59 and who has been enrolled for four or fewer years in a 23.10school in which English is the primary language of instruction; or23.11(iv) other alternative methods recommended by the Assessment Advisory 23.12Committee, if subsequently specifically authorized by law to allow other alternative 23.13methods;23.14(10) use three consecutive school years of research and analysis through the 23.152014-2015 school year, as prescribed by the commissioner, to calculate and report an 23.16alignment index that compares students' final grades in this course with their end-of-course 23.17assessment scores;23.18(11) subsequent to calculating and reporting the alignment index under clause (10), 23.19require schools that are highly misaligned for two or more consecutive school years to 23.20transmit written notice of the misalignment to all parents of students enrolled in the school, 23.21as prescribed by the commissioner; and23.22(12) when schools are highly misaligned for two or more consecutive years under 23.23clause (11), use school district funds under section 122A.60, subdivision 1a, paragraph 23.24(a), to correct the misalignment.23.25(c) The requirements of this subdivision apply to students in public schools, 23.26including charter schools, who enter grade 8 in the 2010-2011 school year or later. The 23.27commissioner may establish a transition period where students who enter grade 8 in the 23.282010-2011 or 2011-2012 school year graduate either under the Graduation-Required 23.29Assessment for Diploma requirements under section 120B.30, subdivision 1, or this 23.30subdivision. The commissioner may seek authority from the legislature to adjust the 23.31time line under this paragraph if  circumstances such as changes in federal law governing 23.32educational accountability and assessment warrant such an adjustment.23.33(d) To fully implement this subdivision and enable school districts to provide 23.34intervention and support to struggling students and improve instruction for all students, 23.35the commissioner must provide districts with (1) a benchmark assessment aligned with 23.36the high school algebra end-of-course assessment, and as funding allows, may provide 24.1districts with (2) an item bank available to teachers for creating formative assessments to 24.2help students prepare for the high school algebra end-of-course assessment.24.3(e) The commissioner shall expand the membership and purpose of the Assessment 24.4Advisory Committee established under section 120B.365 to include assessment experts 24.5and practitioners from both secondary and postsecondary education systems and other 24.6appropriate stakeholders to monitor the implementation of and student outcomes based 24.7on the algebra end-of-course assessment and policies and the state support available 24.8to districts, including small or rural districts, under this subdivision. This committee 24.9shall report annually by February 15 to the commissioner and the legislature on the 24.10implementation of and student outcomes based on the assessment and policies under this 24.11subdivision. Notwithstanding section 15.059, subdivision 3, committee members shall not 24.12receive compensation, per diem payments, or reimbursement for expenses.24.13(f) Using a solicitation process that includes a "request for proposal" process and 24.14multiple responses, the commissioner shall contract for at least two  independent studies 24.15at two-year intervals to evaluate (1) the implementation of the requirements and (2) the 24.16availability and efficacy of resources to support and improve student outcomes based on 24.17student achievement data under this subdivision. The commissioner must submit the 24.18results of the first study to the education policy and finance committees of the legislature 24.19by February 15, 2015. The commissioner must submit the results of the second study 24.20to the legislature by February 15, 2017.24.21(g) The commissioner must not begin to develop additional statewide end-of-course 24.22exams in geometry, chemistry, or physics until specifically authorized in law to do so.24.23(h) A district or charter school must indicate on a student's transcript the student's 24.24level of college and career readiness in algebra under this subdivision after the levels have 24.25been established through a professionally recognized methodology.24.26EFFECTIVE DATE.This section is effective the day following final enactment.24.27    Sec. 9. Minnesota Statutes 2009 Supplement, section 120B.30, subdivision 3, is 24.28amended to read:24.29    Subd. 3. Reporting. The commissioner shall report test data results publicly and 24.30to stakeholders, including the performance achievement levels developed from students' 24.31unweighted test scores in each tested subject and a listing of demographic factors that 24.32strongly correlate with student performance. The test results must not include personally 24.33identifiable information as defined in Code of Federal Regulations, title 34, section 99.3.24.34The commissioner shall also report data that compares performance results among school 24.35sites, school districts, Minnesota and other states, and Minnesota and other nations. The 25.1commissioner shall disseminate to schools and school districts a more comprehensive 25.2report containing testing information that meets local needs for evaluating instruction 25.3and curriculum.25.4    Sec. 10. Minnesota Statutes 2009 Supplement, section 120B.30, subdivision 4, is 25.5amended to read:25.6    Subd. 4. Access to tests.Consistent with section 13.34, the commissioner must 25.7adopt and publish a policy to provide public and parental access for review of basic skills 25.8tests, Minnesota Comprehensive Assessments, or any other such statewide test and 25.9assessment which would not compromise the objectivity or fairness of the testing or 25.10examination process. Upon receiving a written request, the commissioner must make 25.11available to parents or guardians a copy of their student's actual responses to the test 25.12questions for their review.25.13    Sec. 11. Minnesota Statutes 2009 Supplement, section 120B.35, subdivision 3, is 25.14amended to read:25.15    Subd. 3. State growth target; other state measures. (a) The state's educational 25.16assessment system measuring individual students' educational growth is based on 25.17indicators of achievement growth that show an individual student's prior achievement. 25.18Indicators of achievement and prior achievement must be based on highly reliable 25.19statewide or districtwide assessments.25.20(b) The commissioner, in consultation with a stakeholder group that includes 25.21assessment and evaluation directors and staff and researchers must implement a model 25.22that uses a value-added growth indicator and includes criteria for identifying schools 25.23and school districts that demonstrate medium and high growth under section 
         120B.299, 25.24subdivisions 8 and 9, and may recommend other value-added measures under section 25.25120B.299, subdivision 3
         . The model may be used to advance educators' professional 25.26development and replicate programs that succeed in meeting students' diverse learning 25.27needs. Data on individual teachers generated under the model are personnel data under 25.28section 
         13.43. The model must allow users to:25.29(1) report student growth consistent with this paragraph; and25.30(2) for all student categories, report and compare aggregated and disaggregated state 25.31growth data using the nine student categories identified under the federal 2001 No Child 25.32Left Behind Act and two student gender categories of male and female, respectively, 25.33following appropriate reporting practices to protect nonpublic student data.26.1The commissioner must report separate measures of student growth and proficiency, 26.2consistent with this paragraph.26.3(c) When reporting student performance under section 
         120B.36, subdivision 1, the 26.4commissioner annually, beginning July 1, 2011, must report two core measures indicating 26.5the extent to which current high school graduates are being prepared for postsecondary 26.6academic and career opportunities:26.7(1) a preparation measure indicating the number and percentage of high school 26.8graduates in the most recent school year who completed course work important to 26.9preparing them for postsecondary academic and career opportunities, consistent with 26.10the core academic subjects required for admission to Minnesota's public colleges and 26.11universities as determined by the Office of Higher Education under chapter 136A; and26.12(2) a rigorous coursework measure indicating the number and percentage of high 26.13school graduates in the most recent school year who successfully completed one or more 26.14college-level advanced placement, international baccalaureate, postsecondary enrollment 26.15options including concurrent enrollment, other rigorous courses of study under section 26.16120B.021, subdivision 1a
         , or industry certification courses or programs.26.17When reporting the core measures under clauses (1) and (2), the commissioner must also 26.18analyze and report separate categories of information using the nine student categories 26.19identified under the federal 2001 No Child Left Behind Act and two student gender 26.20categories of male and female, respectively, following appropriate reporting practices to 26.21protect nonpublic student data.26.22(d) When reporting student performance under section 
         120B.36, subdivision 1, the 26.23commissioner annually, beginning July 1, 2014, must report summary data on school 26.24safety and students' engagement and connection at school. The summary data under this 26.25paragraph are separate from and must not be used for any purpose related to measuring 26.26or evaluating the performance of classroom teachers. The commissioner, in consultation 26.27with qualified experts on student engagement and connection and classroom teachers, 26.28must identify highly reliable variables that generate summary data under this paragraph. 26.29The summary data may be used at school, district, and state levels only. Any data on 26.30individuals received, collected, or created that are used to generate the summary data 26.31under this paragraph are nonpublic data under section 
         13.02, subdivision 9.26.32(e) For purposes of statewide educational accountability, the commissioner must 26.33identify and report measures that demonstrate the success of school districts, school sites, 26.34charter schools, and alternative program providers in improving the graduation outcomes 26.35of students under this paragraph. When reporting student performance under section 26.36120B.36, subdivision 1, the commissioner, beginning July 1, 2013, must annually report 27.1summary data on (i) the four- and six-year graduation rates of students throughout the state 27.2who are identified as at risk of not graduating or off track to graduate, including students 27.3who are eligible to participate in a program under section 123A.05 or 124D.68, among 27.4other students, and (ii) the success that school districts, school sites, charter schools, and 27.5alternative program providers experience in:27.6(1) identifying at-risk and off-track student populations by grade;27.7(2) providing successful prevention and intervention strategies for at-risk students;27.8(3) providing successful recuperative and recovery or reenrollment strategies for 27.9off-track students; and27.10(4) improving the graduation outcomes of at-risk and off-track students.27.11    For purposes of this paragraph, a student who is at risk of not graduating is a student 27.12in eighth or ninth grade who meets one or more of the following criteria: first enrolled 27.13in an English language learners program in eighth or ninth grade and may be older than 27.14other students enrolled in the same grade; as an eighth grader, is absent from school for at 27.15least 20 percent of the days of instruction during the school year, is two or more years 27.16older than other students enrolled in the same grade, or fails multiple core academic 27.17courses; or as a ninth grader, fails multiple ninth grade core academic courses in English 27.18language arts, math, science, or social studies.27.19    For purposes of this paragraph, a student who is off track to graduate is a student 27.20who meets one or more of the following criteria: first enrolled in an English language 27.21learners program in high school and is older than other students enrolled in the same grade; 27.22is a returning dropout; is 16 or 17 years old and two or more academic years off track to 27.23graduate; is 18 years or older and two or more academic years off track to graduate; or is 27.2418 years or older and may graduate within one school year.27.25EFFECTIVE DATE.Paragraph (e) applies to data that are collected in the 27.262012-2013 school year and later and reported annually beginning July 1, 2013, consistent 27.27with the recommendations the commissioner receives from recognized and qualified 27.28experts on improving differentiated graduation rates, and establishing alternative routes to 27.29a standard high school diploma for at-risk and off-track students.27.30    Sec. 12. Minnesota Statutes 2009 Supplement, section 120B.36, subdivision 1, is 27.31amended to read:27.32    Subdivision 1. School performance report cards. (a) The commissioner 27.33shall report student academic performance under section 
         120B.35, subdivision 2; the 27.34percentages of students showing low, medium, and high growth under section 
         120B.35, 27.35subdivision 3
         , paragraph (b); school safety and student engagement and connection 28.1under section 
         120B.35, subdivision 3, paragraph (d); rigorous coursework under section 28.2120B.35, subdivision 3
         , paragraph (c); the four- and six-year graduation rates of at-risk and 28.3off-track students throughout the state under section 120B.35, subdivision 3, paragraph 28.4(e), and the success that school districts, school sites, charter schools, and alternative 28.5program providers experience in their efforts to improve the graduation outcomes of 28.6those students; two separate student-to-teacher ratios that clearly indicate the definition 28.7of teacher consistent with sections 
         122A.06 and 
         122A.15 for purposes of determining 28.8these ratios; staff characteristics excluding salaries; student enrollment demographics; 28.9district mobility; and extracurricular activities. The report also must indicate a school's 28.10adequate yearly progress status, and must not set any designations applicable to high- and 28.11low-performing schools due solely to adequate yearly progress status.28.12    (b) The commissioner shall develop, annually update, and post on the department 28.13Web site school performance report cards.28.14    (c) The commissioner must make available performance report cards by the 28.15beginning of each school year.28.16    (d) A school or district may appeal its adequate yearly progress status in writing to 28.17the commissioner within 30 days of receiving the notice of its status. The commissioner's 28.18decision to uphold or deny an appeal is final.28.19    (e) School performance report card data are nonpublic data under section 
         13.02, 28.20subdivision 9
         , until not later than ten days after the appeal procedure described in 28.21paragraph (d) concludes. The department shall annually post school performance report 28.22cards to its public Web site no later than September 1.28.23EFFECTIVE DATE.This section is effective the day following final enactment 28.24and applies to annual reports beginning July 1, 2013.28.25    Sec. 13. [121A.215] LOCAL SCHOOL DISTRICT WELLNESS POLICIES; 28.26WEB SITE.28.27Where available, a school district must post its current local school wellness policy 28.28on its Web site.28.29EFFECTIVE DATE.This section is effective August 1, 2010.28.30    Sec. 14. Minnesota Statutes 2009 Supplement, section 122A.09, subdivision 4, is 28.31amended to read:28.32    Subd. 4. License and rules. (a) The board mustmay adopt new rules and amend 28.33any existing rules to license public school teachers and interns subject toonly under 29.1specific legislative authority and consistent with the requirements of chapter 14. This 29.2paragraph does not prohibit the board from making technical changes or corrections to 29.3rules or repealing rules adopted by the board.29.4(b) The board must adopt rules requiring a person to successfully complete a skills 29.5examination in reading, writing, and mathematics as a requirement for initial teacher 29.6licensure. Such rules must require college and universities offering a board-approved 29.7teacher preparation program to provide remedial assistance to persons who did not 29.8achieve a qualifying score on the skills examination, including those for whom English is 29.9a second language.29.10(c) The board must adopt rules to approve teacher preparation programs. The board, 29.11upon the request of a postsecondary student preparing for teacher licensure or a licensed 29.12graduate of a teacher preparation program, shall assist in resolving a dispute between the 29.13person and a postsecondary institution providing a teacher preparation program when the 29.14dispute involves an institution's recommendation for licensure affecting the person or the 29.15person's credentials. At the board's discretion, assistance may include the application 29.16of chapter 14.29.17(d) The board must provide the leadership and shall adopt rules for the redesign of 29.18teacher education programs to implement a research based, results-oriented curriculum 29.19that focuses on the skills teachers need in order to be effective. The board shall implement 29.20new systems of teacher preparation program evaluation to assure program effectiveness 29.21based on proficiency of graduates in demonstrating attainment of program outcomes.29.22(e) The board must adopt rules requiring candidates for initial licenses to 29.23successfully complete pass an examination of general pedagogical knowledge and 29.24examinations of licensure-specific teaching skills. The rules shall be effective by 29.25September 1, 2001. The rules under this paragraph also must require candidates for 29.26initial licenses to teach prekindergarten or elementary students to successfully complete, 29.27as part of the examination of licensure-specific teaching skills, test items assessing the 29.28candidates' knowledge, skill, and ability in comprehensive, scientifically based reading 29.29instruction under section 
         122A.06, subdivision 4, and their knowledge and understanding 29.30of the foundations of reading development, the development of reading comprehension, 29.31and reading assessment and instruction, and their ability to integrate that knowledge 29.32and understanding. The rules under this paragraph also must require general education 29.33candidates for initial licenses to teach prekindergarten or elementary students to pass, 29.34as part of the examination of licensure-specific teaching skills, test items assessing the 29.35candidates' knowledge, skill, and ability in mathematics.30.1(f) The board must adopt rules requiring teacher educators to work directly with 30.2elementary or secondary school teachers in elementary or secondary schools to obtain 30.3periodic exposure to the elementary or secondary teaching environment.30.4(g) The board must grant licenses to interns and to candidates for initial licenses.30.5(h) The board must design and implement an assessment system which requires a 30.6candidate for an initial license and first continuing license to demonstrate the abilities 30.7necessary to perform selected, representative teaching tasks at appropriate levels.30.8(i) The board must receive recommendations from local committees as established 30.9by the board for the renewal of teaching licenses. Committee recommendations must be 30.10consistent with section 122A.18, subdivision 4, paragraph (b).30.11(j) The board must grant life licenses to those who qualify according to requirements 30.12established by the board, and suspend or revoke licenses pursuant to sections 
         122A.20 and 30.13214.10
         . The board must not establish any expiration date for application for life licenses.30.14(k) The board must adopt rules that require all licensed teachers who are renewing 30.15their continuing license to include in their renewal requirements further preparation in 30.16the areas of using positive behavior interventions and in accommodating, modifying, and 30.17adapting curricula, materials, and strategies to appropriately meet the needs of individual 30.18students and ensure adequate progress toward the state's graduation rule.30.19(l) In adopting rules to license public school teachers who provide health-related 30.20services for disabled children, the board shall adopt rules consistent with license or 30.21registration requirements of the commissioner of health and the health-related boards who 30.22license personnel who perform similar services outside of the school.30.23(m) The board must adopt rules that require all licensed teachers who are renewing 30.24their continuing license to include in their renewal requirements further reading 30.25preparation, consistent with section 
         122A.06, subdivision 4. The rules do not take effect 30.26until they are approved by law. Teachers who do not provide direct instruction including, at 30.27least, counselors, school psychologists, school nurses, school social workers, audiovisual 30.28directors and coordinators, and recreation personnel are exempt from this section.30.29(n) The board must adopt rules that require all licensed teachers who are renewing 30.30their continuing license to include in their renewal requirements further preparation 30.31in understanding the key warning signs of early-onset mental illness in children and 30.32adolescents.30.33(o) The board, consistent with section 122A.18, subdivision 4, paragraph (b), must 30.34amend its licensure renewal rules to include professional reflection and growth in best 30.35teaching practices in the preparation requirements for relicensure under this paragraph 31.1and paragraphs (i), (k), (m), and (n), and any other preparation requirements applicable to 31.2teachers seeking to renew their continuing license from the board.31.3EFFECTIVE DATE.This section is effective the day following final enactment 31.4and applies to all new and amended rules proposed by the Board of Teaching, including all 31.5new and amended rules that are not yet formally adopted, except that the amendments 31.6to paragraphs (i) and (o) apply to licensees seeking relicensure beginning June 30, 2012. 31.7This section does not affect the requirement that the Board of Teaching continue to finally 31.8adopt rules initially proposed before the effective date of this section, to implement the 31.9requirement of Laws 2003, chapter 129, article 1, section 10, and Laws 2007, chapter 31.10146, article 2, section 34, that the board adopt rules relating to credentials for education 31.11paraprofessionals.31.12    Sec. 15. [122A.091] BOARD OF TEACHING; TEACHER PERFORMANCE 31.13ASSESSMENTS.31.14(a) Consistent with section 122A.09, subdivision 4, the Board of Teaching must 31.15adopt rules to establish a statewide teacher performance assessment system that is aligned 31.16with Minnesota's required K-12 academic standards and accommodates locally adopted 31.17alternative assessment measures including teacher portfolios. Teacher performance 31.18assessments must:31.19(1) include training and a reliability review for educators who evaluate teachers' 31.20performance;31.21(2) be integrated with board-approved teacher preparation requirements; and31.22(3) correspond to the state and local resources allocated for this purpose.31.23(b) To the extent resources are available, the Board of Teaching must:31.24(1) convene a group of experts, where at least one-third of group members 31.25are classroom teachers, to advise the board about teacher performance standards, 31.26developmental scales for teacher candidates, and the design, content, administration, and 31.27scoring of teacher performance assessments;31.28(2) design, develop, and implement assessment standards and a statewide training 31.29program for educators to evaluate teachers' performance;31.30(3) establish a review panel to examine districts' use of teacher performance 31.31assessments;31.32(4) periodically analyze the validity of assessment content and the reliability of 31.33assessment scores under this section;31.34(5) establish and implement appropriate standards applicable to teacher candidates 31.35for demonstrating satisfactory performance;32.1(6) analyze and eliminate bias in the performance assessments;32.2(7) collect and analyze background information from teacher candidates who 32.3participate in a performance assessment, interpret and report the results, and use 32.4the information and results to analyze the quality and effectiveness of performance 32.5assessments; and32.6(8) examine and revise board approval of teacher preparation programs and 32.7institutions to assure teacher candidates of opportunities to acquire the knowledge, skills, 32.8and abilities measured by the assessment system.32.9(c) The board must ensure that performance assessments are ongoing, well-integrated 32.10into teacher preparation programs, aligned with state standards of effective teaching 32.11practices, and consistently applied to teacher candidates enrolled in board-approved 32.12teacher preparation programs. Performance assessments must meet the needs of teacher 32.13candidates, teacher preparation program providers, and school districts that employ newly 32.14licensed teachers by:32.15(1) designing performance assessments that accommodate formative assessment 32.16information for teacher candidates, postsecondary faculty, and educators who evaluate 32.17teachers' performance to use to help teachers and teacher candidates improve their 32.18teaching knowledge, skills, and abilities;32.19(2) developing a teacher performance reporting system that a teacher preparation 32.20program provider can use to recommend a successful teacher candidate for licensure; and32.21(3) using reports of formative assessment information and performance assessment 32.22results for developing new teacher induction plans.32.23EFFECTIVE DATE.This section is effective the day following final enactment.32.24    Sec. 16. Minnesota Statutes 2008, section 122A.16, is amended to read:32.25122A.16 HIGHLY QUALIFIED TEACHER DEFINED.32.26(a) A qualified teacher is one holding a valid license, under this chapter, to perform 32.27the particular service for which the teacher is employed in a public school.32.28(b) For the purposes of the federal No Child Left Behind Act, a highly qualified 32.29teacher is one who holds a valid license under this chapter to perform the particular service 32.30for which the teacher is employed in a public school or who meets the requirements of a 32.31highly objective uniform state standard of evaluation (HOUSSE).32.32All Minnesota teachers teaching in a core academic subject area, as defined by the 32.33federal No Child Left Behind Act, in which they are not fully licensed may complete the 32.34following HOUSSE process in the core subject area for which the teacher is requesting 33.1highly qualified status by completing an application, in the form and manner described by 33.2the commissioner, that includes:33.3(1) documentation of student achievement as evidenced by norm-referenced test 33.4results that are objective and psychometrically valid and reliable;33.5(2) evidence of local, state, or national activities, recognition, or awards for 33.6professional contribution to achievement;33.7(3) description of teaching experience in the teachers' core subject area in a public 33.8school under a waiver, variance, limited license or other exception; nonpublic school; and 33.9postsecondary institution;33.10(4) test results from the Praxis IIsubject area content test;33.11(5) evidence of advanced certification from the National Board for Professional 33.12Teaching Standards;33.13(6) evidence of the successful completion of course work or pedagogy courses; and33.14(7) evidence of the successful completion of high quality professional development 33.15activities.33.16Districts must assign a school administrator to serve as a HOUSSE reviewer to 33.17meet with teachers under this paragraph and, where appropriate, certify the teachers' 33.18applications. Teachers satisfy the definition of highly qualified when the teachers receive 33.19at least 100 of the total number of points used to measure the teachers' content expertise 33.20under clauses (1) to (7). Teachers may acquire up to 50 points only in any one clause (1) 33.21to (7). Teachers may use the HOUSSE process to satisfy the definition of highly qualified 33.22for more than one subject area.33.23(c) Achievement of the HOUSSE criteria is not equivalent to a license. A teacher 33.24must obtain permission from the Board of Teaching in order to teach in a public school.33.25    Sec. 17. Minnesota Statutes 2008, section 122A.18, subdivision 1, is amended to read:33.26    Subdivision 1. Authority to license. (a) The Board of Teaching must license 33.27teachers, as defined in section 
         122A.15, subdivision 1, except for supervisory personnel, 33.28as defined in section 
         122A.15, subdivision 2.  33.29(b) The Board of School Administrators must license supervisory personnel as 33.30defined in section 
         122A.15, subdivision 2, except for athletic coaches.  33.31(c) Licenses under the jurisdiction of the Board of Teaching, the Board of School 33.32Administrators, and the commissioner of education must be issued through the licensing 33.33section of the department.33.34(d) The Board of Teaching may approve only those teacher preparation programs that 33.35target and address identified concerns affecting students in kindergarten through grade 12. 34.1The Board of Teaching and the Department of Education, consistent with the requirements 34.2of chapter 13, must enter into an agreement to share kindergarten through grade 12 34.3educational data solely for approving and improving teacher education programs. The 34.4Board of Teaching must ensure that this information remains confidential and is used only 34.5for this purpose. Any unauthorized disclosure is subject to a penalty under section 13.09.34.6(e) The Board of School Administrators may approve only those administrator 34.7preparation programs that target and address identified concerns affecting students in 34.8kindergarten through grade 12. The Board of School Administrators and the Department 34.9of Education, consistent with the requirements of chapter 13, must enter into an agreement 34.10to share kindergarten through grade 12 educational data solely for approving and 34.11improving education administration programs. The Board of School Administrators must 34.12ensure that this information remains confidential and is used only for this purpose. Any 34.13unauthorized disclosure is subject to a penalty under section 13.09.34.14    Sec. 18. Minnesota Statutes 2008, section 122A.18, subdivision 2, is amended to read:34.15    Subd. 2. Teacher and support personnel qualifications. (a) The Board of 34.16Teaching must issue licenses under its jurisdiction to persons the board finds to be 34.17qualified and competent for their respective positions.34.18(b) The board must require a person to successfully complete pass an examination of 34.19skills in reading, writing, and mathematics before being granted an initial teaching license 34.20to provide direct instruction to pupils in prekindergarten, elementary, secondary, or special 34.21education programs. The board must require colleges and universities offering a board 34.22approved teacher preparation program to provide remedial assistance that includes a 34.23formal diagnostic component to persons enrolled in their institution who did not achieve a 34.24qualifying score on the skills examination, including those for whom English is a second 34.25language. The colleges and universities must provide assistance in the specific academic 34.26areas of deficiency in which the person did not achieve a qualifying score. School 34.27districts must provide similar, appropriate, and timely remedial assistance that includes a 34.28formal diagnostic component and mentoring to those persons employed by the district 34.29who completed their teacher education program outside the state of Minnesota, received 34.30a one-year license to teach in Minnesota and did not achieve a qualifying score on the 34.31skills examination, including those persons for whom English is a second language. The 34.32Board of Teaching shall report annually to the education committees of the legislature 34.33on the total number of teacher candidates during the most recent school year taking the 34.34skills examination, the number who achieve a qualifying score on the examination, the 34.35number who do not achieve a qualifying score on the examination, the distribution of all 35.1candidates' scores, the number of candidates who have taken the examination at least once 35.2before, and the number of candidates who have taken the examination at least once before 35.3and achieve a qualifying score.35.4(c) A person who has completed an approved teacher preparation program and 35.5obtained a one-year license to teach, but has not successfully completed the skills 35.6examination, may renew the one-year license for two additional one-year periods. Each 35.7renewal of the one-year license is contingent upon the licensee:35.8(1) providing evidence of participating in an approved remedial assistance program 35.9provided by a school district or postsecondary institution that includes a formal diagnostic 35.10component in the specific areas in which the licensee did not obtain qualifying scores; and35.11(2) attempting to successfully complete the skills examination during the period 35.12of each one-year license.35.13(d)(c) The Board of Teaching must grant continuing licenses only to those persons 35.14who have met board criteria for granting a continuing license, which includes successfully 35.15completing passing the skills examination in reading, writing, and mathematics.35.16(e)(d) All colleges and universities approved by the board of teaching to prepare 35.17persons for teacher licensure must include in their teacher preparation programs a common 35.18core of teaching knowledge and skills to be acquired by all persons recommended 35.19for teacher licensure. This common core shall meet the standards developed by the 35.20interstate new teacher assessment and support consortium in its 1992 "model standards for 35.21beginning teacher licensing and development." Amendments to standards adopted under 35.22this paragraph are covered by chapter 14. The board of teaching shall report annually to 35.23the education committees of the legislature on the performance of teacher candidates 35.24on common core assessments of knowledge and skills under this paragraph during the 35.25most recent school year.35.26(e) The Board of Teaching must: 35.27(1) ensure that kindergarten through grade 12 teacher licensing standards are highly 35.28aligned with the state's kindergarten through grade 12 academic standards;35.29(2) adopt a review cycle that is consistent with the kindergarten through grade 12 35.30academic standards review cycle under section 120B.023, subdivision 2; and 35.31(3) review and align the teacher licensure standards with the kindergarten through 35.32grade 12 academic standards within one school year after the commissioner reviews and 35.33adopts revised kindergarten through grade 12 academic standards in a particular subject 35.34area.35.35(f) All teacher preparation programs approved by the Board of Teaching must 35.36require teacher candidates to complete at least one online course.36.1    Sec. 19. Minnesota Statutes 2008, section 122A.23, subdivision 2, is amended to read:36.2    Subd. 2. Applicants licensed in other states. (a) Subject to the requirements 36.3of sections 
         122A.18, subdivision 8, and 
         123B.03, the Board of Teaching must issue 36.4a teaching license or a temporary teaching license under paragraphs (b) to (e) to an 36.5applicant who holds at least a baccalaureate degree from a regionally accredited college 36.6or university and holds or held a similar out-of-state teaching license that requires the 36.7applicant to successfully complete a teacher preparation program approved by the issuing 36.8state, which includes field-specific teaching methods and student teaching or essentially 36.9equivalent experience.  36.10(b) The Board of Teaching must issue a teaching license to an applicant who:36.11(1) successfully completed passed all exams and successfully completed human 36.12relations preparation components required by the Board of Teaching; and36.13(2) holds or held an out-of-state teaching license to teach the same content field and 36.14grade levels if the scope of the out-of-state license is no more than one grade level less 36.15than a similar Minnesota license.36.16(c) The Board of Teaching, consistent with board rules, must issue up to three 36.17one-year temporary teaching licenses to an applicant who holds or held an out-of-state 36.18teaching license to teach the same content field and grade levels, where the scope of the 36.19out-of-state license is no more than one grade level less than a similar Minnesota license, 36.20but has not successfully completed passed all exams and successfully completed human 36.21relations preparation components required by the Board of Teaching.36.22(d) The Board of Teaching, consistent with board rules, must issue up to three 36.23one-year temporary teaching licenses to an applicant who:36.24(1) successfully completed passed all exams and successfully completed human 36.25relations preparation components required by the Board of Teaching; and36.26(2) holds or held an out-of-state teaching license to teach the same content field 36.27and grade levels, where the scope of the out-of-state license is no more than one grade 36.28level less than a similar Minnesota license, but has not completed field-specific teaching 36.29methods or student teaching or equivalent experience.36.30The applicant may complete field-specific teaching methods and student teaching 36.31or equivalent experience by successfully participating in a one-year school district 36.32mentorship program consistent with board-adopted standards of effective practice and 36.33Minnesota graduation requirements.36.34(e) The Board of Teaching must issue a temporary teaching license for a term of 36.35up to three years only in the content field or grade levels specified in the out-of-state 36.36license to an applicant who:37.1(1) successfully completed passed all exams and successfully completed human 37.2relations preparation components required by the Board of Teaching; and37.3(2) holds or held an out-of-state teaching license where the out-of-state license is 37.4more limited in the content field or grade levels than a similar Minnesota license.37.5(f) The Board of Teaching must not issue to an applicant more than three one-year 37.6temporary teaching licenses under this subdivision.37.7(g) The Board of Teaching must not issue a license under this subdivision if the 37.8applicant has not attained the additional degrees, credentials, or licenses required in a 37.9particular licensure field.37.10    Sec. 20. [122A.245] ALTERNATIVE TEACHER PREPARATION PROGRAM 37.11AND LIMITED-TERM TEACHER LICENSE.37.12    Subdivision 1.Requirements.(a) The Board of Teaching must approve qualified 37.13teacher preparation programs under this section that are a means to acquire a two-year 37.14limited-term license and to prepare for acquiring a standard entrance license. Partnerships 37.15composed of school districts or charter schools and either:37.16(1) a college or university with a board-approved alternative teacher preparation 37.17program; or37.18(2) a nonprofit corporation formed for an education-related purpose and subject 37.19to chapter 317A and a college or university with a board-approved alternative teacher 37.20preparation program may offer this program if:37.21(i) a need for teachers exists based on the determination by a participating school 37.22district or charter school that in the previous school year too few qualified candidates 37.23applied for its posted, available teaching positions;37.24(ii) the teaching staff does not reflect the racial and cultural diversity of the student 37.25population of the district or charter school; or37.26(iii) the school district or charter school identifies a need to reduce or eliminate a 37.27student achievement gap based on school performance report card data under section 37.28120B.36.37.29(b) To participate in this program, a candidate must:37.30(1) have a bachelor's degree with a minimum 3.0 grade point average, or have a 37.31bachelor's degree and meet other board-adopted criteria;37.32(2) pass the reading, writing, and mathematics skills examination under section 37.33122A.18; and37.34(3) pass the board-approved content area and pedagogy tests.38.1    Subd. 2.Characteristics.An alternative teacher preparation program under this 38.2section must include:38.3(1) a minimum 200-hour instructional phase that provides intensive preparation 38.4before that person assumes classroom responsibilities;38.5(2) a research-based and results-oriented approach focused on best teaching practices 38.6to increase student proficiency and growth measured against state academic standards;38.7(3) strategies to combine pedagogy and best teaching practices to better inform 38.8teachers' classroom instruction;38.9(4) assessment, supervision, and evaluation of the program participant to determine 38.10the participant's specific needs throughout the program and to support the participant 38.11in successfully completing the program;38.12(5) formal instruction and intensive peer coaching throughout the school year that 38.13provide structured guidance and regular ongoing support;38.14(6) high quality, sustained, intensive, and classroom-embedded staff development 38.15opportunities conducted by a mentor or by a mentorship team that may include school 38.16administrators, teachers, and postsecondary faculty members and are directed at improving 38.17student learning and achievement; and38.18(7) a requirement that program participants demonstrate to the local site team under 38.19subdivision 5 that they are making satisfactory progress toward acquiring a standard 38.20entrance license from the Board of Teaching.38.21    Subd. 3.Program approval.The Board of Teaching must approve alternative 38.22teacher preparation programs under this section based on board-adopted criteria that reflect 38.23best practices for alternative teacher preparation programs consistent with this section. 38.24The board must permit licensure candidates to demonstrate licensure competencies in 38.25school-based settings and through other nontraditional means.38.26    Subd. 4.Employment conditions.Where applicable, teachers with a limited-term 38.27license under this section are subject to the terms of the local collective bargaining 38.28agreement between the local representative of the teachers and the school board.38.29    Subd. 5.Approval for standard entrance license.A local site team that may 38.30include teachers, school administrators, postsecondary faculty, and nonprofit staff must 38.31evaluate the performance of the teacher candidate using the Minnesota State Standards of 38.32Effective Practice for Teachers established in rule and submit to the board an evaluation 38.33report recommending whether or not to issue the teacher candidate a standard entrance 38.34license.39.1    Subd. 6.Standard entrance license.The Board of Teaching must issue a standard 39.2entrance license to a teacher candidate under this section who successfully performs 39.3throughout the program and is recommended for licensure under subdivision 5.39.4    Subd. 7.Qualified teacher.A person with a valid limited-term license under this 39.5section is the teacher of record and a qualified teacher within the meaning of section 39.6122A.16.39.7    Subd. 8.Reports.The Board of Teaching must submit an interim report on the 39.8efficacy of this program to the K-12 Education Policy and Finance committees of the 39.9legislature by February 15, 2012, and a final report by February 15, 2014.39.10EFFECTIVE DATE.This section is effective for the 2010-2011 school year and 39.11later.39.12    Sec. 21. [122A.246] ALTERNATIVE TEACHER PREPARATION 39.13PROGRAM AND LIMITED-TERM TEACHER LICENSE FOR MID-CAREER 39.14PROFESSIONALS.39.15    Subdivision 1.Requirements.(a) The Board of Teaching annually must approve 39.16qualified teacher preparation programs under this section that are a means for mid-career 39.17professionals to acquire a two-year limited-term license and to prepare for acquiring a 39.18standard entrance license. Partnerships composed of school districts or charter schools 39.19and either:39.20(1) a college or university with a board-approved alternative teacher preparation 39.21program; or39.22(2) a nonprofit corporation formed for an education-related purpose and subject 39.23to chapter 317A and a college or university with a board-approved alternative teacher 39.24preparation program may offer this program if:39.25(i) a need for teachers exists in a subject area identified by the department as a 39.26shortage area;39.27(ii) the teaching staff does not reflect the racial and cultural diversity of the student 39.28population of the district or charter school; and39.29(iii) the district or charter school identifies a need to reduce or eliminate a student 39.30achievement gap based on school performance report card data under section 120B.36.39.31(b) To participate in this program, a candidate must:39.32(1) have a bachelor's degree and at least ten years of professional experience in a 39.33field related to the license being sought; or 39.34(2) hold a valid teaching license and have at least five years of classroom teaching 39.35experience.40.1(c) A candidate under paragraph (b), clause (1), must:40.2(1) pass the reading, writing, and mathematics skills examination under section 40.3122A.18; 40.4(2) obtain qualifying scores on board-approved content area and pedagogy tests; and40.5(3) before receiving a limited term license under this section, complete a minimum 40.6200-hour instructional phase that provides intensive preparation and a full-time student 40.7teaching experience that places the candidate in the classroom under the direct supervision 40.8of a fully licensed classroom teacher for at least 12 weeks. A candidate under paragraph 40.9(b), clause (1), is declared to have met the requirements of this paragraph through the 40.10licensing process and previous classroom experience.40.11    Subd. 2.Characteristics.An alternative teacher preparation program under this 40.12section must include:40.13(1) a research-based and results-oriented approach focused on best teaching practices 40.14to increase student proficiency and growth measured against state academic standards;40.15(2) strategies to combine pedagogy and best teaching practices to better inform 40.16teachers' classroom instruction;40.17(3) assessment, supervision, and evaluation of the program participant to determine 40.18the participant's specific needs throughout the program and to support the participant 40.19in successfully completing the program;40.20(4) formal instruction and intensive peer coaching throughout the school year that 40.21provide structured guidance and regular ongoing support;40.22(5) high quality, sustained, intensive, and classroom-embedded staff development 40.23opportunities conducted by a mentor or by a mentorship team that may include school 40.24administrators, teachers, and postsecondary faculty members and are directed at improving 40.25student learning and achievement; and40.26(6) a requirement that program participants demonstrate to the local site team under 40.27subdivision 5 that they are making satisfactory progress toward acquiring a standard 40.28entrance license from the Board of Teaching.40.29    Subd. 3.Program approval.The Board of Teaching must approve alternative 40.30teacher preparation programs under this section based on board-adopted criteria that reflect 40.31best practices for alternative teacher preparation programs consistent with this section. 40.32The board must permit licensure candidates to demonstrate licensure competencies in 40.33school-based settings and through other nontraditional means.40.34    Subd. 4.Employment conditions.(a) Each full school year that a teacher with 40.35a limited-term license teaches in a Minnesota school is one year of the teacher's first 40.36probationary employment period.41.1(b) Where applicable, teachers with a limited-term license under this section 41.2are subject to the terms of the local collective bargaining agreement between the local 41.3representative of the teachers and the school board.41.4(c) A school district or charter school must not prospectively promise to employ a 41.5teacher candidate who receives a standard entrance license under this section.41.6    Subd. 5.Approval for standard entrance license.Postsecondary faculty, the 41.7supervising teacher, and other qualified staff must evaluate the performance of the teacher 41.8candidate using the Minnesota state standards of effective practice for teachers and content 41.9standards by licensure area established in rule and submit to the board an evaluation report 41.10recommending whether or not to issue the teacher candidate a standard entrance license.41.11    Subd. 6.Standard entrance license.The Board of Teaching may issue a standard 41.12entrance license to a teacher candidate under this section who successfully performs under 41.13the two-year limited license and is recommended for licensure under subdivision 5.41.14    Subd. 7.Qualified teacher.A person with a valid limited-term license under this 41.15section is the teacher of record and a qualified teacher within the meaning of section 41.16122A.16.41.17    Subd. 8.Reports.