1.1                          A bill for an act 
  1.2             relating to education; families and early childhood 
  1.3             education; kindergarten through grade 12; providing 
  1.4             for child care programs, early childhood programs, 
  1.5             prevention, self-sufficiency and lifelong learning, 
  1.6             general education, other general programs, nonpublic 
  1.7             pupil programs, charter schools, desegregation 
  1.8             programs, American Indian programs, accountability and 
  1.9             reform, programs for special populations, special 
  1.10            programs, facilities and technology, nutrition 
  1.11            programs, libraries, and state agencies; renaming the 
  1.12            department of children, families, and learning to 
  1.13            department of education; appropriating money; amending 
  1.14            Minnesota Statutes 2002, sections 15.01; 119A.01, 
  1.15            subdivision 2; 119A.02, subdivisions 2, 3; 119B.011, 
  1.16            subdivisions 8, 10; 119B.12, subdivision 2; 119B.13, 
  1.17            subdivision 2, by adding a subdivision; 120A.02; 
  1.18            120A.05, subdivisions 4, 7; 122A.61, subdivision 1; 
  1.19            123B.53, subdivision 4; 123B.57, subdivisions 1, 6; 
  1.20            123B.59, subdivisions 1, 2, 3, 5, by adding a 
  1.21            subdivision; 123B.75, subdivision 5; 123B.92, 
  1.22            subdivision 9; 124D.09, subdivision 13; 124D.11, 
  1.23            subdivisions 1, 4, 6, 9; 124D.128, subdivisions 2, 3, 
  1.24            6; 124D.135, subdivisions 1, 8; 124D.16, subdivision 
  1.25            6; 124D.20, subdivisions 3, 5, by adding subdivisions; 
  1.26            124D.52, subdivisions 1, 3; 124D.531, subdivisions 1, 
  1.27            2, 4, 7; 124D.59, subdivision 2; 124D.65, subdivision 
  1.28            5; 124D.86, subdivisions 3, 4, 5; 125A.76, 
  1.29            subdivisions 1, 4; 125A.79, subdivisions 1, 6; 
  1.30            126C.05, subdivisions 8, 14, 15, 17; 126C.10, 
  1.31            subdivisions 1, 3, 4, 7, 8, 17, 18, by adding 
  1.32            subdivisions; 126C.13, subdivision 4; 126C.17, 
  1.33            subdivisions 1, 2, 5, 7, 13; 126C.40, subdivisions 1, 
  1.34            2, 6; 126C.43, subdivisions 2, 3; 126C.45; 127A.05, 
  1.35            subdivisions 1, 3; 127A.45, subdivisions 2, 3, 10, 13, 
  1.36            14, 14a, 16; 268.052, subdivisions 2, 4; Laws 2001, 
  1.37            First Special Session chapter 6, article 2, section 
  1.38            64; proposing coding for new law in Minnesota 
  1.39            Statutes, chapters 124D; 127A; repealing Minnesota 
  1.40            Statutes 2002, sections 119A.01, subdivision 1; 
  1.41            119A.46; 120B.23; 122A.62; 122A.64; 122A.65; 123B.59, 
  1.42            subdivisions 6, 7; 124D.09, subdivision 15; 124D.115; 
  1.43            124D.1156; 124D.118; 124D.17; 124D.21; 124D.221; 
  1.44            124D.54; 124D.89; 125A.79, subdivision 2; 126C.01, 
  1.45            subdivision 9; 126C.05, subdivision 12; 126C.10, 
  1.46            subdivision 5; 126C.445; 126C.455; Laws 1993, chapter 
  2.1             224, article 8, section 20, subdivision 2, as amended; 
  2.2             Laws 2000, chapter 489, article 2, section 36, as 
  2.3             amended; Laws 2001, First Special Session chapter 6, 
  2.4             article 2, section 70. 
  2.5   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  2.6                              ARTICLE 1
  2.7                          GENERAL EDUCATION
  2.8      Section 1.  Minnesota Statutes 2002, section 122A.61, 
  2.9   subdivision 1, is amended to read: 
  2.10     Subdivision 1.  [STAFF DEVELOPMENT REVENUE.] A district is 
  2.11  required to reserve an amount equal to at least two percent of 
  2.12  the basic revenue under section 126C.10, subdivision 
  2.13  2, remaining after subtracting $415 times the district's 
  2.14  adjusted marginal cost pupil units, for in-service education for 
  2.15  programs under section 120B.22, subdivision 2, for staff 
  2.16  development plans, including plans for challenging instructional 
  2.17  activities and experiences under section 122A.60, and for 
  2.18  curriculum development and programs, other in-service education, 
  2.19  teachers' workshops, teacher conferences, the cost of substitute 
  2.20  teachers staff development purposes, preservice and in-service 
  2.21  education for special education professionals and 
  2.22  paraprofessionals, and other related costs for staff development 
  2.23  efforts.  A district may annually waive the requirement to 
  2.24  reserve their basic revenue under this section if a majority 
  2.25  vote of the licensed teachers in the district and a majority 
  2.26  vote of the school board agree to a resolution to waive the 
  2.27  requirement.  A district in statutory operating debt is exempt 
  2.28  from reserving basic revenue according to this section.  
  2.29  Districts may expend an additional amount of unreserved revenue 
  2.30  for staff development based on their needs.  With the exception 
  2.31  of amounts reserved for staff development from revenues 
  2.32  allocated directly to school sites, the board must initially 
  2.33  allocate 50 percent of the reserved revenue to each school site 
  2.34  in the district on a per teacher basis, which must be retained 
  2.35  by the school site until used.  The board may retain 25 percent 
  2.36  to be used for district wide staff development efforts.  The 
  2.37  remaining 25 percent of the revenue must be used to make grants 
  3.1   to school sites for best practices methods.  A grant may be used 
  3.2   for any purpose authorized under section 120B.22, subdivision 2, 
  3.3   122A.60, or for the costs of curriculum development and 
  3.4   programs, other in-service education, teachers' workshops, 
  3.5   teacher conferences, substitute teachers for staff development 
  3.6   purposes, and other staff development efforts, and determined by 
  3.7   the site professional development team.  The site professional 
  3.8   development team must demonstrate to the school board the extent 
  3.9   to which staff at the site have met the outcomes of the 
  3.10  program.  The board may withhold a portion of initial allocation 
  3.11  of revenue if the staff development outcomes are not being met. 
  3.12     Sec. 2.  Minnesota Statutes 2002, section 123B.75, 
  3.13  subdivision 5, is amended to read: 
  3.14     Subd. 5.  [LEVY RECOGNITION.] (a) "School district tax 
  3.15  settlement revenue" means the current, delinquent, and 
  3.16  manufactured home property tax receipts collected by the county 
  3.17  and distributed to the school district. 
  3.18     (b) In June of 2001, the school district must recognize as 
  3.19  revenue, in the fund for which the levy was made, the lesser of: 
  3.20     (1) the sum of May, June, and July school district tax 
  3.21  settlement revenue received in that calendar year plus general 
  3.22  education aid according to section 126C.13, subdivision 4, 
  3.23  received in July and August of that calendar year; or 
  3.24     (2) the sum of: 
  3.25     (i) 31 percent of the referendum levy certified in the 
  3.26  prior calendar year according to section 126C.17, subdivision 9; 
  3.27  plus 
  3.28     (ii) the entire amount of the levy certified in the prior 
  3.29  calendar year according to sections 124D.86, subdivision 4, for 
  3.30  school districts receiving revenue under 124D.86, subdivision 3, 
  3.31  clauses (1), (2), and (3); 126C.41, subdivisions 1, 2, and 3, 
  3.32  paragraphs (4), (5), and (6); 126C.43, subdivision 2; and 
  3.33  126C.48, subdivision 6.  
  3.34     (c) For fiscal year 2002 and later years, In June of each 
  3.35  year 2003, the school district must recognize as revenue, in the 
  3.36  fund for which the levy was made, the lesser of: 
  4.1      (1) the sum of May, June, and July school district tax 
  4.2   settlement revenue received in that calendar year, plus general 
  4.3   education aid according to section 126C.13, subdivision 4, 
  4.4   received in July and August of that calendar year; or 
  4.5      (2) the sum of: 
  4.6      (i) 31 percent of the referendum levy certified according 
  4.7   to section 126C.17, in calendar year 2000; plus 
  4.8      (ii) the entire amount of the levy certified in the prior 
  4.9   calendar year according to section 124D.86, subdivision 4, for 
  4.10  school districts receiving revenue under sections 124D.86, 
  4.11  subdivision 3, clauses (1), and (2), and (3); 126C.41, 
  4.12  subdivisions 1, 2, and 3, paragraphs (4) (b), (5) (c), 
  4.13  and (6) (d); 126C.43, subdivision 2; and 126C.48, subdivision 6. 
  4.14     (c) For fiscal year 2004 and later years, in June of each 
  4.15  year, the school district must recognize as revenue, in the fund 
  4.16  for which the levy was made, the lesser of: 
  4.17     (1) the sum of May, June, and July school district tax 
  4.18  settlement revenue received in that calendar year, plus general 
  4.19  education aid according to section 126C.13, subdivision 4, 
  4.20  received in July and August of that calendar year; or 
  4.21     (2) the sum of: 
  4.22     (i) the greater of 36.6 percent of the referendum levy 
  4.23  certified according to section 126.17, in the prior calendar 
  4.24  year or 31 percent of the referendum levy certified according to 
  4.25  section 126C.17, in calendar year 2000; plus 
  4.26     (ii) the entire amount of the levy certified in the prior 
  4.27  calendar year according to section 124D.86, subdivision 4, for 
  4.28  school districts receiving revenue under sections 124D.86, 
  4.29  subdivision 3, clauses (1) and (2); 126C.41, subdivisions 1, 2, 
  4.30  and 3, paragraphs (b), (c), and (d); 126C.43, subdivision 2; and 
  4.31  126C.48, subdivision 6; plus 
  4.32     (iii) 36.6 percent of the amount of the levy certified in 
  4.33  the prior calendar year for the school district's general and 
  4.34  community service funds, plus or minus auditor's adjustments, 
  4.35  not including levy portions that are assumed by the state, that 
  4.36  remains after subtracting the referendum levy certified 
  5.1   according to section 126C.17 and the amount recognized according 
  5.2   to clause (ii). 
  5.3      Sec. 3.  Minnesota Statutes 2002, section 124D.09, 
  5.4   subdivision 13, is amended to read: 
  5.5      Subd. 13.  [FINANCIAL ARRANGEMENTS.] For a pupil enrolled 
  5.6   in a course under this section, the department must make 
  5.7   payments according to this subdivision for courses that were 
  5.8   taken for secondary credit.  
  5.9      The department must not make payments to a school district 
  5.10  or post-secondary institution for a course taken for 
  5.11  post-secondary credit only.  The department must not make 
  5.12  payments to a post-secondary institution for a course from which 
  5.13  a student officially withdraws during the first 14 days of the 
  5.14  quarter or semester or who has been absent from the 
  5.15  post-secondary institution for the first 15 consecutive school 
  5.16  days of the quarter or semester and is not receiving instruction 
  5.17  in the home or hospital. 
  5.18     A post-secondary institution shall receive the following: 
  5.19     (1) for an institution granting quarter credit, the 
  5.20  reimbursement per credit hour shall be an amount equal to 88 
  5.21  percent of the product of the formula allowance minus $415, 
  5.22  multiplied by 1.3, and divided by 45; or 
  5.23     (2) for an institution granting semester credit, the 
  5.24  reimbursement per credit hour shall be an amount equal to 88 
  5.25  percent of the product of the general revenue formula 
  5.26  allowance minus $415, multiplied by 1.3, and divided by 30. 
  5.27     The department must pay to each post-secondary institution 
  5.28  100 percent of the amount in clause (1) or (2) within 30 days of 
  5.29  receiving initial enrollment information each quarter or 
  5.30  semester.  If changes in enrollment occur during a quarter or 
  5.31  semester, the change shall be reported by the post-secondary 
  5.32  institution at the time the enrollment information for the 
  5.33  succeeding quarter or semester is submitted.  At any time the 
  5.34  department notifies a post-secondary institution that an 
  5.35  overpayment has been made, the institution shall promptly remit 
  5.36  the amount due.  
  6.1      Sec. 4.  Minnesota Statutes 2002, section 124D.128, 
  6.2   subdivision 2, is amended to read: 
  6.3      Subd. 2.  [COMMISSIONER DESIGNATION.] (a) An area learning 
  6.4   center designated by the state must be a site.  To be 
  6.5   designated, a district or center must demonstrate to the 
  6.6   commissioner that it will: 
  6.7      (1) provide a program of instruction that permits pupils to 
  6.8   receive instruction throughout the entire year; and. 
  6.9      (2) maintain a record system that, for purposes of section 
  6.10  126C.05, permits identification of membership attributable to 
  6.11  pupils participating in the program.  The record system and 
  6.12  identification must ensure that the program will not have the 
  6.13  effect of increasing the total number of pupil units 
  6.14  attributable to an individual pupil as a result of a learning 
  6.15  year program.  The record system must include the date the pupil 
  6.16  originally enrolled in a learning year program, the pupil's 
  6.17  grade level, the date of each grade promotion, the average daily 
  6.18  membership generated in each grade level, the number of credits 
  6.19  or standards earned, and the number needed to graduate. 
  6.20     (b) A student who has not completed a school district's 
  6.21  graduation requirements may continue to enroll in courses the 
  6.22  student must complete in order to graduate until the student 
  6.23  satisfies the district's graduation requirements or the student 
  6.24  is 21 years old, whichever comes first. 
  6.25     Sec. 5.  Minnesota Statutes 2002, section 124D.128, 
  6.26  subdivision 3, is amended to read: 
  6.27     Subd. 3.  [STUDENT PLANNING.] A district must inform all 
  6.28  pupils and their parents about the learning year program and 
  6.29  that participation in the program is optional.  A continual 
  6.30  learning plan must be developed at least annually for each pupil 
  6.31  with the participation of the pupil, parent or guardian, 
  6.32  teachers, and other staff; each participant must sign and date 
  6.33  the plan.  The plan must specify the learning experiences that 
  6.34  must occur during the entire fiscal year and, for secondary 
  6.35  students, for graduation.  The plan must include:  
  6.36     (1) the pupil's learning objectives and experiences, 
  7.1   including courses or credits the pupil plans to complete each 
  7.2   year and, for a secondary pupil, the graduation requirements the 
  7.3   student must complete; 
  7.4      (2) the assessment measurements used to evaluate a pupil's 
  7.5   objectives; 
  7.6      (3) requirements for grade level or other appropriate 
  7.7   progression; and 
  7.8      (4) for pupils generating more than one average daily 
  7.9   membership in a given grade not making grade progression, an 
  7.10  indication of which objectives were unmet. 
  7.11  The plan may be modified to conform to district schedule 
  7.12  changes.  The district may not modify the plan if the 
  7.13  modification would result in delaying the student's time of 
  7.14  graduation.  
  7.15     Sec. 6.  Minnesota Statutes 2002, section 124D.128, 
  7.16  subdivision 6, is amended to read: 
  7.17     Subd. 6.  [REVENUE COMPUTATION AND REPORTING.] Aid and levy 
  7.18  revenue computations must be based on the total number of hours 
  7.19  of education programs for pupils in average daily membership for 
  7.20  each fiscal year.  Average daily membership shall be computed 
  7.21  under section 126C.05, subdivision 15.  Hours of participation 
  7.22  that occur after the close of the regular 2003-2004 
  7.23  instructional year and before July 1, 2004, must be attributed 
  7.24  to the following fiscal year.  For revenue computation purposes, 
  7.25  the learning year program shall generate revenue based on the 
  7.26  formulas for the fiscal year in which the services are 
  7.27  provided.  The dates a participating pupil is promoted must be 
  7.28  reported in a timely manner to the department. 
  7.29     Sec. 7.  Minnesota Statutes 2002, section 124D.59, 
  7.30  subdivision 2, is amended to read: 
  7.31     Subd. 2.  [PUPIL OF LIMITED ENGLISH PROFICIENCY.] 
  7.32  (a) "Pupil of limited English proficiency" means a pupil in 
  7.33  kindergarten through grade 12 who meets the following 
  7.34  requirements: 
  7.35     (1) the pupil in kindergarten through grade 12, as declared 
  7.36  by a parent or guardian first learned a language other than 
  8.1   English, comes from a home where the language usually spoken is 
  8.2   other than English, or usually speaks a language other than 
  8.3   English; and 
  8.4      (2) for a pupil in kindergarten through grade 2, the pupil 
  8.5   is determined by developmentally appropriate measures, which 
  8.6   might include observations, teacher judgment, parent 
  8.7   recommendations, or developmentally appropriate assessment 
  8.8   instruments, to lack the necessary English skills to participate 
  8.9   fully in classes taught in English; or. 
  8.10     (3) the (b) Notwithstanding paragraph (a), a pupil in 
  8.11  grades 3 4 through 12 scores who was enrolled in a Minnesota 
  8.12  public school on the dates during the previous school year when 
  8.13  a commissioner provided assessment that measures the pupil's 
  8.14  emerging academic English was administered, shall not be counted 
  8.15  as a pupil of limited English proficiency in calculating limited 
  8.16  English proficiency pupil units under section 126C.05, 
  8.17  subdivision 17, and shall not generate state limited English 
  8.18  proficiency aid under section 124D.65, subdivision 5, unless the 
  8.19  pupil scored below the state cutoff score on an assessment 
  8.20  measuring emerging academic English provided by the commissioner 
  8.21  during the previous school year. 
  8.22     (c) Notwithstanding paragraphs (a) and (b), a pupil in 
  8.23  kindergarten through grade 12 shall not be counted as a pupil of 
  8.24  limited English proficiency in calculating limited English 
  8.25  proficiency pupil units under section 126C.05, subdivision 17, 
  8.26  and shall not generate state limited English proficiency aid 
  8.27  under section 124D.65, subdivision 5, if: 
  8.28     (i) the pupil is not enrolled during the current fiscal 
  8.29  year in an educational program for pupils of limited English 
  8.30  proficiency in accordance with sections 124D.58 to 124D.64; or 
  8.31     (ii) the pupil has generated five or more years of average 
  8.32  daily membership in Minnesota public schools since July 1, 1996. 
  8.33     Sec. 8.  Minnesota Statutes 2002, section 124D.65, 
  8.34  subdivision 5, is amended to read: 
  8.35     Subd. 5.  [SCHOOL DISTRICT LEP REVENUE.] (a) A school 
  8.36  district's limited English proficiency programs revenue for 
  9.1   fiscal year 2000 equals the state total limited English 
  9.2   proficiency programs revenue, minus the amount determined under 
  9.3   paragraph (b), times the ratio of the district's adjusted 
  9.4   limited English proficiency programs base revenue to the state 
  9.5   total adjusted limited English proficiency programs base revenue.
  9.6      (b) Notwithstanding paragraph (a), if the limited English 
  9.7   proficiency programs base revenue for a district equals zero, 
  9.8   the limited English proficiency programs revenue equals the sum 
  9.9   of the following amounts, computed using current year data: 
  9.10     (1) 68 percent of the salary of one full-time equivalent 
  9.11  teacher for each 40 pupils of limited English proficiency 
  9.12  enrolled, or 68 percent of the salary of one-half of a full-time 
  9.13  teacher in a district with 20 or fewer pupils of limited English 
  9.14  proficiency enrolled; and 
  9.15     (2) for supplies and equipment purchased or rented for use 
  9.16  in the instruction of pupils of limited English proficiency an 
  9.17  amount equal to 47 percent of the sum actually spent by the 
  9.18  district but not to exceed an average of $47 in any one school 
  9.19  year for each pupil of limited English proficiency receiving 
  9.20  instruction. 
  9.21     (c) A district's limited English proficiency programs 
  9.22  revenue for fiscal year 2001 2004 and later equals the product 
  9.23  of $584 $700 times the greater of 20 or the number of adjusted 
  9.24  marginal cost average daily membership of eligible pupils of 
  9.25  limited English proficiency enrolled in the district during the 
  9.26  current fiscal year. 
  9.27     (d) A pupil ceases to generate state limited English 
  9.28  proficiency aid in the school year following the school year in 
  9.29  which the pupil attains the state cutoff score on a 
  9.30  commissioner-provided assessment that measures the pupil's 
  9.31  emerging academic English. 
  9.32     Sec. 9.  Minnesota Statutes 2002, section 126C.05, 
  9.33  subdivision 8, is amended to read: 
  9.34     Subd. 8.  [AVERAGE DAILY MEMBERSHIP.] Membership for pupils 
  9.35  in grades kindergarten through 12 and for prekindergarten pupils 
  9.36  with disabilities shall mean the number of pupils on the current 
 10.1   roll of the school, counted from the date of entry until 
 10.2   withdrawal.  The date of withdrawal shall mean the day the pupil 
 10.3   permanently leaves the school or the date it is officially known 
 10.4   that the pupil has left or has been legally excused.  However, a 
 10.5   pupil, regardless of age, who has been absent from school for 15 
 10.6   consecutive school days during the regular school year or for 
 10.7   five consecutive school days during summer school or 
 10.8   intersession classes of flexible school year programs without 
 10.9   receiving instruction in the home or hospital shall be dropped 
 10.10  from the roll and classified as withdrawn.  Nothing in this 
 10.11  section shall be construed as waiving the compulsory attendance 
 10.12  provisions cited in section 120A.22.  Average daily membership 
 10.13  equals the sum for all pupils of the number of days of the 
 10.14  school year each pupil is enrolled in the district's schools 
 10.15  divided by the number of days the schools are in session.  Days 
 10.16  of summer school or intersession classes of flexible school year 
 10.17  programs are only included in the computation of membership for 
 10.18  pupils with a disability not appropriately served primarily in 
 10.19  the regular classroom.  A student must not be counted as more 
 10.20  than one pupil in average daily membership under this section.  
 10.21  When the initial total average daily membership exceeds one for 
 10.22  a pupil enrolled in more than one school district during the 
 10.23  fiscal year, each district's average daily membership must be 
 10.24  reduced proportionately. 
 10.25     Sec. 10.  Minnesota Statutes 2002, section 126C.05, 
 10.26  subdivision 14, is amended to read: 
 10.27     Subd. 14.  [COMPUTING PUPIL UNITS FOR A PRIOR YEAR.] In 
 10.28  computing pupil units for a prior year, the number of pupil 
 10.29  units shall be adjusted to reflect any change for the current 
 10.30  year in relative weightings by grade level or category of 
 10.31  special assistance, any change in measurement from average daily 
 10.32  attendance to average daily membership, any change in the limit 
 10.33  on average daily membership that can be generated by a pupil for 
 10.34  a fiscal year as provided in subdivisions 8 and 15, and any 
 10.35  change in school district boundaries, but not for the addition 
 10.36  for the first time in the current year of a specified category 
 11.1   of special assistance as provided in subdivision 1, clause (4). 
