SF 3945
Introduction - 94th Legislature (2025 - 2026)
Posted on 02/27/2026 10:28 a.m.
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A bill for an act
relating to education finance; renaming the local optional revenue program;
increasing the program's funding; appropriating money; amending Minnesota
Statutes 2024, sections 126C.10, subdivision 2e; 126C.17, subdivisions 7a, 7b;
Minnesota Statutes 2025 Supplement, section 124E.20, subdivision 1.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
Section 1.
Minnesota Statutes 2025 Supplement, section 124E.20, subdivision 1, is amended
to read:
Subdivision 1.
Revenue calculation.
(a) General education revenue must be paid to a
charter school as though it were a district. The general education revenue for each adjusted
pupil unit is the state average general education revenue per pupil unit, plus the referendum
equalization aid allowance and deleted text begin first tierdeleted text end local deleted text begin optionaldeleted text end new text begin educationnew text end aid allowance in the pupil's
district of residence, minus an amount equal to the product of the formula allowance
according to section 126C.10, subdivision 2, times .0466, calculated without declining
enrollment revenue, local deleted text begin optionaldeleted text end new text begin educationnew text end revenue, basic skills revenue, extended time
revenue, pension adjustment revenue, transition revenue, and transportation sparsity revenue,
plus declining enrollment revenue, basic skills revenue, pension adjustment revenue, and
transition revenue as though the school were a school district.
(b) For a charter school operating an extended day, extended week, or summer program,
the general education revenue in paragraph (a) is increased by an amount equal to 25 percent
of the statewide average extended time revenue per adjusted pupil unit.
(c) Notwithstanding paragraph (a), the general education revenue for an eligible special
education charter school as defined in section 124E.21, subdivision 2, equals the sum of
the amount determined under paragraph (a) and the school's unreimbursed cost as defined
in section 124E.21, subdivision 2, for educating students not eligible for special education
services.
(d) A charter school's general education revenue under paragraphs (a) to (c) is increased
by $132 times the adjusted pupil units for that fiscal year.
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective for fiscal year 2027 and later.
new text end
Sec. 2.
Minnesota Statutes 2024, section 126C.10, subdivision 2e, is amended to read:
Subd. 2e.
Local deleted text begin optionaldeleted text end new text begin educationnew text end revenue.
(a)new text begin For purposes of this subdivision:
new text end
new text begin
(1) "regional average wage" means the average wage for each of Minnesota's economic
development regions for the most recent three years computed by the Minnesota Department
of Employment and Economic Development; and
new text end
new text begin
(2) "statewide average wage" means the statewide average wage for the most recent
three years computed by the Minnesota Department of Employment and Economic
Development.
new text end
new text begin
(b) A school district's region is the economic development region where the school
district's administrative offices are located.
new text end
new text begin
(c) A school district's geographical cost education index equals the greater of one or:
new text end
new text begin
(1) the sum of 0.23; and
new text end
new text begin
(2) 0.77 times the ratio of the regional average wage to the statewide average wage.
new text end
new text begin
(d) The local education allowance equals $979 for fiscal year 2027. The regional
education allowance for fiscal year 2028 and later equals the local education allowance for
the previous year times the ratio of the general education basic formula allowance for the
current year to the general education basic formula allowance for the previous year.
new text end
new text begin (e)new text end Local deleted text begin optionaldeleted text end new text begin educationnew text end revenue for a deleted text begin schooldeleted text end district equals the deleted text begin sum of the district's
first tier local optional revenue and second tier local optional revenue. A district's first tier
local optional revenue equals $300 timesdeleted text end new text begin product of:
new text end
new text begin
(1) the local education allowance for that year;
new text end
new text begin
(2) the school district's geographic cost index for that year; and
new text end
new text begin (3)new text end the adjusted pupil units of the district for that school year. deleted text begin A district's second tier
local optional revenue equals $424 times the adjusted pupil units of the district for that
school year.
deleted text end
deleted text begin
(b) A district's local optional levy equals the sum of the first tier local optional levy and
the second tier local optional levy.
deleted text end
deleted text begin (c)deleted text end new text begin (f)new text end A district's deleted text begin first tierdeleted text end local deleted text begin optionaldeleted text end new text begin educationnew text end levy equals the district's deleted text begin first tier
deleted text end local deleted text begin optionaldeleted text end new text begin educationnew text end revenue times the lesser of one or the ratio of the district's
referendum market value per resident pupil unit to deleted text begin $880,000deleted text end new text begin $.......new text end .
deleted text begin
(d) For fiscal year 2023, a district's second tier local optional levy equals the district's
second tier local optional revenue times the lesser of one or the ratio of the district's
referendum market value per resident pupil unit to $548,842. For fiscal year 2024, a district's
second tier local optional levy equals the district's second tier local optional revenue times
the lesser of one or the ratio of the district's referendum market value per resident pupil unit
to $510,000. For fiscal year 2025, a district's second tier local optional levy equals the
district's second tier local optional revenue times the lesser of one or the ratio of the district's
referendum market value per resident pupil unit to $626,450. For fiscal year 2026, a district's
second tier local optional levy equals the district's second tier local optional revenue times
the lesser of one or the ratio of the district's referendum market value per resident pupil unit
to $642,038. For fiscal year 2027 and later, a district's second tier local optional levy equals
the district's second tier local optional revenue times the lesser of one or the ratio of the
district's referendum market value per resident pupil unit to $671,345.
deleted text end
deleted text begin (e)deleted text end new text begin (g)new text end The local deleted text begin optionaldeleted text end new text begin educationnew text end levy must be spread on referendum market value.