(a) The Board of Teaching annually must collect and report to 41.18the K-12 Education Policy and Finance Committees of the legislature alternative teacher 41.19preparation program provider data on cumulative teacher retention rates, number of 41.20licenses issued by licensure area, the locations where teachers are placed, the number of 41.21programs approved, and the demographic characteristics of the teacher candidates, among 41.22other data. The board may use these data to approve program providers under this section.41.23(b) The Board of Teaching must submit a report on the efficacy of this program to the 41.24K-12 Education Policy and Finance committees of the legislature by February 15, 2014.41.25    Sec. 22. Minnesota Statutes 2009 Supplement, section 122A.40, subdivision 8, is 41.26amended to read:41.27    Subd. 8. Annual evaluations and peer coaching for continuing contract 41.28teachers.(a) To improve student learning and success, a school board and an exclusive 41.29representative of the teachers in the district, consistent with paragraph (b), shall develop 41.30a an annual teacher evaluation and peer review process for continuing contract teachers 41.31through joint agreement. The peer review process may must include having trained 41.32observers serve as peer coaches or having teachers participate in professional learning 41.33communities.42.1(b) To develop, improve, and support qualified teachers and effective teaching 42.2practices and improve student learning and success, the annual evaluation process for 42.3continuing contract teachers must:42.4(1) be a collaborative effort between teachers and school administrators to develop 42.5and implement a teacher evaluation process that is based on professional teaching 42.6standards and includes both formative assessments to improve instruction through 42.7identifying teachers' strengths and weaknesses and summative assessments conducted at 42.8least once every three school years and used to make personnel decisions, consistent 42.9with clause (2);42.10(2) coordinate staff development activities under section 122A.60 with this 42.11evaluation process and teachers' evaluation outcomes and give teachers not meeting 42.12standards of effective practice sufficient support to improve;42.13(3) include in-class observations by both licensed mentor teachers and school 42.14administrators who are trained evaluators, use a valid observation framework or protocol, 42.15and periodically undergo a reliability review;42.16(4) provide peer coaching or have teachers participate in professional learning 42.17communities, consistent with paragraph (a);42.18(5) require teachers to develop and present a portfolio demonstrating evidence 42.19of reflection and professional growth, consistent with section 122A.18, subdivision 42.204, paragraph (b), using criteria developed by the Board of Teaching to reliably assess 42.21portfolio content, and include teachers' own performance assessment based on student 42.22work samples, student and family surveys, and videotapes of teachers' work, among 42.23other activities;42.24(6) demonstrate teachers' content knowledge and teaching skills; and42.25(7) use longitudinal data on student academic growth, student attendance, student 42.26engagement and connection, and other outcome measures as evaluation components.42.27EFFECTIVE DATE.This section is effective the day following final enactment 42.28and applies beginning when a district next enters into or modifies a collective bargaining 42.29agreement or by the 2011-2012 school year, whichever comes first.42.30    Sec. 23. Minnesota Statutes 2009 Supplement, section 122A.41, subdivision 5, is 42.31amended to read:42.32    Subd. 5. Annual evaluations and peer coaching for continuing contract 42.33teachers.(a) To improve student learning and success, a school board and an exclusive 42.34representative of the teachers in the district, consistent with paragraph (b), must develop a42.35an annual teacher evaluation and peer review process for nonprobationary teachers through 43.1joint agreement. The peer review process may must include having trained observers 43.2serve as peer coaches or having teachers participate in professional learning communities.43.3(b) To develop, improve, and support qualified teachers and effective teaching 43.4practices and improve student learning and success, the annual evaluation process for 43.5continuing contract teachers must:43.6(1) be a collaborative effort between teachers and school administrators to develop 43.7and implement a teacher evaluation process that is based on professional teaching 43.8standards and includes both formative assessments to improve instruction through 43.9identifying teachers' strengths and weaknesses and summative assessments conducted at 43.10least once every three school years and used to make personnel decisions, consistent 43.11with clause (2);43.12(2) coordinate staff development activities under section 122A.60 with this 43.13evaluation process and teachers' evaluation outcomes and give teachers not meeting 43.14standards of effective practice sufficient support to improve;43.15(3) include in-class observations by both licensed mentor teachers and school 43.16administrators who are trained evaluators, use a valid observation framework or protocol, 43.17and periodically undergo a reliability review;43.18(4) provide peer coaching or have teachers participate in professional learning 43.19communities, consistent with paragraph (a);43.20(5) require teachers to develop and present a portfolio demonstrating evidence 43.21of reflection and professional growth, consistent with section 122A.18, subdivision 43.224, paragraph (b), using criteria developed by the Board of Teaching to reliably assess 43.23portfolio content, and include teachers' own performance assessment based on student 43.24work samples, student and family surveys, and videotapes of teachers' work, among 43.25other activities;43.26(6) demonstrate teachers' content knowledge and teaching skills; and43.27(7) use longitudinal data on student academic growth, student attendance, student 43.28engagement and connection, and other outcome measures as evaluation components.43.29EFFECTIVE DATE.This section is effective the day following final enactment 43.30and applies beginning when a district next enters into or modifies a collective bargaining 43.31agreement or by the 2011-2012 school year, whichever comes first.43.32    Sec. 24. [123A.29] EFFICIENCY PLUS ACCESS TASK FORCES.43.33    Subdivision 1.Purpose.The purpose of the efficiency plus access task forces 43.34is to facilitate greater efficiency and reduce education costs through collaboration and 43.35cooperation across school districts and other governmental agencies while maintaining 44.1or improving the learning results for students. The legislative intent is to reduce the 44.2administrative costs of education without resorting to a policy of required consolidation 44.3that reduces the number of districts or school boards and without creating fewer larger 44.4schools that require longer bus rides for students.44.5    Subd. 2.Required district participation.Each district with an enrollment of 44.6fewer than 5,000 pupils in K-12 for fiscal year 2010 shall participate in an efficiency 44.7plus access task force.44.8    Subd. 3.Optional district and other public entity participation.School districts 44.9with more than 5,000 pupils, charter schools, cities, townships, counties, public higher 44.10education institutions, Head Start agencies, public libraries, and other public entities are 44.11encouraged to participate in the efficiency plus access task forces.44.12    Subd. 4.Task force membership.(a) Participating districts may organize the task 44.13forces using an existing education district, intermediate district, or other cooperative 44.14model. Districts may request that a service cooperative assist in establishing task forces 44.15for their service area. Districts do not need to be contiguous to form an efficiency plus 44.16access task force. Each task force shall consist of one member appointed by each district 44.17board included in the task force and one member from each entity defined in subdivision 44.183 that choose to participate. Districts and other public entities may decide to become 44.19members of more than one efficiency plus access task force. These appointments shall be 44.20made by August 15, 2010.44.21(b) Each school board shall develop a process within the district allowing teachers, 44.22students, parents, and the community to have access and opportunities to review and make 44.23recommendations to be brought forward to the efficiency plus access task force.44.24(c) The initial meeting of each task force shall not be later than September 30, 2010. 44.25At the initial meeting, each task force shall elect a chair and other officers it considers 44.26necessary to coordinate the work of the task force.44.27    Subd. 5.Task force; powers.(a) Each task force shall review and make 44.28recommendations to the boards of the participating districts and public entities regarding 44.29how the purpose of this section can be met in the following areas:44.30(1) administrative services including but not limited to superintendent services, 44.31principal services, financial management, human services, facilities and grounds 44.32maintenance, food and nutrition services, research and evaluation services, transportation 44.33services, health services, information technology services, and other administrative 44.34services. Cooperation with other public agencies for the provision of administrative 44.35services should be considered;45.1(2) instructional and learning services including but not limited to creating a 45.2common calendar; low-attendance elective secondary courses; use of technology to 45.3replace or supplement courses currently being provided; use of technology to provide 45.4new learning opportunities through technology with an emphasis on using low-cost or 45.5no-cost learning opportunities available online; coordination with higher education so 45.6that advanced courses are provided college credit to avoid duplication between high 45.7school and postsecondary; determine how certain students can complete select high school 45.8credit requirements while in middle school; and exploring ways to utilize the learning 45.9opportunities in the community through programs such as parks and recreation, arts, 45.10libraries, and other community providers; and45.11(3) cooperative arrangements for shared extracurricular activities, including having 45.12the activities become the responsibility of the community recreational program.45.13(b) The task force shall consider creating new models of schools including 45.14project-based learning schools, online learning schools in cooperation with other education 45.15districts, service cooperatives or chartered schools, new grade 11 postsecondary models 45.16in partnership with colleges and universities, prekindergarten through primary grades in 45.17partnership with early childhood providers, and other models of schooling.45.18    Subd. 6.Reporting.Each efficiency plus access task force shall file its initial 45.19planning report with the commissioner no later than October 15, 2010. The report shall 45.20include the basic information about the composition of the task force, including how input 45.21to the task force will be obtained consistent with subdivision 4, paragraph (b). Each task 45.22force shall complete its recommendations and file its report with the member school 45.23boards and commissioner no later than December 1, 2011. The report shall include 45.24recommendations pursuant to subdivision 5 and identify the financial impact of those 45.25recommendations for at least fiscal years 2013 and 2014. Each school board shall file a 45.26report with the commissioner regarding the actions it will take in response to the report 45.27no later than March 15, 2012. The report shall also include the impact on other agencies 45.28included in the task force planning.45.29    Sec. 25. Minnesota Statutes 2009 Supplement, section 123B.143, subdivision 1, 45.30is amended to read:45.31    Subdivision 1. Contract; duties. All districts maintaining a classified secondary 45.32school must employ a superintendent who shall be an ex officio nonvoting member of the 45.33school board. The authority for selection and employment of a superintendent must be 45.34vested in the board in all cases. An individual employed by a board as a superintendent 45.35shall have an initial employment contract for a period of time no longer than three years 46.1from the date of employment. Any subsequent employment contract must not exceed a 46.2period of three years. A board, at its discretion, may or may not renew an employment 46.3contract. A board must not, by action or inaction, extend the duration of an existing 46.4employment contract. Beginning 365 days prior to the expiration date of an existing 46.5employment contract, a board may negotiate and enter into a subsequent employment 46.6contract to take effect upon the expiration of the existing contract. A subsequent contract 46.7must be contingent upon the employee completing the terms of an existing contract. If a 46.8contract between a board and a superintendent is terminated prior to the date specified in 46.9the contract, the board may not enter into another superintendent contract with that same 46.10individual that has a term that extends beyond the date specified in the terminated contract. 46.11A board may terminate a superintendent during the term of an employment contract for any 46.12of the grounds specified in section 
         122A.40, subdivision 9 or 13. A superintendent shall 46.13not rely upon an employment contract with a board to assert any other continuing contract 46.14rights in the position of superintendent under section 
         122A.40. Notwithstanding the 46.15provisions of sections 
         122A.40, subdivision 10 or 11, 
         123A.32, 
         123A.75, or any other law 46.16to the contrary, no individual shall have a right to employment as a superintendent based 46.17on order of employment in any district. If two or more districts enter into an agreement for 46.18the purchase or sharing of the services of a superintendent, the contracting districts have 46.19the absolute right to select one of the individuals employed to serve as superintendent 46.20in one of the contracting districts and no individual has a right to employment as the 46.21superintendent to provide all or part of the services based on order of employment in a 46.22contracting district. The superintendent of a district shall perform the following:46.23    (1) visit and supervise the schools in the district, report and make recommendations 46.24about their condition when advisable or on request by the board;46.25    (2) recommend to the board employment and dismissal of teachers;46.26    (3) annually evaluate each school principal and assistant principal assigned 46.27responsibility for supervising a school building within the district, consistent with section 46.28123B.147, subdivision 3, paragraph (b);46.29(4) superintend school grading practices and examinations for promotions;46.30    (4) (5) make reports required by the commissioner; and46.31    (5) (6) perform other duties prescribed by the board.46.32EFFECTIVE DATE.This section is effective the day following final enactment 46.33and applies beginning when a district next enters into or modifies a collective bargaining 46.34agreement or by the 2011-2012 school year, whichever comes first.46.35    Sec. 26. Minnesota Statutes 2008, section 123B.147, subdivision 3, is amended to read:47.1    Subd. 3. Duties; evaluation.(a) The principal shall provide administrative, 47.2supervisory, and instructional leadership services, under the supervision of the 47.3superintendent of schools of the district and in accordance with according to the policies, 47.4rules, and regulations of the school board of education, for the planning, management, 47.5operation, and evaluation of the education program of the building or buildings to which 47.6the principal is assigned.47.7(b) To enhance principals' leadership skills and support and improve teachers' 47.8teaching practices, the school board and the exclusive representative of the school 47.9principals of the district must negotiate a plan for an annual evaluation of the school 47.10principals and assistant principals assigned responsibility for supervising a school building 47.11within the district. The annual evaluation process must:47.12(1) be designed to support and improve principals' instructional leadership 47.13defined in the plan, organizational management, and professional development, and 47.14strengthen principals' capacity in the areas of instruction, supervision, evaluation, and the 47.15development of teachers and highly effective school organizations;47.16(2) include formative and summative evaluations;47.17(3) be consistent with the principals' job description, district long-term plans and 47.18goals, and principals' own professional multiyear growth plans and goals;47.19(4) include on-the-job observations, team assessments and evaluations, and verbal 47.20and written feedback on performance;47.21(5) require feedback from teachers, support staff, students, and parents;47.22(6) use longitudinal data on student academic growth as an evaluation component; 47.23and47.24(7) be linked to professional development.47.25EFFECTIVE DATE.This section is effective the day following final enactment 47.26and applies beginning when a district next enters into or modifies a collective bargaining 47.27agreement or by the 2011-2012 school year, whichever comes first.47.28    Sec. 27. Minnesota Statutes 2009 Supplement, section 124D.10, subdivision 3, is 47.29amended to read:47.30    Subd. 3. Authorizer. (a) For purposes of this section, the terms defined in this 47.31subdivision have the meanings given them.47.32"Application" to receive approval as an authorizer means the proposal an eligible 47.33authorizer submits to the commissioner under paragraph (c) before that authorizer is able 47.34to submit any affidavit to charter to a school.48.1"Application" under subdivision 4 means the charter school business plan a 48.2school developer submits to an authorizer for approval to establish a charter school that 48.3documents the school developer's mission statement, school purposes, program design, 48.4financial plan, governance and management structure, and background and experience, 48.5plus any other information the authorizer requests. The application also shall include a 48.6"statement of assurances" of legal compliance prescribed by the commissioner.48.7"Affidavit" means a written statement the authorizer submits to the commissioner 48.8for approval to establish a charter school under subdivision 4 attesting to its review and 48.9approval process before chartering a school.48.10"Affidavit" means the form an authorizer submits to the commissioner that is a 48.11precondition to a charter school organizing an affiliated nonprofit building corporation 48.12under subdivision 17a.48.13(b) The following organizations may authorize one or more charter schools:48.14(1) a school board; intermediate school district school board; education district 48.15organized under sections 
         123A.15 to 
         123A.19;48.16(2) a charitable organization under section 501(c)(3) of the Internal Revenue 48.17Code of 1986, excluding a nonpublic sectarian or religious institution, without an 48.18approved affidavit by the commissioner prior to July 1, 2009, and any person other than a 48.19natural person that directly or indirectly, through one or more intermediaries, controls, 48.20is controlled by, or is under common control with the nonpublic sectarian or religious 48.21institution, and any other charitable organization under this clause that in the federal IRS 48.22Form 1023, Part IV, describes activities indicating a religious purpose, that:48.23(i) is a member of the Minnesota Council of Nonprofits or the Minnesota Council on 48.24Foundations;48.25(ii) is registered with the attorney general's office;48.26(iii) reports an end-of-year fund balance of at least $2,000,000; and48.27(iv) is incorporated in the state of Minnesota;48.28(3) a Minnesota private college, notwithstanding clause (2), that grants two- or 48.29four-year degrees and is registered with the Minnesota Office of Higher Education under 48.30chapter 136A; community college, state university, or technical college governed by the 48.31Board of Trustees of the Minnesota State Colleges and Universities; or the University of 48.32Minnesota; or48.33(4) a nonprofit corporation subject to chapter 317A, described in section 
         317A.905, 48.34and exempt from federal income tax under section 501(c)(6) of the Internal Revenue Code 48.35of 1986, may authorize one or more charter schools if the charter school has operated 49.1for at least three years under a different authorizer and if the nonprofit corporation has 49.2existed for at least 25 years.49.3(5) no more than three single-purpose sponsors that are charitable, nonsectarian 49.4organizations formed under section 501(c)(3) of the Internal Revenue Code of 1986 and 49.5incorporated in the state of Minnesota whose sole purpose is to charter schools. Eligible 49.6organizations interested in being approved as a sponsor under this paragraph must submit a 49.7proposal to the commissioner that includes the provisions of paragraph (c) and a five-year 49.8financial plan. Such authorizers shall consider and approve applications using the criteria 49.9provided in subdivision 4 and shall not limit the applications it solicits, considers, or 49.10approves to any single curriculum, learning program, or method.49.11(c) An eligible authorizer under this subdivision must apply to the commissioner for 49.12approval as an authorizer before submitting any affidavit to the commissioner to charter 49.13a school. The application for approval as a charter school authorizer must demonstrate 49.14the applicant's ability to implement the procedures and satisfy the criteria for chartering a 49.15school under this section. The commissioner must approve or disapprove an application 49.16within 60 business days of the application deadline. If the commissioner disapproves 49.17the application, the commissioner must notify the applicant of the deficiencies and the 49.18applicant then has 20 business days to address the deficiencies to the commissioner's 49.19satisfaction. Failing to address the deficiencies to the commissioner's satisfaction makes 49.20an applicant ineligible to be an authorizer. The commissioner, in establishing criteria for 49.21approval, must consider the applicant's:49.22(1) capacity and infrastructure;49.23(2) application criteria and process;49.24(3) contracting process;49.25(4) ongoing oversight and evaluation processes; and49.26(5) renewal criteria and processes.49.27(d) The affidavit application for approval to be submitted to and evaluated by the 49.28commissioner must include at least the following:49.29(1) how chartering schools is a way for the organization to carry out its mission;49.30(2) a description of the capacity of the organization to serve as a sponsor, including 49.31the personnel who will perform the sponsoring duties, their qualifications, the amount of 49.32time they will be assigned to this responsibility, and the financial resources allocated 49.33by the organization to this responsibility;49.34(3) a description of the application and review process the authorizer will use to make 49.35decisions regarding the granting of charters, which will include at least the following:49.36(i) how the statutory purposes defined in subdivision 1 are addressed;50.1(ii) the mission, goals, program model, and student performance expectations;50.2(iii) an evaluation plan for the school that includes criteria for evaluating educational, 50.3organizational, and fiscal plans;50.4(iv) the school's governance plan;50.5(v) the financial management plan; and50.6(vi) the administration and operations plan;50.7(4) a description of the type of contract it will arrange with the schools it charters 50.8that meets the provisions of subdivision 6 and defines the rights and responsibilities of the 50.9charter school for governing its educational program, controlling its funds, and making 50.10school management decisions;50.11(5) the process to be used for providing ongoing oversight of the school consistent 50.12with the contract expectations specified in clause (4) that assures that the schools chartered 50.13are complying with both the provisions of applicable law and rules, and with the contract;50.14(6) the process for making decisions regarding the renewal or termination of 50.15the school's charter based on evidence that demonstrates the academic, organizational, 50.16and financial competency of the school, including its success in increasing student 50.17achievement and meeting the goals of the charter school agreement; and50.18(7) an assurance specifying that the organization is committed to serving as a 50.19sponsor for the full five-year term.50.20A disapproved applicant under this paragraph may resubmit an application during a 50.21future application period.50.22(e) The authorizer must participate in department-approved training.50.23(f) An authorizer that chartered a school before August 1, 2009, must apply by 50.24June 30, 2011, to the commissioner for approval, under paragraph (c), to continue as an 50.25authorizer under this section. For purposes of this paragraph, an authorizer that fails to 50.26submit a timely application is ineligible to charter a school.50.27(g) The commissioner shall review an authorizer's performance every five years in 50.28a manner and form determined by the commissioner and may review an authorizer's 50.29performance more frequently at the commissioner's own initiative or at the request of a 50.30charter school operator, charter school board member, or other interested party. The 50.31commissioner, after completing the review, shall transmit a report with findings to the 50.32authorizer. If, consistent with this section, the commissioner finds that an authorizer 50.33has not fulfilled the requirements of this section, the commissioner may subject the 50.34authorizer to corrective action, which may include terminating the contract with the 50.35charter school board of directors of a school it chartered. The commissioner must notify 50.36the authorizer in writing of any findings that may subject the authorizer to corrective 51.1action and the authorizer then has 15 business days to request an informal hearing before 51.2the commissioner takes corrective action.51.3(h) The commissioner may at any time take corrective action against an authorizer, 51.4including terminating an authorizer's ability to charter a school for:51.5(1) failing to demonstrate the criteria under paragraph (c) under which the 51.6commissioner approved the authorizer;51.7(2) violating a term of the chartering contract between the authorizer and the charter 51.8school board of directors; or51.9(3) unsatisfactory performance as an approved authorizer.51.10    Sec. 28. Minnesota Statutes 2009 Supplement, section 124D.10, subdivision 4, is 51.11amended to read:51.12    Subd. 4. Formation of school. (a) An authorizer, after receiving an application from 51.13a school developer, may charter a licensed teacher under section 
         122A.18, subdivision 51.141
         , or a group of individuals that includes one or more licensed teachers under section 51.15122A.18, subdivision 1
         , to operate a school subject to the commissioner's approval of the 51.16authorizer's affidavit under paragraph (b). The school must be organized and operated 51.17as a cooperative under chapter 308A or nonprofit corporation under chapter 317A and 51.18the provisions under the applicable chapter shall apply to the school except as provided 51.19in this section.51.20Notwithstanding sections 
         465.717 and 
         465.719, a school district, subject to this 51.21section and section 
         124D.11, may create a corporation for the purpose of establishing a 51.22charter school.51.23    (b) Before the operators may establish and operate a school, the authorizer must file 51.24an affidavit with the commissioner stating its intent to charter a school. An authorizer 51.25must file a separate affidavit for each school it intends to charter. The affidavit must 51.26state the terms and conditions under which the authorizer would charter a school and 51.27how the authorizer intends to oversee the fiscal and student performance of the charter 51.28school and to comply with the terms of the written contract between the authorizer 51.29and the charter school board of directors under subdivision 6. The commissioner must 51.30approve or disapprove the authorizer's affidavit within 60 business days of receipt of the 51.31affidavit. If the commissioner disapproves the affidavit, the commissioner shall notify 51.32the authorizer of the deficiencies in the affidavit and the authorizer then has 20 business 51.33days to address the deficiencies. If the authorizer does not address deficiencies to the 51.34commissioner's satisfaction, the commissioner's disapproval is final. Failure to obtain 52.1commissioner approval precludes an authorizer from chartering the school that is the 52.2subject of this affidavit.52.3    (c) The authorizer may prevent an approved charter school from opening for 52.4operation if, among other grounds, the charter school violates this section or does not meet 52.5the ready-to-open standards that are part of the authorizer's oversight and evaluation 52.6process or are stipulated in the charter school contract.52.7(d) The operators authorized to organize and operate a school, before entering into a 52.8contract or other agreement for professional or other services, goods, or facilities, must 52.9incorporate as a cooperative under chapter 308A or as a nonprofit corporation under 52.10chapter 317A and must establish a board of directors composed of at least five members 52.11who are not related parties until a timely election for members of the ongoing charter 52.12school board of directors is held according to the school's articles and bylaws under 52.13paragraph (f). A charter school board of directors must be composed of at least five 52.14members who are not related parties. Staff members employed at the school, including 52.15teachers providing instruction under a contract with a cooperative, and all parents or legal 52.16guardians of children enrolled in the school are the voters eligible to elect the members 52.17of the school's board of directors. A charter school must notify eligible voters of the 52.18school board election dates at least 30 days before the election. Board of director meetings 52.19must comply with chapter 13D.52.20    (e) Upon the request of an individual, the charter school must make available in 52.21a timely fashion the minutes of meetings of the board of directors, and of members 52.22and committees having any board-delegated authority; financial statements showing all 52.23operations and transactions affecting income, surplus, and deficit during the school's last 52.24annual accounting period; and a balance sheet summarizing assets and liabilities on the 52.25closing date of the accounting period. A charter school also must post on its official Web 52.26site information identifying its authorizer and indicate how to contact that authorizer and 52.27include that same information about its authorizer in other school materials that it makes 52.28available to the public.52.29(f) Every charter school board member shall attend department-approved training 52.30on board governance, the board's role and responsibilities, employment policies and 52.31practices, and financial management. A board member who does not begin the required 52.32training within six months of being seated and complete the required training within 12 52.33months of being seated on the board is ineligible to continue to serve as a board member.52.34(g) The ongoing board must be elected before the school completes its third year 52.35of operation. Board elections must be held during a time when school is in session. The 52.36charter school board of directors shall be composed of at least five nonrelated members 53.1and include: (i) at least one licensed teacher employed and serving as a teacher at the 53.2school or a licensed teacher providing instruction under a contact contract between the 53.3charter school and a cooperative; (ii) the parent or legal guardian of a student enrolled 53.4in the charter school who is not employed by the charter school; and (iii) an interested 53.5community member who is not employed by the charter school and does not have a child 53.6enrolled in the school. The board may be a teacher majority board composed of teachers 53.7described in this paragraph. The chief financial officer and the chief administrator are may 53.8only serve as ex-officio nonvoting board members and shall not serve as a voting member 53.9of the board. Charter school employees shall not serve on the board unless item (i) applies. 53.10Contractors providing facilities, goods, or services to a charter school shall not serve on 53.11the board of directors of the charter school. Board bylaws shall outline the process and 53.12procedures for changing the board's governance model, consistent with chapter 317A. A 53.13board may change its governance model only:53.14(1) by a majority vote of the board of directors and the licensed teachers employed 53.15by the school, including licensed teachers providing instruction under a contract between 53.16the school and a cooperative; and53.17(2) with the authorizer's approval.53.18Any change in board governance must conform with the board structure established 53.19under this paragraph.53.20(h) The granting or renewal of a charter by an authorizer must not be conditioned 53.21upon the bargaining unit status of the employees of the school.53.22(i) The granting or renewal of a charter school by an authorizer must not be 53.23contingent on the charter school being required to contract, lease, or purchase services 53.24from the authorizer. Any potential contract, lease, or purchase of service from an 53.25authorizer must be disclosed to the commissioner, accepted through an open bidding 53.26process, and be a separate contract from the charter contract. The school must document 53.27the open bidding process. An authorizer must not enter into a contract to provide 53.28management and financial services for a school that it authorizes, unless the school 53.29documents that it received at least two competitive bids.53.30    (j) An authorizer may permit the board of directors of a charter school to expand 53.31the operation of the charter school to additional sites or to add additional grades at the 53.32school beyond those described in the authorizer's original affidavit as approved by 53.33the commissioner only after submitting a supplemental affidavit for approval to the 53.34commissioner in a form and manner prescribed by the commissioner. The supplemental 53.35affidavit must show that:54.1    (1) the expansion proposed by the charter school is supported by need and projected 54.2enrollment;54.3(2) the charter school expansion is warranted, at a minimum, by longitudinal data 54.4demonstrating students' improved academic performance and growth on statewide 54.5assessments under chapter 120B;54.6    (3) the charter school is fiscally sound and has the financial capacity to implement 54.7the proposed expansion; and54.8    (4) the authorizer finds that the charter school has the management capacity to 54.9carry out its expansion.54.10    (k) The commissioner shall have 30 business days to review and comment on the 54.11supplemental affidavit. The commissioner shall notify the authorizer of any deficiencies in 54.12the supplemental affidavit and the authorizer then has 30 business days to address, to the 54.13commissioner's satisfaction, any deficiencies in the supplemental affidavit. The school 54.14may not expand grades or add sites until the commissioner has approved the supplemental 54.15affidavit. The commissioner's approval or disapproval of a supplemental affidavit is final.54.16    Sec. 29. Minnesota Statutes 2009 Supplement, section 124D.10, subdivision 4a, 54.17is amended to read:54.18    Subd. 4a. Conflict of interest. (a) An individual is prohibited from serving must 54.19not serve as a member of the charter school board of directors if the that individual, an 54.20immediate family member, or the individual's partner is an owner, an employee or agent 54.21of, or a contractor who contracts with a for-profit or nonprofit entity, or an individual, and54.22with whom the charter school contracts, directly or indirectly, for professional services, 54.23goods, or facilities. A violation of this prohibition renders a contract voidable at the option 54.24of the commissioner or the charter school board of directors. A member of a charter 54.25school board of directors who violates this prohibition is individually liable to the charter 54.26school for any damage caused by the violation.54.27(b) No member of the board of directors, employee, officer, or agent of a charter 54.28school shall participate in selecting, awarding, or administering a contract if a conflict 54.29of interest exists. A conflict exists when:54.30(1) the board member, employee, officer, or agent;54.31(2) the immediate family of the board member, employee, officer, or agent;54.32(3) the partner of the board member, employee, officer, or agent; or54.33(4) an organization that employs, or is about to employ any individual in clauses 54.34(1) to (3),55.1has a financial or other interest in the entity with which the charter school is contracting. 55.2A violation of this prohibition renders the contract void.55.3(c) Any employee, agent, or board member of the authorizer who participates 55.4in the initial review, approval, ongoing oversight, evaluation, or the charter renewal or 55.5nonrenewal process or decision is ineligible to serve on the board of directors of a school 55.6chartered by that authorizer.55.7(d) An individual may serve as a member of the board of directors if no conflict of 55.8interest under paragraph (a) exists.55.9(e) A charter school board member or employee may receive remuneration such as 55.10a fee-for-service as part of a financial transaction involving a charter school only if the 55.11remuneration is payment for services rendered that are in addition to the services the board 55.12member or employee already agreed to provide to the charter school and the board of 55.13directors formally approves the remuneration.55.14(f) The conflict of interest provisions under this subdivision do not apply to 55.15compensation paid to a teacher employed by the charter school who also serves as a 55.16member of the board of directors.55.17(f)(g) The conflict of interest provisions under this subdivision do not apply to a 55.18teacher who provides services to a charter school through a cooperative formed under 55.19chapter 308A when the teacher also serves on the charter school board of directors.55.20EFFECTIVE DATE.This section is effective the day following final enactment.55.21    Sec. 30. Minnesota Statutes 2009 Supplement, section 124D.10, subdivision 6a, 55.22is amended to read:55.23    Subd. 6a. Audit report. (a) The charter school must submit an audit report to the 55.24commissioner and its authorizer by December 31 each year.55.25(b) The charter school, with the assistance of the auditor conducting the audit, must 55.26include with the report a copy of all charter school agreements for corporate management 55.27services. If the entity that provides the professional services to the charter school is 55.28exempt from taxation under section 501 of the Internal Revenue Code of 1986, that entity 55.29must file with the commissioner by February 15 a copy of the annual return required under 55.30section 6033 of the Internal Revenue Code of 1986.55.31(c) If the commissioner receives an audit report indicating that a material weakness 55.32exists in the financial reporting systems of a charter school, the charter school must 55.33submit a written report to the commissioner explaining how the material weakness will 55.34be resolved. An entity, as a condition of providing financial services to a charter school, 56.1must agree to make available information about a charter school's financial audit to the 56.2commissioner upon request.56.3    Sec. 31. Minnesota Statutes 2009 Supplement, section 124D.10, subdivision 11, 56.4is amended to read:56.5    Subd. 11. Employment and other operating matters. (a) A charter school must 56.6employ or contract with necessary teachers, as defined by section 
         122A.15, subdivision 56.71
         , who hold valid licenses to perform the particular service for which they are employed 56.8in the school. The charter school's state aid may be reduced under section 
         127A.43 56.9if the school employs a teacher who is not appropriately licensed or approved by the 56.10board of teaching. The school may employ necessary employees who are not required to 56.11hold teaching licenses to perform duties other than teaching and may contract for other 56.12services. The school may discharge teachers and nonlicensed employees. The charter 56.13school board is subject to section 
         181.932. When offering employment to a prospective 56.14employee, a charter school must give that employee a written description of the terms and 56.15conditions of employment and the school's personnel policies. The terms and conditions 56.16of employment must include an annual teacher evaluation that is substantively consistent 56.17with section 122A.40, subdivision 8, paragraph (b). Teacher evaluations do not create 56.18an expectation of continuing employment.56.19(b) A person, without holding a valid administrator's license, may perform 56.20administrative, supervisory, or instructional leadership duties. The board of directors shall 56.21establish qualifications for persons that hold administrative, supervisory, or instructional 56.22leadership roles. The qualifications shall include at least the following areas: instruction 56.23and assessment; human resource and personnel management; financial management; 56.24legal and compliance management; effective communication; and board, authorizer, and 56.25community relationships. The board of directors shall use those qualifications as the 56.26basis for job descriptions, hiring, and performance evaluations, substantively consistent 56.27with section 123B.147, subdivision 3, paragraph (b), of those who hold administrative, 56.28supervisory, or instructional leadership roles. Performance evaluations do not create 56.29an expectation of continuing employment. The board of directors and an individual 56.30who does not hold a valid administrative license and who serves in an administrative, 56.31supervisory, or instructional leadership position shall develop a professional development 56.32plan. Documentation of the implementation of the professional development plan of these 56.33persons shall be included in the school's annual report.56.34(c) The board of directors also shall decide matters related to the operation of the 56.35school, including budgeting, curriculum and operating procedures.57.1EFFECTIVE DATE.This section is effective for the 2011-2012 school year and 57.2later.57.3    Sec. 32. Minnesota Statutes 2009 Supplement, section 124D.10, subdivision 23, 57.4is amended to read:57.5    Subd. 23. Causes for nonrenewal or termination of charter school contract. (a) 57.6The duration of the contract with an authorizer must be for the term contained in the 57.7contract according to subdivision 6. The authorizer may or may not renew a contract at 57.8the end of the term for any ground listed in paragraph (b). An authorizer may unilaterally 57.9terminate a contract during the term of the contract for any ground listed in paragraph 57.10(b). At least 60 days before not renewing or terminating a contract, the authorizer shall 57.11notify the board of directors of the charter school of the proposed action in writing. The 57.12notice shall state the grounds for the proposed action in reasonable detail and that the 57.13charter school's board of directors may request in writing an informal hearing before the 57.14authorizer within 15 business days of receiving notice of nonrenewal or termination of the 57.15contract. Failure by the board of directors to make a written request for a hearing within 57.16the 15-business-day period shall be treated as acquiescence to the proposed action. Upon 57.17receiving a timely written request for a hearing, the authorizer shall give ten business days' 57.18notice to the charter school's board of directors of the hearing date. The authorizer shall 57.19conduct an informal hearing before taking final action. The authorizer shall take final 57.20action to renew or not renew a contract no later than 20 business days before the proposed 57.21date for terminating the contract or the end date of the contract.57.22(b) A contract may be terminated or not renewed upon any of the following grounds:57.23(1) failure to meet the requirements for pupil performance contained in the contract;57.24(2) failure to meet generally accepted standards of fiscal management;57.25(3) violations of law; or57.26(4) other good cause shown.57.27If a contract is terminated or not renewed under this paragraph, the school must be 57.28dissolved according to the applicable provisions of chapter 308A or 317A.57.29(c) If the sponsor and the charter school board of directors mutually agree to 57.30terminate or not renew the contract, a change in sponsors is allowed if the commissioner 57.31approves the transfer to a different eligible authorizer to authorize the charter school. 57.32Both parties must jointly submit their intent in writing to the commissioner to mutually 57.33terminate the contract. The sponsor that is a party to the existing contract at least must 57.34inform the approved different eligible sponsor about the fiscal and operational status 57.35and student performance of the school. Before the commissioner determines whether 58.1to approve a transfer of authorizer, the commissioner first must determine whether the 58.2charter school and prospective new authorizer can identify and effectively resolve those 58.3circumstances causing the previous authorizer and the charter school to mutually agree to 58.4terminate the contract. If no transfer of sponsor is approved, the school must be dissolved 58.5according to applicable law and the terms of the contract.58.6(d) The commissioner, after providing reasonable notice to the board of directors of 58.7a charter school and the existing authorizer, and after providing an opportunity for a public 58.8hearing under chapter 14, may terminate the existing contract between the authorizer and 58.9the charter school board if the charter school has a history of:58.10(1) failure to meet pupil performance requirements contained in the contract58.11consistent with state law;58.12(2) financial mismanagement or failure to meet generally accepted standards of 58.13fiscal management; or58.14(3) repeated or major violations of the law.58.15    (e) If the commissioner terminates a charter school contract under subdivision 3, 58.16paragraph (g), the commissioner shall provide the charter school with information about 58.17other eligible authorizers.58.18    Sec. 33. [124D.101] VACANT BUILDING INVENTORY.58.19The Department of Administration and the Department of Education annually shall 58.20publish a list of state and district-owned buildings and parts of buildings that are vacant 58.21and unused and that may be suitable for operating a charter school. The Department of 58.22Education shall make the list available to charter school applicants and operators. The 58.23list shall include the building address, a brief building description, and building name. 58.24Nothing in this section requires a building owner to sell or lease a listed building or a part 58.25of a building to a charter school, any other school, or any other prospective buyer or 58.26tenant. School districts, upon request, must provide the Department of Education with the 58.27information it needs to compile the vacant building list under this section.58.28EFFECTIVE DATE.This section is effective the day following final enactment.58.29    Sec. 34. Laws 2009, chapter 96, article 2, section 64, is amended to read:58.30    Sec. 64. RESERVED REVENUE FOR STAFF DEVELOPMENT; 58.31TEMPORARY SUSPENSION.58.32(a) Notwithstanding Minnesota Statutes, section 
         122A.61, subdivision 1, for fiscal 58.33years 2010 and 2011 only, a school district or charter school may use revenue reserved for 58.34staff development under Minnesota Statutes, section 
         122A.61, subdivision 1, according 59.1to the requirements of general education revenue under Minnesota Statutes, section 59.2126C.13, subdivision 5
         .59.3(b) On June 30, 2010, a school district may permanently transfer any balance from 59.4the reserved account for staff development to the undesignated general fund balance.59.5    Sec. 35. Laws 2009, chapter 96, article 2, section 67, subdivision 14, is amended to 59.6read:59.7    Subd. 14. Collaborative urban educator. For the collaborative urban educator 59.8grant program:

59.9$528,000.....201059.10$528,000.....2011

59.11$210,000 each year is for the Southeast Asian teacher program at Concordia 59.12University, St. Paul; $159,000 each year is for the collaborative urban educator program at 59.13the University of St. Thomas; and $159,000 each year is for the Center for Excellence in 59.14Urban Teaching at Hamline University. Grant recipients must collaborate with urban and 59.15nonurban school districts. Any balance in the first year does not cancel but is available 59.16in the second year.59.17EFFECTIVE DATE.This section is effective the day following final enactment.59.18    Sec. 36. Laws 2009, chapter 96, article 2, section 67, subdivision 17, is amended to 59.19read:59.20    Subd. 17. Education Planning and Assessment System (EPAS) program. For 59.21the Educational Planning and Assessment System (EPAS) program under Minnesota 59.22Statutes, section 
         120B.128:

59.23$829,000.....201059.24$829,000638,000.....2011

59.25Any balance in the first year does not cancel but is available in the second year.59.26EFFECTIVE DATE.This section is effective July 1, 2010.59.27    Sec. 37. IMPLEMENTING DIFFERENTIATED GRADUATION RATE 59.28MEASURES AND EXPLORING ALTERNATIVE ROUTES TO A STANDARD 59.29DIPLOMA FOR AT-RISK AND OFF-TRACK STUDENTS.59.30(a) To implement the requirements of Minnesota Statutes, section 120B.35, 59.31subdivision 3, paragraph (e), the commissioner of education must convene a group 59.32of recognized and qualified experts on improving differentiated graduation rates and 60.1establishing alternative routes to a standard high school diploma for at-risk and off-track 60.2students throughout the state. The commissioner must assist the group, as requested, 60.3to explore and recommend to the commissioner and the legislature (i) research-based 60.4measures that demonstrate the relative success of school districts, school sites, charter 60.5schools, and alternative program providers in improving the graduation outcomes of 60.6at-risk and off-track students, and (ii) state options for establishing alternative routes to a 60.7standard diploma consistent with the educational accountability system under Minnesota 60.8Statutes, chapter 120B. When proposing alternative routes to a standard diploma, the 60.9group also must identify highly reliable variables that generate summary data to comply 60.10with Minnesota Statutes, section 120B.35, subdivision 3, paragraph (e), including: who 60.11initiates the request for an alternative route; who approves the request for an alternative 60.12route; the parameters of the alternative route process, including whether a student first 60.13must fail a regular, state-mandated exam; and the comparability of the academic and 60.14achievement criteria reflected in the alternative route and the standard route for a standard 60.15diploma. The group is also encouraged to identify the data, time lines, and methods 60.16needed to evaluate and report on the alternative routes to a standard diploma once they are 60.17implemented and the student outcomes that result from those routes.60.18(b) The commissioner must convene the first meeting of this group by September 60.1915, 2010. Group members must include: one administrator of, one teacher from, and 60.20one parent of a student currently enrolled in a state-approved alternative program 60.21selected by the Minnesota Association of Alternative Programs; one representative 60.22selected by the Minnesota Online Learning Alliance; one representative selected by 60.23the Metropolitan Federation of Alternative Schools; one representative selected by the 60.24Minnesota Association of Charter Schools; one representative selected by the Minnesota 60.25School Board Association; one representative selected by Education Minnesota; one 60.26representative selected by the Association of Metropolitan School Districts; one 60.27representative selected by the Minnesota Rural Education Association; two faculty 60.28members selected by the dean of the college of education at the University of Minnesota 60.29with expertise in serving and assessing at-risk and off-track students; two Minnesota State 60.30Colleges and Universities faculty members selected by the Minnesota State Colleges 60.31and Universities chancellor with expertise in serving and assessing at-risk and off-track 60.32students; one currently serving superintendent from a school district selected by the 60.33Minnesota Association of School Administrators; one currently serving high school 60.34principal selected by the Minnesota Association of Secondary School Principals; and 60.35two public members selected by the commissioner. The group may seek input from 60.36representatives of other interested stakeholders and organizations with expertise to help 61.1inform the group's work. The group must meet at least quarterly. Group members do not 61.2receive compensation or reimbursement of expenses for participating in this group. The 61.3group expires February 16, 2012.61.4(c) The group, by February 15, 2012, must develop and submit to the commissioner 61.5and the education policy and finance committees of the legislature recommendations 61.6and legislation, consistent with this section and Minnesota Statutes, section 120B.35, 61.7subdivision 3, paragraph (e), for:61.8(1)  measuring and reporting differentiated graduation rates for at-risk and off-track 61.9students throughout the state and the success and costs that school districts, school sites, 61.10charter schools, and alternative program providers experience in identifying and serving 61.11at-risk or off-track student populations; and61.12(2) establishing alternative routes to a standard diploma.61.13EFFECTIVE DATE.This section is effective the day following final enactment 61.14and applies to school report cards beginning July 1, 2013.61.15    Sec. 38. RULEMAKING AUTHORITY.61.16The commissioner of education shall adopt rules consistent with chapter 14 that 61.17provide English language proficiency standards for instruction of students identified 61.18as limited English proficient under Minnesota Statutes, sections 124D.58 to 124D.64. 61.19The English language proficiency standards must encompass the language domains of 61.20listening, speaking, reading, and writing. The English language proficiency standards must 61.21reflect social and academic dimensions of acquiring a second language that are accepted 61.22of English language learners in prekindergarten through grade 12. The English language 61.23proficiency standards must address the specific contexts for language acquisition in the 61.24areas of social and instructional settings as well as academic language encountered in 61.25language arts, mathematics, science, and social studies. The English language proficiency 61.26standards must express the progression of language development through language 61.27proficiency levels. The English language proficiency standards must be implemented 61.28for all limited English proficient students beginning in the 2011-2012 school year and 61.29assessed beginning in the 2012-2013 school year.61.30    Sec. 39. DEPARTMENT OF EDUCATION.61.31    Subdivision 1.Recess guidelines.The department is encouraged to develop 61.32voluntary school district guidelines that promote high quality recess practices and foster 61.33student behaviors that lead students to increase their activity levels, improve their social 61.34skills, and misbehave less.62.1    Subd. 2.Common course catalogue.The department is encouraged to include 62.2in the Minnesota common course catalogue all district physical education classes and 62.3physical education graduation requirements.62.4    Subd. 3.Standards adoption.Notwithstanding Minnesota Statutes, sections 62.5120B.021, subdivision 2, and 120B.023, any statutory criteria required when reviewing or 62.6revising standards and benchmarks, any requirements governing the content of statewide 62.7standards, and any other law to the contrary, the commissioner of education shall initially 62.8adopt the most recent standards developed by the National Association for Sport and 62.9Physical Education for physical education in kindergarten through grade 12.62.10EFFECTIVE DATE.This section is effective the day following final enactment.62.11    Sec. 40. HEALTHY KIDS AWARDS PROGRAM.62.12    Subdivision 1.Recognition.The healthy kids awards program rewards kindergarten 62.13through grade 12 students for their nutritional well-being and physical activity. In addition 62.14to the physical and nutritional education students receive in physical education classes, 62.15the program is intended to integrate physical activity and nutritional education into 62.16nonphysical education classes, recess, and extracurricular activities throughout the day. 62.17Interested schools must agree to participate from October through May of each school year.62.18    Subd. 2.School district participation.School districts annually by September 62.1915 may submit to the commissioner of education a letter of intent to participate in a 62.20healthy kids awards program from October to May during the current school year. The 62.21commissioner must recognize on the school performance report card under Minnesota 62.22Statutes, section 120B.36, those schools and districts that affirm to the commissioner, as 62.23prescribed by the commissioner, that at least 75 percent of students in the school or district 62.24are physically active for at least 60 minutes each school day. The time students spend 62.25participating in a physical education class counts toward the daily 60-minute requirement.62.26EFFECTIVE DATE.This section is effective the day following final enactment 62.27and applies beginning in the 2010-2011 school year and later.62.28    Sec. 41. ADVISORY TASK FORCE ON SCHOOL DESEGREGATION AND 62.29INTEGRATION.62.30    Subdivision 1.Establishment; purpose; membership.(a) An advisory task force 62.31on school desegregation and integration is established to develop recommendations and 62.32legislation for the legislature on: (i) addressing the findings and recommendations in the 62.332005 Minnesota legislative auditor's report on school district integration revenue, (ii) 63.1amending Minnesota's school desegregation rule, and (iii) specifying the purpose, use, and 63.2allocation of integration revenue under Minnesota Statutes, section 124D.86. The task 63.3force shall consist of education stakeholders interested in addressing school desegregation 63.4and integration policies, integration revenue uses, and the academic achievement gap 63.5among groups of students. The 17-member task force consists of the commissioner of 63.6education or the commissioner's designee and the following:63.7(1) one member appointed by and serving at the pleasure of the Minnesota Indian 63.8Affairs Council;63.9(2) one member appointed by and serving at the pleasure of the Council on 63.10Asian-Pacific Minnesotans;63.11(3) one member appointed by and serving at the pleasure of the Council on Black 63.12Minnesotans;63.13(4) one member appointed by and serving at the pleasure of the Chicano Latino 63.14Affairs Council;63.15(5) three public members appointed by the speaker of the house who are currently 63.16serving as school district superintendents, collaborative coordinators, or school board 63.17members, with one public member from each of the following: an urban school district, a 63.18suburban school district, and a rural school district, and where at least one of the three 63.19public members is also from a metropolitan integration district;63.20(6) four current members of the house of representatives appointed by the speaker 63.21of the house, with two from each political party, and where two members are from the 63.22seven-county metropolitan area and two members are from rural Minnesota;63.23(7) three public members appointed by the senate Subcommittee on Committees of 63.24the Committee on Rules and Administration who are currently serving as school district 63.25superintendents, collaborative coordinators, or school board members, with one public 63.26member from each of the following: an urban school district, a suburban school district, 63.27and a rural school district, and where at least one of the three public members is also from 63.28a rural integration collaborative district; and63.29(8) two current members of the senate appointed by the senate Subcommittee on 63.30Committees of the Committee on Rules and Administration, with one from each political 63.31party, and where one member is from the seven-county metropolitan area and the second 63.32member is from rural Minnesota.63.33(b) Task force members shall be appointed by July 1, 2010. Task force members 63.34shall be represented by the designated appointee of each named organization. The task 63.35force shall seek input from nonmember organizations such as the Institute on Race and 63.36Poverty, the Minneapolis Urban League, the Minnesota Minority Education Partnership, 64.1the National Association for the Advancement of Colored People, and the Office of the 64.2State Demographer, among other organizations whose expertise can help inform the 64.3work of the task force.64.4(c) The commissioner of education shall convene the first meeting of the task force 64.5by September 15, 2010. Task force members shall elect one member to serve as the 64.6task force chair. The task force may invite representatives of other interested education 64.7stakeholders and organizations to participate in task force meetings. The task force must 64.8meet at least monthly.64.9(d) Upon request, the commissioner of education shall provide assistance to the 64.10task force.64.11(e) Task force members do not receive compensation or reimbursement of expenses 64.12from the task force for service on the task force.64.13    Subd. 2.Duties; report.(a) The task force shall develop recommendations and 64.14legislation for addressing the findings and recommendations in the 2005 Minnesota 64.15legislative auditor's report on school district integration revenue, amending Minnesota's 64.16school desegregation rule, and Minnesota Statutes, section 124D.86, governing the use 64.17and allocation of integration revenue. These recommendations and legislation may 64.18address but are not limited to:64.19(1) access to integrated and equitable learning environments that enhance 64.20achievement and opportunities for all students;64.21(2) changing demographics among Minnesota students reflected in the increasing 64.22numbers of students of color, new immigrants, and English language learners;64.23(3) cultural proficiency training for teachers;64.24(4) the impact of school choice laws on state and local school desegregation and 64.25integration efforts; and64.26(5) financial and other resources that enable schools and school districts to provide 64.27staff development training, magnet schools, and other interdistrict collaborative initiatives 64.28that enhance student achievement.64.29(b) By January 15, 2011, the task force shall submit to the legislative committees 64.30and divisions with jurisdiction over early childhood through grade 12 education policy 64.31and finance a report and accompanying legislation that reflect the substance of the 64.32recommendation of the task force.64.33    Subd. 3.Expiration.The task force expires on January 16, 2011.64.34EFFECTIVE DATE.This section is effective the day following final enactment.64.35    Sec. 42. ASSESSMENT ADVISORY COMMITTEE; RECOMMENDATIONS.65.1(a) The Assessment Advisory Committee must develop recommendations for 65.2alternative methods by which students satisfy the high school algebra end-of-course 65.3requirements under Minnesota Statutes, section 120B.30, subdivision 1b, paragraph (b), 65.4clause (9), and demonstrate their college and career readiness. The Assessment Advisory 65.5Committee, among other alternative methods and if consistent with federal educational 65.6accountability law, must consider allowing students to:65.7(1) achieve the mathematics college readiness score on the American College Test 65.8(ACT) or Scholastic Aptitude Test (SAT) exam;65.9(2) achieve a college-credit score on a College-Level Examination Program (CLEP) 65.10for algebra;65.11(3) achieve a score on an equivalent Advanced Placement or International 65.12Baccalaureate exam that would earn credit at a four-year college or university; or65.13(4) pass a credit-bearing course in college algebra or a more advanced course in that 65.14subject with a grade of C or better under Minnesota Statutes, section 124D.09, including 65.15Minnesota Statutes, section 124D.09, subdivision 10.65.16(b) The Assessment Advisory Committee, in the context of the high school algebra 65.17end-of-course assessment under Minnesota Statutes, section 120B.30, subdivision 1b, may 65.18develop recommendations on integrating universal design principles to improve access 65.19to learning and assessments for all students, more accurately understand what students 65.20know and can do, provide Minnesota with more cost-effective assessments, and provide 65.21educators with more valid inferences about students' achievement levels.65.22(c) The Assessment Advisory Committee, for purposes of fully implementing the 65.23high school algebra end-of-course assessment under Minnesota Statutes, section 120B.30, 65.24subdivision 1b, also must develop recommendations for:65.25(1) calculating the alignment index, including how questions about validity and 65.26reliability are resolved; and65.27(2) defining "misaligned" and "highly misaligned" and when and under what specific 65.28circumstances misalignments occur.65.29(d) By February 15, 2011, the Assessment Advisory Committee must submit its 65.30recommendations under this section to the education commissioner and the education 65.31policy and finance committees of the legislature.65.32(e) The commissioner must not implement any element of any recommendation 65.33under paragraphs (a) to (d) related to the high school algebra end-of-course assessment 65.34under Minnesota Statutes, section 120B.30, subdivision 1b, without first receiving specific 65.35legislative authority to do so.65.36EFFECTIVE DATE.This section is effective the day following final enactment.66.1    Sec. 43. REPEALER.66.2Minnesota Statutes 2008, section 122A.24, is repealed.66.3EFFECTIVE DATE.This section is effective August 1, 2010.66.4ARTICLE 366.5SPECIAL PROGRAMS66.6    Section 1. Minnesota Statutes 2009 Supplement, section 125A.02, subdivision 1, 66.7is amended to read:66.8    Subdivision 1. Child with a disability. "Child with a disability" means a child 66.9identified under federal and state special education law as having a hearing impairment, 66.10blindness, visual disability, deaf or hard-of-hearing, blind or visually impaired, deafblind, 66.11or having a speech or language impairment, a physical disability impairment, other health 66.12impairment disability, mental developmental cognitive disability, emotional/behavioral an 66.13emotional or behavioral disorder, specific learning disability, autism spectrum disorder, 66.14traumatic brain injury, or severe multiple disabilities impairments, or deafblind disability66.15and who needs special education and related services, as determined by the rules of the 66.16commissioner, is a child with a disability. A licensed physician, an advanced practice 66.17nurse, or a licensed psychologist is qualified to make a diagnosis and determination 66.18of attention deficit disorder or attention deficit hyperactivity disorder for purposes of 66.19identifying a child with a disability.66.20EFFECTIVE DATE.This section is effective July 1, 2010.66.21    Sec. 2. Minnesota Statutes 2008, section 125A.03, is amended to read:66.22125A.03 SPECIAL INSTRUCTION FOR CHILDREN WITH A DISABILITY.66.23(a) As defined Except as provided in paragraph (b), every district must provide or 66.24make available special instruction education and related services, either within the district 66.25or in another district, for all children every child with a disability, including providing 66.26required services under Code of Federal Regulations, title 34, section 300.121, paragraph 66.27(d), to those children suspended or expelled from school for more than ten school days 66.28in that school year, who are residents is a resident of the district and who are disabled as 66.29set forth in section 125A.02 from birth until that child becomes 21 years old or receives 66.30a regular high school diploma, whichever comes first. For purposes of state and federal 66.31special education laws, The phrase "special instruction education and related services" 66.32in the state Education Code means a free and appropriate public education provided to an 67.1eligible child with disabilities and includes special education and related services defined 67.2in the Individuals with Disabilities Education Act, subpart A, section 300.24 a disability.  67.3(b) Notwithstanding any age limits in laws to the contrary, special instruction and 67.4services must be provided from birth until July 1 after the child with a disability becomes 67.521 years old but shall not extend beyond secondary school or its equivalent, except as 67.6provided in section 124D.68, subdivision 2. If a child with a disability becomes 21 years 67.7old during the school year, the district shall continue to make available special education 67.8and related services until the last day of the school year, or until the day the child receives 67.9a regular high school diploma, whichever comes first.67.10(c) For purposes of this section and section 121A.41, subdivision 7, paragraph (a), 67.11clause (2), "school year" means the days of student instruction designated by the school 67.12board as the regular school year in the annual calendar adopted under section 120A.41.67.13(d) A district shall identify, locate, and evaluate children with a disability in the 67.14district who are in need of special education and related services. Local health, education, 67.15and social service agencies must refer children under age five who are known to need or 67.16suspected of needing special instruction education and related services to the school 67.17district. Districts with less than the minimum number of eligible children with a disability 67.18as determined by the commissioner must cooperate with other districts to maintain a full 67.19range of programs for education and services for children with a disability. This section 67.20does not alter the compulsory attendance requirements of section 120A.22.67.21EFFECTIVE DATE.This section is effective July 1, 2010.67.22    Sec. 3. [125A.031] RESOLVING DISPUTES AMONG DISTRICTS.67.23If districts dispute which district is responsible for providing or making available 67.24special education and related services to a child with a disability who is not currently 67.25enrolled in a district because the child's district of residence is disputed, the district in 67.26which that child first tries to enroll shall provide or make available special education 67.27and related services to the child until the commissioner is notified and expeditiously 67.28resolves the dispute. For purposes of this section, "district" means a school district or a 67.29charter school.67.30    Sec. 4. Minnesota Statutes 2009 Supplement, section 125A.091, subdivision 7, is 67.31amended to read:67.32    Subd. 7. Conciliation conference. A parent must have an opportunity to meet with 67.33appropriate district staff in at least one conciliation conference if the parent objects to 67.34any proposal of which the parent receives notice under subdivision 3a. A district must 68.1offer to hold a conciliation conference within two business days after receiving a parent's 68.2objection to a proposal or refusal in the prior written notice. The district must hold the 68.3conciliation conference within ten calendar days from the date the district receives a the68.4parent's objection to a proposal or refusal in the prior written notice. Except as provided 68.5in this section, all discussions held during a conciliation conference are confidential 68.6and are not admissible in a due process hearing. Within five school days after the final 68.7conciliation conference, the district must prepare and provide to the parent a conciliation 68.8conference memorandum that describes the district's final proposed offer of service. This 68.9memorandum is admissible in evidence in any subsequent proceeding.68.10EFFECTIVE DATE.This section is effective the day following final enactment 68.11and applies to all conciliation conferences required after that date.68.12    Sec. 5. Minnesota Statutes 2008, section 125A.21, subdivision 2, is amended to read:68.13    Subd. 2. Third party reimbursement. (a) Beginning July 1, 2000, districts shall 68.14seek reimbursement from insurers and similar third parties for the cost of services 68.15provided by the district whenever the services provided by the district are otherwise 68.16covered by the child's health coverage. Districts shall request, but may not require, the 68.17child's family to provide information about the child's health coverage when a child with a 68.18disability begins to receive services from the district of a type that may be reimbursable, 68.19and shall request, but may not require, updated information after that as needed.68.20(b) For children enrolled in medical assistance under chapter 256B or MinnesotaCare 68.21under chapter 256L who have no other health coverage, a district shall provide an initial 68.22written notice to the enrolled child's parent or legal representative of its intent to seek 68.23reimbursement from medical assistance or MinnesotaCare for the individual education 68.24plan health-related services provided by the district. The notice shall include:68.25(1) the right of the parent or legal representative to request a copy of all records 68.26concerning individualized education program health-related services disclosed by the 68.27district to any third party; 68.28(2) the right of the parent or legal representative to withdraw consent for disclosing a 68.29child's records at any time without consequence, including consent that was initially 68.30given as part of the application process for MinnesotaCare or medical assistance under 68.31section 256B.08, subdivision 1; and68.32(3) a decision to revoke consent for schools to share information from education 68.33records does not impact a parent's eligibility for MinnesotaCare or medical assistance.68.34(c) The district shall give the parent or legal representative annual written notice of:69.1(1) the district's intent to seek reimbursement from medical assistance or 69.2MinnesotaCare for individual education plan health-related services provided by the 69.3district;69.4(2) the right of the parent or legal representative to request a copy of all records 69.5concerning individual education plan health-related services disclosed by the district to 69.6any third party; and69.7(3) the right of the parent or legal representative to withdraw consent for disclosure 69.8of a child's records at any time without consequence, including consent that was initially 69.9given as part of the application process for MinnesotaCare or medical assistance under 69.10section 256B.08, subdivision 1.69.11The written notice shall be provided as part of the written notice required by Code of 69.12Federal Regulations, title 34, section 
         300.504.  69.13(d) In order to access the private health care coverage of a child who is covered by 69.14private health care coverage in whole or in part, a district must:69.15(1) obtain annual written informed consent from the parent or legal representative, in 69.16compliance with subdivision 5; and69.17(2) inform the parent or legal representative that a refusal to permit the district 69.18or state Medicaid agency to access their private health care coverage does not relieve 69.19the district of its responsibility to provide all services necessary to provide free and 69.20appropriate public education at no cost to the parent or legal representative.69.21(e) If the commissioner of human services obtains federal approval to exempt 69.22covered individual education plan health-related services from the requirement that private 69.23health care coverage refuse payment before medical assistance may be billed, paragraphs 69.24(b), (c), and (d) shall also apply to students with a combination of private health care 69.25coverage and health care coverage through medical assistance or MinnesotaCare.69.26(f) In the event that Congress or any federal agency or the Minnesota legislature 69.27or any state agency establishes lifetime limits, limits for any health care services, 69.28cost-sharing provisions, or otherwise provides that individual education plan health-related 69.29services impact benefits for persons enrolled in medical assistance or MinnesotaCare, the 69.30amendments to this subdivision adopted in 2002 are repealed on the effective date of any 69.31federal or state law or regulation that imposes the limits. In that event, districts must 69.32obtain informed consent consistent with this subdivision as it existed prior to the 2002 69.33amendments and subdivision 5, before seeking reimbursement for children enrolled in 69.34medical assistance under chapter 256B or MinnesotaCare under chapter 256L who have 69.35no other health care coverage.70.1EFFECTIVE DATE.This section is effective the day following final enactment.70.2    Sec. 6. Minnesota Statutes 2008, section 125A.21, subdivision 3, is amended to read:70.3    Subd. 3. Use of reimbursements. Of the reimbursements received, districts may:70.4(1) retain an amount sufficient to compensate the district for its administrative costs 70.5of obtaining reimbursements;70.6(2) regularly obtain from education- and health-related entities training and other 70.7appropriate technical assistance designed to improve the district's ability to determine 70.8which services are reimbursable and to seek timely reimbursement in a cost-effective 70.9manner access third-party payments for individualized education program health-related 70.10services; or70.11(3) reallocate reimbursements for the benefit of students with special needs70.12individualized education programs or individual family service plans in the district.70.13    Sec. 7. Minnesota Statutes 2008, section 125A.21, subdivision 5, is amended to read:70.14    Subd. 5. Informed consent. When obtaining informed consent, consistent with 70.15sections 
         13.05, subdivision 4, paragraph (d); and,256B.77, subdivision 2, paragraph 70.16(p), and Code of Federal Regulations, title 34, parts 99 and 300, to bill health plans for 70.17covered services, the school district must notify the legal representative (1) that the cost of 70.18the person's private health insurance premium may increase due to providing the covered 70.19service in the school setting, (2) that the school district may pay certain enrollee health 70.20plan costs, including but not limited to, co-payments, coinsurance, deductibles, premium 70.21increases or other enrollee cost-sharing amounts for health and related services required 70.22by an individual service plan, or individual family service plan, and (3) that the school's 70.23billing for each type of covered service may affect service limits and prior authorization 70.24thresholds. The informed consent may be revoked in writing at any time by the person 70.25authorizing the billing of the health plan.  70.26    Sec. 8. Minnesota Statutes 2008, section 125A.21, subdivision 7, is amended to read:70.27    Subd. 7. District disclosure of information. A school district may disclose 70.28information contained in a student's individual education plan, consistent with section 70.2913.32, subdivision 3
         , paragraph (a), and Code of Federal Regulations, title 34, part 99;70.30including records of the student's diagnosis and treatment, to a health plan company only 70.31with the signed and dated consent of the student's parent, or other legally authorized 70.32individual. The school district shall disclose only that information necessary for the health 70.33plan company to decide matters of coverage and payment. A health plan company may 71.1use the information only for making decisions regarding coverage and payment, and for 71.2any other use permitted by law.  71.3    Sec. 9. Minnesota Statutes 2008, section 125A.515, is amended by adding a 71.4subdivision to read:71.5    Subd. 3a.Students without a disability from other states. A school district need 71.6not provide education services under this section to an out-of-state student without an 71.7individualized education program who lacks a tuition agreement or other agreement by the 71.8placing authority to pay for the services.71.9EFFECTIVE DATE.This section is effective July 1, 2010, for fiscal years 2011 71.10and later.71.11    Sec. 10. Minnesota Statutes 2009 Supplement, section 125A.63, subdivision 2, is 71.12amended to read:71.13    Subd. 2. Programs.The Department of Education, through the resource centers 71.14must offer summer institutes or other training programs and other educational strategies71.15throughout the state for deaf or hard-of-hearing, blind or visually impaired, and multiply 71.16disabled pupils. The resource centers must also offer workshops for teachers, and 71.17leadership development for teachers.71.18A program offered through the resource centers must promote and develop education 71.19programs offered by school districts or other organizations. The program must assist 71.20school districts or other organizations to develop innovative programs.71.21    Sec. 11. Minnesota Statutes 2009 Supplement, section 125A.63, subdivision 4, is 71.22amended to read:71.23    Subd. 4. Advisory committees. (a) The commissioner shall establish an 71.24advisory committee for each resource center. The advisory committees shall develop 71.25recommendations regarding the resource centers and submit an annual report to the 71.26commissioner on the form and in the manner prescribed by the commissioner.71.27(b) The advisory committee for the Resource Center for the Deaf and Hard of 71.28Hearing shall meet periodically at least four times per year and submit an annual report 71.29to the commissioner, the education policy and finance committees of the legislature, 71.30and the Commission of Deaf, DeafBlind, and Hard of Hearing Minnesotans. The report 71.31must, at least:71.32(1) identify and report the aggregate, data-based education outcomes for children 71.33with the primary disability classification of deaf and hard of hearing, consistent with 72.1the commissioner's child count reporting practices, the commissioner's state and local 72.2outcome data reporting system by district and region, and the school performance report 72.3cards under section 
         120B.36, subdivision 1, and relevant IDEA Parts B and C mandated 72.4reporting data; and72.5(2) describe the implementation of a data-based plan for improving the education 72.6outcomes of deaf and hard of hearing children that is premised on evidence-based best 72.7practices, and provide a cost estimate for ongoing implementation of the plan.; and72.8(3) include the recommendations for improving the developmental outcomes of 72.9children birth to age 3 and the data underlying those recommendations that the coordinator 72.10identifies under subdivision 5.72.11    Sec. 12. Minnesota Statutes 2009 Supplement, section 125A.63, subdivision 5, is 72.12amended to read:72.13    Subd. 5. Statewide hearing loss early education intervention coordinator. (a) 72.14The coordinator shall:72.15    (1) collaborate with the early hearing detection and intervention coordinator for the 72.16Department of Health, the director of the Department of Education Resource Center for 72.17Deaf and Hard-of-Hearing, and the Department of Health Early Hearing Detection and 72.18Intervention Advisory Council;72.19    (2) coordinate and support Department of Education early hearing detection and 72.20intervention teams;72.21    (3) leverage resources by serving as a liaison between interagency early intervention 72.22committees; part C coordinators from the Departments of Education, Health, and 72.23Human Services; Department of Education regional low-incidence facilitators; service 72.24coordinators from school districts; Minnesota children with special health needs in the 72.25Department of Health; public health nurses; child find; Department of Human Services 72.26Deaf and Hard-of-Hearing Services Division; and others as appropriate;72.27    (4) identify, support, and promote culturally appropriate and evidence-based early 72.28intervention practices for infants with hearing loss, and provide training, outreach, and use 72.29of technology to increase consistency in statewide service provision;72.30    (5) identify culturally appropriate specialized reliable and valid instruments to assess 72.31and track the progress of children with hearing loss and promote their use;72.32    (6) ensure that early childhood providers, parents, and members of the individual 72.33family service and intervention plan are provided with child progress data resulting from 72.34specialized assessments;73.1    (7) educate early childhood providers and teachers of the deaf and hard-of-hearing 73.2to use developmental data from specialized assessments to plan and adjust individual 73.3family service plans; and73.4    (8) make recommendations that would improve educational outcomes to the early 73.5hearing detection and intervention committee, the commissioners of education and health, 73.6the Commission of Deaf, DeafBlind and Hard-of-Hearing Minnesotans, and the advisory 73.7council of the Minnesota Department of Education Resource Center for the Deaf and 73.8Hard-of-Hearing.73.9    (b) The Department of Education must provide aggregate data regarding outcomes 73.10of deaf and hard-of-hearing children with hearing loss who receive early intervention 73.11services within the state in accordance with the state performance plan.73.12EFFECTIVE DATE.This section is effective the day following final enactment.73.13    Sec. 13. Minnesota Statutes 2008, section 125A.69, subdivision 1, is amended to read:73.14    Subdivision 1. Two kinds Admissions.There are two kinds of Admission to the 73.15Minnesota State Academies is described in this section.73.16(a) A pupil who is deaf, hard of hearing, or blind-deaf, may be admitted to the 73.17Academy for the Deaf. A pupil who is blind or visually impaired, blind-deaf, or multiply 73.18disabled may be admitted to the Academy for the Blind. For a pupil to be admitted, two 73.19decisions must be made under sections 
         125A.03 to 
         125A.24 and 
         125A.65. 73.20(1) It must be decided by the individual education planning team that education in 73.21regular or special education classes in the pupil's district of residence cannot be achieved 73.22satisfactorily because of the nature and severity of the deafness or blindness or visual 73.23impairment respectively.73.24(2) It must be decided by the individual education planning team that the academy 73.25provides the most appropriate placement within the least restrictive alternative for the 73.26pupil.73.27(b) A deaf or hard of hearing child or a visually impaired pupil may be admitted to 73.28get socialization skills or on a short-term basis for skills development.73.29(c) A parent of a child who resides in Minnesota and who meets the disability criteria 73.30for being deaf or hard-of-hearing, blind or visually impaired, or multiply disabled may 73.31apply to place the child in the Minnesota State Academies. Academy staff must review 73.32the application to determine whether the Minnesota State Academies is an appropriate 73.33placement for the child. If academy staff determine that the Minnesota State Academies 73.34is an appropriate placement, the staff must invite the individualized education program 73.35team at the child's resident school district to participate in a meeting to arrange a trial 74.1placement of between 60 and 90 calendar days at the Minnesota State Academies. If 74.2the child's parent consents to the trial placement, the Minnesota State Academies is the 74.3responsible serving school district and incur all due process obligations under law and the 74.4child's resident school district is responsible for any transportation included in the child's 74.5individualized education program during the trial placement. Before the trial placement 74.6ends, academy staff must convene an individualized education program team meeting to 74.7determine whether to continue the child's placement at the Minnesota State Academies or 74.8that another placement is appropriate. If the individualized education program team and 74.9the parent are unable to agree on the child's placement, the child's placement reverts to the 74.10placement in the child's individualized education program that immediately preceded the 74.11trial placement. If the parent and individualized education program team agree to continue 74.12the placement beyond the trial period, the transportation and due process responsibilities 74.13are the same as those described for the trial placement under this paragraph.74.14EFFECTIVE DATE.This section is effective for the 2010-2011 school year and 74.15later.74.16    Sec. 14. Minnesota Statutes 2009 Supplement, section 256B.0625, subdivision 26, 74.17is amended to read:74.18    Subd. 26. Special education services. (a) Medical assistance covers medical 74.19services identified in a recipient's individualized education plan and covered under the 74.20medical assistance state plan. Covered services include occupational therapy, physical 74.21therapy, speech-language therapy, clinical psychological services, nursing services, 74.22school psychological services, school social work services, personal care assistants 74.23serving as management aides, assistive technology devices, transportation services, 74.24health assessments, and other services covered under the medical assistance state plan. 74.25Mental health services eligible for medical assistance reimbursement must be provided or 74.26coordinated through a children's mental health collaborative where a collaborative exists if 74.27the child is included in the collaborative operational target population. The provision or 74.28coordination of services does not require that the individual education plan be developed 74.29by the collaborative.74.30The services may be provided by a Minnesota school district that is enrolled as a 74.31medical assistance provider or its subcontractor, and only if the services meet all the 74.32requirements otherwise applicable if the service had been provided by a provider other 74.33than a school district, in the following areas: medical necessity, physician's orders, 74.34documentation, personnel qualifications, and prior authorization requirements. The 74.35nonfederal share of costs for services provided under this subdivision is the responsibility 75.1of the local school district as provided in section 
         125A.74. Services listed in a child's 75.2individual education plan are eligible for medical assistance reimbursement only if those 75.3services meet criteria for federal financial participation under the Medicaid program.75.4(b) Approval of health-related services for inclusion in the individual education plan 75.5does not require prior authorization for purposes of reimbursement under this chapter. 75.6The commissioner may require physician review and approval of the plan not more than 75.7once annually or upon any modification of the individual education plan that reflects a 75.8change in health-related services.75.9(c) Services of a speech-language pathologist provided under this section are covered 75.10notwithstanding Minnesota Rules, part 9505.0390, subpart 1, item L, if the person:75.11(1) holds a masters degree in speech-language pathology;75.12(2) is licensed by the Minnesota Board of Teaching as an educational 75.13speech-language pathologist; and75.14(3) either has a certificate of clinical competence from the American Speech and 75.15Hearing Association, has completed the equivalent educational requirements and work 75.16experience necessary for the certificate or has completed the academic program and is 75.17acquiring supervised work experience to qualify for the certificate.75.18(d) Medical assistance coverage for medically necessary services provided under 75.19other subdivisions in this section may not be denied solely on the basis that the same or 75.20similar services are covered under this subdivision.75.21(e) The commissioner shall develop and implement package rates, bundled rates, or 75.22per diem rates for special education services under which separately covered services are 75.23grouped together and billed as a unit in order to reduce administrative complexity.75.24(f) The commissioner shall develop a cost-based payment structure for payment of 75.25these services. Only costs reported through designated Department of Education data 75.26systems in distinct service categories may be included in the cost-based payment structure. 75.27The commissioner shall reimburse claims submitted based on an interim rate, and shall 75.28settle at a final rate once the department has determined it. The commissioner shall 75.29notify the school district of the final rate. The school district has 60 days to appeal the 75.30final rate. To appeal the final rate, the school district shall file a written appeal request 75.31to the commissioner within 60 days of the date the final rate determination was mailed. 75.32The appeal request shall specify (1) the disputed items and (2) the name and address of 75.33the person to contact regarding the appeal.75.34(g) Effective July 1, 2000, medical assistance services provided under an individual 75.35education plan or an individual family service plan by local school districts shall not count 75.36against medical assistance authorization thresholds for that child.76.1(h) Nursing services as defined in section 