 11.2      Sec. 11.  Minnesota Statutes 2002, section 126C.05, 
 11.3   subdivision 15, is amended to read: 
 11.4      Subd. 15.  [LEARNING YEAR PUPIL UNITS.] (a) When a pupil is 
 11.5   enrolled in a learning year program under section 124D.128, an 
 11.6   area learning center under sections 123A.05 and 123A.06, an 
 11.7   alternative program approved by the commissioner, or a contract 
 11.8   alternative program under section 124D.68, subdivision 3, 
 11.9   paragraph (d), or subdivision 3a, for more than 1,020 hours in a 
 11.10  school year for a secondary student, more than 935 hours in a 
 11.11  school year for an elementary student, or more than 425 hours in 
 11.12  a school year for a kindergarten student without a disability, 
 11.13  that pupil may be counted as more than one pupil in average 
 11.14  daily membership.  The amount in excess of one pupil must be 
 11.15  determined by the ratio of the number of hours of instruction 
 11.16  provided to that pupil in excess of:  (i) the greater of 1,020 
 11.17  hours or the number of hours required for a full-time secondary 
 11.18  pupil in the district to 1,020 for a secondary pupil; (ii) the 
 11.19  greater of 935 hours or the number of hours required for a 
 11.20  full-time elementary pupil in the district to 935 for an 
 11.21  elementary pupil in grades 1 through 6; and (iii) the greater of 
 11.22  425 hours or the number of hours required for a full-time 
 11.23  kindergarten student without a disability in the district to 425 
 11.24  for a kindergarten student without a disability.  Hours that 
 11.25  occur after the close of the instructional year in June shall be 
 11.26  attributable to the following fiscal year.  A kindergarten 
 11.27  student must not be counted as more than 1.2 pupils in average 
 11.28  daily membership under this subdivision.  A student in grades 1 
 11.29  through 12 must not be counted as more than 1.5 pupils one pupil 
 11.30  in average daily membership under this subdivision. 
 11.31     (b)(i) To receive general education revenue for a pupil in 
 11.32  an alternative program that has an independent study component, 
 11.33  a district must meet the requirements in this paragraph.  The 
 11.34  district must develop, for the pupil, a continual learning plan 
 11.35  consistent with section 124D.128, subdivision 3.  Each school 
 11.36  district that has a state-approved public alternative program 
 12.1   must reserve revenue in an amount equal to at least 90 percent 
 12.2   of the district average general education revenue per pupil unit 
 12.3   less compensatory revenue per pupil unit times the number of 
 12.4   pupil units generated by students attending a state-approved 
 12.5   public alternative program.  The amount of reserved revenue 
 12.6   available under this subdivision may only be spent for program 
 12.7   costs associated with the state-approved public alternative 
 12.8   program.  Compensatory revenue must be allocated according to 
 12.9   section 126C.15, subdivision 2. 
 12.10     (ii) General education revenue for a pupil in an approved 
 12.11  alternative program without an independent study component must 
 12.12  be prorated for a pupil participating for less than a full year, 
 12.13  or its equivalent.  The district must develop a continual 
 12.14  learning plan for the pupil, consistent with section 124D.128, 
 12.15  subdivision 3.  Each school district that has a state-approved 
 12.16  public alternative program must reserve revenue in an amount 
 12.17  equal to at least 90 percent of the district average general 
 12.18  education revenue per pupil unit less compensatory revenue per 
 12.19  pupil unit times the number of pupil units generated by students 
 12.20  attending a state-approved public alternative program.  The 
 12.21  amount of reserved revenue available under this subdivision may 
 12.22  only be spent for program costs associated with the 
 12.23  state-approved public alternative program.  Compensatory revenue 
 12.24  must be allocated according to section 126C.15, subdivision 2.  
 12.25     (iii) General education revenue for a pupil in an approved 
 12.26  alternative program that has an independent study component must 
 12.27  be paid for each hour of teacher contact time and each hour of 
 12.28  independent study time completed toward a credit or graduation 
 12.29  standards necessary for graduation.  Average daily membership 
 12.30  for a pupil shall equal the lesser of one or the number of hours 
 12.31  of teacher contact time and independent study time divided by 
 12.32  1,020. 
 12.33     (iv) For an alternative program having an independent study 
 12.34  component, the commissioner shall require a description of the 
 12.35  courses in the program, the kinds of independent study involved, 
 12.36  the expected learning outcomes of the courses, and the means of 
 13.1   measuring student performance against the expected outcomes.  
 13.2      Sec. 12.  Minnesota Statutes 2002, section 126C.05, 
 13.3   subdivision 17, is amended to read: 
 13.4      Subd. 17.  [LEP PUPIL UNITS.] (a) Limited English 
 13.5   proficiency pupil units for fiscal year 1998 2004 and thereafter 
 13.6   shall be determined according to this subdivision. 
 13.7      (b) The limited English proficiency concentration 
 13.8   percentage for a district equals the product of 100 times the 
 13.9   ratio of: 
 13.10     (1) the number of eligible pupils of limited English 
 13.11  proficiency in average daily membership enrolled in the district 
 13.12  during the current fiscal year; to 
 13.13     (2) the number of pupils in average daily membership 
 13.14  enrolled in the district. 
 13.15     (c) The limited English proficiency pupil units for 
 13.16  each eligible pupil enrolled in a program for pupils of limited 
 13.17  English proficiency in accordance with sections 124D.58 to 
 13.18  124D.64 in average daily membership equals the lesser of one or 
 13.19  the quotient obtained by dividing the limited English 
 13.20  proficiency concentration percentage for the pupil's district of 
 13.21  enrollment by 11.5. 
 13.22     (d) Limited English proficiency pupil units shall be 
 13.23  counted by the district of enrollment. 
 13.24     (e) Notwithstanding paragraph (d), for the purposes of this 
 13.25  subdivision, pupils enrolled in a cooperative or intermediate 
 13.26  school district shall be counted by the district of residence. 
 13.27     (f) For the purposes of this subdivision, the terms defined 
 13.28  in section 124D.59 have the same meaning. 
 13.29     Sec. 13.  Minnesota Statutes 2002, section 126C.10, 
 13.30  subdivision 1, is amended to read: 
 13.31     Subdivision 1.  [GENERAL EDUCATION REVENUE.] (a) For fiscal 
 13.32  year 2002, the general education revenue for each district 
 13.33  equals the sum of the district's basic revenue, basic skills 
 13.34  revenue, training and experience revenue, secondary sparsity 
 13.35  revenue, elementary sparsity revenue, transportation sparsity 
 13.36  revenue, total operating capital revenue, equity revenue, 
 14.1   transition revenue, and supplemental revenue. 
 14.2      (b) For fiscal year 2003 and later, the general education 
 14.3   revenue for each district equals the sum of the district's basic 
 14.4   revenue, basic skills revenue, training and experience revenue, 
 14.5   secondary sparsity revenue, elementary sparsity revenue, 
 14.6   transportation sparsity revenue, total operating capital 
 14.7   revenue, and equity revenue. 
 14.8      (b) For fiscal year 2004 and later, the general education 
 14.9   revenue for each district equals the sum of the district's basic 
 14.10  revenue, basic skills revenue, secondary sparsity revenue, 
 14.11  elementary sparsity revenue, transportation sparsity revenue, 
 14.12  total operating capital revenue, equity revenue, and transition 
 14.13  revenue. 
 14.14     Sec. 14.  Minnesota Statutes 2002, section 126C.10, 
 14.15  subdivision 3, is amended to read: 
 14.16     Subd. 3.  [COMPENSATORY EDUCATION REVENUE.] For fiscal year 
 14.17  2004 and later, the compensatory education revenue for each 
 14.18  building in the district equals the formula allowance minus $415 
 14.19  times the compensation revenue pupil units computed according to 
 14.20  section 126C.05, subdivision 3.  Revenue shall be paid to the 
 14.21  district and must be allocated according to section 126C.15, 
 14.22  subdivision 2. 
 14.23     Sec. 15.  Minnesota Statutes 2002, section 126C.10, 
 14.24  subdivision 4, is amended to read: 
 14.25     Subd. 4.  [BASIC SKILLS REVENUE.] (a) For fiscal year 2002, 
 14.26  a school district's basic skills revenue equals the sum of: 
 14.27     (1) compensatory revenue under subdivision 3; plus 
 14.28     (2) limited English proficiency revenue according to 
 14.29  section 124D.65, subdivision 5; plus 
 14.30     (3) $190 times the limited English proficiency pupil units 
 14.31  according to section 126C.05, subdivision 17; plus 
 14.32     (4) $22.50 times the number of adjusted marginal cost pupil 
 14.33  units in kindergarten to grade 8. 
 14.34     (b) For fiscal year 2003 2004 and later, a school 
 14.35  district's basic skills revenue equals the sum of: 
 14.36     (1) compensatory revenue under subdivision 3; plus 
 15.1      (2) limited English proficiency revenue under section 
 15.2   124D.65, subdivision 5; plus 
 15.3      (3) $190 $250 times the limited English proficiency pupil 
 15.4   units under section 126C.05, subdivision 17. 
 15.5      Sec. 16.  Minnesota Statutes 2002, section 126C.10, 
 15.6   subdivision 7, is amended to read: 
 15.7      Subd. 7.  [SECONDARY SPARSITY REVENUE.] (a) A district's 
 15.8   secondary sparsity revenue for a school year equals the sum of 
 15.9   the results of the following calculation for each qualifying 
 15.10  high school in the district: 
 15.11     (1) the formula allowance for the school year minus $415, 
 15.12  multiplied by 
 15.13     (2) the secondary average daily membership of pupils served 
 15.14  in the high school, multiplied by 
 15.15     (3) the quotient obtained by dividing 400 minus the 
 15.16  secondary average daily membership by 400 plus the secondary 
 15.17  daily membership, multiplied by 
 15.18     (4) the lesser of 1.5 or the quotient obtained by dividing 
 15.19  the isolation index minus 23 by ten. 
 15.20     (b) A newly formed district that is the result of districts 
 15.21  combining under the cooperation and combination program or 
 15.22  consolidating under section 123A.48 must receive secondary 
 15.23  sparsity revenue equal to the greater of:  (1) the amount 
 15.24  calculated under paragraph (a) for the combined district; or (2) 
 15.25  the sum of the amounts of secondary sparsity revenue the former 
 15.26  districts had in the year prior to consolidation, increased for 
 15.27  any subsequent changes in the secondary sparsity formula. 
 15.28     Sec. 17.  Minnesota Statutes 2002, section 126C.10, 
 15.29  subdivision 8, is amended to read: 
 15.30     Subd. 8.  [ELEMENTARY SPARSITY REVENUE.] A district's 
 15.31  elementary sparsity revenue equals the sum of the following 
 15.32  amounts for each qualifying elementary school in the district:  
 15.33     (1) the formula allowance for the year minus $415, 
 15.34  multiplied by 
 15.35     (2) the elementary average daily membership of pupils 
 15.36  served in the school, multiplied by 
 16.1      (3) the quotient obtained by dividing 140 minus the 
 16.2   elementary average daily membership by 140 plus the average 
 16.3   daily membership. 
 16.4      Sec. 18.  Minnesota Statutes 2002, section 126C.10, 
 16.5   subdivision 17, is amended to read: 
 16.6      Subd. 17.  [TRANSPORTATION SPARSITY DEFINITIONS.] The 
 16.7   definitions in this subdivision apply to subdivisions 18 and 19. 
 16.8      (a) "Sparsity index" for a district means the greater of .2 
 16.9   or the ratio of the square mile area of the district to the 
 16.10  resident pupil units of the district. 
 16.11     (b) "Density index" for a district means the ratio of the 
 16.12  square mile area of the district to the resident pupil units of 
 16.13  the district.  However, the density index for a district cannot 
 16.14  be greater than .2 or less than .005. 
 16.15     (c) "Fiscal year 1996 base allowance" for a district means 
 16.16  the result of the following computation: 
 16.17     (1) sum the following amounts: 
 16.18     (i) the fiscal year 1996 regular transportation revenue for 
 16.19  the district according to Minnesota Statutes 1996, section 
 16.20  124.225, subdivision 7d, paragraph (a), excluding the revenue 
 16.21  attributable nonpublic school pupils and to pupils with 
 16.22  disabilities receiving special transportation services; plus 
 16.23     (ii) the fiscal year 1996 nonregular transportation revenue 
 16.24  for the district according to Minnesota Statutes 1996, section 
 16.25  124.225, subdivision 7d, paragraph (b), excluding the revenue 
 16.26  for desegregation transportation according to Minnesota Statutes 
 16.27  1996, section 124.225, subdivision 1, paragraph (c), clause (4), 
 16.28  and the revenue attributable to nonpublic school pupils and to 
 16.29  pupils with disabilities receiving special transportation 
 16.30  services or board and lodging; plus 
 16.31     (iii) the fiscal year 1996 excess transportation levy for 
 16.32  the district according to Minnesota Statutes 1996, section 
 16.33  124.226, subdivision 5, excluding the levy attributable to 
 16.34  nonpublic school pupils; plus 
 16.35     (iv) the fiscal year 1996 late activity bus levy for the 
 16.36  district according to Minnesota Statutes 1996, section 124.226, 
 17.1   subdivision 9, excluding the levy attributable to nonpublic 
 17.2   school pupils; plus 
 17.3      (v) an amount equal to one-third of the fiscal year 1996 
 17.4   bus depreciation for the district according to Minnesota 
 17.5   Statutes 1996, section 124.225, subdivision 1, paragraph (b), 
 17.6   clauses (2), (3), and (4). 
 17.7      (2) divide the result in clause (1) by the district's 
 17.8   1995-1996 fund balance pupil units. 
 17.9      Sec. 19.  Minnesota Statutes 2002, section 126C.10, 
 17.10  subdivision 18, is amended to read: 
 17.11     Subd. 18.  [TRANSPORTATION SPARSITY REVENUE ALLOWANCE.] (a) 
 17.12  A district's transportation sparsity allowance equals the 
 17.13  greater of zero or the result of the following computation: 
 17.14     (i) Multiply the formula allowance according to subdivision 
 17.15  2 minus $415, by .1469. 
 17.16     (ii) Multiply the result in clause (i) by the district's 
 17.17  sparsity index raised to the 26/100 power. 
 17.18     (iii) Multiply the result in clause (ii) by the district's 
 17.19  density index raised to the 13/100 power. 
 17.20     (iv) Multiply the formula allowance minus $415 according to 
 17.21  subdivision 2, by .0485. 
 17.22     (v) Subtract the result in clause (iv) from the result in 
 17.23  clause (iii). 
 17.24     (b) Transportation sparsity revenue is equal to the 
 17.25  transportation sparsity allowance times the adjusted marginal 
 17.26  cost pupil units. 
 17.27     Sec. 20.  Minnesota Statutes 2002, section 126C.10, is 
 17.28  amended by adding a subdivision to read: 
 17.29     Subd. 29.  [EQUITY LEVY.] To obtain equity revenue for 
 17.30  fiscal year 2005 and later, a district may levy an amount not 
 17.31  more than the product of its equity revenue for the fiscal year 
 17.32  times the lesser of one or the ratio of its referendum market 
 17.33  value per resident marginal cost pupil unit to $476,000. 
 17.34     Sec. 21.  Minnesota Statutes 2002, section 126C.10, is 
 17.35  amended by adding a subdivision to read: 
 17.36     Subd. 30.  [EQUITY AID.] A district's equity aid equals its 
 18.1   equity revenue minus its equity levy times the ratio of the 
 18.2   actual amount levied to the permitted levy. 
 18.3      Sec. 22.  Minnesota Statutes 2002, section 126C.10, is 
 18.4   amended by adding a subdivision to read: 
 18.5      Subd. 31.  [TRANSITION REVENUE.] (a) A district's 
 18.6   transition allowance for fiscal years 2004 through 2008 equals 
 18.7   the greater of zero or the product of the ratio of the number of 
 18.8   adjusted marginal cost pupil units the district would have 
 18.9   counted for fiscal year 2004 under Minnesota Statutes 2002 to 
 18.10  the district's adjusted marginal cost pupil units for fiscal 
 18.11  year 2004, times the difference between:  (i) the lesser of the 
 18.12  district's general education revenue per adjusted marginal cost 
 18.13  pupil unit for fiscal year 2003 or the amount of general 
 18.14  education revenue the district would have received per adjusted 
 18.15  marginal cost pupil unit for fiscal year 2004 according to 
 18.16  Minnesota Statutes 2002, and (ii) the district's general 
 18.17  education revenue for fiscal year 2004 excluding transition 
 18.18  revenue divided by the number of adjusted marginal cost pupil 
 18.19  units the district would have counted for fiscal year 2004 under 
 18.20  Minnesota Statutes 2002.  A district's transition allowance for 
 18.21  fiscal year 2009 and later is zero. 
 18.22     (b) A district's transition revenue for fiscal year 2004 
 18.23  and later equals the product of the district's transition 
 18.24  allowance times the district's adjusted marginal cost pupil 
 18.25  units. 
 18.26     Sec. 23.  Minnesota Statutes 2002, section 126C.10, is 
 18.27  amended by adding a subdivision to read: 
 18.28     Subd. 32.  [TRANSITION LEVY.] To obtain transition revenue 
 18.29  for fiscal year 2005 and later, a district may levy an amount 
 18.30  not more than the product of its transition revenue for the 
 18.31  fiscal year times the lesser of one or the ratio of its 
 18.32  referendum market value per resident marginal cost pupil unit to 
 18.33  $476,000. 
 18.34     Sec. 24.  Minnesota Statutes 2002, section 126C.10, is 
 18.35  amended by adding a subdivision to read: 
 18.36     Subd. 33.  [TRANSITION AID.] (a) For fiscal year 2004, a 
 19.1   district's transition aid equals its transition revenue. 
 19.2      (b) For fiscal year 2005 and later, a district's transition 
 19.3   aid equals its transition revenue minus its transition levy 
 19.4   times the ratio of the actual amount levied to the permitted 
 19.5   levy. 
 19.6      Sec. 25.  Minnesota Statutes 2002, section 126C.13, 
 19.7   subdivision 4, is amended to read: 
 19.8      Subd. 4.  [GENERAL EDUCATION AID.] (a) For fiscal year 
 19.9   2004, a district's general education aid is the sum of the 
 19.10  following amounts:  
 19.11     (1) general education revenue; 
 19.12     (2) shared time aid according to section 126C.01, 
 19.13  subdivision 7; and 
 19.14     (3) referendum aid according to section 126C.17. 
 19.15     (b) For fiscal year 2005 and later, a district's general 
 19.16  education aid is the sum of the following amounts: 
 19.17     (1) general education revenue, excluding equity revenue and 
 19.18  transition revenue; 
 19.19     (2) equity aid according to section 126C.10, subdivision 
 19.20  30; 
 19.21     (3) transition aid according to section 126C.10, 
 19.22  subdivision 33; 
 19.23     (4) shared time aid according to section 126C.01, 
 19.24  subdivision 7; and 
 19.25     (5) referendum aid according to section 126C.17. 
 19.26     Sec. 26.  Minnesota Statutes 2002, section 126C.17, 
 19.27  subdivision 1, is amended to read: 
 19.28     Subdivision 1.  [REFERENDUM ALLOWANCE.] (a) For fiscal year 
 19.29  2002, a district's referendum revenue allowance equals the sum 
 19.30  of the allowance under section 126C.16, subdivision 2, plus any 
 19.31  additional allowance per resident marginal cost pupil unit 
 19.32  authorized under subdivision 9 for fiscal year 2002. 
 19.33     (b) For fiscal year 2003 and later, a district's initial 
 19.34  referendum revenue allowance equals the sum of the allowance 
 19.35  under section 126C.16, subdivision 2, plus any additional 
 19.36  allowance per resident marginal cost pupil unit authorized under 
 20.1   subdivision 9 before May 1, 2001, for fiscal year 2002 and 
 20.2   later, plus the referendum conversion allowance approved under 
 20.3   subdivision 13, minus $415.  For districts with more than one 
 20.4   referendum authority, the reduction must be computed separately 
 20.5   for each authority.  The reduction must be applied first to the 
 20.6   referendum conversion allowance and next to the authority with 
 20.7   the earliest expiration date.  A district's initial referendum 
 20.8   revenue allowance may not be less than zero. 
 20.9      (c) For fiscal year 2003 and later, a district's referendum 
 20.10  revenue allowance equals the initial referendum allowance plus 
 20.11  any additional allowance per resident marginal cost pupil unit 
 20.12  authorized under subdivision 9 after between April 30, 2001, and 
 20.13  December 30, 2001, for fiscal year 2003 and later. 
 20.14     (d) For fiscal year 2004 and later, a district's referendum 
 20.15  revenue allowance equals the sum of (1) the product of (i) the 
 20.16  ratio of the resident marginal cost pupil units the district 
 20.17  would have counted for fiscal year 2004 under Minnesota Statutes 
 20.18  2002, section 126C.05, to the district's resident marginal cost 
 20.19  pupil units for fiscal year 2004 times (ii) the initial 
 20.20  referendum allowance plus any additional allowance per resident 
 20.21  marginal cost pupil unit authorized under subdivision 9 between 
 20.22  April 30, 2001, and May 30, 2003, for fiscal year 2003 and 
 20.23  later, plus (2) any additional allowance per resident marginal 
 20.24  cost pupil unit authorized under subdivision 9 after May 30, 
 20.25  2003, for fiscal year 2005 and later. 
 20.26     Sec. 27.  Minnesota Statutes 2002, section 126C.17, 
 20.27  subdivision 2, is amended to read: 
 20.28     Subd. 2.  [REFERENDUM ALLOWANCE LIMIT.] (a) Notwithstanding 
 20.29  subdivision 1, for fiscal year 2002, a district's referendum 
 20.30  allowance must not exceed the greater of:  
 20.31     (1) the district's referendum allowance for fiscal year 
 20.32  1994; 
 20.33     (2) 25 percent of the formula allowance; or 
 20.34     (3) for a newly reorganized district created after July 1, 
 20.35  1994, the sum of the referendum revenue authority for the 
 20.36  reorganizing districts for the fiscal year preceding the 
 21.1   reorganization, divided by the sum of the resident marginal cost 
 21.2   pupil units of the reorganizing districts for the fiscal year 
 21.3   preceding the reorganization. 