A district may levy less than the permitted amount.
deleted text begin (f)deleted text end new text begin (h)new text end A district's local deleted text begin optionaldeleted text end new text begin educationnew text end aid equals its local deleted text begin optionaldeleted text end new text begin educationnew text end revenue
minus its local deleted text begin optionaldeleted text end new text begin educationnew text end levy. If a district's actual levy for deleted text begin first or second tierdeleted text end local
deleted text begin optionaldeleted text end new text begin educationnew text end revenue is less than its maximum levy limit deleted text begin for that tierdeleted text end , its aid must be
proportionately reduced.
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective for revenue for fiscal year 2027 and later.
new text end
Sec. 3.
Minnesota Statutes 2024, section 126C.17, subdivision 7a, is amended to read:
Subd. 7a.
Referendum tax base replacement aid.
new text begin (a) For fiscal year 2026, new text end for each
school district that had a referendum allowance for fiscal year 2002 exceeding $415, for
each separately authorized referendum levy, the commissioner of revenue, in consultation
with the commissioner of education, shall certify the amount of the referendum levy in taxes
payable year 2001 attributable to the portion of the referendum allowance exceeding $415
levied against property classified as class 2, noncommercial 4c(1), or 4c(4), under section
273.13, excluding the portion of the tax paid by the portion of class 2a property consisting
of the house, garage, and surrounding one acre of land. The resulting amount must be used
to reduce the district's referendum levy or first tier local optional levy amount otherwise
determined, and must be paid to the district each year that the referendum or first tier local
optional authority remains in effect, is renewed, or new referendum authority is approved.
The aid payable under this subdivision must be subtracted from the district's referendum
equalization aid under subdivision 7. The referendum equalization aid and the first tier local
optional aid after the subtraction must not be less than zero.
new text begin
(b) For fiscal year 2027 and later, a school district's referendum tax base replacement
aid equals its referendum tax base replacement aid for fiscal year 2026 per adjusted pupil
unit for fiscal year 2026 times its adjusted pupil units for the current school year.
new text end
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective for revenue for fiscal year 2027 and later.
new text end
Sec. 4.
Minnesota Statutes 2024, section 126C.17, subdivision 7b, is amended to read:
Subd. 7b.
Referendum aid guarantee.
deleted text begin
(a) Notwithstanding subdivision 7, the sum of
a district's referendum equalization aid and local optional aid under section 126C.10,
subdivision 2e, for fiscal year 2015 must not be less than the sum of the referendum
equalization aid the district would have received for fiscal year 2015 under Minnesota
Statutes 2012, section 126C.17, subdivision 7, and the adjustment the district would have
received under Minnesota Statutes 2012, section 127A.47, subdivision 7, paragraphs (a),
(b), and (c).
deleted text end
deleted text begin (b)deleted text end new text begin (a)new text end Notwithstanding subdivision 7, new text begin for fiscal year 2026, new text end the sum of referendum
equalization aid and local optional aid under section 126C.10, subdivision 2e, deleted text begin for fiscal year
2016 and later,deleted text end for a district qualifying for additional aid under paragraph (a) for fiscal year
2015, must not be less than the product of (1) the sum of the district's referendum equalization
aid and local optional aid under section 126C.10, subdivision 2e, for fiscal year 2015, times
(2) the lesser of one or the ratio of the sum of the district's referendum revenue and local
optional revenue for that school year to the sum of the district's referendum revenue and
local optional revenue for fiscal year 2015, times (3) the lesser of one or the ratio of the
district's referendum market value used for fiscal year 2015 referendum equalization
calculations to the district's referendum market value used for that year's referendum
equalization calculations.
new text begin
(b) For fiscal year 2027 and later, a district's referendum aid guarantee equals its
referendum aid guarantee for fiscal year 2026 divided by its adjusted pupil units for 2026
multiplied by its adjusted pupil units for the current fiscal year.
new text end
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective for fiscal year 2027 and later.
new text end
Sec. 5. new text begin APPROPRIATIONS; GENERAL EDUCATION AID.
new text end
new text begin Subdivision 1. new text end
new text begin Department of Education. new text end
new text begin
The sum indicated in this section is
appropriated from the general fund to the Department of Education in the fiscal year
designated.
new text end
new text begin Subd. 2. new text end
new text begin Local education aid. new text end
new text begin
For additional general education aid under Minnesota
Statutes, section 126C.19:
new text end
|
new text begin
$ new text end |
new text begin
....... new text end |
new text begin
..... new text end |
new text begin
2027 new text end |
Sec. 6. new text begin REVISOR INSTRUCTION.
new text end
new text begin
The revisor of statutes must substitute the term "local education revenue," "local education
aid," and "local education levy" for "local optional revenue," "local optional aid," and "local
optional levy" wherever the terms appear in Minnesota Statutes. The revisor may also make
grammatical changes related to the change in terms.
new text end