         148.171, subdivision 15, and provided 76.2as an individual education plan health-related service, are eligible for medical assistance 76.3payment if they are otherwise a covered service under the medical assistance program. 76.4Medical assistance covers the administration of prescription medications by a licensed 76.5nurse who is employed by or under contract with a school district when the administration 76.6of medications is identified in the child's individualized education plan. The simple 76.7administration of medications alone is not covered under medical assistance when 76.8administered by a provider other than a school district or when it is not identified in the 76.9child's individualized education plan.76.10    Sec. 15. Laws 2009, chapter 79, article 5, section 60, is amended to read:76.11    Sec. 60. Minnesota Statutes 2008, section 256L.05, is amended by adding a 76.12subdivision to read:76.13    Subd. 1c. Open enrollment and streamlined application and enrollment 76.14process. (a) The commissioner and local agencies working in partnership must develop a 76.15streamlined and efficient application and enrollment process for medical assistance and 76.16MinnesotaCare enrollees that meets the criteria specified in this subdivision.76.17(b) The commissioners of human services and education shall provide 76.18recommendations to the legislature by January 15, 2010, on the creation of an open 76.19enrollment process for medical assistance and MinnesotaCare that is coordinated with 76.20the public education system. The recommendations must:76.21(1) be developed in consultation with medical assistance and MinnesotaCare 76.22enrollees and representatives from organizations that advocate on behalf of children and 76.23families, low-income persons and minority populations, counties, school administrators 76.24and nurses, health plans, and health care providers;76.25(2) be based on enrollment and renewal procedures best practices, including express 76.26lane eligibility as required under subdivision 1d;76.27(3) simplify the enrollment and renewal processes wherever possible; and76.28(4) establish a process:76.29(i) to disseminate information on medical assistance and MinnesotaCare to all 76.30children in the public education system, including prekindergarten programs; and76.31(ii) for the commissioner of human services to enroll children and other household 76.32members who are eligible.76.33The commissioner of human services in coordination with the commissioner of 76.34education shall implement an open enrollment process by August 1, 2010, to be effective 76.35beginning with the 2010-2011 school year.77.1(c) The commissioner and local agencies shall develop an online application process 77.2for medical assistance and MinnesotaCare.77.3(d) The commissioner shall develop an application that is easily understandable 77.4and does not exceed four pages in length.77.5(e) The commissioner of human services shall present to the legislature, by January 77.615, 2010, an implementation plan for the open enrollment period and online application 77.7process.77.8(f) To ensure parity between all providers of medical services in the ability to seek 77.9reimbursement from MinnesotaCare or medical assistance, the commissioner of human 77.10services, in consultation with the commissioner of education, shall include on new or 77.11revised enrollment forms consent authorization language for all providers of medical 77.12services to the parent's child or children, including schools, by incorporating language on 77.13the enrollment form that is consistent with federal data practices laws requiring consent 77.14before a school may release information from individual educational records. The consent 77.15language shall include a statement that the medical services providers may share with the 77.16commissioner of human services medical or other information in the possession of the 77.17provider that is necessary for the provider to be reimbursed by MinnesotaCare or medical 77.18assistance. The consent language also shall state that information may be shared from 77.19a child's individual educational records and that the parent may revoke the consent for 77.20schools to share information from educational records at any time. The commissioner 77.21shall include substantially similar consent authorization language on each of its other 77.22enrollment forms as they are scheduled for review, revision, or replacement.77.23EFFECTIVE DATE.This section is effective July 1, 2010, or upon federal 77.24approval, which must be requested by the commissioner, whichever is later.77.25    Sec. 16. SPECIAL EDUCATION REPORT.77.26As the agency charged with administering and enforcing federal and state special 77.27education laws and making special education aid payments, the Department of Education 77.28must identify and report by February 15, 2011, to the committees of the house of 77.29representatives and senate with primary jurisdiction over kindergarten through grade 77.3012 education the specific circumstances under which a school district or other entity, 77.31consistent with federal and state law, must provide special education and related services 77.32to a child with a disability and thereby receives payment for providing the special 77.33education and related services.77.34EFFECTIVE DATE.This section is effective the day following final enactment.78.1    Sec. 17. THIRD-PARTY BILLING.78.2To allow the cost effective billing of medical assistance for covered services that 78.3are not reimbursed by other legally liable third parties, the commissioner of human 78.4services must:78.5(1) summarize and document school district efforts to secure reimbursement from 78.6legally liable third parties; and78.7(2) request permission from the Centers for Medicare and Medicaid Services to 78.8allow school districts to bill Medicaid alone, without first billing private payers, when:78.9(i) a child has both public and private coverage; and78.10(ii) documentation demonstrates that the private payer involved does not reimburse 78.11for individualized education program health-related services.78.12    Sec. 18. REVISOR'S INSTRUCTION.78.13The revisor of statutes shall substitute the term "individualized education program" 78.14or similar terms for "individual education plan" or similar terms wherever they appear 78.15in Minnesota Statutes and Minnesota Rules referring to the requirements relating to 78.16the federal Individuals with Disabilities Education Act. The revisor shall also make 78.17grammatical changes related to the changes in terms.78.18    Sec. 19.  REPEALER.78.19Minnesota Statutes 2008, section 125A.54, is repealed.78.20ARTICLE 478.21FACILITIES AND TECHNOLOGY78.22    Section 1. Minnesota Statutes 2008, section 123B.57, as amended by Laws 2009 78.23chapter 96, article 4, section 2, is amended to read:78.24123B.57 CAPITAL EXPENDITURE; HEALTH AND SAFETY.78.25    Subdivision 1. Health and safety program revenue application. (a) To receive 78.26health and safety revenue for any fiscal year a district must submit to the commissioner 78.27an a capital expenditure health and safety revenue application for aid and levy by the 78.28date determined by the commissioner. The application may be for hazardous substance 78.29removal, fire and life safety code repairs, labor and industry regulated facility and 78.30equipment violations, and health, safety, and environmental management, including 78.31indoor air quality management. The application must include a health and safety program78.32budget adopted and confirmed by the school district board as being consistent with the 79.1district's health and safety policy under subdivision 2. The program budget must include 79.2the estimated cost, per building, of the program per Uniform Financial Accounting and 79.3Reporting Standards (UFARS) finance code, by fiscal year. Upon approval through the 79.4adoption of a resolution by each of an intermediate district's member school district 79.5boards and the approval of the Department of Education, a school district may include 79.6its proportionate share of the costs of health and safety projects for an intermediate 79.7district in its application.79.8(b) Health and safety projects with an estimated cost of $500,000 or more per 79.9site are not eligible for health and safety revenue. Health and safety projects with an 79.10estimated cost of $500,000 or more per site that meet all other requirements for health and 79.11safety funding, are eligible for alternative facilities bonding and levy revenue according 79.12to section 
         123B.59. A school board shall not separate portions of a single project into 79.13components to qualify for health and safety revenue, and shall not combine unrelated 79.14projects into a single project to qualify for alternative facilities bonding and levy revenue.79.15(c) The commissioner of education shall not make eligibility for health and safety 79.16revenue contingent on a district's compliance status, level of program development, or 79.17training. The commissioner shall not mandate additional performance criteria such as 79.18training, certifications, or compliance evaluations as a prerequisite for levy approval.79.19    Subd. 2. Contents of program Health and safety policy.To qualify for health 79.20and safety revenue, a district school board must adopt a health and safety program policy. 79.21The program policy must include plans, where applicable, for hazardous substance 79.22removal, fire and life safety code repairs, regulated facility and equipment violations, 79.23and provisions for implementing a health and safety program that complies with health, 79.24safety, and environmental management, regulations and best practices including indoor 79.25air quality management.79.26(a) A hazardous substance plan must contain provisions for the removal or 79.27encapsulation of asbestos from school buildings or property, asbestos-related repairs, 79.28cleanup and disposal of polychlorinated biphenyls found in school buildings or property, 79.29and cleanup, removal, disposal, and repairs related to storing heating fuel or transportation 79.30fuels such as alcohol, gasoline, fuel, oil, and special fuel, as defined in section 296A.01. 79.31If a district has already developed a plan for the removal or encapsulation of asbestos as 79.32required by the federal Asbestos Hazard Emergency Response Act of 1986, the district 79.33may use a summary of that plan, which includes a description and schedule of response 79.34actions, for purposes of this section. The plan must also contain provisions to make 79.35modifications to existing facilities and equipment necessary to limit personal exposure 79.36to hazardous substances, as regulated by the federal Occupational Safety and Health 80.1Administration under Code of Federal Regulations, title 29, part 1910, subpart Z; or is 80.2determined by the commissioner to present a significant risk to district staff or student 80.3health and safety as a result of foreseeable use, handling, accidental spill, exposure, or 80.4contamination. 80.5(b) A fire and life safety plan must contain a description of the current fire and life 80.6safety code violations, a plan for the removal or repair of the fire and life safety hazard, 80.7and a description of safety preparation and awareness procedures to be followed until the 80.8hazard is fully corrected.80.9(c) A facilities and equipment violation plan must contain provisions to correct 80.10health and safety hazards as provided in Department of Labor and Industry standards 80.11pursuant to section 182.655. 80.12(d) A health, safety, and environmental management plan must contain a description 80.13of training, record keeping, hazard assessment, and program management as defined 80.14in section 123B.56. 80.15(e) A plan to test for and mitigate radon produced hazards.80.16(f) A plan to monitor and improve indoor air quality.80.17    Subd. 3. Health and safety revenue. A district's health and safety revenue 80.18for a fiscal year equals the district's alternative facilities levy under section 
         123B.59, 80.19subdivision 5, paragraph (b), plus the greater of zero or:80.20    (1) the sum of (a) the total approved cost of the district's hazardous substance 80.21plan for fiscal years 1985 through 1989, plus (b) the total approved cost of the district's 80.22health and safety program for fiscal year 1990 through the fiscal year to which the levy 80.23is attributable, excluding expenditures funded with bonds issued under section 
         123B.59 80.24or 
         123B.62, or chapter 475; certificates of indebtedness or capital notes under section 80.25123B.61
         ; levies under section 
         123B.58, 
         123B.59, 
         123B.63, or 
         126C.40, subdivision 1 or 80.266; and other federal, state, or local revenues, minus 80.27    (2) the sum of (a) the district's total hazardous substance aid and levy for fiscal years 80.281985 through 1989 under sections 
         124.245 and 
         275.125, subdivision 11c, plus (b) the 80.29district's health and safety revenue under this subdivision, for years before the fiscal year 80.30to which the levy is attributable. 80.31    Subd. 4. Health and safety levy. To receive health and safety revenue, a district 80.32may levy an amount equal to the district's health and safety revenue as defined in 80.33subdivision 3 multiplied by the lesser of one, or the ratio of the quotient derived by 80.34dividing the adjusted net tax capacity of the district for the year preceding the year the 80.35levy is certified by the adjusted marginal cost pupil units in the district for the school year 80.36to which the levy is attributable, to $2,935.81.1    Subd. 5. Health and safety aid. A district's health and safety aid is the difference 81.2between its health and safety revenue and its health and safety levy. If a district does not 81.3levy the entire amount permitted, health and safety aid must be reduced in proportion to 81.4the actual amount levied. Health and safety aid may not be reduced as a result of reducing 81.5a district's health and safety levy according to section 
         123B.79. 81.6    Subd. 6. Uses of health and safety revenue.(a) Health and safety revenue may 81.7be used only for approved expenditures necessary to correct fire and life safety hazards, 81.8or for the; design, purchase, installation, maintenance, and inspection of fire protection 81.9and alarm equipment; purchase or construction of appropriate facilities for the storage of 81.10combustible and flammable materials; inventories and facility modifications not related 81.11to a remodeling project to comply with lab safety requirements under section 121A.31; 81.12inspection, testing, repair, removal or encapsulation, and disposal of asbestos from school 81.13buildings or property owned or being acquired by the district, asbestos-related repairs,81.14asbestos-containing building materials; cleanup and disposal of polychlorinated biphenyls 81.15found in school buildings or property owned or being acquired by the district, or the; 81.16cleanup and disposal of hazardous and infectious wastes; cleanup, removal, disposal, and 81.17repairs related to storing heating fuel or transportation fuels such as alcohol, gasoline, fuel 81.18oil, and special fuel, as defined in section 
         296A.01, Minnesota; correction of occupational 81.19safety and health administration regulated facility and equipment hazards,; indoor air 81.20quality inspections, investigations, and testing; mold abatement,; upgrades or replacement 81.21of mechanical ventilation systems to meet American Society of Heating, Refrigerating 81.22and Air Conditioning Engineers standards and State Mechanical Code,; design, materials, 81.23and installation of local exhaust ventilation systems, including required make up air for 81.24controlling regulated hazardous substances; correction of Department of Health Food 81.25Code and violations; correction of swimming pool hazards excluding depth correction,; 81.26playground safety inspections and the installation of impact surfacing materials; bleacher 81.27repair or rebuilding to comply with the order of a building code inspector under section 81.28326B.112; testing and mitigation of elevated radon hazards; lead in water, paint, soil, 81.29and toys testing; copper in water testing; cleanup after major weather-related disasters 81.30or flooding; reduction of excessive organic and inorganic levels in wells and well 81.31capping of abandoned wells; installation and testing of boiler backflow valves to prevent 81.32contamination of potable water; vaccinations, titers, and preventative supplies for 81.33bloodborne pathogen compliance; costs to comply with the Janet B. Johnson Parents' 81.34Right To Know Act; and health, safety, and environmental management costs associated 81.35with implementing the district's health and safety program including costs to establish 81.36and operate safety committees, in school buildings or property owned or being acquired 82.1by the district. Testing and calibration activities are permitted for existing mechanical 82.2ventilation systems at intervals no less than every five years. Health and safety revenue 82.3must not be used to finance a lease purchase agreement, installment purchase agreement, 82.4or other deferred payments agreement. Health and safety revenue must not be used for 82.5the construction of new facilities or the purchase of portable classrooms, for interest or 82.6other financing expenses, or for energy efficiency projects under section 123B.65. The 82.7revenue may not be used for a building or property or part of a building or property used 82.8for postsecondary instruction or administration or for a purpose unrelated to elementary 82.9and secondary education.82.10    Subd. 6a.Restrictions on health and safety revenue.(b) Notwithstanding 82.11paragraph (a) subdivision 6, health and safety revenue must not be used to finance a 82.12lease purchase agreement, installment purchase agreement, or other deferred payments 82.13agreement, for the construction of new facilities, remodeling of existing facilities, or 82.14the purchase of portable classrooms, for interest or other financing expenses, or for 82.15energy efficiency projects under section 123B.65, for a building or property or part of a 82.16building or property used for postsecondary instruction or administration or for a purpose 82.17unrelated to elementary and secondary education, for replacement of building materials 82.18or facilities including roof, walls, windows, internal fixtures and flooring, nonhealth and 82.19safety costs associated with demolition of facilities, structural repair or replacement of 82.20facilities due to unsafe conditions, violence prevention and facility security, ergonomics, 82.21or for building and heating, ventilating and air conditioning supplies, maintenance, and 82.22cleaning activities. All assessments, investigations, inventories, and support equipment 82.23not leading to the engineering or construction of a project shall be included in the health, 82.24safety, and environmental management costs in subdivision 8, paragraph (a).82.25    Subd. 6b.Health and safety projects.(a) Health and safety revenue applications 82.26defined in subdivision 1 must be accompanied by a description of each project for which 82.27funding is being requested. Project descriptions must provide enough detail for an auditor 82.28to determine if the work qualifies for revenue. For projects other than fire and life 82.29safety projects, playground projects, and health, safety, and environmental management 82.30activities, a project description does not need to include itemized details such as material 82.31types, room locations, square feet, names, or license numbers. The commissioner shall 82.32approve only projects that comply with subdivisions 6 and 8, as defined by the Department 82.33of Education.82.34(b) Districts may request funding for allowable projects based on self-assessments, 82.35safety committee recommendations, insurance inspections, management assistance 82.36reports, fire marshal orders, or other mandates. Notwithstanding subdivision 1, paragraph 83.1(b), and subdivision 8, paragraph (b), for projects under $500,000, individual project 83.2size for projects authorized by this subdivision is not limited and may include related 83.3work in multiple facilities. Health and safety management costs from subdivision 8 may 83.4be reported as a single project.83.5(c) All costs directly related to a project shall be reported in the appropriate Uniform 83.6Financial Accounting and Reporting Standards (UFARS) finance code.83.7(d) For fire and life safety egress and all other projects exceeding $20,000, cited 83.8under Minnesota Fire Code, a fire marshal plan review is required.83.9(e) Districts shall update project estimates with actual expenditures for each 83.10fiscal year. If a project's final cost is significantly higher than originally approved, the 83.11commissioner may request additional supporting information.83.12    Subd. 6c.Appeals process.In the event a district is denied funding approval for 83.13a project the district believes complies with subdivisions 6 and 8, and is not otherwise 83.14excluded, a district may appeal the decision. All such requests must be in writing. The 83.15commissioner shall respond in writing. A written request must contain the following: 83.16project number; description and amount; reason for denial; unresolved questions for 83.17consideration; reasons for reconsideration; and a specific statement of what action the 83.18district is requesting.83.19    Subd. 7. Proration. In the event that the health and safety aid available for any year 83.20is prorated, a district having its aid prorated may levy an additional amount equal to the 83.21amount not paid by the state due to proration.83.22    Subd. 8. Health, safety, and environmental management cost. (a) "Health, safety, 83.23and environmental management" is defined in section 123B.56.83.24(b) A district's cost for health, safety, and environmental management is limited to 83.25the lesser of:83.26(1) actual cost to implement their plan; or83.27(2) an amount determined by the commissioner, based on enrollment, building 83.28age, and size.83.29(b) (c) The department may contract with regional service organizations, private 83.30contractors, Minnesota Safety Council, or state agencies to provide management 83.31assistance to school districts for health and safety capital projects. Management assistance 83.32is the development of written programs for the identification, recognition and control of 83.33hazards, and prioritization and scheduling of district health and safety capital projects. 83.34The department commissioner shall not mandate management assistance or exclude 83.35private contractors from the opportunity to provide any health and safety services to 83.36school districts.84.1(c) Notwithstanding paragraph (b), the department may approve revenue, up to 84.2the limit defined in paragraph (a) for districts having an approved health, safety, and 84.3environmental management plan that uses district staff to accomplish coordination and 84.4provided services.84.5EFFECTIVE DATE.This section is effective July 1, 2010.84.6    Sec. 2. [126C.75] FIBER OPTIC INFRASTRUCTURE GRANT PROGRAM.84.7    Subdivision 1.Creation of accounts.Two public school fiber optic infrastructure 84.8accounts are created, one in the general fund and one in the bond proceeds fund. Money 84.9in these accounts may only be used for capital costs of fiber optic infrastructure for 84.10eligible public school projects.84.11    Subd. 2.Program purpose.The fiber optic infrastructure grant program is 84.12established to provide the capital investment needed to bridge the gap between the federal 84.13Schools and Libraries Program of the Universal Service Fund, commonly known as 84.14"E-Rate," and the total cost of fiber optic infrastructure that will better public school 84.15buildings to support 21st century learning capacity at each district school.84.16    Subd. 3.General eligibility; state general obligation bond funds.Article XI, 84.17section 5, clause (a), of the Minnesota Constitution requires that state general obligation 84.18bonds be issued to finance only the acquisition or betterment of public land, buildings, and 84.19other public improvements of a capital nature. The legislature has determined that many 84.20fiber optic infrastructure projects will constitute betterments and capital improvements 84.21within the meaning of the Minnesota Constitution and capital expenditures under generally 84.22accepted accounting principles, and will be financed more efficiently and economically 84.23under this section than by direct appropriations for specific projects.84.24    Subd. 4.Definitions.For purposes of this section:84.25(1) "school district" means an independent, common, special, or intermediate school 84.26district or a charter school.84.27(2) "fiber optic infrastructure" means the land, buildings, fiber optic connection 84.28cable, and end point hardware, including routers and switches. It does not include 84.29computers, telephones, or cameras.84.30    Subd. 5.Grant program established.The commissioner shall make grants to 84.31school districts for fiber optic infrastructure projects.84.32    Subd. 6.Eligible costs for grants.(a) "Eligible cost" for use of state general 84.33obligation bond fund money means the acquisition of land or permanent easements; 84.34preparation of land on which the fiber optic infrastructure will be located, including 84.35demolition of structures and remediation of any hazardous conditions on the land; and 85.1predesign, design, acquisition, and installation of publicly owned fiber optic infrastructure 85.2in this state with a useful life of at least ten years that supports public school district 85.3facility operation, administration, and instruction; the unpaid principal on debt issued by 85.4the school district for a fiber optic infrastructure project, or the amount necessary to pay in 85.5a lump sum all lease payments due if payment results in the school district owning the fiber 85.6optic infrastructure. All uses under this paragraph must be for publicly owned property.85.7(b) "Eligible cost" for use of any other source of money will be determined by 85.8limitations imposed on that source, but may include the costs of leases and reimbursement 85.9of the costs of purchase and installation of fiber optic infrastructure.85.10    Subd. 7.Application.The commissioner must develop forms and procedures for 85.11soliciting and reviewing applications for grants under this section. At a minimum, a school 85.12district must include the following information in its application:85.13(1) a resolution adopted by its school board certifying that the money required to be 85.14supplied by the school district to complete the project is available and committed;85.15(2) a detailed and specific description of the project and an estimate, along with 85.16necessary supporting evidence, of the total costs for the project;85.17(3) an assessment of the need for and benefits of the project;85.18(4) a timeline indicating the major milestones of the project and their anticipated 85.19completion dates; and85.20(5) any additional information or material the commissioner prescribes.85.21    Subd. 8.Criteria for grants.The commissioner must develop the criteria that will 85.22be used to award grants if grant applications exceed available resources.85.23    Subd. 9.Cancellation of grant.If, five years after execution of a grant agreement, 85.24the commissioner determines that the grantee has not proceeded in a timely manner with 85.25implementation of the project funded, the commissioner must cancel the grant and the 85.26grantee must repay to the commissioner all grant money paid to the grantee. Section 85.2716A.642 applies to any appropriations made to the commissioner under this section that 85.28have not been awarded to grantees.85.29    Subd. 10.Report.By January 15 of each year, the commissioner must submit to 85.30the commissioner of management and budget and the chairs of the legislative committees 85.31or divisions with jurisdiction over education policy, education finance, and capital 85.32investment, a list of the projects that have been funded with money under this program 85.33during the preceding calendar year, as well as a list of those priority projects for which state 85.34bond proceeds fund appropriations will be sought during that year's legislative session.85.35EFFECTIVE DATE.This section is effective the day following final enactment.86.1    Sec. 3. HEALTH AND SAFETY POLICY.86.2Notwithstanding Minnesota Statutes, section 123B.57, subdivision 2, a school board 86.3that has not yet adopted a health and safety policy by September 30, 2010, may submit an 86.4application for health and safety revenue for taxes payable in 2011 in the form and manner 86.5specified by the commissioner of education.86.6EFFECTIVE DATE.This section is effective the day following final enactment.86.7ARTICLE 586.8ACCOUNTING86.9    Section 1. Minnesota Statutes 2009 Supplement, section 16A.152, subdivision 2, as 86.10amended by Laws 2010, chapter 215, article 11, section 15, is amended to read:86.11    Subd. 2. Additional revenues; priority. (a) If on the basis of a forecast of general 86.12fund revenues and expenditures, the commissioner of management and budget determines 86.13that there will be a positive unrestricted budgetary general fund balance at the close of 86.14the biennium, the commissioner of management and budget must allocate money to the 86.15following accounts and purposes in priority order:86.16    (1) the cash flow account established in subdivision 1 until that account reaches 86.17$350,000,000;86.18    (2) the budget reserve account established in subdivision 1a until that account 86.19reaches $653,000,000;86.20    (3) the amount necessary to increase the aid payment schedule for school district 86.21aids and credits payments in section 
         127A.45 to not more than 90 percent rounded to the 86.22nearest tenth of a percent without exceeding the amount available and with any remaining 86.23funds deposited in the budget reserve;86.24    (4) the amount necessary to restore all or a portion of the net aid reductions under 86.25section 
         127A.441 and to reduce the property tax revenue recognition shift under section 86.26123B.75, subdivision 5
         , paragraph (b), and Laws 2003, First Special Session chapter 9, 86.27article 5, section 34, as amended by Laws 2003, First Special Session chapter 23, section 86.2820, by the same amount; 86.29(5) to the state airports fund, the amount necessary to restore the amount transferred 86.30from the state airports fund under Laws 2008, chapter 363, article 11, section 3, 86.31subdivision 5; and86.32(6) to the fire safety account in the special revenue fund, the amount necessary to 86.33restore transfers from the account to the general fund made in Laws 2010.87.1    (b) The amounts necessary to meet the requirements of this section are appropriated 87.2from the general fund within two weeks after the forecast is released or, in the case of 87.3transfers under paragraph (a), clauses (3) and (4), as necessary to meet the appropriations 87.4schedules otherwise established in statute.87.5    (c) The commissioner of management and budget shall certify the total dollar 87.6amount of the reductions under paragraph (a), clauses (3) and (4), to the commissioner of 87.7education. The commissioner of education shall increase the aid payment percentage and 87.8reduce the property tax shift percentage by these amounts and apply those reductions to 87.9the current fiscal year and thereafter.87.10EFFECTIVE DATE.This section is effective the day following final enactment.87.11    Sec. 2. Minnesota Statutes 2008, section 123B.12, is amended to read:87.12123B.12 INSUFFICIENT FUNDS TO PAY ORDERS.87.13(a) In the event that a district or a cooperative unit defined in section 
         123A.24, 87.14subdivision 2
         , has insufficient funds to pay its usual lawful current obligations, subject to 87.15section 
         471.69, the board may enter into agreements with banks or any person to take its 87.16orders. Any order drawn, after having been presented to the treasurer for payment and not 87.17paid for want of funds shall be endorsed by the treasurer by putting on the back thereof 87.18the words "not paid for want of funds," giving the date of endorsement and signed by the 87.19treasurer. A record of such presentment, nonpayment and endorsement shall be made by 87.20the treasurer. The treasurer shall serve a written notice upon the payee or the payee's 87.21assignee, personally, or by mail, when the treasurer is prepared to pay such orders. The 87.22notice may be directed to the payee or the payee's assignee at the address given in writing 87.23by such payee or assignee to such treasurer, at any time prior to the service of such notice. 87.24No order shall draw any interest if such address is not given when the same is unknown to 87.25the treasurer, and no order shall draw any interest after the service of such notice.  87.26(b) A district may enter, subject to section 
         471.69, into a an unsecured line of credit 87.27agreement with a financial institution. The amount of credit available must not exceed 9587.28380 percent of average expenditure per month of operating expenditures in the previous 87.29fiscal year. Any amount advanced must be repaid no later than 45 120 days after the 87.30day of advancement.87.31EFFECTIVE DATE.This section is effective the day following final enactment.87.32    Sec. 3. Minnesota Statutes 2008, section 123B.75, is amended by adding a subdivision 87.33to read:88.1    Subd. 1a.Definition.For the purpose of this section, "school district tax settlement 88.2revenue" means the current, delinquent, and manufactured home property tax receipts 88.3collected by the county and distributed to the school district.88.4EFFECTIVE DATE.This section is effective the day following final enactment 88.5and applies to fiscal years 2010 and later.88.6    Sec. 4. Minnesota Statutes 2008, section 123B.75, subdivision 5, is amended to read:88.7    Subd. 5. Levy recognition. (a) "School district tax settlement revenue" means the 88.8current, delinquent, and manufactured home property tax receipts collected by the county 88.9and distributed to the school district.88.10(b) For fiscal year 2004 and later years 2009 and 2010, in June of each year, the 88.11school district must recognize as revenue, in the fund for which the levy was made, the 88.12lesser of:88.13(1) the sum of May, June, and July school district tax settlement revenue received in 88.14that calendar year, plus general education aid according to section 
         126C.13, subdivision 88.154
         , received in July and August of that calendar year; or88.16(2) the sum of:88.17(i) 31 percent of the referendum levy certified according to section 
         126C.17, in 88.18calendar year 2000; and88.19(ii) the entire amount of the levy certified in the prior calendar year according to 88.20section 
         124D.86, subdivision 4, for school districts receiving revenue under sections 88.21124D.86, subdivision 3
         , clauses (1), (2), and (3); 
         126C.41, subdivisions 1, 2, paragraph 88.22(a), and 3
         , paragraphs (b), (c), and (d); 
         126C.43, subdivision 2; 
         126C.457; and 
         126C.48, 88.23subdivision 6
         ; plus88.24(iii) zero percent of the amount of the levy certified in the prior calendar year for the 88.25school district's general and community service funds, plus or minus auditor's adjustments, 88.26not including the levy portions that are assumed by the state, that remains after subtracting 88.27the referendum levy certified according to section 126C.17 and the amount recognized 88.28according to item (ii).88.29(b) For fiscal year 2011 and later years, in June of each year, the school district must 88.30recognize as revenue, in the fund for which the levy was made, the lesser of:88.31(1) the sum of May, June, and July school district tax settlement revenue received in 88.32that calendar year, plus general education aid according to section 126C.13, subdivision 88.334, received in July and August of that calendar year; or88.34(2) the sum of:89.1(i) the greater of 47.8 percent of the referendum levy certified according to section 89.2126C.17, in the prior calendar year or 31 percent of the referendum levy certified 89.3according to section 126C.17, in calendar year 2000; plus89.4(ii) the entire amount of the levy certified in the prior calendar year according to 89.5section 124D.86, subdivision 4, for school districts receiving revenue under sections 89.6124D.86, subdivision 3, clauses (1), (2), and (3); 126C.41, subdivisions 1, 2, and 3, 89.7paragraphs (b), (c), and (d); 126C.43, subdivision 2; 126C.457; and 126C.48, subdivision 89.86; plus89.9(iii) 47.8 percent of the amount of the levy certified in the prior calendar year for the 89.10school district's general and community service funds, plus or minus auditor's adjustments, 89.11not including the levy portions that are assumed by the state, that remains after subtracting 89.12the referendum levy certified according to section 126C.17 and the amount recognized 89.13according to clause (ii).89.14    Sec. 5. Minnesota Statutes 2008, section 126C.54, is amended to read:89.15126C.54 REPAYMENT; MATURITY DATE OF CERTIFICATES; INTEREST.89.16(a) The proceeds of the current tax levies and future state aid receipts or other school 89.17funds which may become available must be applied to the extent necessary to repay 89.18such certificates and the full faith and credit of the district shall be pledged to payment 89.19of the certificates. Certificates issued in anticipation of receipt of aids shall mature not 89.20later than the anticipated date of receipt of the aids as estimated by the commissioner, but 89.21in no event later than three months after the close of the school year in which issued. 89.22Certificates issued in anticipation of receipt of taxes shall mature not later than the 89.23anticipated date of receipt in full of the taxes, but in no event later than three months after 89.24the close of the calendar year in which issued. The certificates must be sold at not less 89.25than par. The certificates must bear interest after maturity until paid at the rate they bore 89.26before maturity and any interest accruing before or after maturity must be paid from 89.27any available school funds.89.28(b) Notwithstanding any contrary provision in paragraph (a), if the certificates are 89.29issued as taxable obligations on which the interest is includable in gross income for federal 89.30income tax purposes, certificates issued in anticipation of receipt of aids shall mature not 89.31later than 12 months after the close of the school year in which issued and certificates 89.32issued in anticipation of receipt of taxes shall mature not later than 12 months after the 89.33close of the calendar year in which issued. Any certificate issued under this section with a 89.34maturity in excess of 12 months must be repaid with money from the general fund.90.1    Sec. 6. Minnesota Statutes 2008, section 127A.42, subdivision 2, is amended to read:90.2    Subd. 2. Violations of law. The commissioner may reduce or withhold the district's 90.3state aid for any school year whenever the board of the district authorizes or permits 90.4violations of law within the district by:90.5(1) employing a teacher who does not hold a valid teaching license or permit in a 90.6public school;90.7(2) noncompliance with a mandatory rule of general application promulgated by the 90.8commissioner in accordance with statute, unless special circumstances make enforcement 90.9inequitable, impose an extraordinary hardship on the district, or the rule is contrary to 90.10the district's best interests;90.11(3) the district's continued performance of a contract made for the rental of rooms 90.12or buildings for school purposes or for the rental of any facility owned or operated by or 90.13under the direction of any private organization, if the contract has been disapproved, the 90.14time for review of the determination of disapproval has expired, and no proceeding for 90.15review is pending;90.16(4) any practice which is a violation of sections 1 and 2 of article 13 of the 90.17Constitution of the state of Minnesota;90.18(5) failure to reasonably provide for a resident pupil's school attendance under 90.19Minnesota Statutes;90.20(6) noncompliance with state laws prohibiting discrimination because of race, 90.21color, creed, religion, national origin, sex, age, marital status, status with regard to 90.22public assistance or disability, as defined in sections 
         363A.08 to 
         363A.19 and 
         363A.28, 90.23subdivision 10
         ; or 90.24(7) using funds contrary to the statutory purpose of the funds.90.25The reduction or withholding must be made in the amount and upon the procedure 90.26provided in this section, or, in the case of the violation stated in clause (1), upon the 90.27procedure provided in section 127A.43.90.28EFFECTIVE DATE.This section is effective July 1, 2010.90.29    Sec. 7. Minnesota Statutes 2008, section 127A.43, is amended to read:90.30127A.43 DISTRICT EMPLOYMENT OF UNLICENSED TEACHERS; AID 90.31REDUCTION.90.32When a district employs one or more teachers who do not hold a valid teaching 90.33license, state aid shall be withheld reduced in the proportion that the number of such 90.34teachers is to the total number of teachers employed by the district, multiplied by 60 91.1percent of the basic revenue, as defined in section 
         126C.10, subdivision 2, of the district 91.2for the year in which the employment occurred.  91.3EFFECTIVE DATE.This section is effective July 1, 2010.91.4    Sec. 8. Minnesota Statutes 2008, section 127A.441, is amended to read:91.5127A.441 AID REDUCTION; LEVY REVENUE RECOGNITION CHANGE.91.6    Each year, the state aids payable to any school district for that fiscal year that are 91.7recognized as revenue in the school district's general and community service funds shall 91.8be adjusted by an amount equal to (1) the amount the district recognized as revenue for the 91.9prior fiscal year pursuant to section 
         123B.75, subdivision 5, paragraph (a) or (b), minus (2) 91.10the amount the district recognized as revenue for the current fiscal year pursuant to section 91.11123B.75, subdivision 5
         , paragraph (a) or (b). For purposes of making the aid adjustments 91.12under this section, the amount the district recognizes as revenue for either the prior fiscal 91.13year or the current fiscal year pursuant to section 
         123B.75, subdivision 5, paragraph (b), 91.14shall not include any amount levied pursuant to section 
         124D.86, subdivision 4, for school 91.15districts receiving revenue under sections 
         124D.86, subdivision 3, clauses (1), (2), and (3); 91.16126C.41, subdivisions 1, 2, and 3
         , paragraphs (b), (c), and (d); 
         126C.43, subdivision 2; 91.17126C.457
         ; and 
         126C.48, subdivision 6. Payment from the permanent school fund shall not 91.18be adjusted pursuant to this section. The school district shall be notified of the amount of 91.19the adjustment made to each payment pursuant to this section. 91.20EFFECTIVE DATE.This section is effective the day following final enactment 91.21and applies to fiscal years 2010 and later.91.22    Sec. 9. Minnesota Statutes 2008, section 127A.45, subdivision 2, is amended to read:91.23    Subd. 2. Definitions. (a) The term "Other district receipts" means payments by 91.24county treasurers pursuant to section 
         276.10, apportionments from the school endowment 91.25fund pursuant to section 
         127A.33, apportionments by the county auditor pursuant to 91.26section 
         127A.34, subdivision 2, and payments to school districts by the commissioner of 91.27revenue pursuant to chapter 298.91.28(b) The term "Cumulative amount guaranteed" means the product of91.29(1) the cumulative disbursement percentage shown in subdivision 3; times91.30(2) the sum of91.31(i) the current year aid payment percentage of the estimated aid and credit 91.32entitlements paid according to subdivision 13; plus91.33(ii) 100 percent of the entitlements paid according to subdivisions 11 and 12; plus92.1(iii) the other district receipts.92.2(c) The term "Payment date" means the date on which state payments to districts 92.3are made by the electronic funds transfer method. If a payment date falls on a Saturday, 92.4a Sunday, or a weekday which is a legal holiday, the payment shall be made on the 92.5immediately preceding business day. The commissioner may make payments on dates 92.6other than those listed in subdivision 3, but only for portions of payments from any 92.7preceding payment dates which could not be processed by the electronic funds transfer 92.8method due to documented extenuating circumstances.92.9(d) The current year aid payment percentage equals 90 73.92.10EFFECTIVE DATE.This section is effective the day following final enactment 92.11and applies to fiscal years 2010 and later.92.12    Sec. 10. Minnesota Statutes 2008, section 127A.45, subdivision 3, is amended to read:92.13    Subd. 3. Payment dates and percentages. (a) For fiscal year 2004 and later, The 92.14commissioner shall pay to a district on the dates indicated an amount computed as follows: 92.15the cumulative amount guaranteed minus the sum of (a)(1) the district's other district 92.16receipts through the current payment, and (b)(2) the aid and credit payments through the 92.17immediately preceding payment. For purposes of this computation, the payment dates and 92.18the cumulative disbursement percentages are as follows:

92.19Payment datePercentage92.20Payment 1July 15:5.592.21Payment 2July 30:8.092.22Payment 3August 15:17.592.23Payment 4August 30:20.092.24Payment 5September 15:22.592.25Payment 6September 30:25.092.26Payment 7October 15:27.092.27Payment 8October 30:30.092.28Payment 9November 15:32.592.29Payment 10November 30:36.592.30Payment 11December 15:42.092.31Payment 12December 30:45.092.32Payment 13January 15:50.092.33Payment 14January 30:54.092.34Payment 15February 15:58.092.35Payment 16February 28:63.092.36Payment 17March 15:68.092.37Payment 18March 30:74.092.38Payment 19April 15:78.093.1Payment 20April 30:85.093.2Payment 21May 15:90.093.3Payment 22May 30:95.093.4Payment 23June 20:100.0

93.5(b) In addition to the amounts paid under paragraph (a), for fiscal year 2004, the 93.6commissioner shall pay to a district on the dates indicated an amount computed as follows:

93.793.8Payment 3August 15: the final adjustment for the prior fiscal year for the state paid property tax credits established in section 273.139293.993.10Payment 4August 30: one-third of the final adjustment for the prior fiscal year for all aid entitlements except state paid property tax credits93.1193.12Payment 6September 30: one-third of the final adjustment for the prior fiscal year for all aid entitlements except state paid property tax credits93.1393.14Payment 8October 30: one-third of the final adjustment for the prior fiscal year for all aid entitlements except state paid property tax credits

93.15(c) (b) In addition to the amounts paid under paragraph (a), for fiscal year 2005 and 93.16later, the commissioner shall pay to a district on the dates indicated an amount computed 93.17as follows:

93.1893.19Payment 3August 15: the final adjustment for the prior fiscal year for the state paid 
                  		property tax credits established in section 
                  273.139293.2093.21Payment 4August 30: 30 percent of the final adjustment for the prior fiscal year for 
                  		all aid entitlements except state paid property tax credits93.2293.23Payment 6September 30: 40 percent of the final adjustment for the prior fiscal year 
                  		for all aid entitlements except state paid property tax credits93.2493.25Payment 8October 30: 30 percent of the final adjustment for the prior fiscal year 
                  		for all aid entitlements except state paid property tax credits