 21.4      (b) Notwithstanding subdivision 1, for fiscal year 2003 and 
 21.5   later fiscal years, a district's referendum allowance must not 
 21.6   exceed the greater of: 
 21.7      (1) the sum of a district's referendum allowance for fiscal 
 21.8   year 1994 times 1.162 plus its referendum conversion allowance 
 21.9   for fiscal year 2003, minus $415; 
 21.10     (2) 18.2 percent of the formula allowance; 
 21.11     (3) for a newly reorganized district created on July 1, 
 21.12  2002, the referendum revenue authority for each reorganizing 
 21.13  district in the year preceding reorganization divided by its 
 21.14  resident marginal cost pupil units for the year preceding 
 21.15  reorganization, minus $415; or 
 21.16     (4) for a newly reorganized district created after July 1, 
 21.17  2002, the referendum revenue authority for each reorganizing 
 21.18  district in the year preceding reorganization divided by its 
 21.19  resident marginal cost pupil units for the year preceding 
 21.20  reorganization. 
 21.21     (b) Notwithstanding subdivision 1, for fiscal year 2004 and 
 21.22  later fiscal years, a district's referendum allowance must not 
 21.23  exceed the greater of: 
 21.24     (1) the sum of a district's referendum allowance for fiscal 
 21.25  year 1994 times 1.177 plus its referendum conversion allowance 
 21.26  for fiscal year 2003, minus $415; 
 21.27     (2) 18.6 percent of the formula allowance; 
 21.28     (3) for a newly reorganized district created on July 1, 
 21.29  2002, the referendum revenue authority for each reorganizing 
 21.30  district in the year preceding reorganization divided by its 
 21.31  resident marginal cost pupil units for the year preceding 
 21.32  reorganization, minus $415; or 
 21.33     (4) for a newly reorganized district created after July 1, 
 21.34  2002, the referendum revenue authority for each reorganizing 
 21.35  district in the year preceding reorganization divided by its 
 21.36  resident marginal cost pupil units for the year preceding 
 22.1   reorganization. 
 22.2      Sec. 28.  Minnesota Statutes 2002, section 126C.17, 
 22.3   subdivision 5, is amended to read: 
 22.4      Subd. 5.  [REFERENDUM EQUALIZATION REVENUE.] (a) For fiscal 
 22.5   year 2003 and later, a district's referendum equalization 
 22.6   revenue equals the sum of the first tier referendum equalization 
 22.7   revenue and the second tier referendum equalization revenue. 
 22.8      (b) A district's first tier referendum equalization revenue 
 22.9   equals the district's first tier referendum equalization 
 22.10  allowance times the district's resident marginal cost pupil 
 22.11  units for that year.  
 22.12     (c) For fiscal years 2003 and 2004, a district's first tier 
 22.13  referendum equalization allowance equals the lesser of the 
 22.14  district's referendum allowance under subdivision 1 or 
 22.15  $126.  For fiscal year 2005, a district's first tier referendum 
 22.16  equalization allowance equals the lesser of the district's 
 22.17  referendum allowance under subdivision 1 or $405.  For fiscal 
 22.18  year 2006 and later, a district's first tier referendum 
 22.19  equalization allowance equals the lesser of the district's 
 22.20  referendum allowance under subdivision 1 or $500. 
 22.21     (d) A district's second tier referendum equalization 
 22.22  revenue equals the district's second tier referendum 
 22.23  equalization allowance times the district's resident marginal 
 22.24  cost pupil units for that year. 
 22.25     (e) A district's second tier referendum equalization 
 22.26  allowance equals the lesser of the district's referendum 
 22.27  allowance under subdivision 1 or 18.2 18.6 percent of the 
 22.28  formula allowance, minus the district's first tier referendum 
 22.29  equalization allowance. 
 22.30     (f) Notwithstanding paragraph (e), the second tier 
 22.31  referendum allowance for a district qualifying for secondary 
 22.32  sparsity revenue under section 126C.10, subdivision 7, or 
 22.33  elementary sparsity revenue under section 126C.10, subdivision 
 22.34  8, equals the district's referendum allowance under subdivision 
 22.35  1 minus the district's first tier referendum equalization 
 22.36  allowance. 
 23.1      Sec. 29.  Minnesota Statutes 2002, section 126C.17, 
 23.2   subdivision 7, is amended to read: 
 23.3      Subd. 7.  [REFERENDUM EQUALIZATION AID.] (a) A district's 
 23.4   referendum equalization aid equals the difference between its 
 23.5   referendum equalization revenue and levy. 
 23.6      (b) If a district's actual levy for first or second tier 
 23.7   referendum equalization revenue is less than its maximum levy 
 23.8   limit for that tier, aid shall be proportionately reduced. 
 23.9      (c) Notwithstanding paragraph (a), the referendum 
 23.10  equalization aid for a district, where the referendum 
 23.11  equalization aid under paragraph (a) exceeds 90 percent of the 
 23.12  referendum revenue, must not exceed 18.2 18.6 percent of the 
 23.13  formula allowance times the district's resident marginal cost 
 23.14  pupil units.  A district's referendum levy is increased by the 
 23.15  amount of any reduction in referendum aid under this paragraph. 
 23.16     Sec. 30.  Minnesota Statutes 2002, section 126C.17, 
 23.17  subdivision 13, is amended to read: 
 23.18     Subd. 13.  [REFERENDUM CONVERSION ALLOWANCE.] (a) A school 
 23.19  district that received supplemental or transition revenue in 
 23.20  fiscal year 2002 may convert its supplemental revenue conversion 
 23.21  allowance and transition revenue conversion allowance to 
 23.22  additional referendum allowance under subdivision 1 for fiscal 
 23.23  year 2003 and thereafter.  A majority of the school board must 
 23.24  approve the conversion at a public meeting before November 1, 
 23.25  2001.  For a district with other referendum authority, the 
 23.26  referendum conversion allowance approved by the board continues 
 23.27  until the portion of the district's other referendum authority 
 23.28  with the earliest expiration date after June 30, 2006, expires.  
 23.29  For a district with no other referendum authority, the 
 23.30  referendum conversion allowance approved by the board continues 
 23.31  until June 30, 2012. 
 23.32     (b) A school district that received transition revenue in 
 23.33  fiscal year 2004 may convert all or part of its transition 
 23.34  revenue to referendum revenue with voter approval in a 
 23.35  referendum called for the purpose.  The referendum must be held 
 23.36  in accordance with subdivision 9, except that the ballot may 
 24.1   state that existing transition revenue authority is being 
 24.2   canceled or is expiring.  In this case, the ballot shall compare 
 24.3   the proposed referendum allowance to the canceled or expiring 
 24.4   transition revenue allowance.  For purposes of this comparison, 
 24.5   the canceled or expiring transition revenue allowance per 
 24.6   adjusted marginal cost pupil unit shall be converted to an 
 24.7   allowance per resident marginal cost pupil unit based on the 
 24.8   district's ratio of adjusted marginal cost pupil units to 
 24.9   resident marginal cost pupil units for the preceding fiscal 
 24.10  year.  The referendum must be held on the first Tuesday after 
 24.11  the first Monday in November.  The notice required under section 
 24.12  275.60 may be modified to read:  "BY VOTING 'YES' ON THIS BALLOT 
 24.13  QUESTION, YOU MAY BE VOTING FOR A PROPERTY TAX INCREASE."  
 24.14  Elections under this paragraph must be held in 2007 or earlier.  
 24.15  The referendum allowance limit for a district under subdivision 
 24.16  2 shall be increased by the amount of the allowance converted 
 24.17  from transition revenue under this paragraph. 
 24.18     Sec. 31.  [127A.441] [AID REDUCTION; LEVY REVENUE 
 24.19  RECOGNITION CHANGE.] 
 24.20     Each year, the state aids payable to any school district 
 24.21  for that fiscal year that are recognized as revenue in the 
 24.22  school district's general and community service funds shall be 
 24.23  adjusted by an amount equal to (1) the amount the district 
 24.24  recognized as revenue for the prior fiscal year pursuant to 
 24.25  section 123B.75, subdivision 5, paragraph (b) or (c), minus (2) 
 24.26  the amount the district recognized as revenue for the current 
 24.27  fiscal year pursuant to section 123B.75, subdivision 5, 
 24.28  paragraph (c).  For purposes of making the aid adjustments under 
 24.29  this section, the amount the district recognizes as revenue for 
 24.30  either the prior fiscal year or the current fiscal year pursuant 
 24.31  to section 123B.75, subdivision 5, paragraph (b) or (c), shall 
 24.32  not include any amount levied pursuant to section 124D.86, 
 24.33  subdivision 4, for school districts receiving revenue under 
 24.34  sections 124D.86, subdivision 3, clauses (1) and (2); 126C.41, 
 24.35  subdivisions 1, 2, and 3, paragraphs (b), (c), and (d); 126C.43, 
 24.36  subdivision 2; and 126C.48, subdivision 6.  Payment from the 
 25.1   permanent school fund shall not be adjusted pursuant to this 
 25.2   section.  The school district shall be notified of the amount of 
 25.3   the adjustment made to each payment pursuant to this section. 
 25.4      Sec. 32.  Minnesota Statutes 2002, section 127A.45, 
 25.5   subdivision 2, is amended to read: 
 25.6      Subd. 2.  [DEFINITIONS.] (a) The term "other district 
 25.7   receipts" means payments by county treasurers pursuant to 
 25.8   section 276.10, apportionments from the school endowment fund 
 25.9   pursuant to section 127A.33, apportionments by the county 
 25.10  auditor pursuant to section 127A.34, subdivision 2, and payments 
 25.11  to school districts by the commissioner of revenue pursuant to 
 25.12  chapter 298.  
 25.13     (b) The term "cumulative amount guaranteed" means the 
 25.14  product of 
 25.15     (1) the cumulative disbursement percentage shown in 
 25.16  subdivision 3; times 
 25.17     (2) the sum of 
 25.18     (i) 83 80 percent of the estimated aid and credit 
 25.19  entitlements paid according to subdivision 13; plus 
 25.20     (ii) 100 percent of the entitlements paid according to 
 25.21  subdivisions 11 and 12; plus 
 25.22     (iii) the other district receipts.  
 25.23     (c) The term "payment date" means the date on which state 
 25.24  payments to districts are made by the electronic funds transfer 
 25.25  method.  If a payment date falls on a Saturday, a Sunday, or a 
 25.26  weekday which is a legal holiday, the payment shall be made on 
 25.27  the immediately preceding business day.  The commissioner may 
 25.28  make payments on dates other than those listed in subdivision 3, 
 25.29  but only for portions of payments from any preceding payment 
 25.30  dates which could not be processed by the electronic funds 
 25.31  transfer method due to documented extenuating circumstances.  
 25.32     Sec. 33.  Minnesota Statutes 2002, section 127A.45, 
 25.33  subdivision 3, is amended to read: 
 25.34     Subd. 3.  [PAYMENT DATES AND PERCENTAGES.] (a) For fiscal 
 25.35  year 2003, the commissioner shall pay to a district on the dates 
 25.36  indicated an amount computed as follows:  the cumulative amount 
 26.1   guaranteed minus the sum of (a) the district's other district 
 26.2   receipts through the current payment, and (b) the aid and credit 
 26.3   payments through the immediately preceding payment.  For 
 26.4   purposes of this computation, the payment dates and the 
 26.5   cumulative disbursement percentages are as follows:  
 26.6                            Payment date               Percentage 
 26.7   Payment 1    July 15:                                         5.1
 26.8   Payment 2    July 30:                                         7.7
 26.9   Payment 3    August 15:                                      16.9
 26.10  Payment 4    August 30:                                      19.3
 26.11  Payment 5    September 15:                                   21.8
 26.12  Payment 6    September 30:                                   24.3
 26.13  Payment 7    October 15:                                     26.3
 26.14  Payment 8    October 30:                                     28.3
 26.15  Payment 9    November 15:                                    32.8
 26.16  Payment 10   November 30:                                    39.1
 26.17  Payment 11   December 15:                                    42.4
 26.18  Payment 12   December 30:                                    45.6
 26.19  Payment 13   January 15:                                     50.5
 26.20  Payment 14   January 30:                                     55.0
 26.21  Payment 15   February 15:                                    60.2
 26.22  Payment 16   February 28:                                    65.0
 26.23  Payment 17   March 15:                                       69.7
 26.24  Payment 18   March 30:                                       74.3
 26.25  Payment 19   April 15:                                       78.3
 26.26  Payment 20   April 30:                                       84.2
 26.27  Payment 21   May 15:                                         88.7
 26.28  Payment 22   May 30:                                         93.3
 26.29  Payment 23   June 20:                                       100.0
 26.30     (b) In addition to the amounts paid under paragraph (a), 
 26.31  for fiscal year 2003, the commissioner shall pay to a district 
 26.32  on the dates indicated an amount computed as follows: 
 26.33  Payment 3    August 15:  the final adjustment for the
 26.34               prior fiscal year for the state paid
 26.35               property tax credits established in
 26.36               section 273.1392
 27.1   Payment 7    October 15:  one-half of the final adjustment
 27.2                for the prior fiscal year for all aid
 27.3                entitlements except state paid property
 27.4                tax credits 
 27.5   Payment 8    October 30:  one-half of the final adjustment
 27.6                for the prior fiscal year for all aid
 27.7                entitlements except state paid property
 27.8                tax credits 
 27.9      (c) For fiscal year 2004 and later, the commissioner shall 
 27.10  pay to a district on the dates indicated an amount computed as 
 27.11  follows:  the cumulative amount guaranteed minus the sum of (a) 
 27.12  the district's other district receipts through the current 
 27.13  payment, and (b) the aid and credit payments through the 
 27.14  immediately preceding payment.  For purposes of this 
 27.15  computation, the payment dates and the cumulative disbursement 
 27.16  percentages are as follows: 
 27.17             Payment date                      Percentage 
 27.18  Payment 1    July 15:                                    5.1 5.5
 27.19  Payment 2    July 30:                                    7.7 8.0
 27.20  Payment 3    August 15:                                 16.9 17.5
 27.21  Payment 4    August 30:                                 19.3 20.0
 27.22  Payment 5    September 15:                              21.8 22.5
 27.23  Payment 6    September 30:                              24.3 25.0
 27.24  Payment 7    October 15:                                26.3 27.0
 27.25  Payment 8    October 30:                                28.3 30.0
 27.26  Payment 9    November 15:                               30.3 32.5
 27.27  Payment 10   November 30:                               35.0 36.5
 27.28  Payment 11   December 15:                               40.0 42.0
 27.29  Payment 12   December 30:                               43.0 45.0
 27.30  Payment 13   January 15:                                48.0 50.0
 27.31  Payment 14   January 30:                                52.0 54.0
 27.32  Payment 15   February 15:                               56.0 58.0
 27.33  Payment 16   February 28:                               61.0 63.0
 27.34  Payment 17   March 15:                                  66.0 68.0
 27.35  Payment 18   March 30:                                  72.0 74.0
 27.36  Payment 19   April 15:                                  76.0 78.0
 28.1   Payment 20   April 30:                                  83.0 85.0
 28.2   Payment 21   May 15:                                    88.0 90.0
 28.3   Payment 22   May 30:                                    95.0
 28.4   Payment 23   June 20:                                  100.0
 28.5      (d) (b) In addition to the amounts paid under paragraph 
 28.6   (c) (a), for fiscal year 2004 and later, the commissioner shall 
 28.7   pay to a district on the dates indicated an amount computed as 
 28.8   follows: 
 28.9   Payment 3    August 15:  the final adjustment for the
 28.10               prior fiscal year for the state paid
 28.11               property tax credits established in 
 28.12               section 273.1392 
 28.13  Payment 4    August 30:  one-third of the final adjustment
 28.14               for the prior fiscal year for all aid
 28.15               entitlements except state paid property
 28.16               tax credits 
 28.17  Payment 6    September 30:  one-third of the final adjustment
 28.18               for the prior fiscal year for all aid
 28.19               entitlements except state paid property
 28.20               tax credits
 28.21  Payment 8    October 30:  one-third of the final adjustment
 28.22               for the prior fiscal year for all aid
 28.23               entitlements except state paid property
 28.24               tax credits
 28.25     (c) In addition to the amounts paid under paragraph (a), 
 28.26  for fiscal year 2005 and later, the commissioner shall pay to a 
 28.27  district on the dates indicated an amount computed as follows: 
 28.28  Payment 3    August 15:  the final adjustment for the
 28.29               prior fiscal year for the state paid
 28.30               property tax credits established in
 28.31               section 273.1392
 28.32  Payment 4    August 30:  30 percent of the final adjustment
 28.33               for the prior fiscal year for all aid
 28.34               entitlements except state paid property
 28.35               tax credits
 28.36  Payment 6    September 30:  40 percent of the final adjustment
 29.1                for the prior fiscal year for all aid
 29.2                entitlements except state paid property
 29.3                tax credits
 29.4   Payment 8    October 30:  30 percent of the final adjustment
 29.5                for the prior fiscal year for all aid
 29.6                entitlements except state paid property
 29.7                tax credits
 29.8      Sec. 34.  Minnesota Statutes 2002, section 127A.45, 
 29.9   subdivision 10, is amended to read: 
 29.10     Subd. 10.  [PAYMENTS TO SCHOOL NONOPERATING FUNDS.] Each 
 29.11  fiscal year state general fund payments for a district 
 29.12  nonoperating fund must be made at 83 80 percent of the estimated 
 29.13  entitlement during the fiscal year of the entitlement.  This 
 29.14  amount shall be paid in 12 equal monthly installments.  The 
 29.15  amount of the actual entitlement, after adjustment for actual 
 29.16  data, minus the payments made during the fiscal year of the 
 29.17  entitlement must be paid prior to October 31 of the following 
 29.18  school year.  The commissioner may make advance payments of debt 
 29.19  service equalization aid or homestead and agricultural credit 
 29.20  aid for a district's debt service fund earlier than would occur 
 29.21  under the preceding schedule if the district submits evidence 
 29.22  showing a serious cash flow problem in the fund.  The 
 29.23  commissioner may make earlier payments during the year and, if 
 29.24  necessary, increase the percent of the entitlement paid to 
 29.25  reduce the cash flow problem. 
 29.26     Sec. 35.  Minnesota Statutes 2002, section 127A.45, 
 29.27  subdivision 13, is amended to read: 
 29.28     Subd. 13.  [AID PAYMENT PERCENTAGE.] Except as provided in 
 29.29  subdivisions 11, 12, 12a, and 14, each fiscal year, all 
 29.30  education aids and credits in this chapter and chapters 120A, 
 29.31  120B, 121A, 122A, 123A, 123B, 124D, 125A, 125B, 126C, 134, and 
 29.32  section 273.1392, shall be paid at 83 80 percent of the 
 29.33  estimated entitlement during the fiscal year of the 
 29.34  entitlement.  For the purposes of this subdivision, a district's 
 29.35  estimated entitlement for special education excess cost aid 
 29.36  under section 125A.79 equals 70 percent of the district's 
 30.1   entitlement for the second prior fiscal year.  The final 
 30.2   adjustment payment, according to subdivision 9, must be the 
 30.3   amount of the actual entitlement, after adjustment for actual 
 30.4   data, minus the payments made during the fiscal year of the 
 30.5   entitlement. 
 30.6      Sec. 36.  Minnesota Statutes 2002, section 127A.45, 
 30.7   subdivision 14, is amended to read: 
 30.8      Subd. 14.  [NONPUBLIC AIDS.] The state shall pay aid 
 30.9   according to sections 123B.40 to 123B.48 for pupils attending 
 30.10  nonpublic schools as follows: 
 30.11     (1) an advance payment by November 30 equal to 83 80 
 30.12  percent of the estimated entitlement for the current fiscal 
 30.13  year; and 
 30.14     (2) a final payment by October 31 of the following fiscal 
 30.15  year, adjusted for actual data.  
 30.16     If a payment advance to meet cash flow needs is requested 
 30.17  by a district and approved by the commissioner, the state shall 
 30.18  pay nonpublic pupil transportation aid according to section 
 30.19  123B.92 by October 31. 
 30.20     Sec. 37.  Minnesota Statutes 2002, section 127A.45, 
 30.21  subdivision 16, is amended to read: 
 30.22     Subd. 16.  [PAYMENTS TO THIRD PARTIES.] Notwithstanding 
 30.23  subdivision 3, 83 80 percent of the amounts under section 
 30.24  123A.26, subdivision 3, shall be paid in equal installments on 
 30.25  August 30, December 30, and March 30, with a 17 20 percent final 
 30.26  adjustment payment on October 30 of the next fiscal year. 
 30.27     Sec. 38.  [APPROPRIATIONS.] 
 30.28     Subdivision 1.  [DEPARTMENT OF EDUCATION.] The sums 
 30.29  indicated in this section are appropriated from the general fund 
 30.30  to the department of education for the fiscal years designated.  
 30.31     Subd. 2.  [GENERAL EDUCATION AID.] For general education 
 30.32  aid under Minnesota Statutes, section 126C.13, subdivision 4: 
 30.33      $ 4,990,899,000 .....     2004
 30.34      $ 5,093,091,000 .....     2005
 30.35     The 2004 appropriation includes $857,432,000 for 2003 and 
 30.36  $4,133,467,000 for 2004. 
 31.1      The 2005 appropriation includes $853,045,000 for 2004 and 
 31.2   $4,240,046,000 for 2005.  
 31.3      Subd. 3.  [REFERENDUM TAX BASE REPLACEMENT AID.] For 
 31.4   referendum tax base replacement aid under Minnesota Statutes, 
 31.5   section 126C.17, subdivision 7a: 
 31.6        $ 8,082,000    .....     2004 
 31.7        $ 7,966,000    .....     2005 
 31.8      The 2004 appropriation includes $1,419,000 for 2003 and 
 31.9   $6,663,000 for 2004.  
 31.10     The 2005 appropriation includes $1,364,000 for 2004 and 
 31.11  $6,602,000 for 2005. 
 31.12     Sec. 39.  [REPEALER.] 
 31.13     Minnesota Statutes 2002, sections 126C.01, subdivision 9; 
 31.14  and 126C.10, subdivision 5, are repealed effective for revenue 
 31.15  in fiscal year 2004 and later. 
