SF 4500
Introduction - 94th Legislature (2025 - 2026)
Posted on 03/18/2026 09:29 a.m.
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A bill for an act
relating to education finance; restoring lease levy authority for space necessary
for graduation ceremonies; amending Minnesota Statutes 2025 Supplement, section
126C.40, subdivision 1.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
Section 1.
Minnesota Statutes 2025 Supplement, section 126C.40, subdivision 1, is amended
to read:
Subdivision 1.
To lease building or land.
(a) When an independent or a special school
district or a group of independent or special school districts finds it economically
advantageous to rent or lease a building or land for any instructional purposesnew text begin , for high
school graduation ceremonies,new text end or for school storage or furniture repair, it may apply to the
commissioner for permission to make an additional capital expenditure levy for this purpose.
An application for permission to levy under this subdivision must contain the terms and
conditions of the proposed lease, and a description of the space to be leased and its proposed
use. Projects funded under this subdivision that require an expenditure in excess of $500,000
per school site if the school district has a capital loan outstanding, or $2,000,000 per school
site if the school district does not have a capital loan outstanding, are subject to review and
comment under section 123B.71, subdivision 8, in the form and manner prescribed by the
commissioner.
(b) The criteria for approval of applications to levy under this subdivision must be
annually prescribed by the commissioner, and must include but are not limited to: the
reasonableness of the price, the appropriateness of the space to the proposed activity, the
feasibility of transporting pupils to the leased building or land, conformity of the lease to
the laws and rules of the state of Minnesota, the appropriateness of the proposed lease to
the space needs of the district, the financial condition of the district, and a review of the
statutory operating debt percentage applicable to the district. The commissioner must not
authorize a levy under this subdivision in an amount greater than the cost to the district of
renting or leasing a building or land for approved purposes. The proceeds of this levy must
not be used for operating costs. A district may not levy under this subdivision for the purpose
of leasing or renting a district-owned building or site to itself.
(c) For agreements finalized after July 1, 1997, a district may not levy under this
subdivision for the purpose of leasing: (1) a newly constructed building used primarily for
regular kindergarten, elementary, or secondary instruction; or (2) a newly constructed
building addition or additions used primarily for regular kindergarten, elementary, or
secondary instruction that contains more than 20 percent of the square footage of the
previously existing building.
(d) Notwithstanding paragraph (b), a district may levy under this subdivision for the
purpose of leasing or renting a district-owned building or site to itself only if the amount is
needed by the district to make payments required by a lease purchase agreement, installment
purchase agreement, or other deferred payments agreement authorized by law, and the levy
meets the requirements of paragraph (c). A levy authorized for a district by the commissioner
under this paragraph may be in the amount needed by the district to make payments required
by a lease purchase agreement, installment purchase agreement, or other deferred payments
agreement authorized by law, provided that any agreement include a provision giving the
school districts the right to terminate the agreement annually without penalty.
(e) The total levy under this subdivision for a district for any year must not exceed $212
times the adjusted pupil units for the fiscal year to which the levy is attributable.
(f) For agreements for which a review and comment under section 123B.71, subdivision
8, have been submitted to the Department of Education after April 1, 1998, the term
"instructional purpose" as used in this subdivision excludes expenditures on stadiums.
(g) The commissioner of education may authorize a school district to exceed the limit
in paragraph (e) if the school district petitions the commissioner for approval. The
commissioner shall grant approval to a school district to exceed the limit in paragraph (e)
for not more than five years if the district meets the following criteria:
(1) the school district has been experiencing pupil enrollment growth in the preceding
five years;
(2) the purpose of the increased levy is in the long-term public interest;
(3) the purpose of the increased levy promotes colocation of government services; and
(4) the purpose of the increased levy is in the long-term interest of the district by avoiding
over construction of school facilities.
(h) A school district that is a member of an intermediate school district or other
cooperative unit under section 123A.24, subdivision 2, or a joint powers district under
section 471.59 may include in its authority under this section the costs associated with leases
of administrative and classroom space for programs of the intermediate school district or
other cooperative unit under section 123A.24, subdivision 2, or joint powers district under
section 471.59. This authority must not exceed $65 times the adjusted pupil units of the
member districts. This authority is in addition to any other authority authorized under this
section. The intermediate school district, other cooperative unit, or joint powers district may
specify which member districts will levy for lease costs under this paragraph.
(i) Notwithstanding paragraph (a), a district may levy under this subdivision for the
purpose of leasing administrative space if the district can demonstrate to the satisfaction of
the commissioner that the lease cost for the administrative space is no greater than the lease
cost for instructional space that the district would otherwise lease. The commissioner must
deny this levy authority unless the district passes a resolution stating its intent to lease
instructional space under this section if the commissioner does not grant authority under
this paragraph. The resolution must also certify that the lease cost for administrative space
under this paragraph is no greater than the lease cost for the district's proposed instructional
lease.
(j) Notwithstanding paragraph (a), a district may levy under this subdivision for the
district's proportionate share of deferred maintenance expenditures for a district-owned
building or site leased to a cooperative unit under section 123A.24, subdivision 2, or a joint
powers district under section 471.59 for any instructional purposes or for school storage.
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective the day following final enactment.
new text end
Sec. 2. new text begin GRADUATION FACILITIES; 2026 GRADUATION.
new text end
new text begin
The Department of Education must approve as part of the lease levy under Minnesota
Statutes, section 126C.40, subdivision 1, for taxes payable in 2027, the costs of any leases
for graduation ceremony facilities for high school students graduating at the end of the
2025-2026 school year, regardless of whether the lease was received by the Department of
Education prior to the district's graduation ceremony.
new text end
new text begin EFFECTIVE DATE. new text end
new text begin
This section is effective the day following final enactment.
new text end