93.26EFFECTIVE DATE.This section is effective the day following final enactment 93.27and applies to fiscal years 2010 and later.93.28    Sec. 11. Minnesota Statutes 2008, section 127A.45, is amended by adding a 93.29subdivision to read:93.30    Subd. 6a.Cash flow adjustment.The board of directors of any charter school 93.31serving fewer than 150 students where the percentage of students eligible for special 93.32education services equals 100 percent of the charter school's total enrollment may request 93.33that the commissioner of education accelerate the school's cash flow under this section. 93.34The commissioner must approve a properly submitted request within 30 days of its receipt. 93.35The commissioner must accelerate the school's regular special education aid payments 93.36according to the schedule in the school's request and modify the payments to the school 93.37under subdivision 3 accordingly. A school must not receive current payments of regular 93.38special education aid exceeding 90 percent of its estimated aid entitlement for the fiscal 94.1year. The commissioner must delay the special education aid payments to all other school 94.2districts and charter schools in proportion to each district or charter school's total share 94.3of regular special education aid such that the overall aid payment savings from the aid 94.4payment shift remains unchanged for any fiscal year. 94.5EFFECTIVE DATE.This section is effective the day following final enactment 94.6and applies to school district or charter school payments made on or after that date.94.7    Sec. 12. Minnesota Statutes 2008, section 127A.45, is amended by adding a 94.8subdivision to read:94.9    Subd. 7b.Advance final payment.(a) Notwithstanding subdivisions 3 and 7, 94.10a school district or charter school exceeding its expenditure limitations under section 94.11123B.83 as of June 30 of the prior fiscal year may receive a portion of its final payment 94.12for the current fiscal year on June 20, if requested by the district or charter school. The 94.13amount paid under this subdivision must not exceed the lesser of:94.14(1) the difference between 90 percent and the current year payment percentage in 94.15subdivision 2, paragraph (d), in the current fiscal year times the sum of the district or 94.16charter school's general education aid plus the aid adjustment in section 127A.50 for 94.17the current fiscal year; or94.18(2) the amount by which the district's or charter school's net negative unreserved 94.19general fund balance as of June 30 of the prior fiscal year exceeds 2.5 percent of the 94.20district or charter school's expenditures for that fiscal year.94.21(b) The state total advance final payment under this subdivision for any year must 94.22not exceed $7,500,000. If the amount request exceeds $7,500,000, the advance final 94.23payment for each eligible district must be reduced proportionately.94.24EFFECTIVE DATE.This section is effective the day following final enactment 94.25and applies to fiscal years 2010 and later.94.26    Sec. 13. Minnesota Statutes 2008, section 127A.45, subdivision 13, is amended to read:94.27    Subd. 13. Aid payment percentage. Except as provided in subdivisions 11, 12, 12a, 94.28and 14, each fiscal year, all education aids and credits in this chapter and chapters 120A, 94.29120B, 121A, 122A, 123A, 123B, 124D, 125A, 125B, 126C, 134, and section 
         273.1392, 94.30shall be paid at the current year aid payment percentage of the estimated entitlement during 94.31the fiscal year of the entitlement. For the purposes of this subdivision, a district's estimated 94.32entitlement for special education excess cost aid under section 125A.79 for fiscal year 94.332005 equals 70 percent of the district's entitlement for the second prior fiscal year. For the 95.1purposes of this subdivision, a district's estimated entitlement for special education excess 95.2cost aid under section 
         125A.79 for fiscal year 2006 and later equals 74.0 percent of the 95.3district's entitlement for the current fiscal year. The final adjustment payment, according 95.4to subdivision 9, must be the amount of the actual entitlement, after adjustment for actual 95.5data, minus the payments made during the fiscal year of the entitlement.95.6    Sec. 14. Minnesota Statutes 2008, section 127A.45, is amended by adding a 95.7subdivision to read:95.8    Subd. 17.Payment to creditors.Except where otherwise specifically authorized, 95.9state education aid payments shall be made only to the school district, charter school, or 95.10other education organization earning state aid revenues as a result of providing education 95.11services.95.12    Sec. 15. FUND TRANSFERS.95.13    Subdivision 1.Fiscal years 2010 and 2011 only.(a) Notwithstanding Minnesota 95.14Statutes, section 123B.80, subdivision 3, for fiscal years 2010 and 2011 only, the 95.15commissioner must approve a request for a fund transfer if the transfer does not increase 95.16state aid obligations to the district or result in additional property tax authority for the 95.17district. This section does not permit transfers from the community service fund.95.18(b) A school board may approve a fund transfer under paragraph (a) only after 95.19adopting a resolution stating the fund transfer will not diminish instructional opportunities 95.20for students.95.21    Subd. 2.Hayfield.Notwithstanding Minnesota Statutes, section 123B.79 or 95.22123B.80, on June 30, 2010, Independent School District No. 203, Hayfield, may 95.23permanently transfer up to $75,000 from its reserved for operating capital account to its 95.24undesignated general fund balance.95.25EFFECTIVE DATE.This section is effective the day following final enactment.95.26    Sec. 16.  REPEALER.95.27Minnesota Statutes 2008, section 127A.46, is repealed.95.28EFFECTIVE DATE.This section is effective July 1, 2010.96.1ARTICLE 696.2STATE AGENCIES96.3    Section 1. Minnesota Statutes 2008, section 3.303, is amended by adding a subdivision 96.4to read:96.5    Subd. 11.Permanent school fund land management analyst.The commission 96.6shall undertake activities that are necessary to advise the legislature and to monitor the 96.7executive branch on issues related to the management of permanent school fund lands. 96.8The commission may hire a lead analyst and other staff as necessary for this purpose. The 96.9commission shall:96.10(1) monitor management of permanent school fund lands;96.11(2) analyze the benefits derived from the fund;96.12(3) actively participate in the work of the permanent school fund advisory committee 96.13under section 127A.30;96.14(4) provide oversight to ensure that the state fulfills its fiduciary responsibilities to 96.15the permanent school fund as specified by the Minnesota Constitution and Minnesota 96.16Statutes; and96.17(5) make effective recommendations to the permanent school fund advisory 96.18committee and the finance divisions and committees of the house of representatives and 96.19the senate.96.20The purpose of this function is to maximize the long-term economic returns to the 96.21school trust lands consistent with the goals of section 127A.31.96.22EFFECTIVE DATE.This section is effective July 1, 2011.96.23    Sec. 2. Minnesota Statutes 2008, section 16A.125, subdivision 5, is amended to read:96.24    Subd. 5. Forest trust lands. (a) The term "state forest trust fund lands" as used 96.25in this subdivision, means public land in trust under the Constitution set apart as "forest 96.26lands under the authority of the commissioner" of natural resources as defined by section 96.2789.001, subdivision 13
         .96.28(b) The commissioner of management and budget shall credit the revenue from the 96.29forest trust fund lands to the forest suspense account. The account must specify the trust 96.30funds interested in the lands and the respective receipts of the lands.96.31(c) After a fiscal year, the commissioner of management and budget shall certify the 96.32total costs incurred for forestry during that year under appropriations for the protection, 96.33improvement, administration, and management of state forest trust fund lands and 96.34construction and improvement of forest roads to enhance the forest value of the lands. 97.1The certificate must specify the trust funds interested in the lands. The commissioner of 97.2natural resources shall supply the commissioner of management and budget with the 97.3information needed for the certificate.97.4(d) After a fiscal year, the commissioner shall distribute the receipts credited to the 97.5suspense account during that fiscal year as follows:97.6(1) the amount of the certified costs incurred by the state for forest management, 97.7forest improvement, and road improvement during the fiscal year shall be transferred to 97.8the forest management investment account established under section 
         89.039, including 97.9the costs associated with the Legislative Coordinating Commission's permanent school 97.10fund land management activities;97.11(2) the balance of the certified costs incurred by the state during the fiscal year 97.12shall be transferred to the general fund; and97.13(3) the balance of the receipts shall then be returned prorated to the trust funds in 97.14proportion to their respective interests in the lands which produced the receipts.97.15EFFECTIVE DATE.This section is effective July 1, 2011.97.16    Sec. 3. Minnesota Statutes 2008, section 127A.30, subdivision 2, is amended to read:97.17    Subd. 2. Duties.  The advisory committee, in conjunction with the Legislative 97.18Coordinating Commission, shall review the policies of the Department of Natural 97.19Resources and current statutes on management of school trust fund lands at least annually 97.20and shall recommend necessary changes in statutes, policy, and implementation in order to 97.21ensure provident utilization of the permanent school fund lands. By January 15 of each 97.22year, the advisory committee shall submit a report to the legislature with recommendations 97.23for the oversight and management of school trust lands to secure long-term economic 97.24return for the permanent school fund, consistent with sections 
         92.121 and 
         127A.31. The 97.25committee's annual report may include recommendations to:97.26    (1) manage the school trust lands efficiently;97.27    (2) reduce the management expenditures of school trust lands and maximize the 97.28revenues deposited in the permanent school trust fund;97.29    (3) manage the sale, exchange, and commercial leasing of school trust lands to 97.30maximize the revenues deposited in the permanent school trust fund and retain the value 97.31from the long-term appreciation of the school trust lands; and97.32    (4) manage the school trust lands to maximize the long-term economic return for the 97.33permanent school trust fund while maintaining sound natural resource conservation and 97.34management principles.98.1EFFECTIVE DATE.This section is effective July 1, 2011.98.2    Sec. 4. Minnesota Statutes 2008, section 157.15, is amended by adding a subdivision 98.3to read:98.4    Subd. 14a.School concession stand."School concession stand" means a food 98.5and beverage service establishment located in a school, on school grounds, or within a 98.6school-owned athletic complex, that is operated in conjunction with school-sponsored 98.7events.98.8    Sec. 5. Minnesota Statutes 2009 Supplement, section 157.16, subdivision 3, is 98.9amended to read:98.10    Subd. 3.  Establishment fees; definitions. (a) The following fees are required 98.11for food and beverage service establishments, youth camps, hotels, motels, lodging 98.12establishments, public pools, and resorts licensed under this chapter. Food and beverage 98.13service establishments must pay the highest applicable fee under paragraph (d), clause 98.14(1), (2), (3), or (4), and establishments serving alcohol must pay the highest applicable 98.15fee under paragraph (d), clause (6) or (7). The license fee for new operators previously 98.16licensed under this chapter for the same calendar year is one-half of the appropriate annual 98.17license fee, plus any penalty that may be required. The license fee for operators opening 98.18on or after October 1 is one-half of the appropriate annual license fee, plus any penalty 98.19that may be required. 98.20    (b) All food and beverage service establishments, except special event food stands, 98.21and all hotels, motels, lodging establishments, public pools, and resorts shall pay an 98.22annual base fee of $150. 98.23    (c) A special event food stand shall pay a flat fee of $50 annually. "Special event 98.24food stand" means a fee category where food is prepared or served in conjunction with 98.25celebrations, county fairs, or special events from a special event food stand as defined 98.26in section 
         157.15. 98.27    (d) In addition to the base fee in paragraph (b), each food and beverage service 98.28establishment, other than a special event food stand and a school concession stand, and 98.29each hotel, motel, lodging establishment, public pool, and resort shall pay an additional 98.30annual fee for each fee category, additional food service, or required additional inspection 98.31specified in this paragraph: 98.32    (1) Limited food menu selection, $60. "Limited food menu selection" means a fee 98.33category that provides one or more of the following: 98.34    (i) prepackaged food that receives heat treatment and is served in the package; 99.1    (ii) frozen pizza that is heated and served; 99.2    (iii) a continental breakfast such as rolls, coffee, juice, milk, and cold cereal; 99.3    (iv) soft drinks, coffee, or nonalcoholic beverages; or 99.4    (v) cleaning for eating, drinking, or cooking utensils, when the only food served 99.5is prepared off site. 99.6    (2) Small establishment, including boarding establishments, $120. "Small 99.7establishment" means a fee category that has no salad bar and meets one or more of 99.8the following: 99.9    (i) possesses food service equipment that consists of no more than a deep fat fryer, a 99.10grill, two hot holding containers, and one or more microwave ovens; 99.11    (ii) serves dipped ice cream or soft serve frozen desserts; 99.12    (iii) serves breakfast in an owner-occupied bed and breakfast establishment; 99.13    (iv) is a boarding establishment; or 99.14    (v) meets the equipment criteria in clause (3), item (i) or (ii), and has a maximum 99.15patron seating capacity of not more than 50. 99.16    (3) Medium establishment, $310. "Medium establishment" means a fee category 99.17that meets one or more of the following: 99.18    (i) possesses food service equipment that includes a range, oven, steam table, salad 99.19bar, or salad preparation area; 99.20    (ii) possesses food service equipment that includes more than one deep fat fryer, 99.21one grill, or two hot holding containers; or 99.22    (iii) is an establishment where food is prepared at one location and served at one or 99.23more separate locations. 99.24    Establishments meeting criteria in clause (2), item (v), are not included in this fee 99.25category. 99.26    (4) Large establishment, $540. "Large establishment" means either: 99.27    (i) a fee category that (A) meets the criteria in clause (3), items (i) or (ii), for a 99.28medium establishment, (B) seats more than 175 people, and (C) offers the full menu 99.29selection an average of five or more days a week during the weeks of operation; or 99.30    (ii) a fee category that (A) meets the criteria in clause (3), item (iii), for a medium 99.31establishment, and (B) prepares and serves 500 or more meals per day. 99.32    (5) Other food and beverage service, including food carts, mobile food units, 99.33seasonal temporary food stands, and seasonal permanent food stands, $60. 99.34    (6) Beer or wine table service, $60. "Beer or wine table service" means a fee 99.35category where the only alcoholic beverage service is beer or wine, served to customers 99.36seated at tables. 100.1    (7) Alcoholic beverage service, other than beer or wine table service, $165. 100.2    "Alcohol beverage service, other than beer or wine table service" means a fee 100.3category where alcoholic mixed drinks are served or where beer or wine are served from 100.4a bar. 100.5    (8) Lodging per sleeping accommodation unit, $10, including hotels, motels, 100.6lodging establishments, and resorts, up to a maximum of $1,000. "Lodging per sleeping 100.7accommodation unit" means a fee category including the number of guest rooms, cottages, 100.8or other rental units of a hotel, motel, lodging establishment, or resort; or the number of 100.9beds in a dormitory. 100.10    (9) First public pool, $325; each additional public pool, $175. "Public pool" means a 100.11fee category that has the meaning given in section 
         144.1222, subdivision 4. 100.12    (10) First spa, $175; each additional spa, $100. "Spa pool" means a fee category that 100.13has the meaning given in Minnesota Rules, part 4717.0250, subpart 9. 100.14    (11) Private sewer or water, $60. "Individual private water" means a fee category 100.15with a water supply other than a community public water supply as defined in Minnesota 100.16Rules, chapter 4720. "Individual private sewer" means a fee category with an individual 100.17sewage treatment system which uses subsurface treatment and disposal. 100.18    (12) Additional food service, $150. "Additional food service" means a location at 100.19a food service establishment, other than the primary food preparation and service area, 100.20used to prepare or serve food to the public. "Additional food service" does not apply to 100.21school concession stands.100.22    (13) Additional inspection fee, $360. "Additional inspection fee" means a fee to 100.23conduct the second inspection each year for elementary and secondary education facility 100.24school lunch programs when required by the Richard B. Russell National School Lunch 100.25Act. 100.26    (e) A fee for review of construction plans must accompany the initial license 100.27application for restaurants, hotels, motels, lodging establishments, resorts, seasonal food 100.28stands, and mobile food units. The fee for this construction plan review is as follows:

100.29Service AreaTypeFee100.30Foodlimited food menu$275100.31small establishment$400100.32medium establishment$450100.33large food establishment$500100.34additional food service$150100.35Transient food servicefood cart$250100.36seasonal permanent food stand$250100.37seasonal temporary food stand$250101.1mobile food unit$350101.2Alcoholbeer or wine table service$150101.3alcohol service from bar$250101.4Lodgingless than 25 rooms$375101.525 to less than 100 rooms$400101.6100 rooms or more$500101.7less than five cabins$350101.8five to less than ten cabins$400101.9ten cabins or more$450

101.10    (f) When existing food and beverage service establishments, hotels, motels, lodging 101.11establishments, resorts, seasonal food stands, and mobile food units are extensively 101.12remodeled, a fee must be submitted with the remodeling plans. The fee for this 101.13construction plan review is as follows:

101.14Service AreaTypeFee101.15Foodlimited food menu$250101.16small establishment$300101.17medium establishment$350101.18large food establishment$400101.19additional food service$150101.20Transient food servicefood cart$250101.21seasonal permanent food stand$250101.22seasonal temporary food stand$250101.23mobile food unit$250101.24Alcoholbeer or wine table service$150101.25alcohol service from bar$250101.26Lodgingless than 25 rooms$250101.2725 to less than 100 rooms$300101.28100 rooms or more$450101.29less than five cabins$250101.30five to less than ten cabins$350101.31ten cabins or more$400