 31.16                             ARTICLE 2 
 31.17                       OTHER GENERAL PROGRAMS 
 31.18     Section 1.  Minnesota Statutes 2002, section 126C.43, 
 31.19  subdivision 2, is amended to read: 
 31.20     Subd. 2.  [PAYMENT TO UNEMPLOYMENT INSURANCE PROGRAM TRUST 
 31.21  FUND BY STATE AND POLITICAL SUBDIVISIONS.] A district may 
 31.22  levy 90 percent of the amounts amount exceeding $10 times the 
 31.23  district's adjusted marginal cost pupil units for the fiscal 
 31.24  year ending in the year before the year the levy is certified 
 31.25  necessary (i) to pay the district's obligations under section 
 31.26  268.052, subdivision 1, and the amounts necessary (ii) to pay 
 31.27  for job placement services offered to employees who may become 
 31.28  eligible for benefits pursuant to section 268.085 for the fiscal 
 31.29  year the levy is certified. 
 31.30     <b>[EFFECTIVE DATE.]</b> This section is effective for taxes 
 31.31  payable in 2004. 
 31.32     Sec. 2.  Minnesota Statutes 2002, section 126C.43, 
 31.33  subdivision 3, is amended to read: 
 31.34     Subd. 3.  [TAX LEVY FOR JUDGMENT.] A district may levy 90 
 31.35  percent of the amounts amount exceeding $10 times the district's 
 31.36  adjusted marginal cost pupil units for the fiscal year ending in 
 32.1   the year before the year the levy is certified necessary to pay 
 32.2   judgments against the district under section 123B.25 that became 
 32.3   final after the date the district certified its proposed levy in 
 32.4   the previous year.  With the approval of the commissioner, a 
 32.5   district may spread this levy over a period not to exceed three 
 32.6   years.  Upon approval through the adoption of a resolution by 
 32.7   each of an intermediate district's member school district 
 32.8   boards, a member school district may include its proportionate 
 32.9   share of the costs of a judgment against an intermediate school 
 32.10  district that became final under section 123B.25 after the date 
 32.11  that the earliest member school district certified its proposed 
 32.12  levy in the previous year.  With the approval of the 
 32.13  commissioner, an intermediate school district member school 
 32.14  district may spread this levy over a period not to exceed three 
 32.15  years. 
 32.16     <b>[EFFECTIVE DATE.]</b> This section is effective for taxes 
 32.17  payable in 2004. 
 32.18     Sec. 3.  Minnesota Statutes 2002, section 126C.45, is 
 32.19  amended to read: 
 32.20     126C.45 [ICE ARENA LEVY.] 
 32.21     (a) Each year, an independent school district operating and 
 32.22  maintaining an ice arena, may levy for the net operational costs 
 32.23  of the ice arena.  The levy may not exceed 90 percent of the net 
 32.24  actual costs of operation of the arena for the previous year.  
 32.25  Net actual costs are defined as operating costs less any 
 32.26  operating revenues. 
 32.27     (b) Any district operating and maintaining an ice arena 
 32.28  must demonstrate to the satisfaction of the office of monitoring 
 32.29  in the department that the district will offer equal sports 
 32.30  opportunities for male and female students to use its ice arena, 
 32.31  particularly in areas of access to prime practice time, team 
 32.32  support, and providing junior varsity and younger level teams 
 32.33  for girls' ice sports and ice sports offerings. 
 32.34     <b>[EFFECTIVE DATE.]</b> This section is effective for taxes 
 32.35  payable in 2004. 
 32.36     Sec. 4.  Minnesota Statutes 2002, section 268.052, 
 33.1   subdivision 2, is amended to read: 
 33.2      Subd. 2.  [ELECTION BY STATE OR POLITICAL SUBDIVISION TO BE 
 33.3   A TAXPAYING EMPLOYER.] (a) The state or political 
 33.4   subdivision excluding a school district may elect to be a 
 33.5   taxpaying employer for any calendar year if a notice of election 
 33.6   is filed within 30 calendar days following January 1 of that 
 33.7   calendar year.  Upon election, the state or political 
 33.8   subdivision shall be assigned the new employer tax rate under 
 33.9   section 268.051, subdivision 5, for the calendar year of the 
 33.10  election and until it qualifies for an experience rating under 
 33.11  section 268.051, subdivision 3. 
 33.12     (b) An election shall be for a minimum period of two 
 33.13  calendar years following the effective date of the election and 
 33.14  continue unless a notice terminating the election is filed not 
 33.15  later than 30 calendar days before the beginning of the calendar 
 33.16  year.  The termination shall be effective at the beginning of 
 33.17  the next calendar year.  Upon election, the commissioner shall 
 33.18  establish a reimbursable account for the state or political 
 33.19  subdivision.  A termination of election shall be allowed only if 
 33.20  the state or political subdivision has, since the beginning of 
 33.21  the experience rating period under section 268.051, subdivision 
 33.22  3, paid taxes and made voluntary payments under section 268.051, 
 33.23  subdivision 7, equal to or more than 125 percent of the 
 33.24  unemployment benefits used in computing the experience rating.  
 33.25  In addition, any unemployment benefits paid after the experience 
 33.26  rating period shall be transferred to the new reimbursable 
 33.27  account of the state or political subdivision.  If the amount of 
 33.28  taxes and voluntary payments paid since the beginning of the 
 33.29  experience rating period exceeds 125 percent of the amount of 
 33.30  unemployment benefits paid during the experience rating period, 
 33.31  that amount in excess shall be applied against any unemployment 
 33.32  benefits paid after the experience rating period. 
 33.33     (c) The method of payments to the fund under subdivisions 3 
 33.34  and 4 shall apply to all taxes paid by or due from the state or 
 33.35  political subdivision that elects to be taxpaying employers 
 33.36  under this subdivision. 
 34.1      (d) The commissioner may allow a notice of election or a 
 34.2   notice terminating election to be filed by mail or electronic 
 34.3   transmission.  
 34.4      <b>[EFFECTIVE DATE.]</b> This section is effective the day 
 34.5   following final enactment. 
 34.6      Sec. 5.  Minnesota Statutes 2002, section 268.052, 
 34.7   subdivision 4, is amended to read: 
 34.8      Subd. 4.  [METHOD OF PAYMENT BY POLITICAL SUBDIVISION.] A 
 34.9   political subdivision or instrumentality thereof is authorized 
 34.10  and directed to pay its liabilities by money collected from 
 34.11  taxes or other revenues.  Every political subdivision authorized 
 34.12  to levy taxes except school districts may include in its tax 
 34.13  levy the amount necessary to pay its liabilities.  School 
 34.14  districts may levy according to section 126C.43, subdivision 2.  
 34.15  If the taxes authorized to be levied cause the total amount of 
 34.16  taxes levied to exceed any limitation upon the power of a 
 34.17  political subdivision to levy taxes, the political subdivision 
 34.18  may levy taxes in excess of the limitations in the amounts 
 34.19  necessary to meet its liability.  The expenditures authorized 
 34.20  shall not be included in computing the cost of government as 
 34.21  defined in any home rule charter.  The governing body of a 
 34.22  municipality, for the purpose of meeting its liabilities, in the 
 34.23  event of a deficit, may issue its obligations payable in not 
 34.24  more than two years, in an amount that may cause its 
 34.25  indebtedness to exceed any statutory or charter limitations, 
 34.26  without an election, and may levy taxes in the manner provided 
 34.27  in section 475.61. 
 34.28     <b>[EFFECTIVE DATE.]</b> This section is effective for taxes 
 34.29  payable in 2004. 
 34.30     Sec. 6.  [APPROPRIATIONS.] 
 34.31     Subdivision 1.  [DEPARTMENT OF EDUCATION.] The sums 
 34.32  indicated in this section are appropriated from the general fund 
 34.33  to the department of education for the fiscal years designated. 
 34.34     Subd. 2.  [ENROLLMENT OPTIONS TRANSPORTATION.] For 
 34.35  transportation of pupils attending postsecondary institutions 
 34.36  under Minnesota Statutes, section 124D.09, or for transportation 
 35.1   of pupils attending nonresident districts under Minnesota 
 35.2   Statutes, section 124D.03: 
 35.3        $50,000        .....     2004
 35.4        $55,000        .....     2005
 35.5      Subd. 3.  [ABATEMENT REVENUE.] For abatement aid under 
 35.6   Minnesota Statutes, section 127A.49:  
 35.7        $2,762,000     .....     2004 
 35.8        $2,945,000     .....     2005 
 35.9      The 2004 appropriation includes $472,000 for 2003 and 
 35.10  $2,290,000 for 2004.  
 35.11     The 2005 appropriation includes $469,000 for 2004 and 
 35.12  $2,476,000 for 2005.  
 35.13     Subd. 4.  [CONSOLIDATION TRANSITION.] For districts 
 35.14  consolidating under Minnesota Statutes, section 123A.485: 
 35.15       $213,000        .....     2004 
 35.16       $620,000        .....     2005 
 35.17     The 2004 appropriation includes $35,000 for 2003 and 
 35.18  $178,000 for 2004. 
 35.19     The 2005 appropriation includes $35,000 for 2004 and 
 35.20  $585,000 for 2005. 
 35.21     Subd. 5.  [TORNADO IMPACT; YELLOW MEDICINE EAST.] For a 
 35.22  grant to independent school district No. 2190, Yellow Medicine 
 35.23  East, for tornado impact declining enrollment aid: 
 35.24       $78,000         .....     2004
 35.25       $39,000         .....     2005
 35.26     Subd. 6.  [DECLINING PUPIL AID; ALBERT LEA.] For declining 
 35.27  pupil aid to independent school district No. 241, Albert Lea: 
 35.28       $225,000        .....     2004
 35.29       $150,000        .....     2005
 35.30     Subd. 7.  [DECLINING PUPIL AID; MESABI EAST.] For declining 
 35.31  pupil aid to independent school district No. 2711, Mesabi East: 
 35.32       $150,000        .....     2004
 35.33       $100,000        .....     2005
 35.34     Subd. 8.  [DECLINING PUPIL AID; ROSEAU.] For declining 
 35.35  pupil aid to independent school district No. 682, Roseau: 
 35.36       $30,000         .....     2004
 36.1        $20,000         .....     2005
 36.2      Sec. 7.  [REPEALER.] 
 36.3      (a) Minnesota Statutes 2002, sections 122A.62; 126C.445; 
 36.4   and 126C.455, are repealed effective for taxes payable in 2004. 
 36.5      (b) Laws 2000, chapter 489, article 2, section 36, as 
 36.6   amended by Laws 2001, First Special Session chapter 6, article 
 36.7   1, section 44, is repealed effective for revenue for fiscal year 
 36.8   2004. 
 36.9                              ARTICLE 3 
 36.10                      NONPUBLIC PUPIL PROGRAMS 
 36.11     Section 1.  Minnesota Statutes 2002, section 123B.92, 
 36.12  subdivision 9, is amended to read: 
 36.13     Subd. 9.  [NONPUBLIC PUPIL TRANSPORTATION AID.] (a) A 
 36.14  district's nonpublic pupil transportation aid for the 1996-1997 
 36.15  and later school years for transportation services for nonpublic 
 36.16  school pupils according to sections 123B.88, 123B.84 to 123B.86, 
 36.17  and this section, equals the sum of the amounts computed in 
 36.18  paragraphs (b) and (c).  This aid does not limit the obligation 
 36.19  to transport pupils under sections 123B.84 to 123B.87. 
 36.20     (b) For regular and excess transportation according to 
 36.21  subdivision 1, paragraph (b), clauses (1) and (2), an amount 
 36.22  equal to the product of: 
 36.23     (1) the district's actual expenditure per pupil transported 
 36.24  in the regular and excess transportation categories during the 
 36.25  second preceding school year; times 
 36.26     (2) the number of nonpublic school pupils residing in the 
 36.27  district who receive regular or excess transportation service or 
 36.28  reimbursement for the current school year; times 
 36.29     (3) the ratio of the formula allowance pursuant to section 
 36.30  126C.10, subdivision 2, for the current school year to the 
 36.31  formula allowance pursuant to section 126C.10, subdivision 2, 
 36.32  for the second preceding school year. 
 36.33     (c) For nonpublic nonregular transportation according to 
 36.34  subdivision 1, paragraph (b), clause (5), an amount equal to the 
 36.35  product of: 
 36.36     (1) the district's actual expenditure for nonpublic 
 37.1   nonregular transportation during the second preceding school 
 37.2   year; times 
 37.3      (2) the ratio of the formula allowance pursuant to section 
 37.4   126C.10, subdivision 2, for the current school year to the 
 37.5   formula allowance pursuant to section 126C.10, subdivision 2, 
 37.6   for the second preceding school year. 
 37.7      (d) Notwithstanding the amount of the formula allowance for 
 37.8   fiscal years 2000, 2001, and 2002 year 2004 in section 126C.10, 
 37.9   subdivision 2, the commissioner shall use the amount of the 
 37.10  formula allowance for the current year plus $87 minus $415 in 
 37.11  determining the nonpublic pupil transportation revenue in 
 37.12  paragraphs (b) and (c) for fiscal year 2000, and the amount of 
 37.13  the formula allowance less $110 in determining the nonpublic 
 37.14  pupil transportation revenue in paragraphs (b) and (c) for 
 37.15  fiscal years 2001 and 2002 2004. 
 37.16     <b>[EFFECTIVE DATE.]</b> This section is effective for revenue for 
 37.17  fiscal year 2004. 
 37.18     Sec. 2.  [NONPUBLIC PUPIL MATERIALS AND TESTS.] 
 37.19     Notwithstanding section 123B.42, subdivision 3, paragraph 
 37.20  (b), the inflation adjustment for nonpublic pupil textbooks, 
 37.21  individualized instructional or cooperative learning materials, 
 37.22  and standardized tests for fiscal year 2004 must be computed 
 37.23  using the fiscal year 2004 formula allowance minus $415. 
 37.24     Sec. 3.  [APPROPRIATIONS.] 
 37.25     Subdivision 1.  [DEPARTMENT OF EDUCATION.] The sums 
 37.26  indicated in this section are appropriated from the general fund 
 37.27  to the department of education for the fiscal years designated. 
 37.28     Subd. 2.  [NONPUBLIC PUPIL AID.] For nonpublic pupil 
 37.29  education aid under Minnesota Statutes, sections 123B.87 and 
 37.30  123B.40 to 123B.43: 
 37.31       $15,073,000    .....     2004 
 37.32       $15,620,000    .....     2005 
 37.33     The 2004 appropriation includes $2,715,000 for 2003 and 
 37.34  $12,358,000 for 2004. 
 37.35     The 2005 appropriation includes $2,530,000 for 2004 and 
 37.36  $13,090,000 for 2005. 
 38.1      Subd. 3.  [NONPUBLIC PUPIL TRANSPORTATION.] For nonpublic 
 38.2   pupil transportation aid under Minnesota Statutes, section 
 38.3   123B.92, subdivision 9: 
 38.4        $22,132,000     .....     2004 
 38.5        $21,987,000     .....     2005 
 38.6      The 2004 appropriation includes $3,990,000 for 2003 and 
 38.7   $18,142,000 for 2004. 
 38.8      The 2005 appropriation includes $3,715,000 for 2004 and 
 38.9   $18,272,000 for 2005. 
 38.10                             ARTICLE 4 
 38.11                          CHARTER SCHOOLS 
 38.12     Section 1.  Minnesota Statutes 2002, section 124D.11, 
 38.13  subdivision 1, is amended to read: 
 38.14     Subdivision 1.  [GENERAL EDUCATION REVENUE.] (a) General 
 38.15  education revenue must be paid to a charter school as though it 
 38.16  were a district.  The general education revenue for each 
 38.17  adjusted marginal cost pupil unit is the state average general 
 38.18  education revenue per pupil unit, plus the referendum 
 38.19  equalization aid allowance in the pupil's district of residence, 
 38.20  minus an amount equal to the product of the formula allowance 
 38.21  according to section 126C.10, subdivision 2, times .0485, 
 38.22  calculated without basic skills revenue, transportation sparsity 
 38.23  revenue, and the transportation portion of the transition 
 38.24  revenue adjustment, plus basic skills revenue and transition 
 38.25  revenue as though the school were a school district. 
 38.26     (b) Notwithstanding paragraph (a), for charter schools in 
 38.27  the first year of operation, general education revenue shall be 
 38.28  computed using the number of adjusted pupil units in the current 
 38.29  fiscal year.  
 38.30     (c) Notwithstanding paragraph (a), transition revenue for a 
 38.31  charter school must be computed using the lesser of the charter 
 38.32  school's adjusted marginal cost pupil units for fiscal year 2004 
 38.33  or the current fiscal year. 
 38.34     <b>[EFFECTIVE DATE.]</b> This section is effective for revenue for 
 38.35  fiscal year 2004. 
 38.36     Sec. 2.  Minnesota Statutes 2002, section 124D.11, 
 39.1   subdivision 4, is amended to read: 
 39.2      Subd. 4.  [BUILDING LEASE AID.] When a charter school finds 
 39.3   it economically advantageous to rent or lease a building or land 
 39.4   for any instructional purposes and it determines that the total 
 39.5   operating capital revenue under section 126C.10, subdivision 13, 
 39.6   is insufficient for this purpose, it may apply to the 
 39.7   commissioner for building lease aid for this purpose.  The 
 39.8   commissioner must review and either approve or deny a lease aid 
 39.9   application using the following criteria: 
 39.10     (1) the reasonableness of the price based on current market 
 39.11  values; 
 39.12     (2) the extent to which the lease conforms to applicable 
 39.13  state laws and rules; and 
 39.14     (3) the appropriateness of the proposed lease in the 
 39.15  context of the space needs and financial circumstances of the 
 39.16  charter school. 
 39.17  A charter school must not use the building lease aid it receives 
 39.18  for custodial, maintenance service, utility, or other operating 
 39.19  costs.  The amount of building lease aid per pupil unit served 
 39.20  for a charter school for any year shall not exceed the lesser of 
 39.21  (a) 90 percent of the approved cost or (b) the product of the 
 39.22  pupil units served for the current school year times $1,500 the 
 39.23  greater of the charter school's building lease aid per pupil 
 39.24  unit served for fiscal year 2003 or $1,200. 
 39.25     <b>[EFFECTIVE DATE.]</b> This section is effective for revenue for 
 39.26  fiscal year 2004. 
 39.27     Sec. 3.  Minnesota Statutes 2002, section 124D.11, 
 39.28  subdivision 6, is amended to read: 
 39.29     Subd. 6.  [OTHER AID, GRANTS, REVENUE.] (a) A charter 
 39.30  school is eligible to receive other aids, grants, and revenue 
 39.31  according to chapters 120A to 129C, as though it were a district.
 39.32     (b) Notwithstanding paragraph (a), a charter school may not 
 39.33  receive aid, a grant, or revenue if a levy is required to obtain 
 39.34  the money, except as otherwise provided in this section.  
 39.35     (c) Federal aid received by the state must be paid to the 
 39.36  school, if it qualifies for the aid as though it were a school 
 40.1   district. 
 40.2      (d) A charter school may receive money from any source for 
 40.3   capital facilities needs.  In the year-end report to the 
 40.4   commissioner of children, families, and learning education, the 
 40.5   charter school shall report the total amount of funds received 
 40.6   from grants and other outside sources. 
 40.7      (e) Notwithstanding paragraph (a) or (b), a charter school 
 40.8   may apply for a grant to receive the aid portion of integration 
 40.9   revenue under section 124D.86, subdivision 3, for enrolled 
 40.10  students who are residents of a district that is eligible for 
 40.11  integration revenue.  The commissioner shall determine grant 
 40.12  recipients and may adopt application guidelines.  The grants 
 40.13  must be competitively determined and must demonstrate that 
 40.14  enrolling pupils in the charter school contributes to 
 40.15  desegregation or integration purposes as determined by the 
 40.16  commissioner.  If the charter school has elected not to provide 
 40.17  transportation under section 124D.10, subdivision 16, the aid 
 40.18  shall be reduced by the amount per pupil unit specified for the 
 40.19  district where the charter school is located under section 
 40.20  123B.92, subdivision 8. 
 40.21     <b>[EFFECTIVE DATE.]</b> This section is effective for revenue for 
 40.22  fiscal year 2004. 
 40.23     Sec. 4.  Minnesota Statutes 2002, section 124D.11, 
 40.24  subdivision 9, is amended to read: 
 40.25     Subd. 9.  [PAYMENT OF AIDS TO CHARTER SCHOOLS.] (a) 
 40.26  Notwithstanding section 127A.45, subdivision 3, aid payments for 
 40.27  the current fiscal year to a charter school not in its first 
 40.28  year of operation shall be of an equal amount on each of the 23 
 40.29  payment dates.  A charter school in its first year of operation 
 40.30  shall receive, on its first payment date, ten percent of its 
 40.31  cumulative amount guaranteed for the year and 22 payments of an 
 40.32  equal amount thereafter the sum of which shall be 90 percent of 
 40.33  the cumulative amount guaranteed. 
 40.34     (b) Notwithstanding paragraph (a), for a charter school 
 40.35  ceasing operation prior to the end of a school year, 83 80 
 40.36  percent of the amount due for the school year may be paid to the 
 41.1   school after audit of prior fiscal year and current fiscal year 
 41.2   pupil counts. 
 41.3      (c) Notwithstanding section 127A.45, subdivision 3, and 
 41.4   paragraph (a), 83 80 percent of the start-up cost aid under 
 41.5   subdivision 8 shall be paid within 45 days after the first day 
 41.6   of student attendance for that school year. 
 41.7      (d) In order to receive state aid payments under this 
 41.8   subdivision, a charter school in its first three years of 
 41.9   operation must submit a quarterly report to the department of 
 41.10  children, families, and learning.  The report must list each 
 41.11  student by grade, show the student's start and end dates, if 
 41.12  any, with the charter school, and for any student participating 
 41.13  in a learning year program, the report must list the hours and 
 41.14  times of learning year activities.  The report must be submitted 
 41.15  not more than two weeks after the end of the calendar quarter to 
 41.16  the department.  The department must develop a Web-based 
 41.17  reporting form for charter schools to use when submitting 
 41.18  enrollment reports.  A charter school in its fourth and 
 41.19  subsequent year of operation must submit enrollment information 
 41.20  to the department in the form and manner requested by the 
 41.21  department. 
 41.22     <b>[EFFECTIVE DATE.]</b> This section is effective for revenue for 
 41.23  fiscal year 2004. 
 41.24     Sec. 5.  [APPROPRIATIONS.] 
 41.25     Subdivision 1.  [DEPARTMENT OF EDUCATION.] The sums 
 41.26  indicated in this section are appropriated from the general fund 
 41.27  to the department of education for the fiscal years designated. 
 41.28     Subd. 2.  [CHARTER SCHOOL BUILDING LEASE AID.] For building 
 41.29  lease aid under Minnesota Statutes, section 124D.11, subdivision 
 41.30  4: 
 41.31       $17,689,000    .....     2004 
 41.32       $21,120,000    .....     2005 
 41.33     The 2004 appropriation includes $2,524,000 for 2003 and 
 41.34  $15,165,000 for 2004. 
 41.35     The 2005 appropriation includes $3,105,000 for 2004 and 
 41.36  $18,015,000 for 2005.  
 42.1      Subd. 3.  [CHARTER SCHOOL STARTUP AID.] For charter school 
 42.2   startup cost aid under Minnesota Statutes, section 124D.11: 
 42.3        $1,705,000     .....     2004 
 42.4        $2,281,000     .....     2005 
 42.5      The 2004 appropriation includes $220,000 for 2003 and 
 42.6   $1,485,000 for 2004.  
 42.7      The 2005 appropriation includes $303,000 for 2004 and 
 42.8   $1,978,000 for 2005. 
 42.9      Subd. 4.  [CHARTER SCHOOL INTEGRATION GRANTS.] For grants 
 42.10  to charter schools to promote integration and desegregation 
 42.11  under Minnesota Statutes, section 124D.11, subdivision 6, 
 42.12  paragraph (e): 
 42.13       $8,000         .....     2004 
 42.14     This appropriation includes $8,000 for 2003 and $0 for 2004.
 42.15                             ARTICLE 5 
 42.16                       DESEGREGATION PROGRAMS 
 42.17     Section 1.  Minnesota Statutes 2002, section 124D.86, 
 42.18  subdivision 3, is amended to read: 
 42.19     Subd. 3.  [INTEGRATION REVENUE.] Integration revenue equals 
 42.20  the following amounts: 
 42.21     (1) for independent school district No. 709, 
 42.22  Duluth, $207 $210 times the adjusted pupil units for the school 
 42.23  year; 
 42.24     (2) for independent school district No. 625, St. 
 42.25  Paul, $446 $468 times the adjusted pupil units for the school 
 42.26  year; 
 42.27     (3) for special school district No. 1, Minneapolis, the sum 
 42.28  of $446 $488 times the adjusted pupil units for the school year 
 42.29  and an additional $35 $38 times the adjusted pupil units for the 
 42.30  school year that is provided entirely through a local levy; 
 42.31     (4) for a district not listed in clause (1), (2), or (3), 
 42.32  that must implement a plan under Minnesota Rules, parts 
 42.33  3535.0100 to 3535.0180, where the district's enrollment of 
 42.34  protected students, as defined under Minnesota Rules, part 
 42.35  3535.0110, exceeds 15 percent, the lesser of (i) the actual cost 
 42.36  of implementing the plan during the fiscal year minus the aid 
 43.1   received under subdivision 6, or (ii) $130 $132 times the 
 43.2   adjusted pupil units for the school year; 
 43.3      (5) for a district not listed in clause (1), (2), (3), or 
 43.4   (4), that is required to implement a plan according to the 
 43.5   requirements of Minnesota Rules, parts 3535.0100 to 3535.0180, 
 43.6   the lesser of 
 43.7      (i) the actual cost of implementing the plan during the 
 43.8   fiscal year minus the aid received under subdivision 6, or 
 43.9      (ii) $93 $94 times the adjusted pupil units for the school 
 43.10  year. 
 43.11     Any money received by districts in clauses (1) to (4) (3) 
 43.12  which exceeds the amount received in fiscal year 2000 shall be 
 43.13  subject to the budget requirements in subdivision 1a; and 
 43.14     (6) for a member district of a multidistrict integration 
 43.15  collaborative that files a plan with the commissioner, but is 
 43.16  not contiguous to a racially isolated district, integration 
 43.17  revenue equals the amount defined in clause (5). 
 43.18     <b>[EFFECTIVE DATE.]</b> This section is effective for revenue for 
 43.19  fiscal year 2004. 
 43.20     Sec. 2.  Minnesota Statutes 2002, section 124D.86, 
 43.21  subdivision 4, is amended to read: 
 43.22     Subd. 4.  [INTEGRATION LEVY.] A district may levy an amount 
 43.23  equal to 37 percent for fiscal year 2003, 22 percent for fiscal 
 43.24  year 2004, and 29 percent for fiscal year 2005, and 22 percent 
 43.25  for fiscal year 2006 and thereafter of the district's 
 43.26  integration revenue as defined in subdivision 3. 
 43.27     <b>[EFFECTIVE DATE.]</b> This section is effective July 1, 2003. 
 43.28     Sec. 3.  Minnesota Statutes 2002, section 124D.86, 
 43.29  subdivision 5, is amended to read: 
 43.30     Subd. 5.  [INTEGRATION AID.] A district's integration aid 
 43.31  equals 63 percent for fiscal year 2003, 78 percent for fiscal 
 43.32  year 2004, and 71 percent for fiscal year 2005, and 78 percent 
 43.33  for fiscal year 2006 and thereafter of the district's 
 43.34  integration revenue as defined in subdivision 3. 
 43.35     <b>[EFFECTIVE DATE.]</b> This section is effective July 1, 2003. 
 43.36     Sec. 4.  [APPROPRIATIONS.] 
 44.1      Subdivision 1.  [DEPARTMENT OF EDUCATION.] The sums 
 44.2   indicated in this section are appropriated from the general fund 
 44.3   to the department of education for the fiscal years designated. 
 44.4      Subd. 2.  [INTEGRATION AID.] For integration aid under 
 44.5   Minnesota Statutes, section 124D.86, subdivision 5: 
 44.6        $61,576,000    .....     2004 
 44.7        $58,963,000    .....     2005 
 44.8      The 2004 appropriation includes $8,428,000 for 2003 and 
 44.9   $53,148,000 for 2004. 
 44.10     The 2005 appropriation includes $10,885,000 for 2004 and 
 44.11  $48,078,000 for 2005.  
 44.12     Subd. 3.  [MAGNET SCHOOL GRANTS.] For magnet school and 
 44.13  program grants: 
 44.14       $750,000       .....     2004 
 44.15       $750,000       .....     2005 
 44.16     These amounts may be used for magnet school programs under 
 44.17  Minnesota Statutes, section 124D.88. 
 44.18     Subd. 4.  [MAGNET SCHOOL STARTUP AID.] For magnet school 
 44.19  startup aid under Minnesota Statutes, section 124D.88: 
 44.20       $ 37,000       .....     2004 
 44.21       $471,000       .....     2005 
 44.22     The 2004 appropriation includes $37,000 for 2003 and $0 for 
 44.23  2004.  
 44.24     The 2005 appropriation includes $0 for 2004 and $471,000 
 44.25  for 2005. 
 44.26     Subd. 5.  [INTERDISTRICT DESEGREGATION OR INTEGRATION 
 44.27  TRANSPORTATION GRANTS.] For interdistrict desegregation or 
 44.28  integration transportation grants under Minnesota Statutes, 
 44.29  section 124D.87: 
 44.30       $5,796,000     .....     2004 
 44.31       $8,401,000     .....     2005
 44.32     Sec. 5.  [REPEALER.] 
 44.33     (a) Minnesota Statutes 2002, sections 122A.64; 122A.65; and 
 44.34  124D.89, are repealed. 
 44.35     (b) Laws 1993, chapter 224, article 8, section 20, 
 44.36  subdivision 2, as amended by Laws 1994, chapter 647, article 8, 
 45.1   section 29, is repealed. 
 45.2                              ARTICLE 6 
 45.3                       AMERICAN INDIAN PROGRAMS 
 45.4      Section 1.  [APPROPRIATIONS.] 
 45.5      Subdivision 1.  [DEPARTMENT OF EDUCATION.] The sums 
 45.6   indicated in this section are appropriated from the general fund 
 45.7   to the department of education for the fiscal years designated. 
 45.8      Subd. 2.  [SUCCESS FOR THE FUTURE.] For American Indian 
 45.9   success for the future grants under Minnesota Statutes, section 
 45.10  124D.81: 
 45.11       $2,137,000     .....     2004
 45.12       $2,137,000     .....     2005
 45.13     The 2004 appropriation includes $363,000 for 2003 and 
 45.14  $1,774,000 for 2004. 
 45.15     The 2005 appropriation includes $363,000 for 2004 and 
 45.16  $1,774,000 for 2005. 
 45.17     Subd. 3.  [AMERICAN INDIAN SCHOLARSHIPS.] For American 
 45.18  Indian scholarships under Minnesota Statutes, section 124D.84: 
 45.19       $1,875,000     .....     2004 
 45.20       $1,875,000     .....     2005 
 45.21     Subd. 4.  [AMERICAN INDIAN TEACHER PREPARATION GRANTS.] For 
 45.22  joint grants to assist American Indian people to become teachers 
 45.23  under Minnesota Statutes, section 122A.63: 
 45.24       $190,000       .....     2004 
 45.25       $190,000       .....     2005 
 45.26     Subd. 5.  [TRIBAL CONTRACT SCHOOLS.] For tribal contract 
 45.27  school aid under Minnesota Statutes, section 124D.83: 
 45.28       $2,204,000     .....     2004
 45.29       $2,337,000     .....     2005
 45.30     The 2004 appropriation includes $285,000 for 2003 and 
 45.31  $1,919,000 for 2004. 
 45.32     The 2005 appropriation includes $393,000 for 2004 and 
 45.33  $1,944,000 for 2005. 
 45.34     Subd. 6.  [EARLY CHILDHOOD PROGRAMS AT TRIBAL SCHOOLS.] For 
 45.35  early childhood family education programs at tribal contract 
 45.36  schools under Minnesota Statutes, section 124D.83, subdivision 4:
 46.1        $68,000        .....     2004 
 46.2        $68,000        .....     2005 
 46.3                              ARTICLE 7 
 46.4                      ACCOUNTABILITY AND REFORM 
 46.5      Section 1.  Laws 2001, First Special Session chapter 6, 
 46.6   article 2, section 64, is amended to read: 
 46.7      Sec. 64.  [SCHOOLS' ACADEMIC AND FINANCIAL PERFORMANCE 
 46.8   EVALUATION; INDEPENDENT CONTRACTOR.] 
 46.9      (a) To assist taxpayers, educators, school board members, 
 46.10  and state and local officials in realizing their commitment to 
 46.11  improving student achievement and the management of school 
 46.12  systems, the commissioner of children, families, and learning 
 46.13  shall contract with an independent school evaluation services 
 46.14  contractor to evaluate and report on the academic and financial 
 46.15  performance of the state's independent school districts using, 
 46.16  but not limited to, six core categories of analysis: 
 46.17     (1) school district expenditures; 
 46.18     (2) students' performance outcomes based on multiple 
 46.19  indicia including students' test scores, attendance rates, 
 46.20  dropout rates, and graduation rates; 
 46.21     (3) return on resources to determine the extent to which 
 46.22  student outcomes improve commensurate with increases in district 
 46.23  spending; 
 46.24     (4) school district finances, taxes, and debt to establish 
 46.25  the context for analyzing the district's return on resources 
 46.26  under clause (3); 
 46.27     (5) students' learning environment to establish the context 
 46.28  for analyzing the district's return on resources under clause 
 46.29  (3); and 
 46.30     (6) school district demographics to establish the 
 46.31  socioeconomic context for analyzing the district's return on 
 46.32  resources under clause (3). 
 46.33     (b) In order to compare the regional and socioeconomic 
 46.34  peers of particular school districts, monitor educational 
 46.35  changes over time and identify important educational trends, the 
 46.36  contractor shall use the six core categories of analysis to: 
 47.1      (1) identify allocations of baseline and incremental school 
 47.2   district spending; 
 47.3      (2) connect student achievement with expenditure patterns; 
 47.4      (3) track school district financial health; 
 47.5      (4) observe school district debt and capital spending 
 47.6   levels; and 
 47.7      (5) measure the return on a school district's educational 
 47.8   resources. 
 47.9      (c) The contractor under paragraph (a) shall evaluate and 
 47.10  report on the academic and financial performance of all school 
 47.11  districts. 
 47.12     (d) Consistent with paragraph (a), clause (2), the 
 47.13  evaluation and reporting of test scores must distinguish between:
 47.14     (1) performance-based assessments; and 
 47.15     (2) academic, objective knowledge-based tests. 
 47.16     (e) The contractor must shall complete its written report 
 47.17  and submit it to the commissioner within 360 days of the date on 
 47.18  which the contract is signed.  The commissioner immediately must 
 47.19  make the report available in a readily accessible format to 
 47.20  state and local elected officials, members of the public, 
 47.21  educators, parents, and other interested individuals.  The 
 47.22  commissioner, upon receiving an individual's request, also must 
 47.23  shall make available all draft reports prepared by the 
 47.24  contractor, consistent with Minnesota Statutes, chapter 13. 
 47.25     Sec. 2.  [APPROPRIATIONS.] 
 47.26     Subdivision 1.  [DEPARTMENT OF EDUCATION.] The sums 
 47.27  indicated in this section are appropriated from the general fund 
 47.28  to the department of education for the fiscal years designated.  
 47.29     Subd. 2.  [STATEWIDE TESTING SUPPORT.] For supporting 
 47.30  implementation of the graduation standards: 
 47.31       $6,500,000     .....     2004 
 47.32       $6,500,000     .....     2005 
 47.33     Subd. 3.  [SEVENTH GRADE TESTING.] For seventh grade 
 47.34  testing under Minnesota Statutes, section 120B.30:  
 47.35       $2,500,000     .....     2004
 47.36       $2,500,000     .....     2005
 48.1      Subd. 4.  [BEST PRACTICES SEMINARS.] For best practices 
 48.2   graduation rule seminars and other professional development 
 48.3   capacity building activities that assure proficiency in teaching 
 48.4   and implementation of graduation rule standards: 
 48.5        $2,180,000     .....     2004
 48.6        $2,180,000     .....     2005
 48.7      Subd. 5.  [SCHOOL PERFORMANCE EVALUATION.] For evaluating 
 48.8   school performance under Laws 2001, First Special Session 
 48.9   chapter 6, article 2, section 64:  
 48.10       $2,000,000     .....     2004
 48.11     This appropriation is available until June 30, 2005.  This 
 48.12  is a onetime appropriation.  
 48.13     Subd. 6.  [ALTERNATIVE TEACHER COMPENSATION.] For 
 48.14  alternative teacher compensation established under Minnesota 
 48.15  Statutes, sections 122A.413 to 122A.415: 
 48.16       $3,700,000     .....     2004
 48.17       $3,700,000     .....     2005
 48.18     If the appropriations under this subdivision are 
 48.19  insufficient to fund all program participants, a participant may 
 48.20  receive less than the maximum per pupil amount available under 
 48.21  Minnesota Statutes, section 122A.415, subdivision 1. 
 48.22                             ARTICLE 8 
 48.23                  PROGRAMS FOR SPECIAL POPULATIONS 
 48.24     Section 1.  [APPROPRIATIONS.] 
 48.25     Subdivision 1.  [DEPARTMENT OF EDUCATION.] The sums 
 48.26  indicated in this section are appropriated from the general fund 
 48.27  to the department of education for the fiscal years designated. 
 48.28     Subd. 2.  [EXAMINATION FEES; TEACHER TRAINING AND SUPPORT 
 48.29  PROGRAMS.] (a) For students' advanced placement and 
 48.30  international baccalaureate examination fees under Minnesota 
 48.31  Statutes 2000, section 120B.13, subdivision 3, and the training 
 48.32  and related costs for teachers and other interested educators 
 48.33  under Minnesota Statutes 2000, section 120B.13, subdivision 1: 
 48.34       $  450,000     .....     2002 
 48.35       $  450,000     .....     2003   
 48.36     (b) $110,000 each year is for examination fees for pupils 
 49.1   of low-income families in public and nonpublic schools.  The 
 49.2   commissioner shall pay all examination fees for all students of 
 49.3   low-income families under Minnesota Statutes, section 120B.13, 
 49.4   subdivision 3.  If this amount is insufficient, a portion of the 
 49.5   funds under paragraph (c) must be used for this purpose. 
 49.6      (c) Notwithstanding Minnesota Statutes, section 120B.13, 
 49.7   subdivision 1, $340,000 each year is for teachers to attend 
 49.8   subject matter summer training programs and follow-up support 
 49.9   workshops approved by the advanced placement or international 
 49.10  baccalaureate programs.  The advanced placement program shall 
 49.11  receive 75 percent of this amount each year, and the 
 49.12  international baccalaureate program shall receive 25 percent of 
 49.13  this amount each year.  The amount of the subsidy for each 
 49.14  teacher attending an advanced placement or international 
 49.15  baccalaureate summer training program or workshop shall be the 
 49.16  same.  The commissioner shall determine the payment process and 
 49.17  the amount of the subsidy. 
 49.18     Subd. 3.  [FIRST GRADE PREPAREDNESS.] For first grade 
 49.19  preparedness grants under Minnesota Statutes, section 124D.081: 
 49.20       $7,250,000     .....     2004 
 49.21       $7,250,000     .....     2005
 49.22     Subd. 4.  [YOUTHWORKS PROGRAM.] For funding youthworks 
 49.23  programs under Minnesota Statutes, sections 124D.37 to 124D.45: 
 49.24       $1,788,000     .....     2004 
 49.25       $1,788,000     .....     2005 
 49.26     A grantee organization may provide health and child care 
 49.27  coverage to the dependents of each participant enrolled in a 
 49.28  full-time youth works program to the extent such coverage is not 
 49.29  otherwise available. 
 49.30     Subd. 5.  [STUDENT ORGANIZATIONS.] For student 
 49.31  organizations: 
 49.32       $625,000       .....     2004
 49.33       $625,000       .....     2005
 49.34     Sec. 2.  [REPEALER.] 
 49.35     Laws 2001, First Special Session chapter 6, article 2, 
 49.36  section 70, is repealed. 
 50.1                              ARTICLE 9
 50.2                           SPECIAL PROGRAMS 
 50.3      Section 1.  Minnesota Statutes 2002, section 125A.76, 
 50.4   subdivision 1, is amended to read: 
 50.5      Subdivision 1.  [DEFINITIONS.] For the purposes of this 
 50.6   section, the definitions in this subdivision apply. 
 50.7      (a) "Base year" for fiscal year 1998 and later fiscal years 
 50.8   means the second fiscal year preceding the fiscal year for which 
 50.9   aid will be paid. 
 50.10     (b) "Basic revenue" has the meaning given it in section 
 50.11  126C.10, subdivision 2.  For the purposes of computing basic 
 50.12  revenue pursuant to this section, each child with a disability 
 50.13  shall be counted as prescribed in section 126C.05, subdivision 1.
 50.14     (c) "Essential personnel" means teachers, cultural 
 50.15  liaisons, related services, and support services staff providing 
 50.16  direct services to students.  Essential personnel may also 
 50.17  include special education paraprofessionals or clericals 
 50.18  providing support to teachers and students by preparing 
 50.19  paperwork and making arrangements related to special education 
 50.20  compliance requirements, including parent meetings and 
 50.21  individual education plans. 
 50.22     (d) "Average daily membership" has the meaning given it in 
 50.23  section 126C.05. 
 50.24     (e) "Program growth factor" means 1.08 for fiscal year 
 50.25  2002, and 1.046 for fiscal year 2003, and 1.0 for fiscal year 
 50.26  2004 and later. 
 50.27     Sec. 2.  Minnesota Statutes 2002, section 125A.76, 
 50.28  subdivision 4, is amended to read: 
 50.29     Subd. 4.  [STATE TOTAL SPECIAL EDUCATION AID.] The state 
 50.30  total special education aid for fiscal year 2000 2004 equals 
 50.31  $463,000,000 $530,642,000.  The state total special education 
 50.32  aid for fiscal year 2001 2005 equals $474,000,000 $529,164,000.  
 50.33  The state total special education aid for later fiscal years 
 50.34  equals:  
 50.35     (1) the state total special education aid for the preceding 
 50.36  fiscal year; times 
 51.1      (2) the program growth factor; times 
 51.2      (3) the ratio of the state total average daily membership 
 51.3   for the current fiscal year to the state total average daily 
 51.4   membership for the preceding fiscal year. 
 51.5      Sec. 3.  Minnesota Statutes 2002, section 125A.79, 
 51.6   subdivision 1, is amended to read: 
 51.7      Subdivision 1.  [DEFINITIONS.] For the purposes of this 
 51.8   section, the definitions in this subdivision apply. 
 51.9      (a) "Unreimbursed special education cost" means the sum of 
 51.10  the following: 
 51.11     (1) expenditures for teachers' salaries, contracted 
 51.12  services, supplies, equipment, and transportation services 
 51.13  eligible for revenue under section 125A.76; plus 
 51.14     (2) expenditures for tuition bills received under sections 
 51.15  125A.03 to 125A.24 and 125A.65 for services eligible for revenue 
 51.16  under section 125A.76, subdivision 2; minus 
 51.17     (3) revenue for teachers' salaries, contracted services, 
 51.18  supplies, and equipment under section 125A.76; minus 
 51.19     (4) tuition receipts under sections 125A.03 to 125A.24 and 
 51.20  125A.65 for services eligible for revenue under section 125A.76, 
 51.21  subdivision 2. 
 51.22     (b) "General revenue" means for fiscal year 1996, the sum 
 51.23  of the general education revenue according to section 126C.10, 
 51.24  subdivision 1, as adjusted according to section 127A.47, 
 51.25  subdivision 7, plus the total referendum revenue according to 
 51.26  section 126C.17, subdivision 4.  For fiscal years 1997 and 
 51.27  later, "general revenue" means the sum of the general education 
 51.28  revenue according to section 126C.10, subdivision 1, as adjusted 
 51.29  according to section 127A.47, subdivisions 7 and 8, plus the 
 51.30  total referendum revenue minus transportation sparsity revenue 
 51.31  minus total operating capital revenue.  
 51.32     (c) "Average daily membership" has the meaning given it in 
 51.33  section 126C.05. 
 51.34     (d) "Program growth factor" means 1.044 for fiscal year 
 51.35  2002 and 1.02 for fiscal year 2003, and 1.0 for fiscal year 2004 
 51.36  and later. 
 52.1      Sec. 4.  Minnesota Statutes 2002, section 125A.79, 
 52.2   subdivision 6, is amended to read: 
 52.3      Subd. 6.  [STATE TOTAL SPECIAL EDUCATION EXCESS COST AID.] 
 52.4   The state total special education excess cost aid for fiscal 
 52.5   year 2004 equals $92,067,000.  The state total special education 
 52.6   aid for fiscal year 2005 equals $91,811,000.  The state total 
 52.7   special education excess cost aid for fiscal year 2002 2006 and 
 52.8   later fiscal years equals: 
 52.9      (1) the state total special education excess cost aid for 
 52.10  the preceding fiscal year; times 
 52.11     (2) the program growth factor; times 
 52.12     (3) the ratio of the state total average daily membership 
 52.13  for the current fiscal year to the state total average daily 
 52.14  membership for the preceding fiscal year.  