101.32    (g) Special event food stands are not required to submit construction or remodeling 101.33plans for review. 101.34(h) Youth camps shall pay an annual single fee for food and lodging as follows:101.35(1) camps with up to 99 campers, $325;101.36(2) camps with 100 to 199 campers, $550; and101.37(3) camps with 200 or more campers, $750.101.38    Sec. 6. DEPARTMENT OF EDUCATION; APPROPRIATIONS.102.1(a) The appropriation to the Department of Education under Laws 2009, chapter 102.296, article 7, section 3, subdivision 2, is reduced by $250,000 in fiscal year 2010 and 102.3by $482,000 in fiscal year 2011.102.4(b) $24,000 in fiscal year 2010 and $23,000 in fiscal year 2011 are transferred from 102.5the department's special revenue fund to the general fund.102.6(c) The base appropriation for the Department of Education for fiscal year 2012 102.7and later is $18,678,000.102.8EFFECTIVE DATE.This section is effective the day following final enactment.102.9    Sec. 7. PERPICH CENTER FOR ARTS EDUCATION; APPROPRIATION.102.10$19,000 in fiscal year 2010 and $11,000 in fiscal year 2011 are transferred from the 102.11Perpich Center's special revenue fund to the general fund.102.12EFFECTIVE DATE.This section is effective the day following final enactment.102.13ARTICLE 7102.14PUPIL TRANSPORTATION102.15    Section 1. Minnesota Statutes 2008, section 123B.88, subdivision 13, is amended to 102.16read:102.17    Subd. 13. Area learning center pupils; transport between buildings. Districts 102.18may provide bus transportation between buildings along school bus routes when space is 102.19available, for pupils attending programs at an area learning center. The transportation is 102.20only permitted between schools and if it does not increase the district's expenditures for 102.21transportation. The cost of these services shall be considered part of the authorized cost 102.22for nonregular transportation for the purpose of section 
         123B.92. 102.23    Sec. 2. Minnesota Statutes 2008, section 123B.90, subdivision 3, is amended to read:102.24    Subd. 3. Model training program. The commissioner shall develop and maintain a 102.25comprehensive model list of school bus safety training programinstructional materials 102.26for pupils who ride the bus that includes bus safety curriculum for both classroom and 102.27practical instruction and age-appropriate instructional materials.102.28EFFECTIVE DATE.This section is effective July 1, 2010.102.29    Sec. 3. Minnesota Statutes 2009 Supplement, section 123B.92, subdivision 1, is 102.30amended to read:103.1    Subdivision 1. Definitions. For purposes of this section and section 
         125A.76, the 103.2terms defined in this subdivision have the meanings given to them.103.3    (a) "Actual expenditure per pupil transported in the regular and excess transportation 103.4categories" means the quotient obtained by dividing:103.5    (1) the sum of:103.6    (i) all expenditures for transportation in the regular category, as defined in paragraph 103.7(b), clause (1), and the excess category, as defined in paragraph (b), clause (2), plus103.8    (ii) an amount equal to one year's depreciation on the district's school bus fleet 103.9and mobile units computed on a straight line basis at the rate of 15 percent per year for 103.10districts operating a program under section 
         124D.128 for grades 1 to 12 for all students in 103.11the district and 12-1/2 percent per year for other districts of the cost of the fleet, plus103.12    (iii) an amount equal to one year's depreciation on the district's type III vehicles, as 103.13defined in section 
         169.011, subdivision 71, which must be used a majority of the time for 103.14pupil transportation purposes, computed on a straight line basis at the rate of 20 percent 103.15per year of the cost of the type three school buses by:103.16    (2) the number of pupils eligible for transportation in the regular category, as defined 103.17in paragraph (b), clause (1), and the excess category, as defined in paragraph (b), clause (2).103.18    (b) "Transportation category" means a category of transportation service provided to 103.19pupils as follows:103.20    (1) Regular transportation is:103.21    (i) transportation to and from school during the regular school year for resident 103.22elementary pupils residing one mile or more from the public or nonpublic school they 103.23attend, and resident secondary pupils residing two miles or more from the public 103.24or nonpublic school they attend, excluding desegregation transportation and noon 103.25kindergarten transportation; but with respect to transportation of pupils to and from 103.26nonpublic schools, only to the extent permitted by sections 
         123B.84 to 
         123B.87;103.27    (ii) transportation of resident pupils to and from language immersion programs;103.28    (iii) transportation of a pupil who is a custodial parent and that pupil's child between 103.29the pupil's home and the child care provider and between the provider and the school, if 103.30the home and provider are within the attendance area of the school;103.31    (iv) transportation to and from or board and lodging in another district, of resident 103.32pupils of a district without a secondary school; and103.33    (v) transportation to and from school during the regular school year required under 103.34subdivision 3 for nonresident elementary pupils when the distance from the attendance 103.35area border to the public school is one mile or more, and for nonresident secondary pupils 104.1when the distance from the attendance area border to the public school is two miles or 104.2more, excluding desegregation transportation and noon kindergarten transportation.104.3    For the purposes of this paragraph, a district may designate a licensed day care 104.4facility, school day care facility, respite care facility, the residence of a relative, or the 104.5residence of a person chosen by the pupil's parent or guardian, or an after-school program 104.6for children operated by a political subdivision of the state, as the home of a pupil for part 104.7or all of the day, if requested by the pupil's parent or guardian, and if that facility or,104.8residence, or program is within the attendance area of the school the pupil attends.104.9    (2) Excess transportation is:104.10    (i) transportation to and from school during the regular school year for resident 104.11secondary pupils residing at least one mile but less than two miles from the public or 104.12nonpublic school they attend, and transportation to and from school for resident pupils 104.13residing less than one mile from school who are transported because of extraordinary 104.14traffic, drug, or crime hazards; and104.15    (ii) transportation to and from school during the regular school year required under 104.16subdivision 3 for nonresident secondary pupils when the distance from the attendance area 104.17border to the school is at least one mile but less than two miles from the public school 104.18they attend, and for nonresident pupils when the distance from the attendance area border 104.19to the school is less than one mile from the school and who are transported because of 104.20extraordinary traffic, drug, or crime hazards.104.21    (3) Desegregation transportation is transportation within and outside of the district 104.22during the regular school year of pupils to and from schools located outside their normal 104.23attendance areas under a plan for desegregation mandated by the commissioner or under 104.24court order.104.25    (4) "Transportation services for pupils with disabilities" is:104.26    (i) transportation of pupils with disabilities who cannot be transported on a regular 104.27school bus between home or a respite care facility and school;104.28    (ii) necessary transportation of pupils with disabilities from home or from school to 104.29other buildings, including centers such as developmental achievement centers, hospitals, 104.30and treatment centers where special instruction or services required by sections 
         125A.03 104.31to 
         125A.24, 
         125A.26 to 
         125A.48, and 
         125A.65 are provided, within or outside the district 104.32where services are provided;104.33    (iii) necessary transportation for resident pupils with disabilities required by sections 104.34125A.12
         , and 
         125A.26 to 
         125A.48;104.35    (iv) board and lodging for pupils with disabilities in a district maintaining special 104.36classes;105.1    (v) transportation from one educational facility to another within the district for 105.2resident pupils enrolled on a shared-time basis in educational programs, and necessary 105.3transportation required by sections 
         125A.18, and 
         125A.26 to 
         125A.48, for resident pupils 105.4with disabilities who are provided special instruction and services on a shared-time basis 105.5or if resident pupils are not transported, the costs of necessary travel between public 105.6and private schools or neutral instructional sites by essential personnel employed by the 105.7district's program for children with a disability;105.8    (vi) transportation for resident pupils with disabilities to and from board and lodging 105.9facilities when the pupil is boarded and lodged for educational purposes; and105.10(vii) transportation of pupils for a curricular field trip activity on a school bus 105.11equipped with a power lift when the power lift is required by a student's disability or 105.12section 504 plan; and105.13(viii)  services described in clauses (i) to (vi) (vii), when provided for pupils with 105.14disabilities in conjunction with a summer instructional program that relates to the pupil's 105.15individual education plan or in conjunction with a learning year program established 105.16under section 
         124D.128.105.17    For purposes of computing special education initial aid under section 
         125A.76, 105.18subdivision 2
         , the cost of providing transportation for children with disabilities includes 105.19(A) the additional cost of transporting a homeless student from a temporary nonshelter 105.20home in another district to the school of origin, or a formerly homeless student from a 105.21permanent home in another district to the school of origin but only through the end of the 105.22academic year; and (B) depreciation on district-owned school buses purchased after July 1, 105.232005, and used primarily for transportation of pupils with disabilities, calculated according 105.24to paragraph (a), clauses (ii) and (iii). Depreciation costs included in the disabled 105.25transportation category must be excluded in calculating the actual expenditure per pupil 105.26transported in the regular and excess transportation categories according to paragraph (a).105.27    (5) "Nonpublic nonregular transportation" is:105.28    (i) transportation from one educational facility to another within the district for 105.29resident pupils enrolled on a shared-time basis in educational programs, excluding 105.30transportation for nonpublic pupils with disabilities under clause (4);105.31    (ii) transportation within district boundaries between a nonpublic school and a 105.32public school or a neutral site for nonpublic school pupils who are provided pupil support 105.33services pursuant to section 
         123B.44; and105.34    (iii) late transportation home from school or between schools within a district for 105.35nonpublic school pupils involved in after-school activities.106.1    (c) "Mobile unit" means a vehicle or trailer designed to provide facilities for 106.2educational programs and services, including diagnostic testing, guidance and counseling 106.3services, and health services. A mobile unit located off nonpublic school premises is a 106.4neutral site as defined in section 
         123B.41, subdivision 13.106.5EFFECTIVE DATE.This section is effective for revenue for fiscal years 2011 106.6and later.106.7    Sec. 4. Minnesota Statutes 2008, section 123B.92, subdivision 5, is amended to read:106.8    Subd. 5. District reports. (a) Each district must report data to the department as 106.9required by the department to account for transportation expenditures.106.10(b) Salaries and fringe benefits of district employees whose primary duties are 106.11other than transportation, including central office administrators and staff, building 106.12administrators and staff, teachers, social workers, school nurses, and instructional aides, 106.13must not be included in a district's transportation expenditures, except that a district may 106.14include salaries and benefits according to paragraph (c) for (1) an employee designated 106.15as the district transportation director, (2) an employee providing direct support to the 106.16transportation director, or (3) an employee providing direct transportation services such as 106.17a bus driver or bus aide.106.18(c) Salaries and fringe benefits of the district employees listed in paragraph (b), 106.19clauses (1), (2), and (3), who work part time in transportation and part time in other areas 106.20must not be included in a district's transportation expenditures unless the district maintains 106.21documentation of the employee's time spent on pupil transportation matters in the form 106.22and manner prescribed by the department.106.23(d) Pupil transportation expenditures, excluding expenditures for capital outlay, 106.24leased buses, student board and lodging, crossing guards, and aides on buses, must 106.25be allocated among transportation categories based on cost-per-mile, cost-per-student, 106.26cost-per-hour, or cost-per-route, regardless of whether the transportation services are 106.27provided on district-owned or contractor-owned school buses. Expenditures for school 106.28bus driver salaries and fringe benefits may either be directly charged to the appropriate 106.29transportation category or may be allocated among transportation categories based 106.30on cost-per-mile, cost-per-student, cost-per-hour, or cost-per-route. Expenditures 106.31by private contractors or individuals who provide transportation exclusively in one 106.32transportation category must be charged directly to the appropriate transportation category. 106.33Transportation services provided by contractor-owned school bus companies incorporated 106.34under different names but owned by the same individual or group of individuals must be 106.35treated as the same company for cost allocation purposes.107.1(e) Notwithstanding paragraph (d), districts contracting for transportation services 107.2are exempt from the standard cost allocation method for authorized and nonauthorized 107.3transportation categories if: (1) the district bids its contracts separately for authorized 107.4and nonauthorized transportation categories and for special transportation separate from 107.5regular and excess transportation; (2) the district receives bids or quotes from more 107.6than one vendor for these transportation categories; and (3) the district's cost-per-mile, 107.7cost-per-hour, or cost-per-route does not vary more than ten percent among categories, 107.8excluding salaries and fringe benefits of bus aides. If the costs reported by the district 107.9for contractor-owned operations vary by more than ten percent among categories, the 107.10department shall require the district to reallocate its transportation costs, excluding salaries 107.11and fringe benefits of bus aides, among all categories.107.12EFFECTIVE DATE.This section is effective for revenue for fiscal years 2011 107.13and later.107.14    Sec. 5. Minnesota Statutes 2008, section 169.447, subdivision 2a, is amended to read:107.15    Subd. 2a. Passenger lap and shoulder belts. (a) In addition to the requirements in 107.16section 
         169.4501, subdivision 1,:107.17(1) a school bus may be equipped with an approved lap belt or an approved lap and 107.18shoulder belt installed for each passenger-seating position on the bus; and107.19(2) a school motor coach manufactured after July 1, 2012, must be equipped with an 107.20approved lap belt or an approved lap and shoulder belt installed for each passenger-seating 107.21position.107.22(b) The design and installation of lap belts and lap and shoulder belts required 107.23under this paragraph (a) must meet the standards of the commissioner established under107.24this paragraph (b).107.25(b) The commissioner shall consider all concerns necessary to properly integrate 107.26lap belts or lap and shoulder belts into the current compartmentalization safety system 107.27and prescribe standards for the design and installation of lap and shoulder belts required 107.28under paragraph (a). The standards are not subject to chapter 14 and are specifically not 107.29subject to section 
         14.386.107.30(c) This subdivision does not apply to specially equipped school buses under section 107.31169.4504
         .107.32(d) A passenger on a school bus or school motor coach equipped with lap belts 107.33or lap and shoulder belts must use these lap belts or lap and shoulder belts unless the 107.34passenger, or if the passenger is a minor, the passenger's parent or guardian, has notified 108.1the school district in writing that the passenger does not intend to wear the lap belt or lap 108.2and shoulder belt.108.3(e) In an action for personal injury or wrongful death against a school district, a 108.4school bus or school motor coach operator under contract with a school district, or any 108.5agent or employee of a school district or operator, or against a volunteer, no such person or 108.6entity shall be held liable solely because the injured party was not wearing a safety belt; 108.7provided, however, that nothing contained herein shall be construed to grant immunity 108.8from liability for failure to:108.9(1) maintain in operating order any equipment required by statute, rule, or school 108.10district policy; or108.11(2) comply with an applicable statute, rule, or school district policy.108.12(f) In an action for personal injury or wrongful death, a school district, a school 108.13bus or school motor coach contract operator, any agent or employee of a school district or 108.14operator, or a volunteer is not liable for failing to assist any child with the adjustment, 108.15fastening, unfastening, or other use of the lap belt or lap and shoulder belt.108.16(g) For purposes of this subdivision, "school motor coach" means a bus that has an 108.17elevated passenger deck located over a baggage compartment, when the vehicle is used 108.18to transport pupils to or from school-related activities, by (1) the school or (2) someone 108.19under an agreement with the school or a school district, including operation under charter 108.20carrier authority.108.21EFFECTIVE DATE.This section is effective July 1, 2012.108.22    Sec. 6. Minnesota Statutes 2009 Supplement, section 171.02, subdivision 2b, is 108.23amended to read:108.24    Subd. 2b. Exception for type III vehicle drivers. (a) Notwithstanding subdivision 108.252, the holder of a class A, B, C, or D driver's license, without a school bus endorsement, 108.26may operate a type III vehicle described in section 
         169.011, subdivision 71, paragraph (h), 108.27under the conditions in paragraphs (b) through (o).108.28    (b) The operator is an employee of the entity that owns, leases, or contracts for 108.29the school bus.108.30    (c) The operator's employer has adopted and implemented a policy that provides for 108.31annual training and certification of the operator in:108.32    (1) safe operation of a type III vehicle;108.33    (2) understanding student behavior, including issues relating to students with 108.34disabilities;109.1    (3) encouraging orderly conduct of students on the bus and handling incidents of 109.2misconduct appropriately;109.3    (4) knowing and understanding relevant laws, rules of the road, and local school 109.4bus safety policies;109.5    (5) handling emergency situations;109.6    (6) proper use of seat belts and child safety restraints;109.7    (7) performance of pretrip vehicle inspections; 109.8    (8) safe loading and unloading of students, including, but not limited to:109.9    (i) utilizing a safe location for loading and unloading students at the curb, on the 109.10nontraffic side of the roadway, or at off-street loading areas, driveways, yards, and other 109.11areas to enable the student to avoid hazardous conditions;109.12    (ii) refraining from loading and unloading students in a vehicular traffic lane, on the 109.13shoulder, in a designated turn lane, or a lane adjacent to a designated turn lane;109.14    (iii) avoiding a loading or unloading location that would require a pupil to cross a 109.15road, or ensuring that the driver or an aide personally escort the pupil across the road if 109.16it is not reasonably feasible to avoid such a location; and109.17    (iv) placing the type III vehicle in "park" during loading and unloading; and109.18(v) escorting a pupil across the road under clause (iii) only after the motor is 109.19stopped, the ignition key is removed, the brakes are set, and the vehicle is otherwise 109.20rendered immobile; and109.21(9) compliance with paragraph (k), concerning reporting certain convictions to the 109.22employer within ten days of the date of conviction.109.23    (d) A background check or background investigation of the operator has been 109.24conducted that meets the requirements under section 
         122A.18, subdivision 8, or 
         123B.03 109.25for school district employees; section 
         144.057 or chapter 245C for day care employees; 109.26or section 
         171.321, subdivision 3, for all other persons operating a type A or type III 109.27vehicle under this subdivision.109.28    (e) Operators shall submit to a physical examination as required by section 
         171.321, 109.29subdivision 2
         .109.30    (f) The operator's employer requires preemployment drug and alcohol testing of 109.31applicants for operator positions. Current operators must comply with the employer's 109.32policy under section 
         181.951, subdivisions 2, 4, and 5. Notwithstanding any law to the 109.33contrary, the operator's employer may use a Breathalyzer or similar device to fulfill 109.34random or reasonable suspicion alcohol testing requirements.110.1    (g) The operator's driver's license is verified annually by the entity that owns, 110.2leases, or contracts for the school bus type III vehicle as required under section 171.321, 110.3subdivision 5.110.4    (h) A person who sustains a conviction, as defined under section 
         609.02, of violating 110.5section 
         169A.25, 
         169A.26, 
         169A.27, or 
         169A.31, or whose driver's license is revoked 110.6under sections 
         169A.50 to 
         169A.53 of the implied consent law, or who is convicted of 110.7violating or whose driver's license is revoked under a similar statute or ordinance of 110.8another state, is precluded from operating a type III vehicle for five years from the date 110.9of conviction.110.10    (i) A person who has ever been convicted of a disqualifying offense as defined in 110.11section 
         171.3215, subdivision 1, paragraph (c), may not operate a type III vehicle under 110.12this subdivision.110.13    (j) A person who sustains a conviction, as defined under section 
         609.02, of a moving 110.14offense in violation of chapter 169 within three years of the first of three other moving 110.15offenses is precluded from operating a type III vehicle for one year from the date of 110.16the last conviction.110.17    (k) An operator who sustains a conviction as described in paragraph (h), (i), or (j) 110.18while employed by the entity that owns, leases, or contracts for the school bus, shall report 110.19the conviction to the employer within ten days of the date of the conviction.110.20    (l) Students riding the type III vehicle must have training required under section 110.21123B.90, subdivision 2
         .110.22    (m) Documentation of meeting the requirements listed in this subdivision must be 110.23maintained under separate file at the business location for each type III vehicle operator. 110.24The business manager, school board, governing body of a nonpublic school, or any 110.25other entity that owns, leases, or contracts for the type III vehicle operating under this 110.26subdivision is responsible for maintaining these files for inspection.110.27    (n) The type III vehicle must bear a current certificate of inspection issued under 110.28section 
         169.451.110.29    (o) An employee of a school or of a school district, who is not employed for the sole 110.30purpose of operating a type III vehicle, is exempt from paragraphs (e) and (f).110.31(p) Notwithstanding any law to the contrary, any person who conducts testing under 110.32paragraph (f) is exempt from section 181.953, subdivisions 9 and 10, paragraph (b).110.33EFFECTIVE DATE.This section is effective July 1, 2010.110.34    Sec. 7. Minnesota Statutes 2008, section 171.321, subdivision 2, is amended to read:111.1    Subd. 2. Rules. (a) The commissioner of public safety shall prescribe rules 111.2governing (1) the physical qualifications of school bus drivers and tests required to obtain 111.3a school bus endorsement and (2) the physical qualifications of type III vehicle drivers. 111.4The rules for physical qualifications of type III vehicle drivers are not subject to chapter 111.514 and section 14.386 does not apply.111.6(b) The rules under paragraph (a) must provide that an applicant for a school 111.7bus endorsement or renewal is exempt from the physical qualifications and medical 111.8examination required to operate a school bus upon providing evidence of being medically 111.9examined and certified within the preceding 24 months as physically qualified to operate a 111.10commercial motor vehicle, pursuant to Code of Federal Regulations, title 49, part 391, 111.11subpart E, or rules of the commissioner of transportation incorporating those federal 111.12regulations. The commissioner shall accept physical examinations for school bus drivers 111.13conducted by medical examiners authorized as provided by Code of Federal Regulations, 111.14title 49, chapter 3, part 391, subpart E.111.15(b) (c) The commissioner of public safety, in conjunction with the commissioner 111.16of education, shall adopt rules prescribing a training program for Head Start bus drivers. 111.17The program must provide for initial classroom and behind-the-wheel training, and annual 111.18in-service training. The program must provide training in defensive driving, human 111.19relations, emergency and accident procedures, vehicle maintenance, traffic laws, and use 111.20of safety equipment. The program must provide that the training will be conducted by the 111.21contract operator for a Head Start agency, the Head Start grantee, a licensed driver training 111.22school, or by another person or entity approved by both commissioners.111.23(d) The commissioner may exempt a type III vehicle driver from the physical 111.24qualifications required to operate a type III vehicle upon receiving evidence of the 111.25driver having been medically examined and certified within the preceding 24 months as 111.26physically qualified to operate a commercial motor vehicle as provided for applicants for a 111.27school bus endorsement under paragraph (b).111.28ARTICLE 8111.29EDUCATION FINANCE REFORM111.30    Section 1. Minnesota Statutes 2008, section 123B.53, subdivision 5, is amended to read:111.31    Subd. 5. Equalized debt service levy. (a) The equalized debt service levy of a 111.32district equals the sum of the first tier equalized debt service levy and the second tier 111.33equalized debt service levy.111.34(b) A district's first tier equalized debt service levy equals the district's first tier debt 111.35service equalization revenue times the lesser of one or the ratio of:112.1(1) the quotient derived by dividing the adjusted net tax capacity of the district for 112.2the year before the year the levy is certified by the adjusted pupil units in the district for 112.3the school year ending in the year prior to the year the levy is certified; to112.4(2) $3,200 100 percent of the statewide adjusted net tax capacity equalizing factor.112.5(c) A district's second tier equalized debt service levy equals the district's second tier 112.6debt service equalization revenue times the lesser of one or the ratio of:112.7(1) the quotient derived by dividing the adjusted net tax capacity of the district for 112.8the year before the year the levy is certified by the adjusted pupil units in the district for 112.9the school year ending in the year prior to the year the levy is certified; to112.10(2) $8,000 200 percent of the statewide adjusted net tax capacity equalizing factor.112.11EFFECTIVE DATE.This section is effective for taxes payable in 2013 and later.112.12    Sec. 2. [123B.555] SCHOOL BOND AGRICULTURAL CREDIT.112.13    Subdivision 1.Eligibility.All class 2a, 2b, and 2c property under section 273.13, 112.14subdivision 23, except for property consisting of the house, garage, and immediately 112.15surrounding one acre of land of an agricultural homestead, is eligible to receive the credit 112.16under this section.112.17    Subd. 2.Credit amount.For each qualifying property, the school bond agricultural 112.18credit is equal to 66 percent of the property's eligible net tax capacity multiplied by the 112.19school debt tax rate determined under section 275.08, subdivision 1b.112.20    Subd. 3.Credit reimbursements.The county auditor shall determine the tax 112.21reductions allowed under this section within the county for each taxes payable year and 112.22shall certify that amount to the commissioner of revenue as a part of the abstracts of tax 112.23lists submitted under section 275.29. Any prior year adjustments shall also be certified on 112.24the abstracts of tax lists. The commissioner shall review the certifications for accuracy, 112.25and may make such changes as are deemed necessary, or return the certification to the 112.26county auditor for correction. The credit under this section must be used to reduce the 112.27school district net tax capacity-based property tax as provided in section 273.1393.112.28    Subd. 4.Payment.The commissioner of revenue shall certify the total of the tax 112.29reductions granted under this section for each taxes payable year within each school 112.30district to the commissioner of education, who shall pay the reimbursement amounts to 112.31each school district as provided in section 273.1392.112.32EFFECTIVE DATE.This section is effective for taxes payable in 2013 and later.113.1    Sec. 3. Minnesota Statutes 2008, section 124D.4531, as amended by Laws 2009, 113.2chapter 88, article 2, section 1, is amended to read:113.3124D.4531 CAREER AND TECHNICAL LEVY AID.113.4    Subdivision 1. Career and technical levy aid. (a) A district with a career and 113.5technical program approved under this section for the fiscal year in which the levy is 113.6certified may levy an amountis eligible for aid equal to the lesser of:113.7(1) $80$240 times the district's average daily membership in grades 10 through 12 113.8for the current fiscal year in which the levy is certified; or113.9(2) 25 percent of approved expenditures in the previous fiscal year in which the 113.10levy is certified for the following:113.11(i) salaries paid to essential, licensed personnel providing direct instructional 113.12services to students in that fiscal year for services rendered in the district's approved 113.13career and technical education programs;113.14(ii) contracted services provided by a public or private agency other than a Minnesota 113.15school district or cooperative center under subdivision 7;113.16(iii) necessary travel between instructional sites by licensed career and technical 113.17education personnel;113.18(iv) necessary travel by licensed career and technical education personnel for 113.19vocational student organization activities held within the state for instructional purposes;113.20(v) curriculum development activities that are part of a five-year plan for 113.21improvement based on program assessment;113.22(vi) necessary travel by licensed career and technical education personnel for 113.23noncollegiate credit-bearing professional development; and113.24(vii) specialized vocational instructional supplies.113.25(b) Up to ten percent of a district's career and technical levyaid may be spent on 113.26equipment purchases. Districts using the career and technical levyaid for equipment 113.27purchases must report to the department on the improved learning opportunities for 113.28students that result from the investment in equipment.113.29(c) The district must recognize the full amount of this levy as revenue for the fiscal 113.30year in which it is certified.113.31    Subd. 2. Allocation from cooperative centers and intermediate districts. For 113.32purposes of this section, a cooperative center or an intermediate district must allocate its 113.33approved expenditures for career and technical education programs among participating 113.34districts.113.35    Subd. 3. LevyAid guarantee. Notwithstanding subdivision 1, the career and 113.36technical education levyaid for a district is not less than the lesser of:114.1(1) the district's career and technical education levy authorityrevenue for the 114.2previous fiscal year; or114.3(2) 100 percent of the approved expenditures for career and technical programs 114.4included in subdivision 1, paragraph (b), for the prior fiscal year in which the levy is 114.5certified.114.6    Subd. 4. District reports. Each district or cooperative center must report data to the 114.7department for all career and technical education programs as required by the department 114.8to implement the career and technical levy formula.114.9    Subd. 5. Allocation from districts participating in agreements for secondary 114.10education or interdistrict cooperation. For purposes of this section, a district with a 114.11career and technical program approved under this section that participates in an agreement 114.12under section 
         123A.30 or 
         123A.32 must allocate its levy authority under this section 114.13among participating districts.114.14EFFECTIVE DATE.This section is effective for aid payments for fiscal year 114.152014 and thereafter.114.16    Sec. 4. Minnesota Statutes 2008, section 124D.59, subdivision 2, is amended to read:114.17    Subd. 2. Pupil of limited English proficiency. (a) "Pupil of limited English 114.18proficiency" means a pupil in kindergarten through grade 12 who meets the following 114.19requirements:114.20(1) the pupil, as declared by a parent or guardian first learned a language other than 114.21English, comes from a home where the language usually spoken is other than English, or 114.22usually speaks a language other than English; and114.23(2) the pupil is determined by developmentally appropriate measures, which might 114.24include observations, teacher judgment, parent recommendations, or developmentally 114.25appropriate assessment instruments, to lack the necessary English skills to participate 114.26fully in classes taught in English.114.27(b) Notwithstanding paragraph (a), a pupil in grades 4 through 12 who was enrolled 114.28in a Minnesota public school on the dates during the previous school year when a 114.29commissioner provided assessment that measures the pupil's emerging academic English 114.30was administered, shall not be counted as a pupil of limited English proficiency in 114.31calculating limited English proficiency pupil units under section 
         126C.05, subdivision 114.3217
         , and shall not generate state limited English proficiency aid under section 
         124D.65, 114.33subdivision 5
         , unless the pupil scored below the state cutoff score on an assessment 114.34measuring emerging academic English provided by the commissioner during the previous 114.35school year.  115.1(c) Notwithstanding paragraphs (a) and (b), a pupil in kindergarten through grade 12 115.2shall not be counted as a pupil of limited English proficiency in calculating limited English 115.3proficiency pupil units under section 
         126C.05, subdivision 17, and shall not generate state 115.4limited English proficiency aid under section 
         124D.65, subdivision 5, if:115.5(1) the pupil is not enrolled during the current fiscal year in an educational program 115.6for pupils of limited English proficiency in accordance with sections 
         124D.58 to 
         124D.64; 115.7or.115.8(2) the pupil has generated five or more years of average daily membership in 115.9Minnesota public schools since July 1, 1996.115.10EFFECTIVE DATE.This section is effective for revenue for fiscal year 2014 115.11and later.115.12    Sec. 5. Minnesota Statutes 2008, section 124D.65, subdivision 5, is amended to read:115.13    Subd. 5. School district LEP revenue. (a) A district's limited English proficiency 115.14programs revenue equals the product of: (1) $700 in fiscal year 2004 and later times .2;115.15(2)  the basic formula allowance for that year; and (3) the greater of 20 or the adjusted 115.16marginal cost average daily membership of eligible pupils of limited English proficiency 115.17enrolled in the district during the current fiscal year.115.18(b) A pupil ceases to generate state limited English proficiency aid in the school 115.19year following the school year in which the pupil attains the state cutoff score on a 115.20commissioner-provided assessment that measures the pupil's emerging academic English.115.21EFFECTIVE DATE.This section is effective for revenue for fiscal year 2014 115.22and later.115.23    Sec. 6. Minnesota Statutes 2008, section 125A.76, subdivision 5, is amended to read:115.24    Subd. 5. School district special education aid. A school district's special education 115.25aid for fiscal year 2008 and later equals the state total special education aid times the ratio 115.26of the district'sits initial special education aid to the state total initial special education aid.115.27EFFECTIVE DATE.This section is effective for revenue for fiscal year 2014 115.28and later.115.29    Sec. 7. Minnesota Statutes 2008, section 125A.79, subdivision 7, is amended to read:115.30    Subd. 7. District special education excess cost aid. A district's special education 115.31excess cost aid for fiscal year 2002 and later equals the state total special education excess 116.1cost aid times the ratio of the district's its initial excess cost aid to the state total initial 116.2excess cost aid.116.3EFFECTIVE DATE.This section is effective for revenue for fiscal year 2014 116.4and later.116.5    Sec. 8. Minnesota Statutes 2008, section 126C.01, is amended by adding a subdivision 116.6to read:116.7    Subd. 2a.Adjusted net tax capacity equalizing factor.The adjusted net tax 116.8capacity equalizing factor equals the quotient derived by dividing the total adjusted net tax 116.9capacity of all school districts in the state for the year before the year the levy is certified 116.10by the total number of adjusted pupil units in the state for the current school year.116.11EFFECTIVE DATE.This section is effective for taxes payable in 2013 and later.116.12    Sec. 9. Minnesota Statutes 2008, section 126C.01, is amended by adding a subdivision 116.13to read:116.14    Subd. 3a.Referendum market value equalizing factor.The referendum market 116.15value equalizing factor equals the quotient derived by dividing the total referendum 116.16market value of all school districts in the state for the year before the year the levy is 116.17certified by the total number of resident pupil units in the state for the current school year.116.18EFFECTIVE DATE.This section is effective for taxes payable in 2013.116.19    Sec. 10. Minnesota Statutes 2008, section 126C.01, is amended by adding a 116.20subdivision to read:116.21    Subd. 5a.Location equity index.(a) A school district's location equity index 116.22equals each district's composite wage level divided by the statewide average wage for the 116.23same period. The composite wage level for a school district equals the sum of 50 percent 116.24of the district's county wage level and 50 percent of the district's economic development 116.25region composite wage level. The composite wage level is computed by using the most 116.26recent three-year weighted wage data.116.27(b) A school district's location equity index must not be less than .9 or greater than 116.281.05.116.29(c) The commissioner of education annually must recalculate the indexes in this 116.30section. For purposes of this subdivision, the commissioner must locate a school district 116.31with boundaries that cross county borders in the county that generates the highest location 116.32equity index for that district.117.1EFFECTIVE DATE.This section is effective for revenue for fiscal year 2014 117.2and later.117.3    Sec. 11. Minnesota Statutes 2008, section 126C.05, subdivision 1, is amended to read:117.4    Subdivision 1. Pupil unit. Pupil units for each Minnesota resident pupil under the 117.5age of 21 or who meets the requirements of section 
         120A.20, subdivision 1, paragraph (c), 117.6in average daily membership enrolled in the district of residence, in another district under 117.7sections 
         123A.05 to 
         123A.08, 
         124D.03, 
         124D.08, or 
         124D.68; in a charter school under 117.8section 
         124D.10; or for whom the resident district pays tuition under section 
         123A.18, 117.9123A.22
         , 
         123A.30, 
         123A.32, 
         123A.44, 
         123A.488, 
         123B.88, subdivision 4, 
         124D.04, 117.10124D.05
         , 
         125A.03 to 
         125A.24, 
         125A.51, or 
         125A.65, shall be counted according to this 117.11subdivision. 117.12    (a) A prekindergarten pupil with a disability who is enrolled in a program approved 117.13by the commissioner and has an individual education plan is counted as the ratio of the 117.14number of hours of assessment and education service to 825 times 
         1.25 with a minimum 117.15average daily membership of 0.28, but not more than 
         1.25 pupil units. 117.16    (b) A prekindergarten pupil who is assessed but determined not to be disabled is 117.17counted as the ratio of the number of hours of assessment service to 825 times 
         1.25. 117.18    (c) A kindergarten pupil with a disability who is enrolled in a program approved 117.19by the commissioner is counted as the ratio of the number of hours of assessment and 117.20education services required in the fiscal year by the pupil's individual education program 117.21plan to 875, but not more than one.117.22    (d) A kindergarten pupil who is not included in paragraph (c) is counted as .612 1.0117.23pupil units.117.24    (e) A pupil who is in any of grades 1 to 3 is counted as 
         1.115 1.0 pupil units for 117.25fiscal year 2000 and thereafter. 117.26    (f) A pupil who is any of grades 4 to 6 is counted as 
         1.06 1.0 pupil units for fiscal 117.27year 1995 and thereafter. 117.28    (g) A pupil who is in any of grades 7 to 12 is counted as 
         1.3 1.0 pupil units.117.29    (h) A pupil who is in the postsecondary enrollment options program is counted as 117.301.3 1.0 pupil units.117.31EFFECTIVE DATE.This section is effective for revenue for fiscal year 2014 117.32and later.117.33    Sec. 12. Minnesota Statutes 2008, section 126C.05, subdivision 3, is amended to read:118.1    Subd. 3. Compensation revenue pupil units. Compensation revenue pupil units 118.2for fiscal year 1998 and thereafter must be computed according to this subdivision.118.3(a) The compensation revenue concentration percentage for each building in a118.4district equals the product of 100 times the ratio of:118.5(1) the sum of the number of pupils enrolled in the building district eligible to receive 118.6free lunch plus one-half of the pupils eligible to receive reduced pricedor reduced-price 118.7lunch on October 1 of the previous fiscal year; to118.8(2) the number of pupils enrolled in the building district on October 1 of the 118.9previous fiscal year.118.10(b) The compensation revenue pupil weighting factor for a building equals the 118.11lesser of one or the quotient obtained by dividing the building's compensation revenue 118.12concentration percentage by 80.0.118.13(c) The compensation revenue pupil units for a building district equals the product of:118.14(1) the sum of the number of pupils enrolled in the building district eligible to receive 118.15free lunch and one-half of the pupils eligible to receive reduced pricedor reduced-price 118.16lunch on October 1 of the previous fiscal year; times118.17(2) the compensation revenue pupil weighting factor for the building; times118.18(3) .60 district.118.19(d) Notwithstanding paragraphs (a) to (c), for charter schools and contracted 118.20alternative programs in the first year of operation, compensation revenue pupil units shall 118.21be computed using data for the current fiscal year. If the charter school or contracted 118.22alternative program begins operation after October 1, compensatory revenue pupil units 118.23shall be computed based on pupils enrolled on an alternate date determined by the 118.24commissioner, and the compensation revenue pupil units shall be prorated based on the 118.25ratio of the number of days of student instruction to 170 days.118.26(e) The percentages in this subdivision must be based on the count of individual 118.27pupils and not on a building average or minimum.118.28EFFECTIVE DATE.This section is effective for revenue for fiscal year 2014 118.29and later.118.30    Sec. 13. Minnesota Statutes 2008, section 126C.05, subdivision 5, is amended to read:118.31    Subd. 5. Adjusted pupil units.(a) Adjusted pupil units for a district or charter 118.32school means the sum of:118.33(1) the number of pupil units served, according to subdivision 7, plus118.34(2) pupil units according to subdivision 1 for whom the district or charter school 118.35pays tuition under section 
         123A.18, 
         123A.22, 
         123A.30, 
         123A.32, 
         123A.44, 
         123A.488, 119.1123B.88, subdivision 4
         , 
         124D.04, 
         124D.05, 
         125A.03 to 
         125A.24, 
         125A.51, or 
         125A.65, 119.2minus 119.3(3) pupil units according to subdivision 1 for whom the district or charter school 119.4receives tuition under section 
         123A.18, 
         123A.22, 
         123A.30, 
         123A.32, 
         123A.44, 
         123A.488, 119.5123B.88, subdivision 4
         , 
         124D.04, 
         124D.05, 
         125A.03 to 
         125A.24, 
         125A.51, or 
         125A.65. 119.6(b) Adjusted marginal cost pupil units means the greater of:119.7(1) the sum of .77 times the pupil units defined in paragraph (a) for the current school 119.8year and .23 times the pupil units defined in paragraph (a) for the previous school year; or119.9(2) the number of adjusted pupil units defined in paragraph (a) for the current school 119.10year.119.11EFFECTIVE DATE.This section is effective for revenue for fiscal year 2014 119.12and later.119.13    Sec. 14. Minnesota Statutes 2008, section 126C.05, subdivision 6, is amended to read:119.14    Subd. 6. Resident pupil units.(a) Resident pupil units for a district means the 119.15number of pupil units according to subdivision 1 residing in the district.119.16(b) Resident marginal cost pupil units means the greater of:119.17(1) the sum of .77 times the pupil units defined in paragraph (a) for the current year 119.18and .23 times the pupil units defined in paragraph (a) for the previous school year; or119.19(2) the number of resident pupil units defined in paragraph (a) for the current school 119.20year.119.21EFFECTIVE DATE.This section is effective for revenue for fiscal year 2014 119.22and later.119.23    Sec. 15. Minnesota Statutes 2008, section 126C.05, subdivision 8, is amended to read:119.24    Subd. 8. Average daily membership. (a) Membership for pupils in grades 119.25kindergarten through 12 and for prekindergarten pupils with disabilities shall mean the 119.26number of pupils on the current roll of the school, counted from the date of entry until 119.27withdrawal. The date of withdrawal shall mean the day the pupil permanently leaves 119.28the school or the date it is officially known that the pupil has left or has been legally 119.29excused. However, a pupil, regardless of age, who has been absent from school for 15 119.30consecutive school days during the regular school year or for five consecutive school days 119.31during summer school or intersession classes of flexible school year programs without 119.32receiving instruction in the home or hospital shall be dropped from the roll and classified 119.33as withdrawn. Nothing in this section shall be construed as waiving the compulsory 120.1attendance provisions cited in section 
         120A.22. Average daily membership equals the 120.2sum for all pupils of the number of days of the school year each pupil is enrolled in the 120.3district's schools divided by the number of days the schools are in session. Days of 120.4summer school or intersession classes of flexible school year programs are only included 120.5in the computation of membership for pupils with a disability not appropriately served 120.6primarily in the regular classroom. A student must not be counted as more than 1.2 pupils 120.7in average daily membership under this section. When the initial total average daily 120.8membership exceeds 1.2 for a pupil enrolled in more than one school district during the 120.9fiscal year, each district's average daily membership must be reduced proportionately. 120.10(b) A student must not be counted as more than one pupil in average daily 120.11membership except for purposes of section 
         126C.10, subdivision 2a. 120.12(c) For purposes of section 126C.10, subdivision 2a, only, a pupil's average daily 120.13membership is counted as 1.0 once a kindergarten or elementary pupil has received 960 120.14hours of instruction during the school year and as 1.0 once a secondary student has 120.15received 1,050 hours of instruction during the school year.120.16EFFECTIVE DATE.This section is effective for revenue for fiscal year 2014 120.17and later.120.18    Sec. 16. Minnesota Statutes 2008, section 126C.05, subdivision 16, is amended to read:120.19    Subd. 16. Free and reduced-price lunches. The commissioner shall determine the 120.20number of children eligible to receive either a free or reduced-price lunch on October 1 120.21each year. Children enrolled in a building on October 1 and determined to be eligible to 120.22receive free or reduced-price lunch by December 15 of that school year shall be counted 120.23as eligible on October 1 for purposes of subdivision 3. The commissioner may use 120.24federal definitions for these purposes and may adjust these definitions as appropriate. 120.25The commissioner may adopt reporting guidelines to assure accuracy of data counts and 120.26eligibility. Districts shall use any guidelines adopted by the commissioner.120.27EFFECTIVE DATE.This section is effective for revenue for fiscal year 2014 120.28and later.120.29    Sec. 17. Minnesota Statutes 2008, section 126C.05, subdivision 17, is amended to read:120.30    Subd. 17. LEP pupil units. (a) Limited English proficiency pupil units for fiscal 120.31year 2004 and thereafter shall be determined according to this subdivision.120.32(b) The limited English proficiency concentration percentage for a district equals the 120.33product of 100 times the ratio of:121.1(1) means the number of eligible pupils of limited English proficiency in average 121.2daily membership enrolled in the district during the current fiscal year; to.121.3(2) the number of pupils in average daily membership enrolled in the district.121.4(c) The limited English proficiency pupil units for each eligible pupil of limited 121.5English proficiency in average daily membership equals the lesser of one or the quotient 121.6obtained by dividing the limited English proficiency concentration percentage for the 121.7pupil's district of enrollment by 11.5.121.8(d) (b) Limited English proficiency pupil units shall be counted by the district of 121.9enrollment.121.10(e) (c) Notwithstanding paragraph (d) (b), for the purposes of this subdivision, 121.11pupils enrolled in a cooperative or intermediate school district shall be counted by the 121.12district of residence.121.13(f) (d) For the purposes of this subdivision, the terms defined in section 
         124D.59121.14have the same meaning. 121.15EFFECTIVE DATE.This section is effective for revenue for fiscal year 2014 121.16and later.121.17    Sec. 18. [126C.09] EDUCATION FUNDING FRAMEWORK.121.18    Subdivision 1.Basic formula framework; general classroom funding.The 121.19general classroom funding for each school district equals the sum of the district's general 121.20education basic revenue, extended time revenue, compensatory revenue, LEP revenue, 121.21referendum replacement revenue, and special education revenue.121.22    Subd. 2.District instructional services.A school district's instructional services 121.23revenue equals the sum of its operating sparsity revenue, location equity revenue, and 121.24declining enrollment revenue.121.25    Subd. 3.District support services.A school district's support services revenue 121.26equals the sum of its operating capital revenue, alternative facilities revenue, integration 121.27revenue, and transportation revenue.121.28EFFECTIVE DATE.This section is effective for revenue for fiscal year 2014 121.29and later.121.30    Sec. 19. Minnesota Statutes 2008, section 126C.10, subdivision 1, is amended to read:121.31    Subdivision 1. General education revenue.(a) For fiscal year 2006 and later121.32through 2013, the general education revenue for each district equals the sum of the 121.33district's basic revenue, extended time revenue, gifted and talented revenue, basic skills 122.1revenue, training and experience revenue, secondary sparsity revenue, elementary sparsity 122.2revenue, transportation sparsity revenue, total operating capital revenue, equity revenue, 122.3alternative teacher compensation revenue, and transition revenue.122.4(b) For fiscal years 2014 and later, a school district's general education revenue 122.5equals the sum of its basic revenue, extended time revenue, declining enrollment revenue, 122.6basic skills revenue, location equity revenue, referendum replacement revenue, secondary 122.7sparsity revenue, elementary sparsity revenue, transportation revenue, and total operating 122.8capital revenue.122.9EFFECTIVE DATE.This section is effective for revenue for fiscal year 2014 122.10and later.122.11    Sec. 20. Minnesota Statutes 2008, section 126C.10, subdivision 2, is amended to read:122.12    Subd. 2. Basic revenue.(a) The basic revenue for each district equals the formula 122.13allowance times the adjusted marginal cost pupil units for the school year. 122.14(b) The formula allowance for fiscal year 2007 is $4,974. The formula allowance for 122.15fiscal year 2008 is $5,074 and the formula allowance for fiscal year 2009 and subsequent 122.16years is $5,124.122.17(c) The formula allowance for fiscal year 2014 is $7,500. The formula allowance 122.18for fiscal year 2015 and later equals the formula allowance for the previous year times 122.19the sum of 1.0 and the greater of zero or the ratio of implicit price deflator, as defined in 122.20section 275.70, subdivision 2, for the most recent year to the implicit price deflator for 122.21the previous year.122.22EFFECTIVE DATE.This section is effective for revenue for fiscal year 2014 122.23and later.122.24    Sec. 21. Minnesota Statutes 2008, section 126C.10, subdivision 2a, is amended to read:122.25    Subd. 2a. Extended time revenue. (a) A school district's extended time revenue 122.26is equal to the product of $4,601 the formula allowance for that year and the sum of 122.27the adjusted marginal cost pupil units of the district for each pupil in average daily 122.28membership in excess of 1.0 and less than 1.2 according to section 
         126C.05, subdivision 8. 122.29(b) A school district's extended time revenue may be used for extended day 122.30programs, extended week programs, summer school, and other programming authorized 122.31under the learning year program.122.32EFFECTIVE DATE.This section is effective for revenue for fiscal year 2014 122.33and later.123.1    Sec. 22. Minnesota Statutes 2008, section 126C.10, is amended by adding a 123.2subdivision to read:123.3    Subd. 2c.Declining enrollment revenue.A school district's declining enrollment 123.4revenue equals the greater of zero or the product of: (1) the basic formula allowance for 123.5that year; and (2) the difference between the mean average adjusted pupil units for the 123.6three preceding years and the adjusted pupil units for the current year.123.7EFFECTIVE DATE.This section is effective for revenue for fiscal year 2014 123.8and later.123.9    Sec. 23. Minnesota Statutes 2008, section 126C.10, is amended by adding a 123.10subdivision to read:123.11    Subd. 2d.Location equity revenue.A school district's location equity revenue 123.12equals the product of:123.13(1) .50;123.14(2) the basic formula allowance for that year;123.15(3) the district's adjusted pupil units for that year; and123.16(4) the district's location equity index minus .9.123.17EFFECTIVE DATE.This section is effective for revenue for fiscal year 2014 123.18and later.123.19    Sec. 24. Minnesota Statutes 2008, section 126C.10, is amended by adding a 123.20subdivision to read:123.21    Subd. 2e.Referendum replacement revenue.A school district's referendum 123.22replacement revenue equals $500 times the district's adjusted pupil units for that year.123.23EFFECTIVE DATE.This section is effective for revenue for fiscal year 2014 123.24and later.123.25    Sec. 25. Minnesota Statutes 2008, section 126C.10, subdivision 3, is amended to read:123.26    Subd. 3. Compensatory education revenue. (a) The compensatory education 123.27revenue for each building in the district equals  the greater of: (1) $2,500 times the district's 123.28enrollment of students eligible for free or reduced-price meals under section 126C.05, 123.29subdivision 3, paragraph (a), clause (1); or (2) 40 percent of the formula allowance minus 123.30$415 times the compensation revenue pupil units computed according to section 
         126C.05, 123.31subdivision 3
         . Revenue shall be paid to the district and must be allocated according to 123.32section 
         126C.15, subdivision 2. 124.1(b) When the district contracting with an alternative program under section 
         124D.69124.2changes prior to the start of a school year, the compensatory revenue generated by pupils 124.3attending the program shall be paid to the district contracting with the alternative program 124.4for the current school year, and shall not be paid to the district contracting with the 124.5alternative program for the prior school year. 124.6(c) When the fiscal agent district for an area learning center changes prior to the start 124.7of a school year, the compensatory revenue shall be paid to the fiscal agent district for the 124.8current school year, and shall not be paid to the fiscal agent district for the prior school year.124.9EFFECTIVE DATE.This section is effective for revenue for fiscal year 2014 124.10and later.124.11    Sec. 26. Minnesota Statutes 2008, section 126C.10, subdivision 4, is amended to read:124.12    Subd. 4. Basic skills revenue. A school district's basic skills revenue equals the 124.13sum of:124.14(1) compensatory revenue under subdivision 3; plus124.15(2) limited English proficiency revenue under section 
         124D.65, subdivision 5; plus.124.16(3) $250 times the limited English proficiency pupil units under section 126C.05, 124.17subdivision 17.124.18EFFECTIVE DATE.This section is effective for revenue for fiscal year 2014 124.19and later.124.20    Sec. 27. Minnesota Statutes 2008, section 126C.10, subdivision 6, is amended to read:124.21    Subd. 6. Definitions. The definitions in this subdivision apply only to subdivisions 124.227 and 8.124.23(a) "High school" means a public secondary school, except a charter school under 124.24section 
         124D.10, that has pupils enrolled in at least the 10th, 11th, and 12th grades. If 124.25there is no high school in the district and the school is at least 19 15 miles from the next 124.26nearest school, the commissioner must designate one school in the district as a high school 124.27for the purposes of this section.124.28(b) "Secondary average daily membership" means, for a district that has only one 124.29high school, the average daily membership of pupils served in grades 7 through 12. For a 124.30district that has more than one high school, "secondary average daily membership" for 124.31each high school means the product of the average daily membership of pupils served in 124.32grades 7 through 12 in the high school, times the ratio of six to the number of grades 124.33in the high school.125.1(c) "Attendance area" means the total surface area of the district, in square miles, 125.2divided by the number of high schools in the district. For a district that does not operate 125.3a high school and is less than 19 15 miles from the nearest operating high school, the 125.4attendance area equals zero.125.5(d) "Isolation index" for a high school means the square root of 55 percent of the 125.6attendance area plus the distance in miles, according to the usually traveled routes, 125.7between the high school and the nearest high school. For a district in which there is located 125.8land defined in section 
         84A.01, 
         84A.20, or 
         84A.31, the distance in miles is the sum of: 125.9(1) the square root of one-half of the attendance area; and125.10(2) the distance from the border of the district to the nearest high school.125.11(e) "Qualifying high school" means a high school that has an isolation index greater 125.12than 23 and that has secondary average daily membership of less than 400.125.13(f) "Qualifying elementary school" means a public elementary school, except a 125.14charter school under section 
         124D.10, that is located 19 15 miles or more from the nearest 125.15elementary school or from the nearest elementary school within the district and, in either 125.16case, has an elementary average daily membership of an average of 20 or fewer per grade.125.17(g) "Elementary average daily membership" means, for a district that has only 125.18one elementary school, the average daily membership of pupils served in kindergarten 125.19through grade 6. For a district that has more than one elementary school, "average daily 125.20membership" for each school means the average daily membership of pupils served in 125.21kindergarten through grade 6 multiplied by the ratio of seven to the number of grades 125.22in the elementary school.125.23EFFECTIVE DATE.This section is effective for revenue for fiscal year 2014 125.24and later.125.25    Sec. 28. Minnesota Statutes 2008, section 126C.10, subdivision 13, is amended to read:125.26    Subd. 13. Total operating capital and technology revenue. (a) Total operating 125.27capital revenue for a district equals: (1) $50 times the adjusted pupil units for the school 125.28year for technology purposes; (2) for any district not participating in the alternative 125.29facilities program under section 123B.59, $600 times the adjusted pupil units for deferred 125.30maintenance and health and safety purposes under sections 123B.57 and 123B.59; (3) the 125.31amount determined under paragraph (b) or (c), plus $73; and (4) $100 times the adjusted 125.32marginal cost pupil units for the school year. The revenue must be placed in a reserved 125.33account in the general fund and may only be used according to subdivision 14.125.34(b) Capital revenue for a district equals $100 times the district's maintenance cost 125.35index times its adjusted marginal cost pupil units for the school year.126.1(c) The revenue for a district that operates a program under section 
         124D.128, is 126.2increased by an amount equal to $30 times the number of marginal cost adjusted pupil 126.3units served at the site where the program is implemented.126.4EFFECTIVE DATE.This section is effective for revenue for fiscal year 2014 126.5and later.126.6    Sec. 29. Minnesota Statutes 2008, section 126C.10, subdivision 14, is amended to read:126.7    Subd. 14. Uses of total operating capital revenue.Technology revenue may only 126.8be used for purposes in clauses (18), (19), (21), (23), and (24). Total operating capital 126.9revenue may be used only for the following purposes:126.10(1) to acquire land for school purposes;126.11(2) to acquire or construct buildings for school purposes;126.12(3) to rent or lease buildings, including the costs of building repair or improvement 126.13that are part of a lease agreement;126.14(4) to improve and repair school sites and buildings, and equip or reequip school 126.15buildings with permanent attached fixtures, including library media centers;126.16(5) for a surplus school building that is used substantially for a public nonschool 126.17purpose;126.18(6) to eliminate barriers or increase access to school buildings by individuals with a 126.19disability;126.20(7) to bring school buildings into compliance with the State Fire Code adopted 126.21according to chapter 299F;126.22(8) to remove asbestos from school buildings, encapsulate asbestos, or make 126.23asbestos-related repairs;126.24(9) to clean up and dispose of polychlorinated biphenyls found in school buildings;126.25(10) to clean up, remove, dispose of, and make repairs related to storing heating fuel 126.26or transportation fuels such as alcohol, gasoline, fuel oil, and special fuel, as defined 126.27in section 
         296A.01; 126.28(11) for energy audits for school buildings and to modify buildings if the audit 126.29indicates the cost of the modification can be recovered within ten years;126.30(12) to improve buildings that are leased according to section 
         123B.51, subdivision 4; 126.31(13) to pay special assessments levied against school property but not to pay 126.32assessments for service charges;126.33(14) to pay principal and interest on state loans for energy conservation according to 126.34section 
         216C.37 or loans made under the Douglas J. Johnson Economic Protection Trust 126.35Fund Act according to sections 
         298.292 to 
         298.298; 127.1(15) to purchase or lease interactive telecommunications equipment;127.2(16) by board resolution, to transfer money into the debt redemption fund to: (i) 127.3pay the amounts needed to meet, when due, principal and interest payments on certain 127.4obligations issued according to chapter 475; or (ii) pay principal and interest on debt 127.5service loans or capital loans according to section 
         126C.70; 127.6(17) to pay operating capital-related assessments of any entity formed under a 127.7cooperative agreement between two or more districts;127.8(18) to purchase or lease computers and related materials, copying machines, 127.9telecommunications equipment, and other noninstructional equipment;127.10(19) to purchase or lease assistive technology or equipment for instructional 127.11programs;127.12(20) to purchase textbooks;127.13(21) to purchase new and replacement library media resources or technology;127.14(22) to purchase vehicles;127.15(23) to purchase or lease telecommunications equipment, computers, and related 127.16equipment for integrated information management systems for:127.17(i) managing and reporting learner outcome information for all students under a 127.18results-oriented graduation rule;127.19(ii) managing student assessment, services, and achievement information required 127.20for students with individual education plans; and127.21(iii) other classroom information management needs; and127.22(24) to pay personnel costs directly related to the acquisition, operation, and 127.23maintenance of telecommunications systems, computers, related equipment, and network 127.24and applications software.127.25EFFECTIVE DATE.This section is effective for revenue for fiscal year 2014.127.26    Sec. 30. Minnesota Statutes 2008, section 126C.10, subdivision 18, is amended to read:127.27    Subd. 18. Transportation sparsity revenue allowance.(a) A district's 127.28transportation sparsity allowance equals the greater of zero or the result of the following 127.29computation:127.30(i) Multiply the formula allowance according to subdivision 2, by .1469.127.31(ii) Multiply the result in clause (i) by the district's sparsity index raised to the 127.3226/100 power.127.33(iii) Multiply the result in clause (ii) by the district's density index raised to the 127.3413/100 power.127.35(iv) Multiply the formula allowance according to subdivision 2, by .0485.128.1(v) Subtract the result in clause (iv) from the result in clause (iii).128.2(b) Transportation sparsity revenue is equal to the transportation sparsity allowance 128.3times the adjusted marginal cost pupil units.128.4EFFECTIVE DATE.This section is effective for fiscal year 2014 and later.128.5    Sec. 31. Minnesota Statutes 2008, section 126C.10, is amended by adding a 128.6subdivision to read:128.7    Subd. 18a.Transportation revenue.(a) A school district's transportation revenue 128.8equals the sum of its transportation sparsity revenue, hazardous transportation revenue, 128.9and bus purchase revenue.128.10(b) A school district's transportation sparsity revenue equals its transportation 128.11sparsity allowance times its adjusted pupil units for that year.128.12(c) A school district's hazardous transportation aid equals the amount necessary to 128.13provide transportation services to students facing hazardous transportation conditions. A 128.14district's hazardous transportation aid must not exceed 20 percent of the district's total 128.15regular to and from school transportation costs for that year. For any year, a school 128.16district may receive aid under this paragraph only after the school board has considered 128.17the comprehensive plan for hazardous transportation submitted by the district's pupil 128.18transportation safety committee at a regularly scheduled meeting of the school board.  The 128.19comprehensive plan may not be adopted until after the board has allowed the public 128.20reasonable time to testify on the plan.128.21(d) A school district's bus purchase revenue equals five percent of the district's 128.22spending on transportation services for the previous fiscal year.128.23EFFECTIVE DATE.This section is effective for revenue for fiscal year 2014 128.24and later.128.25    Sec. 32. [126C.115] INNOVATION REVENUE.128.26    (a) A school district must use its innovation revenue to implement evidence-based 128.27innovation premised on research-based curriculum and instruction and other education 128.28programs and practices, including best teaching practices, that are known to improve 128.29academic performance for diverse groups of students. If a school district demonstrates 128.30low growth and needs to improve students' current achievement and educational growth, 128.31as measured by a growth-based value-added system under section 120B.35, the school 128.32district must submit a plan to the commissioner, developed in consultation with interested 128.33parents, that describes how the district proposes to use its innovation revenue to 129.1supplement state reading requirements under section 120B.12, subdivision 1, and state 129.2math and science requirements under section 120B.023, subdivision 2, paragraphs (b) and 129.3(d), and improve student outcomes. The plan must:129.4    (1) identify specific education goals, consistent with this section, and the indicators 129.5to demonstrate progress toward achieving those goals, which may include a value-added 129.6assessment model under sections 120B.35 and 120B.362;129.7    (2) supplement current district initiatives that may transform district programs, 129.8practices, and processes sufficient to significantly improve student outcomes, which 129.9may include, among other initiatives, an organizational assessment and performance 129.10improvement process under section 120B.3625; and129.11    (3) demonstrate how innovation revenue helps narrow and eliminate differences in 129.12student academic achievement in reading, math, and science based on student measures of 129.13mobility, attendance, race and ethnicity, gender, English language learner status, eligibility 129.14for free or reduced price lunch, and special education, among other outcomes.129.15    (b) After transmitting its plan to the commissioner, a district must spend its 129.16innovation revenue effectively and efficiently, consistent with its plan. A school district 129.17that submits an innovation revenue plan under paragraph (a) must report annually by June 129.1830 to the commissioner and post on the district's official Web site reliable and accessible 129.19information and supporting longitudinal data showing the amount of progress the district 129.20made in the immediately preceding school year and previous school years in realizing its 129.21innovation revenue goals. The commissioner must analyze the data from the annual 129.22district reports and post the analysis on the department's official Web site.129.23EFFECTIVE DATE.This section is effective for revenue for fiscal year 2014 129.24and later.129.25    Sec. 33. Minnesota Statutes 2008, section 126C.13, subdivision 4, is amended to read:129.26    Subd. 4. General education aid.For fiscal years 2007 and later, A district's general 129.27education aid is the sum of the following amounts equals its:129.28    (1) general education revenue, excluding equity revenue, total operating capital 129.29revenue, alternative teacher compensation revenue, and transition revenue;129.30    (2) operating capital aid under section 126C.10, subdivision 13b;129.31    (3) equity aid under section 126C.10, subdivision 30;129.32    (4) alternative teacher compensation aid under section 126C.10, subdivision 36;129.33    (5) transition aid under section 126C.10, subdivision 33 for that year;129.34    (6) (2) shared time aid under section 
         126C.01, subdivision 7;129.35    (7) (3) referendum aid under section 
         126C.17, subdivisions 7 and 7a; and130.1    (8) (4) online learning aid according to section 
         124D.096.130.2EFFECTIVE DATE.This section is effective for revenue for fiscal year 2014 130.3and later.130.4    Sec. 34. Minnesota Statutes 2008, section 126C.13, subdivision 5, is amended to read:130.5    Subd. 5. Uses of revenue.Except as provided in sections 126C.10, subdivision 130.614; 126C.12; and 126C.15, (a) General education revenue may be used during the 130.7regular school year and the summer for general and special school purposes and for 130.8prekindergarten programs except as limited by paragraph (b).  130.9(b) General education revenue set-asides include:130.10(1) 1.0 percent of basic revenue must be used only for gifted and talented activities 130.11consistent with section 120B.15;130.12(2) 5.0 percent of basic revenue must be used only to implement a district's 130.13innovative revenue program activities under section 126C.115;130.14(3) basic skills revenue must be used according to section 126C.15; and130.15(4) operating capital revenue must be spent according to section 126C.10, 130.16subdivision 14.130.17EFFECTIVE DATE.This section is effective for revenue for fiscal year 2014 130.18and later.130.19    Sec. 35. Minnesota Statutes 2008, section 126C.17, subdivision 1, is amended to read:130.20    Subdivision 1. Referendum allowance.(a) For fiscal year 2003 and later, a district's 130.21initial referendum revenue allowance equals the sum of the allowance under section 130.22126C.16, subdivision 2, plus any additional allowance per resident marginal cost pupil 130.23unit authorized under subdivision 9 before May 1, 2001, for fiscal year 2002 and later, 130.24plus the referendum conversion allowance approved under subdivision 13, minus $415. 130.25For districts with more than one referendum authority, the reduction must be computed 130.26separately for each authority. The reduction must be applied first to the referendum 130.27conversion allowance and next to the authority with the earliest expiration date. A 130.28district's initial referendum revenue allowance may not be less than zero. 130.29(b) For fiscal year 2003, a district's referendum revenue allowance equals the initial 130.30referendum allowance plus any additional allowance per resident marginal cost pupil unit 130.31authorized under subdivision 9 between April 30, 2001, and December 30, 2001, for 130.32fiscal year 2003 and later.131.1(c) For fiscal year 2004 and later, A district's referendum revenue allowance equals 131.2the sum of:131.3(1) the product of (i) the ratio of the resident marginal cost pupil units the district 131.4would have counted for fiscal year 2004 under Minnesota Statutes 2002, section 126C.05, 131.5to the district's resident marginal cost pupil units for fiscal year 2004, times (ii) the greater 131.6of zero or the district's initial referendum allowance plus any additional allowance per 131.7resident marginal cost pupil unit authorized under subdivision 9 between April 30, 2001, 131.8and May 30, 2003, for fiscal year 2003 and later 2014 less $500, plus 131.9(2) any additional allowance per resident marginal cost pupil unit authorized under 131.10subdivision 9 after May 30, 2003 2012, for fiscal year 2005 2014 and later.131.11EFFECTIVE DATE.This section is effective for revenue for fiscal year 2014 131.12and later.131.13    Sec. 36. Minnesota Statutes 2008, section 126C.17, subdivision 5, is amended to read:131.14    Subd. 5. Referendum equalization revenue. (a) For fiscal year 2003 and later,131.15A district's referendum equalization revenue equals the sum of the first tier referendum 131.16equalization revenue and the second tier referendum equalization revenue.131.17(b) A district's first tier referendum equalization revenue equals the district's first 131.18tier referendum equalization allowance times the district's resident marginal cost pupil 131.19units for that year.131.20(c) For fiscal year 2006, a district's first tier referendum equalization allowance 131.21equals the lesser of the district's referendum allowance under subdivision 1 or $500. For 131.22fiscal year 2007, a district's first tier referendum equalization allowance equals the lesser 131.23of the district's referendum allowance under subdivision 1 or $600.131.24For fiscal year 2008 and later, (b)  A district's first tier referendum equalization 131.25allowance equals the lesser of the district's referendum allowance under subdivision 1 131.26or $700.131.27(d) (c) A district's second tier referendum equalization revenue equals the district's 131.28second tier referendum equalization allowance times the district's resident marginal cost 131.29pupil units for that year.131.30(e) For fiscal year 2006, a district's second tier referendum equalization allowance 131.31equals the lesser of the district's referendum allowance under subdivision 1 or 18.6 percent 131.32of the formula allowance, minus the district's first tier referendum equalization allowance. 131.33For fiscal year 2007 and later, (d) A district's second tier referendum equalization 131.34allowance equals the lesser of the district's referendum allowance under subdivision 1 or 132.126 percent of the formula allowance, minus the district's first tier referendum equalization 132.2allowance.132.3(f)  (e) Notwithstanding paragraph (e) (d), the second tier referendum allowance for a 132.4district qualifying for secondary sparsity revenue under section 
         126C.10, subdivision 7, or 132.5elementary sparsity revenue under section 
         126C.10, subdivision 8, equals the district's 132.6referendum allowance under subdivision 1 minus the district's first tier referendum 132.7equalization allowance.132.8EFFECTIVE DATE.This section is effective for revenue for fiscal year 2014.132.9    Sec. 37. Minnesota Statutes 2008, section 126C.17, subdivision 6, is amended to read:132.10    Subd. 6. Referendum equalization levy. (a) For fiscal year 2003 and later,132.11A district's referendum equalization levy equals the sum of the first tier referendum 132.12equalization levy and the second tier referendum equalization levy.132.13(b) A district's first tier referendum equalization levy equals the district's first tier 132.14referendum equalization revenue times the lesser of one or the ratio of the district's 132.15referendum market value per resident marginal cost pupil unit to $476,000 100 percent of 132.16the statewide referendum market value equalizing factor.132.17(c) A district's second tier referendum equalization levy equals the district's second 132.18tier referendum equalization revenue times the lesser of one or the ratio of the district's 132.19referendum market value per resident marginal cost pupil unit to $270,000 60 percent of 132.20the statewide referendum market value equalizing factor.132.21EFFECTIVE DATE.This section is effective for revenue for fiscal year 2014.132.22    Sec. 38. Minnesota Statutes 2008, section 126C.20, is amended to read:132.23126C.20 ANNUAL GENERAL EDUCATION AID APPROPRIATION.132.24There is annually appropriated from the general fund to the department the amount132.25amounts necessary for: (1) general education aid; (2) special education aid; (3) debt 132.26service aid; and (4) the school bond agricultural credit. This amount These amounts must 132.27be reduced by the amount of any money specifically appropriated for the same purpose 132.28in any year from any state fund.132.29EFFECTIVE DATE.This section is effective for revenue for fiscal year 2014 132.30and later.132.31    Sec. 39. Minnesota Statutes 2008, section 126C.40, subdivision 1, is amended to read:133.1    Subdivision 1. To lease building or land. (a) When an independent or a special 133.2school district or a group of independent or special school districts finds it economically 133.3advantageous to rent or lease a building or land for any instructional purposes or 133.4administrative purpose, or for school storage or furniture repair, and it determines that 133.5the operating capital revenue authorized under section 
         126C.10, subdivision 13, is 133.6insufficient for this purpose, it may apply to the commissioner for permission to make 133.7an additional capital expenditure levy for this purpose. An application for permission to 133.8levy under this subdivision must contain financial justification for the proposed levy, the 133.9terms and conditions of the proposed lease, and a description of the space to be leased 133.10and its proposed use.133.11    (b) The criteria for approval of applications to levy under this subdivision must 133.12include: the reasonableness of the price, the appropriateness of the space to the proposed 133.13activity, the feasibility of transporting pupils to the leased building or land, conformity 133.14of the lease to the laws and rules of the state of Minnesota, and the appropriateness of 133.15the proposed lease to the space needs and the financial condition of the district. The 133.16commissioner must not authorize a levy under this subdivision in an amount greater than 133.17the cost to the district of renting or leasing a building or land for approved purposes. 133.18The proceeds of this levy must not be used for custodial or other maintenance services. 133.19A district may not levy under this subdivision for the purpose of leasing or renting a 133.20district-owned building or site to itself.133.21    (c) For agreements finalized after July 1, 1997, a district may not levy under this 133.22subdivision for the purpose of leasing: (1) a newly constructed building used primarily 133.23for regular kindergarten, elementary, or secondary instruction; or (2) a newly constructed 133.24building addition or additions used primarily for regular kindergarten, elementary, or 133.25secondary instruction that contains more than 20 percent of the square footage of the 133.26previously existing building.133.27    (d) Notwithstanding paragraph (b), a district may levy under this subdivision for the 133.28purpose of leasing or renting a district-owned building or site to itself only if the amount 133.29is needed by the district to make payments required by a lease purchase agreement, 133.30installment purchase agreement, or other deferred payments agreement authorized by law, 133.31and the levy meets the requirements of paragraph (c). A levy authorized for a district by 133.32the commissioner under this paragraph may be in the amount needed by the district to 133.33make payments required by a lease purchase agreement, installment purchase agreement, 133.34or other deferred payments agreement authorized by law, provided that any agreement 133.35include a provision giving the school districts the right to terminate the agreement 133.36annually without penalty.134.1    (e) The total levy under this subdivision for a district for any year must not exceed 134.2$150 times the resident pupil units for the fiscal year to which the levy is attributable.134.3    (f) For agreements for which a review and comment have been submitted to the 134.4Department of Education after April 1, 1998, the term "instructional purpose" as used in 134.5this subdivision excludes expenditures on stadiums.134.6    (g) The commissioner of education may authorize a school district to exceed the 134.7limit in paragraph (e) if the school district petitions the commissioner for approval. The 134.8commissioner shall grant approval to a school district to exceed the limit in paragraph (e) 134.9for not more than five years if the district meets the following criteria:134.10    (1) the school district has been experiencing pupil enrollment growth in the 134.11preceding five years;134.12    (2) the purpose of the increased levy is in the long-term public interest;134.13    (3) the purpose of the increased levy promotes colocation of government services; 134.14and134.15    (4) the purpose of the increased levy is in the long-term interest of the district by 134.16avoiding over construction of school facilities.134.17    (h) A school district that is a member of an intermediate school district may include 134.18in its authority under this section the costs associated with leases of administrative and 134.19classroom space for intermediate school district programs. This authority must not 134.20exceed $43 $50 times the adjusted marginal cost pupil units of the member districts. This 134.21authority is in addition to any other authority authorized under this section.134.22    (i) In addition to the allowable capital levies in paragraph (a), a district that is a 134.23member of the "Technology and Information Education Systems" data processing joint 134.24board, that finds it economically advantageous to enter into a lease purchase agreement for 134.25a building for a group of school districts or special school districts for staff development 134.26purposes, may levy for its portion of lease costs attributed to the district within the total 134.27levy limit in paragraph (e).134.28EFFECTIVE DATE.This section is effective for revenue for fiscal year 2014 134.29and later.134.30    Sec. 40. Minnesota Statutes 2008, section 127A.51, is amended to read:134.31127A.51 STATEWIDE AVERAGE REVENUE.134.32By October 1 of each year the commissioner must estimate the statewide average 134.33adjusted general revenue per adjusted marginal cost pupil unit and the disparity in adjusted 134.34general revenue among pupils and districts by computing the ratio of the 95th percentile 135.1to the fifth percentile of adjusted general revenue. The commissioner must provide that 135.2information to all districts.135.3If the disparity in adjusted general revenue as measured by the ratio of the 95th 135.4percentile to the fifth percentile increases in any year, the commissioner shall recommend 135.5to the legislature options for change in the general education formula that will limit the 135.6disparity in adjusted general revenue to no more than the disparity for the previous 135.7school year. The commissioner must submit the recommended options to the education 135.8committees of the legislature by January 15.135.9For purposes of this section and section 
         126C.10, adjusted general revenue means:  135.10(1) for fiscal year 2002, the sum of basic revenue under section 
         126C.10, subdivision 135.112
         ; supplemental revenue under section 
         126C.10, subdivisions 9 and 12; transition revenue 135.12under section 
         126C.10, subdivision 20; referendum revenue under section 
         126C.17; and 135.13equity revenue under section 
         126C.10, subdivisions 24a and 24b; and135.14(2) for fiscal year 2003 and later through 2013, the sum of basic revenue under 135.15section 
         126C.10, subdivision 2; referendum revenue under section 
         126C.17; and equity 135.16revenue under section 
         126C.10, subdivisions 24a and 24b.; and135.17(3) for fiscal year 2014 and later, the sum of basic revenue under section 126C.10, 135.18subdivision 2, and referendum revenue under section 126C.17.135.19EFFECTIVE DATE.This section is effective for fiscal year 2014 and later.135.20    Sec. 41. PHASE-IN.135.21    Subdivision 1.Baseline revenue.A school district's baseline revenue equals the 135.22revenue amounts for the aid appropriations calculated under Minnesota Statutes, section 135.23126C.20, calculated using the current year's data and the revenue formulas in place in 135.24Minnesota Statutes 2008.135.25    Subd. 2.New revenue.A school district's new revenue equals the revenue amounts 135.26for the aid appropriations calculated under Minnesota Statutes, section 126C.20, calculated 135.27using the current year's data and the revenue formulas in place under this act.135.28    Subd. 3.Phase-in schedule.A school district's revenue amounts for the revenue 135.29formulas listed in subdivisions 1 and 2 equals the district's baseline revenue plus the 135.30percent of the difference specified in subdivision 6 multiplied by the number of years 135.31of the phase in specified in subdivision 7.135.32    Subd. 4.Aid.A school district's aid entitlement for the formulas listed under 135.33this act equals the district's baseline aid plus the phase-in percentage times the new aid 135.34amounts calculated under this act.136.1    Subd. 5.Levy.A school district levy for the formulas listed in this act equals the 136.2levy for the same formulas calculated under Minnesota Statutes 2008, and the phase-in 136.3percentage times the new revenue amounts for the levy calculated under this act.136.4    Subd. 6.Percentage.The phase-in percentage equals 25 percent.136.5    Subd. 7.Years of phase-in.The new revenue under this section is phased in over 136.6four years.136.7EFFECTIVE DATE.This section is effective July 1, 2013.136.8    Sec. 42. REVISOR'S INSTRUCTION.136.9In the year 2014 and subsequent editions of Minnesota Statutes, the revisor of statutes 136.10shall change all references to "adjusted marginal cost pupil units" to "adjusted pupil units" 136.11and all references to "resident marginal cost pupil units" to "resident pupil units."136.12EFFECTIVE DATE.This section is effective July 1, 2013.136.13    Sec. 43.  REPEALER.136.14Minnesota Statutes 2008, sections 123B.54; 123B.57, subdivisions 3, 4, and 5; 136.15123B.591; 125A.76, subdivision 4; 125A.79, subdivision 6; 126C.10, subdivisions 2b, 136.1613a, 13b, 24, 25, 26, 27, 28, 29, 30, 31, 31a, 31b, 32, 33, 34, 35, and 36; 126C.12; 136.17126C.126; and 127A.50, are repealed.136.18EFFECTIVE DATE.This section is effective for revenue for fiscal year 2014.136.19ARTICLE 9136.20FORECAST ADJUSTMENTS136.21    Section 1. Minnesota Statutes 2009 Supplement, section 123B.54, is amended to read:136.22123B.54 DEBT SERVICE APPROPRIATION.136.23    (a) $9,109,000 in fiscal year 2009, $7,948,000 $6,608,000 in fiscal year 2010, 136.24$9,275,000 $8,465,000 in fiscal year 2011, $9,574,000 $16,900,000 in fiscal year 2012, 136.25and $8,904,000 $19,175,000 in fiscal year 2013 and later are appropriated from the 136.26general fund to the commissioner of education for payment of debt service equalization 136.27aid under section 
         123B.53.136.28    (b) The appropriations in paragraph (a) must be reduced by the amount of any 136.29money specifically appropriated for the same purpose in any year from any state fund.136.30EFFECTIVE DATE.This section is effective the day following final enactment.137.1    Sec. 2. Laws 2009, chapter 96, article 4, section 12, subdivision 3, is amended to read:137.2    Subd. 3. Debt service equalization. For debt service aid according to Minnesota 137.3Statutes, section 
         123B.53, subdivision 6:

137.4137.5$7,948,0006,608,000.....2010137.6137.7$9,275,0008,465,000.....2011

137.8The 2010 appropriation includes $851,000 for 2009 and $7,097,000 $5,757,000137.9for 2010.137.10The 2011 appropriation includes $788,000 $2,128,000 for 2010 and $8,487,000137.11$6,337,000 for 2011.137.12EFFECTIVE DATE.This section is effective the day following final enactment.137.13    Sec. 3. Laws 2009, chapter 96, article 5, section 13, subdivision 4, is amended to read:137.14    Subd. 4. Kindergarten milk. For kindergarten milk aid under Minnesota Statutes, 137.15section 
         124D.118:

137.16137.17$1,098,0001,104,000.....2010137.18137.19$1,120,0001,126,000.....2011