 52.15     Sec. 5.  [SPECIAL EDUCATION CROSS-SUBSIDY REDUCTION AID.] 
 52.16     (a) For fiscal year 2004, a district shall receive special 
 52.17  education cross-subsidy reduction aid equal to $5,000,000 times 
 52.18  the ratio of the district's special education excess cost aid 
 52.19  for the previous fiscal year according to section 125A.79, 
 52.20  subdivision 7, to the state total special education excess cost 
 52.21  aid for the previous fiscal year according to section 125A.79, 
 52.22  subdivision 6. 
 52.23     (b) For fiscal year 2005, a district shall receive special 
 52.24  education cross-subsidy reduction aid equal to $15,000,000 times 
 52.25  the ratio of the district's special education excess cost aid 
 52.26  for the previous fiscal year according to section 125A.79, 
 52.27  subdivision 7, to the state total special education excess cost 
 52.28  aid for the previous fiscal year according to section 125A.79, 
 52.29  subdivision 6. 
 52.30     (c) Special education cross-subsidy reduction aid must be 
 52.31  used to pay for a district's unfunded special education costs 
 52.32  that would otherwise be cross-subsidized by a district's general 
 52.33  education revenue. 
 52.34     Sec. 6.  [APPROPRIATIONS.] 
 52.35     Subdivision 1.  [DEPARTMENT OF EDUCATION.] The sums 
 52.36  indicated in this section are appropriated from the general fund 
 53.1   to the department of education for the fiscal years designated. 
 53.2      Subd. 2.  [SPECIAL EDUCATION; REGULAR.] For special 
 53.3   education aid under Minnesota Statutes, section 125A.75: 
 53.4        $531,011,000   .....     2004 
 53.5        $529,415,000   .....     2005 
 53.6      The 2004 appropriation includes $90,577,000 for 2003 and 
 53.7   $440,434,000 for 2004. 
 53.8      The 2005 appropriation includes $90,208,000 for 2004 and 
 53.9   $439,207,000 for 2005. 
 53.10     Subd. 3.  [AID FOR CHILDREN WITH DISABILITIES.] For aid 
 53.11  under Minnesota Statutes, section 125A.75, subdivision 3, for 
 53.12  children with disabilities placed in residential facilities 
 53.13  within the district boundaries for whom no district of residence 
 53.14  can be determined: 
 53.15       $2,177,000     .....     2004 
 53.16       $2,244,000     .....     2005 
 53.17     If the appropriation for either year is insufficient, the 
 53.18  appropriation for the other year is available.  
 53.19     Subd. 4.  [TRAVEL FOR HOME-BASED SERVICES.] For aid for 
 53.20  teacher travel for home-based services under Minnesota Statutes, 
 53.21  section 125A.75, subdivision 1: 
 53.22       $227,000       .....     2004 
 53.23       $262,000       .....     2005 
 53.24     The 2004 appropriation includes $34,000 for 2003 and 
 53.25  $193,000 for 2004. 
 53.26     The 2005 appropriation includes $39,000 for 2004 and 
 53.27  $223,000 for 2005. 
 53.28     Subd. 5.  [SPECIAL EDUCATION; EXCESS COSTS.] For excess 
 53.29  cost aid under Minnesota Statutes, section 125A.79, subdivision 
 53.30  7: 
 53.31       $94,512,000    .....     2004 
 53.32       $93,019,000    .....     2005 
 53.33     The 2004 appropriation includes $41,754,000 for 2003 and 
 53.34  $52,758,000 for 2004. 
 53.35     The 2005 appropriation includes $39,309,000 for 2004 and 
 53.36  $53,710,000 for 2005.  
 54.1      Subd. 6.  [SPECIAL EDUCATION CROSS-SUBSIDY REDUCTION 
 54.2   AID.] For special education cross-subsidy reduction aid under 
 54.3   section 5: 
 54.4        $ 5,000,000    .....     2004 
 54.5        $15,000,000    .....     2005 
 54.6      This is a onetime appropriation. 
 54.7      Subd. 7.  [LITIGATION COSTS FOR SPECIAL EDUCATION.] For 
 54.8   paying the costs a district incurs under Minnesota Statutes, 
 54.9   section 125A.75, subdivision 8: 
 54.10       $346,000       .....     2004 
 54.11       $356,000       .....     2005 
 54.12     Subd. 8.  [TRANSITION FOR DISABLED STUDENTS.] For aid for 
 54.13  transition programs for children with disabilities under 
 54.14  Minnesota Statutes, section 124D.454: 
 54.15       $8,892,000     .....     2004 
 54.16       $8,866,000     .....     2005 
 54.17     The 2004 appropriation includes $1,516,000 for 2003 and 
 54.18  $7,376,000 for 2004.  
 54.19     The 2005 appropriation includes $1,510,000 for 2004 and 
 54.20  $7,356,000 for 2005.  
 54.21     Subd. 9.  [COURT-PLACED SPECIAL EDUCATION REVENUE.] For 
 54.22  reimbursing serving school districts for unreimbursed eligible 
 54.23  expenditures attributable to children placed in the serving 
 54.24  school district by court action under Minnesota Statutes, 
 54.25  section 125A.79, subdivision 4: 
 54.26       $152,000       .....     2004 
 54.27       $160,000       .....     2005 
 54.28     Subd. 10.  [OUT-OF-STATE TUITION SPECIAL EDUCATION.] For 
 54.29  special education out-of-state tuition according to Minnesota 
 54.30  Statutes, section 125A.79, subdivision 8: 
 54.31       $250,000       .....     2004 
 54.32       $250,000       .....     2005 
 54.33     Sec. 7.  [REPEALER.] 
 54.34     Minnesota Statutes 2002, section 125A.79, subdivision 2, is 
 54.35  repealed. 
 54.36                             ARTICLE 10 
 55.1                      FACILITIES AND TECHNOLOGY 
 55.2      Section 1.  Minnesota Statutes 2002, section 123B.53, 
 55.3   subdivision 4, is amended to read: 
 55.4      Subd. 4.  [DEBT SERVICE EQUALIZATION REVENUE.] (a) The debt 
 55.5   service equalization revenue of a district equals the sum of the 
 55.6   first tier debt service equalization revenue and the second tier 
 55.7   debt service equalization revenue. 
 55.8      (b) The first tier debt service equalization revenue of a 
 55.9   district equals the greater of zero or the eligible debt service 
 55.10  revenue minus the amount raised by a levy of 15 percent times 
 55.11  the adjusted net tax capacity of the district minus the second 
 55.12  tier debt service equalization revenue of the district. 
 55.13     (c) The second tier debt service equalization revenue of a 
 55.14  district equals the greater of zero or the eligible debt service 
 55.15  revenue, excluding alternative facilities levies under section 
 55.16  123B.59, subdivision 5, minus the amount raised by a levy of 25 
 55.17  percent times the adjusted net tax capacity of the district. 
 55.18     <b>[EFFECTIVE DATE.]</b> This section is effective for revenue for 
 55.19  fiscal year 2005. 
 55.20     Sec. 2.  Minnesota Statutes 2002, section 123B.57, 
 55.21  subdivision 1, is amended to read: 
 55.22     Subdivision 1.  [HEALTH AND SAFETY PROGRAM.] (a) To receive 
 55.23  health and safety revenue for any fiscal year a district must 
 55.24  submit to the commissioner an application for aid and levy by 
 55.25  the date determined by the commissioner.  The application may be 
 55.26  for hazardous substance removal, fire and life safety code 
 55.27  repairs, labor and industry regulated facility and equipment 
 55.28  violations, and health, safety, and environmental management, 
 55.29  including indoor air quality management.  The application must 
 55.30  include a health and safety program adopted by the school 
 55.31  district board.  The program must include the estimated cost, 
 55.32  per building, of the program by fiscal year.  Upon approval 
 55.33  through the adoption of a resolution by each of an intermediate 
 55.34  district's member school district boards and the approval of the 
 55.35  department of children, families, and learning, a school 
 55.36  district may include its proportionate share of the costs of 
 56.1   health and safety projects for an intermediate district in its 
 56.2   application. 
 56.3      (b) Health and safety projects with an estimated cost of 
 56.4   $500,000 or more per site, approved after February 1, 2003, are 
 56.5   not eligible for health and safety revenue.  Health and safety 
 56.6   projects with an estimated cost of $500,000 or more per site, 
 56.7   approved after February 1, 2003, that meet all other 
 56.8   requirements for health and safety funding, are eligible for 
 56.9   alternative facilities bonding and levy revenue according to 
 56.10  section 123B.59.  A school board shall not separate portions of 
 56.11  a single project into components to qualify for health and 
 56.12  safety revenue, and shall not combine unrelated projects into a 
 56.13  single project to qualify for alternative facilities bonding and 
 56.14  levy revenue. 
 56.15     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
 56.16  following final enactment and applies to projects approved after 
 56.17  February 1, 2003, for taxes payable in 2004 and later. 
 56.18     Sec. 3.  Minnesota Statutes 2002, section 123B.57, 
 56.19  subdivision 6, is amended to read: 
 56.20     Subd. 6.  [USES OF HEALTH AND SAFETY REVENUE.] (a) Health 
 56.21  and safety revenue may be used only for approved expenditures 
 56.22  necessary to correct fire and life safety hazards, life safety 
 56.23  hazards, or for the removal or encapsulation of asbestos from 
 56.24  school buildings or property owned or being acquired by the 
 56.25  district, asbestos-related repairs, cleanup and disposal of 
 56.26  polychlorinated biphenyls found in school buildings or property 
 56.27  owned or being acquired by the district, or the cleanup, 
 56.28  removal, disposal, and repairs related to storing heating fuel 
 56.29  or transportation fuels such as alcohol, gasoline, fuel oil, and 
 56.30  special fuel, as defined in section 296A.01, labor and 
 56.31  industry Minnesota occupational safety and health administration 
 56.32  regulated facility and equipment hazards, indoor air quality 
 56.33  mold abatement, upgrades or replacement of mechanical 
 56.34  ventilation systems to meet American Society of Heating, 
 56.35  Refrigerating and Air Conditioning Engineers standards and state 
 56.36  mechanical code, department of health food code and swimming 
 57.1   pool hazards excluding depth correction, and health, safety, and 
 57.2   environmental management.  Health and safety revenue must not be 
 57.3   used to finance a lease purchase agreement, installment purchase 
 57.4   agreement, or other deferred payments agreement.  Health and 
 57.5   safety revenue must not be used for the construction of new 
 57.6   facilities or the purchase of portable classrooms, for interest 
 57.7   or other financing expenses, or for energy efficiency projects 
 57.8   under section 123B.65.  The revenue may not be used for a 
 57.9   building or property or part of a building or property used for 
 57.10  post-secondary instruction or administration or for a purpose 
 57.11  unrelated to elementary and secondary education. 
 57.12     (b) Notwithstanding paragraph (a), health and safety 
 57.13  revenue must not be used for replacement of building materials 
 57.14  or facilities including roof, walls, windows, internal fixtures 
 57.15  and flooring, nonhealth and safety costs associated with 
 57.16  demolition of facilities, structural repair or replacement of 
 57.17  facilities due to unsafe conditions, violence prevention and 
 57.18  facility security, ergonomics, building and heating, ventilating 
 57.19  and air conditioning supplies, maintenance, cleaning, testing, 
 57.20  and calibration activities.  All assessments, investigations, 
 57.21  inventories, and support equipment not leading to the 
 57.22  engineering or construction of a project shall be included in 
 57.23  the health, safety, and environmental management costs in 
 57.24  subdivision 8, paragraph (a). 
 57.25     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
 57.26  following final enactment and applies to projects approved after 
 57.27  February 1, 2003, for taxes payable in 2004 and later. 
 57.28     Sec. 4.  Minnesota Statutes 2002, section 123B.59, 
 57.29  subdivision 1, is amended to read: 
 57.30     Subdivision 1.  [TO QUALIFY.] (a) An independent or special 
 57.31  school district qualifies to participate in the alternative 
 57.32  facilities bonding and levy program if the district has: 
 57.33     (1) more than 66 students per grade; 
 57.34     (2) over 1,850,000 square feet of space and the average age 
 57.35  of building space is 15 years or older or over 1,500,000 square 
 57.36  feet and the average age of building space is 35 years or older; 
 58.1      (3) insufficient funds from projected health and safety 
 58.2   revenue and capital facilities revenue to meet the requirements 
 58.3   for deferred maintenance, to make accessibility improvements, or 
 58.4   to make fire, safety, or health repairs; and 
 58.5      (4) a ten-year facility plan approved by the commissioner 
 58.6   according to subdivision 2. 
 58.7      (b) An independent or special school district not eligible 
 58.8   to participate in the alternative facilities bonding and levy 
 58.9   program under paragraph (a) qualifies for limited participation 
 58.10  in the program if the district has: 
 58.11     (1) one or more health and safety projects with an 
 58.12  estimated cost of $500,000 or more per site that would qualify 
 58.13  for health and safety revenue except for the project size 
 58.14  limitation in section 123B.57, subdivision 1, paragraph (b); and 
 58.15     (2) insufficient funds from capital facilities revenue to 
 58.16  fund those projects. 
 58.17     <b>[EFFECTIVE DATE.]</b> This section is effective for revenue for 
 58.18  fiscal year 2005. 
 58.19     Sec. 5.  Minnesota Statutes 2002, section 123B.59, 
 58.20  subdivision 2, is amended to read: 
 58.21     Subd. 2.  [TEN-YEAR PLAN FACILITY.] (a) A district 
 58.22  qualifying district under subdivision 1, paragraph (a), must 
 58.23  have a ten-year facility plan approved by the commissioner that 
 58.24  includes an inventory of projects and costs that would be 
 58.25  eligible for: 
 58.26     (1) health and safety revenue, without restriction as to 
 58.27  project size; 
 58.28     (2) disabled access levy; and 
 58.29     (3) deferred capital expenditures and maintenance projects 
 58.30  necessary to prevent further erosion of facilities. 
 58.31     (b) A district qualifying under subdivision 1, paragraph 
 58.32  (b), must have a five-year plan approved by the commissioner 
 58.33  that includes an inventory of projects and costs for health and 
 58.34  safety projects with an estimated cost of $500,000 or more per 
 58.35  site that would qualify for health and safety revenue except for 
 58.36  the project size limitation in section 123B.57, subdivision 1, 
 59.1   paragraph (b). 
 59.2      (c) The school district must: 
 59.3      (1) annually update the plan plans; 
 59.4      (2) biennially submit a facility maintenance plan; and 
 59.5      (3) indicate whether the district will issue bonds to 
 59.6   finance the plan or levy for the costs. 
 59.7      <b>[EFFECTIVE DATE.]</b> This section is effective for revenue for 
 59.8   fiscal year 2005. 
 59.9      Sec. 6.  Minnesota Statutes 2002, section 123B.59, 
 59.10  subdivision 3, is amended to read: 
 59.11     Subd. 3.  [BOND AUTHORIZATION.] (a) A school district, upon 
 59.12  approval of its board and the commissioner, may issue general 
 59.13  obligation bonds under this section to finance approved 
 59.14  facilities plans approved by its board and the commissioner.  
 59.15  Chapter 475, except sections 475.58 and 475.59, must be complied 
 59.16  with.  The district may levy under subdivision 5 for the debt 
 59.17  service revenue.  The authority to issue bonds under this 
 59.18  section is in addition to any bonding authority authorized by 
 59.19  this chapter, or other law.  The amount of bonding authority 
 59.20  authorized under this section must be disregarded in calculating 
 59.21  the bonding or net debt limits of this chapter, or any other law 
 59.22  other than section 475.53, subdivision 4. 
 59.23     (b) Before a district issues bonds under this subdivision, 
 59.24  it must publish notice of the intended projects, the amount of 
 59.25  the bond issue, and the total amount of district indebtedness. 
 59.26     (c) A bond issue tentatively authorized by the board under 
 59.27  this subdivision becomes finally authorized unless a petition 
 59.28  signed by more than 15 percent of the registered voters of the 
 59.29  district is filed with the school board within 30 days of the 
 59.30  board's adoption of a resolution stating the board's intention 
 59.31  to issue bonds.  The percentage is to be determined with 
 59.32  reference to the number of registered voters in the district on 
 59.33  the last day before the petition is filed with the board.  The 
 59.34  petition must call for a referendum on the question of whether 
 59.35  to issue the bonds for the projects under this section.  The 
 59.36  approval of 50 percent plus one of those voting on the question 
 60.1   is required to pass a referendum authorized by this section. 
 60.2      <b>[EFFECTIVE DATE.]</b> This section is effective the day 
 60.3   following final enactment and applies to bonds issued after 
 60.4   February 1, 2003, for taxes payable in 2004 and later. 
 60.5      Sec. 7.  Minnesota Statutes 2002, section 123B.59, is 
 60.6   amended by adding a subdivision to read: 
 60.7      Subd. 3a.  [LEVY AUTHORIZATION.] (a) A school district may 
 60.8   levy under this section to finance the portion of facilities 
 60.9   plans approved by its board and the commissioner that are not 
 60.10  financed through bond issues according to subdivision 3. 
 60.11     (b) Before a district levies under this subdivision, it 
 60.12  must publish notice of the intended projects, including the 
 60.13  total estimated project cost. 
 60.14     (c) A levy tentatively authorized by the board under this 
 60.15  subdivision becomes finally authorized unless a petition signed 
 60.16  by more than 15 percent of the registered voters of the district 
 60.17  is filed with the school board within 30 days of the board's 
 60.18  adoption of a resolution stating the board's intention to levy.  
 60.19  The percentage is to be determined with reference to the number 
 60.20  of registered voters in the district on the last day before the 
 60.21  petition is filed with the board.  The petition must call for a 
 60.22  referendum on the question of whether to levy for the projects 
 60.23  under this section.  The approval of 50 percent plus one of 
 60.24  those voting on the question is required to pass a referendum 
 60.25  authorized by this section.  The referendum must be held on a 
 60.26  date set by the board.  The ballot must provide a general 
 60.27  description of the proposed projects and state the estimated 
 60.28  total cost of the projects, the specific number of years, not to 
 60.29  exceed ten, for which the referendum authorization applies, the 
 60.30  maximum amount of the levy for each year, and the estimated tax 
 60.31  rate as a percentage of net tax capacity for the amount 
 60.32  specified for the first year and for the maximum amount 
 60.33  specified in the schedule.  The ballot must contain a textual 
 60.34  portion with the information required in this subdivision and a 
 60.35  question stating substantially the following: 
 60.36     "Shall the alternative facilities levy proposed by the 
 61.1   board of ............ School District No. ............ be 
 61.2   approved?" 
 61.3      If approved, the amount stated for each year may be 
 61.4   certified for the number of years approved.  The district must 
 61.5   notify the commissioner of the results of the referendum. 
 61.6      <b>[EFFECTIVE DATE.]</b> This section is effective the day 
 61.7   following final enactment and applies to levies for taxes 
 61.8   payable in 2004 and later. 
 61.9      Sec. 8.  Minnesota Statutes 2002, section 123B.59, 
 61.10  subdivision 5, is amended to read: 
 61.11     Subd. 5.  [LEVY AUTHORIZED.] A district, after local board 
 61.12  approval, may levy for costs related to an approved facility 
 61.13  plan as follows:  
 61.14     (a) if the district has indicated to the commissioner that 
 61.15  bonds will be issued, the district may levy for the principal 
 61.16  and interest payments on outstanding bonds issued according to 
 61.17  subdivision 3 after reduction for any alternative facilities aid 
 61.18  receivable under subdivision 6; or 
 61.19     (b) if the district has indicated to the commissioner that 
 61.20  the plan will be funded through levy, the district may levy 
 61.21  according to the schedule approved in the plan after reduction 
 61.22  for any alternative facilities aid receivable under subdivision 
 61.23  6 3b. 
 61.24     <b>[EFFECTIVE DATE.]</b> This section is effective for taxes 
 61.25  payable in 2004. 
 61.26     Sec. 9.  Minnesota Statutes 2002, section 126C.40, 
 61.27  subdivision 1, is amended to read: 
 61.28     Subdivision 1.  [TO LEASE BUILDING OR LAND.] (a) When an 
 61.29  independent or a special school district or a group of 
 61.30  independent or special school districts finds it economically 
 61.31  advantageous to rent or lease a building or land for any 
 61.32  instructional purposes or for school storage or furniture 
 61.33  repair, and it determines that the operating capital revenue 
 61.34  authorized under section 126C.10, subdivision 13, is 
 61.35  insufficient for this purpose, it may apply to the commissioner 
 61.36  for permission to make an additional capital expenditure levy 
 62.1   for this purpose.  An application for permission to levy under 
 62.2   this subdivision must contain financial justification for the 
 62.3   proposed levy, the terms and conditions of the proposed lease, 
 62.4   and a description of the space to be leased and its proposed use.
 62.5      (b) The criteria for approval of applications to levy under 
 62.6   this subdivision must include:  the reasonableness of the price, 
 62.7   the appropriateness of the space to the proposed activity, the 
 62.8   feasibility of transporting pupils to the leased building or 
 62.9   land, conformity of the lease to the laws and rules of the state 
 62.10  of Minnesota, and the appropriateness of the proposed lease to 
 62.11  the space needs and the financial condition of the district.  
 62.12  The commissioner must not authorize a levy under this 
 62.13  subdivision in an amount greater than 90 percent of the cost to 
 62.14  the district of renting or leasing a building or land for 
 62.15  approved purposes.  The proceeds of this levy must not be used 
 62.16  for custodial or other maintenance services.  A district may not 
 62.17  levy under this subdivision for the purpose of leasing or 
 62.18  renting a district-owned building or site to itself. 
 62.19     (c) For agreements finalized after July 1, 1997, a district 
 62.20  may not levy under this subdivision for the purpose of leasing:  
 62.21  (1) a newly constructed building used primarily for regular 
 62.22  kindergarten, elementary, or secondary instruction; or (2) a 
 62.23  newly constructed building addition or additions used primarily 
 62.24  for regular kindergarten, elementary, or secondary instruction 
 62.25  that contains more than 20 percent of the square footage of the 
 62.26  previously existing building. 
 62.27     (d) Notwithstanding paragraph (b), a district may levy 
 62.28  under this subdivision for the purpose of leasing or renting a 
 62.29  district-owned building or site to itself only if the amount is 
 62.30  needed by the district to make payments required by a lease 
 62.31  purchase agreement, installment purchase agreement, or other 
 62.32  deferred payments agreement authorized by law, and the levy 
 62.33  meets the requirements of paragraph (c).  A levy authorized for 
 62.34  a district by the commissioner under this paragraph may be in 
 62.35  the amount needed by the district to make payments required by a 
 62.36  lease purchase agreement, installment purchase agreement, or 
 63.1   other deferred payments agreement authorized by law, provided 
 63.2   that any agreement include a provision giving the school 
 63.3   districts the right to terminate the agreement annually without 
 63.4   penalty. 
 63.5      (e) The total levy under this subdivision for a district 
 63.6   for any year must not exceed $100 $90 times the resident pupil 
 63.7   units for the fiscal year to which the levy is attributable. 
 63.8      (f) For agreements for which a review and comment have been 
 63.9   submitted to the department of children, families, and learning 
 63.10  after April 1, 1998, the term "instructional purpose" as used in 
 63.11  this subdivision excludes expenditures on stadiums. 
 63.12     (g) The commissioner of children, families, and learning 
 63.13  may authorize a school district to exceed the limit in paragraph 
 63.14  (e) if the school district petitions the commissioner for 
 63.15  approval.  The commissioner shall grant approval to a school 
 63.16  district to exceed the limit in paragraph (e) for not more than 
 63.17  five years if the district meets the following criteria: 
 63.18     (1) the school district has been experiencing pupil 
 63.19  enrollment growth in the preceding five years; 
 63.20     (2) the purpose of the increased levy is in the long-term 
 63.21  public interest; 
 63.22     (3) the purpose of the increased levy promotes colocation 
 63.23  of government services; and 
 63.24     (4) the purpose of the increased levy is in the long-term 
 63.25  interest of the district by avoiding over construction of school 
 63.26  facilities. 
 63.27     (h) A school district that is a member of an intermediate 
 63.28  school district may include in its authority under this 
 63.29  section 90 percent of the costs associated with leases of 
 63.30  administrative and classroom space for intermediate school 
 63.31  district programs.  This authority must not exceed $25 $22.50 
 63.32  times the adjusted marginal cost pupil units of the member 
 63.33  districts.  This authority is in addition to any other authority 
 63.34  authorized under this section. 
 63.35     (i) In addition to the allowable capital levies in 
 63.36  paragraph (a), a district that is a member of the "Technology 
 64.1   and Information Education Systems" data processing joint board, 
 64.2   that finds it economically advantageous to enter into a lease 
 64.3   purchase agreement for a building for a group of school 
 64.4   districts or special school districts for staff development 
 64.5   purposes, may levy for its portion of lease costs attributed to 
 64.6   the district within the total levy limit in paragraph (e). 
 64.7      <b>[EFFECTIVE DATE.]</b> This section is effective for taxes 
 64.8   payable in 2004. 
 64.9      Sec. 10.  Minnesota Statutes 2002, section 126C.40, 
 64.10  subdivision 2, is amended to read: 
 64.11     Subd. 2.  [PRE-JULY 1990 LEASE PURCHASE, INSTALLMENT BUYS.] 
 64.12  A district may annually levy 90 percent of the amount needed to 
 64.13  make payments required by a lease purchase agreement, 
 64.14  installment purchase agreement, or other deferred payment 
 64.15  agreement authorized by Minnesota Statutes 1989 Supplement, 
 64.16  section 465.71, if:  
 64.17     (1) the agreement was approved by the commissioner before 
 64.18  July 1, 1990, according to Minnesota Statutes 1989 Supplement, 
 64.19  section 275.125, subdivision 11d; or 
 64.20     (2) the district levied in 1989 for the payments. 
 64.21     <b>[EFFECTIVE DATE.]</b> This section is effective for taxes 
 64.22  payable in 2004. 
 64.23     Sec. 11.  Minnesota Statutes 2002, section 126C.40, 
 64.24  subdivision 6, is amended to read: 
 64.25     Subd. 6.  [LEASE PURCHASE; INSTALLMENT BUYS.] (a) Upon 
 64.26  application to, and approval by, the commissioner in accordance 
 64.27  with the procedures and limits in subdivision 1, paragraphs (a) 
 64.28  and (b), a district, as defined in this subdivision, may: 
 64.29     (1) purchase real or personal property under an installment 
 64.30  contract or may lease real or personal property with an option 
 64.31  to purchase under a lease purchase agreement, by which 
 64.32  installment contract or lease purchase agreement title is kept 
 64.33  by the seller or vendor or assigned to a third party as security 
 64.34  for the purchase price, including interest, if any; and 
 64.35     (2) annually levy 90 percent of the amounts necessary to 
 64.36  pay the district's obligations under the installment contract or 
 65.1   lease purchase agreement. 
 65.2      (b) The obligation created by the installment contract or 
 65.3   the lease purchase agreement must not be included in the 
 65.4   calculation of net debt for purposes of section 475.53, and does 
 65.5   not constitute debt under other law.  An election is not 
 65.6   required in connection with the execution of the installment 
 65.7   contract or the lease purchase agreement. 
 65.8      (c) The proceeds of the levy authorized by this subdivision 
 65.9   must not be used to acquire a facility to be primarily used for 
 65.10  athletic or school administration purposes. 
 65.11     (d) For the purposes of this subdivision, "district" means: 
 65.12     (1) a school district required to have a comprehensive plan 
 65.13  for the elimination of segregation whose plan has been 
 65.14  determined by the commissioner to be in compliance with 
 65.15  department of children, families, and learning rules relating to 
 65.16  equality of educational opportunity and school desegregation 
 65.17  and, for a district eligible for revenue under section 124D.86, 
 65.18  subdivision 3, clause (4), where the acquisition of property 
 65.19  under this subdivision is determined by the commissioner to 
 65.20  contribute to the implementation of the desegregation plan; or 
 65.21     (2) a school district that participates in a joint program 
 65.22  for interdistrict desegregation with a district defined in 
 65.23  clause (1) if the facility acquired under this subdivision is to 
 65.24  be primarily used for the joint program and the commissioner 
 65.25  determines that the joint programs are being undertaken to 
 65.26  implement the districts' desegregation plan. 
 65.27     (e) Notwithstanding subdivision 1, the prohibition against 
 65.28  a levy by a district to lease or rent a district-owned building 
 65.29  to itself does not apply to levies otherwise authorized by this 
 65.30  subdivision. 
 65.31     (f) For the purposes of this subdivision, any references in 
 65.32  subdivision 1 to building or land shall include personal 
 65.33  property. 
 65.34     <b>[EFFECTIVE DATE.]</b> This section is effective for taxes 
 65.35  payable in 2004. 
 65.36     Sec. 12.  [BONDS; MOUNDS VIEW.] 
 66.1      Notwithstanding Minnesota Statutes, section 123B.59, 
 66.2   subdivision 3, independent school district No. 621, Mounds View, 
 66.3   may issue bonds according to Minnesota Statutes 2002, section 
 66.4   123B.59, subdivision 3, for projects approved by the 
 66.5   commissioner before February 1, 2003. 
 66.6      <b>[EFFECTIVE DATE.]</b> This section is effective the day 
 66.7   following final enactment. 
 66.8      Sec. 13.  [APPROPRIATIONS.] 
 66.9      Subdivision 1.  [DEPARTMENT OF EDUCATION.] The sums 
 66.10  indicated in this section are appropriated from the general fund 
 66.11  to the department of education for the fiscal years designated.  
 66.12     Subd. 2.  [HEALTH AND SAFETY REVENUE.] For health and 
 66.13  safety aid according to Minnesota Statutes, section 123B.57, 
 66.14  subdivision 5: 
 66.15       $8,076,000     .....     2004 
 66.16       $5,999,000     .....     2005 
 66.17     The 2004 appropriation includes $1,516,000 for 2003 and 
 66.18  $6,560,000 for 2004. 
 66.19     The 2005 appropriation includes $1,343,000 for 2004 and 
 66.20  $4,657,000 for 2005. 
 66.21     Subd. 3.  [DEBT SERVICE EQUALIZATION.] For debt service aid 
 66.22  according to Minnesota Statutes, section 123B.53, subdivision 6: 
 66.23       $35,584,000    .....     2004 
 66.24       $37,629,000    .....     2005 
 66.25     The 2004 appropriation includes $5,586,000 for 2003 and 
 66.26  $29,998,000 for 2004. 
 66.27     The 2005 appropriation includes $6,144,000 for 2004 and 
 66.28  $31,485,000 for 2005. 
 66.29     Subd. 4.  [ALTERNATIVE FACILITIES BONDING AID.] For 
 66.30  alternative facilities bonding aid, according to Minnesota 
 66.31  Statutes, section 123B.59, subdivision 1: 
 66.32       $19,287,000    .....     2004 
 66.33       $ 3,280,000    .....     2005 
 66.34     The 2004 appropriation includes $3,278,000 for 2003 and 
 66.35  $16,009,000 for 2004. 
 66.36     The 2005 appropriation includes $3,280,000 for 2004 and $0 
 67.1   for 2005. 
 67.2      Sec. 14.  [REPEALER.] 
 67.3      Minnesota Statutes 2002, section 123B.59, subdivisions 6 
 67.4   and 7, are repealed effective for revenue for fiscal year 2005. 
 67.5                              ARTICLE 11 
 67.6                          NUTRITION PROGRAMS 
 67.7      Section 1.  [124D.116] [SCHOOL BREAKFAST PROGRAM.] 
 67.8      Subdivision 1.  [PURPOSE.] The purpose of the school 
 67.9   breakfast program is to provide affordable morning nutrition to 
 67.10  children so that they can effectively learn.  Public and 
 67.11  nonpublic schools that participate in the federal school 
 67.12  breakfast program may receive state breakfast aid either under 
 67.13  the fast break to learning program or the traditional school 
 67.14  breakfast program.  Schools shall encourage all children to eat 
 67.15  a nutritious breakfast, either at home or at school, and shall 
 67.16  work to eliminate barriers to breakfast participation at school 
 67.17  such as inadequate facilities and transportation. 
 67.18     Subd. 2.  [PROGRAM; ELIGIBILITY.] (a) Each school year, 
 67.19  public and nonpublic elementary schools that (1) participate in 
 67.20  the federal school breakfast program and (2) served at least 33 
 67.21  percent of school lunches free or at a reduced price during the 
 67.22  second preceding school year or participated in the fast break 
 67.23  to learning breakfast program during the previous school year, 
 67.24  are eligible for the state fast break to learning breakfast 
 67.25  program.  Elementary schools participating in the fast break to 
 67.26  learning breakfast program receive reimbursement under 
 67.27  subdivision 3, paragraph (a), to offer school breakfast to all 
 67.28  students without charge.  Schools shall not charge student 
 67.29  households for fast break to learning meals. 
 67.30     (b) Each school year, public and nonpublic schools that (1) 
 67.31  participate in the federal school breakfast program and (2) do 
 67.32  not participate in the fast break to learning breakfast program, 
 67.33  will receive traditional school breakfast reimbursement under 
 67.34  subdivision 3, paragraph (b), to support an affordable breakfast 
 67.35  program for all students.  Schools shall not charge student 
 67.36  households for meals served to children who are eligible for 
 68.1   reduced-price meals under federal school meal guidelines. 
 68.2      Subd. 3.  [PROGRAM REIMBURSEMENT.] (a) Each school year, 
 68.3   the state must reimburse schools that participate in the fast 
 68.4   break to learning breakfast program for the difference between 
 68.5   the per meal federal rates of reimbursement and the average 
 68.6   breakfast cost, based on the United States Department of Labor 
 68.7   Consumer Price Index for Cost of Food Away from Home.  Meals 
 68.8   that are reimbursed at the federal free rate and free and 
 68.9   reduced-price meals that are eligible for the federal "severe 
 68.10  need" reimbursement rate do not qualify for fast break to 
 68.11  learning funds. 
 68.12     (b) Each school year, the state must reimburse schools that 
 68.13  participate in the federal school breakfast program and do not 
 68.14  participate in the fast break to learning breakfast program in 
 68.15  the amount of 30 cents for each reduced-price breakfast not 
 68.16  eligible for the federal "severe need" reimbursement rate and 20 
 68.17  cents for each fully paid breakfast served during school year 
 68.18  2003-2004 and 40 cents for each fully paid breakfast served in 
 68.19  school year 2004-2005 and each school year thereafter. 
 68.20     Sec. 2.  Minnesota Statutes 2002, section 127A.45, 
 68.21  subdivision 14a, is amended to read: 
 68.22     Subd. 14a.  [STATE NUTRITION PROGRAMS.] Notwithstanding 
 68.23  subdivision 3, the state shall pay 100 percent of the aid for 
 68.24  the current year according to sections 124D.111, 124D.115, and 
 68.25  124D.118 and 83 percent of the aid for the current year 
 68.26  according to section 124D.1156 124D.116 based on submitted 
 68.27  monthly vouchers showing meals and milk served.  The remaining 
 68.28  17 percent according to section 124D.1156 shall be paid by 
 68.29  October 30 of the following fiscal year. 
 68.30     Sec. 3.  [APPROPRIATIONS.] 
 68.31     Subdivision 1.  [DEPARTMENT OF EDUCATION.] The sums 
 68.32  indicated in this section are appropriated from the general fund 
 68.33  to the department of education for the fiscal years designated. 
 68.34     Subd. 2.  [SCHOOL LUNCH.] (a) For school lunch aid 
 68.35  according to Minnesota Statutes, section 124D.111, and Code of 
 68.36  Federal Regulations, title 7, section 210.17:  
 69.1        $7,800,000     .....     2004 
 69.2        $7,950,000     .....     2005 
 69.3      Subd. 3.  [TRADITIONAL SCHOOL BREAKFAST.] For traditional 
 69.4   school breakfast aid under Minnesota Statutes, section 124D.116: 
 69.5        $  873,000     .....     2004 
 69.6        $1,646,000     .....     2005 
 69.7      Subd. 4.  [FAST BREAK TO LEARNING BREAKFAST.] For fast 
 69.8   break to learning breakfast under Minnesota Statutes, section 
 69.9   124D.116: 
 69.10       $5,461,000     .....     2004 
 69.11       $5,186,000     .....     2005 
 69.12     The 2004 appropriation includes $747,000 for 2003 and 
 69.13  $4,714,000 for 2004. 
 69.14     Subd. 5.  [SUMMER SCHOOL SERVICE REPLACEMENT AID.] For 
 69.15  summer food service replacement aid under Minnesota Statutes, 
 69.16  section 124D.119: 
 69.17       $150,000       .....     2004 
 69.18       $150,000       .....     2005 
 69.19     Sec. 4.  [REPEALER.] 
 69.20     Minnesota Statutes 2002, sections 124D.115; 124D.1156; and 
 69.21  124D.118, are repealed. 
 69.22                             ARTICLE 12 
 69.23                             LIBRARIES 
 69.24     Section 1.  [APPROPRIATIONS.] 
 69.25     Subdivision 1.  [DEPARTMENT OF EDUCATION.] The sums 
 69.26  indicated in this section are appropriated from the general fund 
 69.27  to the department of education for the fiscal years designated.  
 69.28     Subd. 2.  [BASIC SUPPORT.] For basic support grants 
 69.29  according to Minnesota Statutes, sections 134.32 to 134.35: 
 69.30       $9,566,000     .....     2004 
 69.31       $9,770,000     .....     2005 
 69.32     The 2004 appropriation includes $1,456,000 for 2003 and 
 69.33  $8,110,000 for 2004. 
 69.34     The 2005 appropriation includes $1,660,000 for 2004 and 
 69.35  $8,110,000 for 2005. 
 69.36     Subd. 3.  [MULTICOUNTY, MULTITYPE LIBRARY SYSTEMS.] For 
 70.1   grants according to Minnesota Statutes, sections 134.353 and 
 70.2   134.354, to multicounty, multitype library systems: 
 70.3        $903,000       .....     2004 
 70.4        $903,000       .....     2005 
 70.5      The 2004 appropriation includes $153,000 for 2003 and 
 70.6   $750,000 for 2004. 
 70.7      The 2005 appropriation includes $153,000 for 2004 and 
 70.8   $750,000 for 2005. 
 70.9                              ARTICLE 13 
 70.10                        CHILD CARE PROGRAMS 
 70.11     Section 1.  Minnesota Statutes 2002, section 119B.12, 
 70.12  subdivision 2, is amended to read: 
 70.13     Subd. 2.  [PARENT FEE.] A family's monthly parent fee must 
 70.14  be a fixed percentage of its annual gross income.  Parent fees 
 70.15  must apply to families eligible for child care assistance under 
 70.16  sections 119B.03 and 119B.05.  Income must be as defined in 
 70.17  section 119B.011, subdivision 15.  The fixed percent is based on 
 70.18  the relationship of the family's annual gross income to 100 
 70.19  percent of state median income.  Beginning January 1, 1998, 
 70.20  parent fees must begin at 75 percent of the poverty level.  The 
 70.21  minimum parent fees for families between 75 percent and 100 
 70.22  percent of poverty level must be $5 $10 per month.  Parent fees 
 70.23  must be established in rule and must provide for graduated 
 70.24  movement to full payment. 
 70.25     Sec. 2.  Minnesota Statutes 2002, section 119B.13, is 
 70.26  amended by adding a subdivision to read: 
 70.27     Subd. 1a.  [LEGAL NONLICENSED FAMILY CHILD CARE PROVIDER 
 70.28  RATES.] (a) Legal nonlicensed family child care providers 
 70.29  receiving reimbursement under this chapter must be paid in 
 70.30  hourly blocks of time for families receiving assistance. 
 70.31     (b) The maximum rate paid to legal nonlicensed family child 
 70.32  care providers must be 90 percent of the county maximum hourly 
 70.33  rate for licensed family child care providers.  In counties 
 70.34  where the maximum hourly rate for licensed family child care 
 70.35  providers is higher than the maximum weekly rate for those 
 70.36  providers divided by 50, the maximum hourly rate that may be 
 71.1   paid to legal nonlicensed family child care providers is the 
 71.2   rate equal to the maximum weekly rate for licensed family child 
 71.3   care providers divided by 50 and then multiplied by 0.90. 
 71.4      (c) A rate which includes a provider bonus paid under 
 71.5   subdivision 2 or a special needs rate paid under subdivision 3 
 71.6   may be in excess of the maximum rate allowed under this 
 71.7   subdivision. 
 71.8      (d) Legal nonlicensed family child care providers receiving 
 71.9   reimbursement under this chapter may not be paid registration 
 71.10  fees for families receiving assistance. 
 71.11     Sec. 3.  Minnesota Statutes 2002, section 119B.13, 
 71.12  subdivision 2, is amended to read: 
 71.13     Subd. 2.  [PROVIDER RATE BONUS FOR ACCREDITATION.] A family 
 71.14  child care provider or child care center shall be paid a ten 
 71.15  percent bonus above the maximum rate established in subdivision 
 71.16  1 or 1a, if the provider or center holds a current early 
 71.17  childhood development credential approved by the commissioner, 
 71.18  up to the actual provider rate.  
 71.19     Sec. 4.  [CHILD CARE ASSISTANCE PARENT FEE SCHEDULE, 
 71.20  RULEMAKING.] 
 71.21     The commissioner of education shall adopt rules under 
 71.22  Minnesota Statutes, chapter 14, to amend the parent fee schedule 
 71.23  in Minnesota Rules, chapter 3400, as follows: 
 71.24     (1) parent fees for families with incomes between 101.01 
 71.25  percent of the federal poverty guidelines and 35 percent of the 
 71.26  state median income must equal 2.42 percent of adjusted gross 
 71.27  income for families at 35 percent of the state median income; 
 71.28     (2) parent fees for families with incomes between 35.01 
 71.29  percent state median income and 42 percent of the state median 
 71.30  income must equal 2.97 percent of adjusted gross income for 
 71.31  families at 42 percent of the state median income; 
 71.32     (3) parent fees for families with incomes between 42.01 
 71.33  percent state median income and 75 percent of the state median 
 71.34  income must begin at 4.13 percent of adjusted gross income and 
 71.35  provide for graduated movement of fee increases; and 
 71.36     (4) parent fees for families at 75 percent of state median 
 72.1   income must equal 22.0 percent of gross annual income. 
 72.2      Sec. 5.  [APPROPRIATIONS.] 
 72.3      Subdivision 1.  [DEPARTMENT OF EDUCATION.] The sums 
 72.4   indicated in this section are appropriated from the general fund 
 72.5   to the department of education for the fiscal years designated. 
 72.6      Subd. 2.  [BASIC SLIDING FEE CHILD CARE.] For child care 
 72.7   assistance according to Minnesota Statutes, section 119B.03: 
 72.8        $44,528,000    .....     2004 
 72.9        $43,774,000    .....     2005 
 72.10     These appropriations are available to be spent in either 
 72.11  year. 
 72.12     Subd. 3.  [MFIP CHILD CARE.] For MFIP child care: 
 72.13       $78,247,000    .....     2004
 72.14       $79,970,000    .....     2005
 72.15     Subd. 4.  [CHILD CARE PROGRAM INTEGRITY.] For the 
 72.16  administrative costs of program integrity and fraud prevention 
 72.17  for child care assistance under chapter 119B: 
 72.18       $175,000       .....     2004 
 72.19       $175,000       .....     2005 
 72.20     Subd. 5.  [CHILD CARE DEVELOPMENT.] For child care 
 72.21  development grants according to Minnesota Statutes, section 
 72.22  119B.21: 
 72.23       $1,365,000     .....     2004
 72.24       $1,365,000     .....     2005
 72.25     Sec. 6.  [FEDERAL TANF TRANSFERS.] 
 72.26     Subdivision 1.  [DEPARTMENT OF EDUCATION.] The sums 
 72.27  indicated in this section are transferred from the federal TANF 
 72.28  fund to the child care and development fund and appropriated to 
 72.29  the department of education for the fiscal years designated.  
 72.30  The commissioner shall ensure that all transferred funds are 
 72.31  expended in accordance with the child care and development fund 
 72.32  regulations and that the maximum allowable transferred funds are 
 72.33  used for the programs in this section. 
 72.34     Subd. 2.  [BASIC SLIDING FEE CHILD CARE.] For child care 
 72.35  assistance according to Minnesota Statutes, section 119B.03:  
 72.36       $17,686,000    .....     2004 
 73.1        $17,700,000    .....     2005 
 73.2      Subd. 3.  [MFIP CHILD CARE.] For MFIP child care: 
 73.3        $7,428,000     .....     2004
 73.4        $2,943,000     .....     2005
 73.5                              ARTICLE 14 
 73.6                       EARLY CHILDHOOD PROGRAMS 
 73.7      Section 1.  Minnesota Statutes 2002, section 124D.135, 
 73.8   subdivision 1, is amended to read: 
 73.9      Subdivision 1.  [REVENUE.] (a) For fiscal year 2004, the 
 73.10  revenue for early childhood family education programs for a 
 73.11  school district equals $113.50 for fiscal years 2000 and 2001 
 73.12  and $120 for 2002 and later fiscal years times the greater of: 
 73.13     (1) 150; or 
 73.14     (2) the number of people under five years of age residing 
 73.15  in the district on October 1 of the previous school year. 
 73.16     (b) For fiscal year 2005 and later fiscal years, the 
 73.17  revenue for early childhood family education programs equals the 
 73.18  sum of: 
 73.19     (1) $120 times the percentage of all first graders enrolled 
 73.20  in the district on October 1 of the second previous school year 
 73.21  eligible to receive free or reduced price lunches times the 
 73.22  greater of 150 or the number of people under five years of age 
 73.23  residing in the district on October 1 of the previous school 
 73.24  year; and 
 73.25     (2) $65 times the percentage of all first graders enrolled 
 73.26  in the district on October 1 of the second previous year not 
 73.27  eligible to receive free or reduced price lunches times the 
 73.28  greater of 150 or the number of people under five years of age 
 73.29  residing in the district on October 1 of the previous school 
 73.30  year. 
 73.31     Sec. 2.  Minnesota Statutes 2002, section 124D.135, 
 73.32  subdivision 8, is amended to read: 
 73.33     Subd. 8.  [RESERVE ACCOUNT LIMIT.] (a) Under this section, 
 73.34  the average balance, during the most recent three-year period in 
 73.35  a district's early childhood family education reserve account on 
 73.36  June 30 of each year, adjusted for any prior reductions under 
 74.1   this subdivision, must not be greater than 25 percent of the sum 
 74.2   of the district's maximum early childhood family education 
 74.3   annual revenue under subdivision 1, excluding adjustments under 
 74.4   this subdivision, plus any fees, grants, or other revenue 
 74.5   received by the district for early childhood family education 
 74.6   programs for the prior year. 
 74.7      (b) If a district's adjusted average early childhood family 
 74.8   education reserve over the three-year period is in excess of 25 
 74.9   percent of the prior year annual revenue the limit under 
 74.10  paragraph (a), the district's early childhood family education 
 74.11  state aid and levy authority for the current school year must be 
 74.12  reduced by the lesser of the current year revenue under 
 74.13  subdivision 1 or the excess reserve amount.  The aid reduction 
 74.14  equals the product of the lesser of the excess reserve amount or 
 74.15  the current year revenue under subdivision 1 times the ratio of 
 74.16  the district's aid for the prior current year under subdivision 
 74.17  4 to the district's revenue for the prior current year under 
 74.18  subdivision 1.  The levy reduction equals the excess reserve 
 74.19  amount minus the aid reduction.  The commissioner must 
 74.20  reallocate aid and levy reduced under this subdivision to other 
 74.21  eligible early childhood family education programs in proportion 
 74.22  to each district's revenue for the prior year under subdivision 
 74.23  1.  For purposes of this paragraph, if a district does not levy 
 74.24  the entire amount permitted under subdivision 3, the revenue 
 74.25  under subdivision 1 must be reduced in proportion to the actual 
 74.26  amount levied.  
 74.27     (b) (c) Notwithstanding paragraph (a), for fiscal year 
 74.28  2003, the excess reserve amount shall be computed using the 
 74.29  balance in a district's early childhood family education reserve 
 74.30  account on June 30, 2002.  For fiscal year 2004, the excess 
 74.31  reserve amount shall be computed using the adjusted average 
 74.32  balance in a district's early childhood family education reserve 
 74.33  account on June 30, 2002, and June 30, 2003. 
 74.34     <b>[EFFECTIVE DATE.]</b> This section is effective for revenue for 
 74.35  fiscal year 2003. 
 74.36     Sec. 3.  Minnesota Statutes 2002, section 124D.16, 
 75.1   subdivision 6, is amended to read: 
 75.2      Subd. 6.  [RESERVE ACCOUNT LIMIT.] (a) Under this section, 
 75.3   the average balance, during the most recent three-year period, 
 75.4   in a district's school readiness reserve account on June 30 of 
 75.5   each year, adjusted for any prior reductions under this 
 75.6   subdivision, must not be greater than 25 percent of the 
 75.7   district's school readiness annual revenue for the prior year, 
 75.8   excluding adjustments under this subdivision.  
 75.9      (b) If a district's adjusted average school readiness 
 75.10  reserve over the three-year period is in excess of 25 percent of 
 75.11  the prior year annual revenue the limit under paragraph (a), the 
 75.12  district's current year school readiness state aid must be 
 75.13  reduced by the lesser of the excess reserve amount or the 
 75.14  current year aid.  The commissioner must reallocate aid reduced 
 75.15  under this subdivision to other eligible school readiness 
 75.16  programs in proportion to each district's aid for the prior year 
 75.17  under subdivision 2.  
 75.18     (b) (c) Notwithstanding paragraph (a), for fiscal year 
 75.19  2003, the excess reserve amount shall be computed using the 
 75.20  balance in a district's school readiness reserve account on June 
 75.21  30, 2002.  For fiscal year 2004, the excess reserve amount shall 
 75.22  be computed using the adjusted average balance in a district's 
 75.23  school readiness reserve account on June 30, 2002, and June 30, 
 75.24  2003. 
 75.25     <b>[EFFECTIVE DATE.]</b> This section is effective for revenue for 
 75.26  fiscal year 2003. 
 75.27     Sec. 4.  [APPROPRIATIONS.] 
 75.28     Subdivision 1.  [DEPARTMENT OF EDUCATION.] The sums 
 75.29  indicated in this section are appropriated from the general fund 
 75.30  to the department of education for the fiscal years designated.  
 75.31     Subd. 2.  [SCHOOL READINESS.] For revenue for school 
 75.32  readiness programs under Minnesota Statutes, sections 124D.15 
 75.33  and 124D.16: 
 75.34       $ 9,833,000    .....     2004
 75.35       $10,312,000    .....     2005
 75.36     The 2004 appropriation includes $1,605,000 for 2003 and 
 76.1   $8,228,000 for 2004. 
 76.2      The 2005 appropriation includes $1,685,000 for 2004 and 
 76.3   $8,627,000 for 2005.  
 76.4      Subd. 3.  [EARLY CHILDHOOD FAMILY EDUCATION AID.] For early 
 76.5   childhood family education aid under Minnesota Statutes, section 
 76.6   124D.135: 
 76.7        $20,292,000    .....     2004 
 76.8        $10,758,000    .....     2005 
 76.9      The 2004 appropriation includes $3,239,000 for 2003 and 
 76.10  $17,053,000 for 2004.  
 76.11     The 2005 appropriation includes $3,492,000 for 2004 and 
 76.12  $7,266,000 for 2005.  
 76.13     Subd. 4.  [HEALTH AND DEVELOPMENTAL SCREENING AID.] For 
 76.14  health and developmental screening aid under Minnesota Statutes, 
 76.15  sections 121A.17 and 121A.19: 
 76.16       $2,661,000     .....     2004 
 76.17       $2,661,000     .....     2005 
 76.18     The 2004 appropriation includes $452,000 for 2003 and 
 76.19  $2,209,000 for 2004.  
 76.20     The 2005 appropriation includes $452,000 for 2004 and 
 76.21  $2,209,000 for 2005.  
 76.22     Subd. 5.  [HEAD START PROGRAM.] For Head Start programs 
 76.23  under Minnesota Statutes, section 119A.52: 
 76.24       $18,375,000    .....     2004
 76.25       $18,375,000    .....     2005
 76.26     Sec. 5.  [REPEALER.] 
 76.27     Minnesota Statutes 2002, section 124D.17, is repealed. 
 76.28                             ARTICLE 15 
 76.29                             PREVENTION 
 76.30     Section 1.  Minnesota Statutes 2002, section 124D.20, 
 76.31  subdivision 3, is amended to read: 
 76.32     Subd. 3.  [GENERAL COMMUNITY EDUCATION REVENUE.] (a) For 
 76.33  fiscal year 2004, the general community education revenue for a 
 76.34  district equals $5.95 times the greater of 1,335 or the 
 76.35  population of the district.  
 76.36     (b) For fiscal year 2005 and later years, the general 
 77.1   community education revenue for a district equals the sum of: 
 77.2      (i) $5.95 times the greater of 1,335 or the population of 
 77.3   the district times the percentage of all students enrolled in 
 77.4   kindergarten through grade 12 in the district on October 1 of 
 77.5   the second previous school year eligible to receive free or 
 77.6   reduced price lunches; and 
 77.7      (ii) $4.95 times the greater of 1,335 or the population of 
 77.8   the district times the percentage of all students enrolled in 
 77.9   kindergarten through grade 12 in the district on October 1 of 
 77.10  the second previous school year not eligible to receive free or 
 77.11  reduced price lunches. 
 77.12     (c) The population of the district is determined according 
 77.13  to section 275.14.  
 77.14     <b>[EFFECTIVE DATE.]</b> This section is effective for revenue for 
 77.15  fiscal year 2005. 
 77.16     Sec. 2.  Minnesota Statutes 2002, section 124D.20, 
 77.17  subdivision 5, is amended to read: 
 77.18     Subd. 5.  [TOTAL COMMUNITY EDUCATION LEVY.] To obtain total 
 77.19  community education revenue, a district operating a youth 
 77.20  after-school enrichment program under section 124D.19, 
 77.21  subdivision 12, may levy the amount raised by a maximum tax rate 
 77.22  of .7431 .985 percent times the adjusted net tax capacity of the 
 77.23  district.  To obtain total community education revenue, a 
 77.24  district not operating a youth after-school enrichment program 
 77.25  may levy the amount raised by a maximum tax rate of .4795 
 77.26  percent times the adjusted net tax capacity of the district.  If 
 77.27  the amount of the total community education levy would exceed 
 77.28  the total community education revenue, the total community 
 77.29  education levy shall be determined according to subdivision 6. 
 77.30     <b>[EFFECTIVE DATE.]</b> This section is effective for revenue for 
 77.31  fiscal year 2005. 
 77.32     Sec. 3.  Minnesota Statutes 2002, section 124D.20, is 
 77.33  amended by adding a subdivision to read: 
 77.34     Subd. 11.  [RESERVE ACCOUNT LIMIT.] (a) Under this section, 
 77.35  the sum of the average balances during the most recent 
 77.36  three-year period in a district's community education reserve 
 78.1   account and unreserved/undesignated community service fund 
 78.2   account on June 30 of each year, adjusted for any prior 
 78.3   reductions under this subdivision, must not be greater than 25 
 78.4   percent of the sum of the district's maximum total community 
 78.5   education revenue under subdivision 1, excluding adjustments 
 78.6   under this subdivision, plus the district's additional community 
 78.7   education levy under section 124D.21, plus any fees, grants, or 
 78.8   other revenue received by the district for community education 
 78.9   programs for the prior year.  For purposes of this paragraph, 
 78.10  "community education programs" means programs according to 
 78.11  subdivisions 8, paragraph (a), and 9, and section 124D.19, 
 78.12  subdivision 12, excluding early childhood family education 
 78.13  programs under section 124D.13, school readiness programs under 
 78.14  sections 124D.15 and 124D.17, and adult basic education programs 
 78.15  under section 124D.52. 
 78.16     (b) If the sum of the average balances during the most 
 78.17  recent three-year period in a district's community education 
 78.18  reserve account and unreserved/undesignated community service 
 78.19  fund account on June 30 of each year, adjusted for any prior 
 78.20  reductions under this subdivision, is in excess of the limit 
 78.21  under paragraph (a), the district's community education state 
 78.22  aid and levy authority for the current school year must be 
 78.23  reduced by the lesser of the current year revenue under 
 78.24  subdivision 1 or the excess reserve amount.  The aid reduction 
 78.25  equals the product of the lesser of the excess reserve amount or 
 78.26  the current year revenue under subdivision 1 times the ratio of 
 78.27  the district's aid for the current year under subdivision 7 to 
 78.28  the district's revenue for the current year under subdivision 
 78.29  1.  The levy reduction equals the excess reserve amount minus 
 78.30  the aid reduction.  For purposes of this paragraph, if a 
 78.31  district does not levy the entire amount permitted under 
 78.32  subdivision 5 or 6, the revenue under subdivision 1 must be 
 78.33  reduced in proportion to the actual amount levied. 
 78.34     (c) Notwithstanding paragraph (a), for fiscal year 2003, 
 78.35  the excess reserve amount shall be computed using the balances 
 78.36  in a district's community education reserve account and 
 79.1   unreserved/undesignated community service fund account on June 
 79.2   30, 2002.  For fiscal year 2004, the excess reserve amount shall 
 79.3   be computed using the adjusted average balances in a district's 
 79.4   community education reserve account and unreserved/undesignated 
 79.5   community service fund account on June 30, 2002, and June 30, 
 79.6   2003. 
 79.7      <b>[EFFECTIVE DATE.]</b> This section is effective for revenue for 
 79.8   fiscal year 2003. 
 79.9      Sec. 4.  Minnesota Statutes 2002, section 124D.20, is 
 79.10  amended by adding a subdivision to read: 
 79.11     Subd. 12.  [WAIVER.] (a) If a district anticipates that the 
 79.12  reserve account may exceed the 25 percent limit established 
 79.13  under subdivision 11 because of extenuating circumstances, prior 
 79.14  approval to exceed the limit must be obtained in writing from 
 79.15  the commissioner. 
 79.16     (b) Notwithstanding paragraph (a), for fiscal year 2003, a 
 79.17  district may submit a waiver request within 30 days of the date 
 79.18  of final enactment. 
 79.19     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
 79.20  following final enactment for revenue for fiscal year 2003. 
 79.21     Sec. 5.  [APPROPRIATIONS.] 
 79.22     Subdivision 1.  [DEPARTMENT OF EDUCATION.] The sums 
 79.23  indicated in this section are appropriated from the general fund 
 79.24  to the department of education for the fiscal years designated. 
 79.25     Subd. 2.  [COMMUNITY EDUCATION AID.] For community 
 79.26  education aid under Minnesota Statutes, section 124D.20: 
 79.27       $5,665,000     .....     2004 
 79.28       $3,324,000     .....     2005 
 79.29     The 2004 appropriation includes $956,000 for 2003 and 
 79.30  $4,709,000 for 2004.  
 79.31     The 2005 appropriation includes $964,000 for 2004 and 
 79.32  $2,360,000 for 2005.  
 79.33     Subd. 3.  [ADULTS WITH DISABILITIES PROGRAM AID.] For 
 79.34  adults with disabilities programs under Minnesota Statutes, 
 79.35  section 124D.56: 
 79.36       $710,000       .....     2004 
 80.1        $710,000       .....     2005 
 80.2      The 2004 appropriation includes $120,000 for 2003 and 
 80.3   $590,000 for 2004.  
 80.4      The 2005 appropriation includes $120,000 for 2004 and 
 80.5   $590,000 for 2005. 
 80.6      Subd. 4.  [HEARING-IMPAIRED ADULTS.] For programs for 
 80.7   hearing-impaired adults under Minnesota Statutes, section 
 80.8   124D.57: 
 80.9        $70,000        .....     2004
 80.10       $70,000        .....     2005
 80.11     Subd. 5.  [VIOLENCE PREVENTION EDUCATION GRANTS.] For 
 80.12  violence prevention education grants under Minnesota Statutes, 
 80.13  section 120B.23: 
 80.14       $246,000       .....     2004
 80.15     This appropriation includes $246,000 for 2003 and $0 for 
 80.16  2004. 
 80.17     Subd. 6.  [ABUSED CHILDREN.] For abused children programs 
 80.18  under Minnesota Statutes, section 119A.21: 
 80.19       $945,000       .....     2004 
 80.20       $945,000       .....     2005 
 80.21     Subd. 7.  [SCHOOL-AGE CARE REVENUE.] For extended day aid 
 80.22  under Minnesota Statutes, section 124D.22: 
 80.23       $42,000        .....     2004 
 80.24       $22,000        .....     2005
 80.25     The 2004 appropriation includes $14,000 for 2003 and 
 80.26  $28,000 for 2004. 
 80.27     The 2005 appropriation includes $5,000 for 2004 and $17,000 
 80.28  for 2005. 
 80.29     Sec. 6.  [REPEALER.] 
 80.30     Minnesota Statutes 2002, sections 120B.23; 124D.21; and 
 80.31  124D.221, are repealed. 
 80.32                             ARTICLE 16 
 80.33               SELF-SUFFICIENCY AND LIFELONG LEARNING 
 80.34     Section 1.  Minnesota Statutes 2002, section 124D.52, 
 80.35  subdivision 1, is amended to read: 
 80.36     Subdivision 1.  [PROGRAM REQUIREMENTS.] (a) An adult basic 
 81.1   education program is a day or evening program offered by a 
 81.2   district that is for people over 16 years of age who do not 
 81.3   attend an elementary or secondary school.  The program offers 
 81.4   academic instruction necessary to earn a high school diploma or 
 81.5   equivalency certificate.  Tuition and fees may not be charged to 
 81.6   a learner for instruction paid under this section, except for 
 81.7      (b) Notwithstanding any law to the contrary, a school board 
 81.8   or the governing body of a consortium offering an adult basic 
 81.9   education program may adopt a sliding fee schedule based on a 
 81.10  family's income, but must waive the fee for participants who are 
 81.11  under the age of 21 or unable to pay.  The fees charged must be 
 81.12  designed to enable individuals of all socioeconomic levels to 
 81.13  participate in the program.  A program may charge a security 
 81.14  deposit to assure return of materials, supplies, and equipment. 
 81.15     (c) Each approved adult basic education program must 
 81.16  develop a memorandum of understanding with the local workforce 
 81.17  development centers located in the approved program's service 
 81.18  delivery area.  The memorandum of understanding must describe 
 81.19  how the adult basic education program and the workforce 
 81.20  development centers will cooperate and coordinate services to 
 81.21  provide unduplicated, efficient, and effective services to 
 81.22  clients.  
 81.23     (d) Adult basic education aid must be spent for adult basic 
 81.24  education purposes as specified in sections 124D.518 to 124D.531.
 81.25     Sec. 2.  Minnesota Statutes 2002, section 124D.52, 
 81.26  subdivision 3, is amended to read: 
 81.27     Subd. 3.  [ACCOUNTS; REVENUE; AID.] Each district, group of 
 81.28  districts, or private nonprofit organization providing adult 
 81.29  basic education programs must establish and maintain accounts 
 81.30  separate from all other district accounts a reserve account 
 81.31  within the community service fund for the receipt and 
 81.32  disbursement of all funds related to these programs.  All 
 81.33  revenue received pursuant to this section must be utilized 
 81.34  solely for the purposes of adult basic education programs.  
 81.35  State aid must not equal more than 100 percent of the 
 81.36  unreimbursed expenses of providing these programs, excluding 
 82.1   in-kind costs.  
 82.2      Sec. 3.  Minnesota Statutes 2002, section 124D.531, 
 82.3   subdivision 1, is amended to read: 
 82.4      Subdivision 1.  [STATE TOTAL ADULT BASIC EDUCATION AID.] 
 82.5   (a) The state total adult basic education aid for fiscal year 
 82.6   2001 2004 and later years equals $30,157,000 $36,510,000.  The 
 82.7   state total adult basic education aid for later years equals: 
 82.8      (1) the state total adult basic education aid for the 
 82.9   preceding fiscal year; times 
 82.10     (2) the lesser of: 
 82.11     (i) 1.08, or 
 82.12     (ii) the greater of 1.00 or the ratio of the state total 
 82.13  contact hours in the first prior program year to the state total 
 82.14  contact hours in the second prior program year.  Beginning in 
 82.15  fiscal year 2002, two percent of the state total adult basic 
 82.16  education aid must be set aside for adult basic education 
 82.17  supplemental service grants under section 124D.522.  
 82.18     (b) The state total adult basic education aid, excluding 
 82.19  basic population aid, equals the difference between the amount 
 82.20  computed in paragraph (a), and the state total basic population 
 82.21  aid under subdivision 2. 
 82.22     Sec. 4.  Minnesota Statutes 2002, section 124D.531, 
 82.23  subdivision 2, is amended to read: 
 82.24     Subd. 2.  [BASIC POPULATION AID.] A district is eligible 
 82.25  for basic population aid if the district has a basic service 
 82.26  level approved by the commissioner under section 124D.52, 
 82.27  subdivision 5, or is a member of a consortium with an approved 
 82.28  basic service level.  Basic population aid is equal to the 
 82.29  greater of $4,000 $3,800 or $1.80 $1.70 times the population of 
 82.30  the district. District population is determined according to 
 82.31  section 275.14. 
 82.32     Sec. 5.  Minnesota Statutes 2002, section 124D.531, 
 82.33  subdivision 4, is amended to read: 
 82.34     Subd. 4.  [ADULT BASIC EDUCATION PROGRAM AID LIMIT.] (a) 
 82.35  Notwithstanding subdivisions 2 and 3, the total adult basic 
 82.36  education aid for a program per prior year contact hour must not 
 83.1   exceed four times the rate per prior year contact hour computed 
 83.2   under subdivision 3, clause (2). 
 83.3      (b) For fiscal year 2004, the aid for a program under 
 83.4   subdivision 3, clause (2), adjusted for changes in program 
 83.5   membership, must not exceed the sum of the aid for that program 
 83.6   under subdivision 3, clause (2), and Minnesota Statutes 2002, 
 83.7   section 124D.54, for fiscal year 2003 by more than the greater 
 83.8   of eight percent or $10,000. 
 83.9      (c) For fiscal year 2002 2005 and later, the aid for a 
 83.10  program under subdivision 3, clause (2), adjusted for changes in 
 83.11  program membership, must not exceed the aid for that program 
 83.12  under subdivision 3, clause (2), for the first preceding fiscal 
 83.13  year by more than the greater of 17 eight percent or 
 83.14  $20,000 $10,000. 
 83.15     (c) (d) Adult basic education aid is payable to a program 
 83.16  for unreimbursed costs. 
 83.17     Sec. 6.  Minnesota Statutes 2002, section 124D.531, 
 83.18  subdivision 7, is amended to read: 
 83.19     Subd. 7.  [PROGRAM AUDITS.] Programs that receive aid under 
 83.20  this section must maintain records that support the aid 
 83.21  payments.  The commissioner may audit these records upon 
 83.22  request.  The commissioner must establish procedures for 
 83.23  conducting fiscal audits of adult basic education programs 
 83.24  according to the schedule in this subdivision.  In calendar year 
 83.25  2003, the commissioner must audit one-half of approved adult 
 83.26  basic education programs that received aid for fiscal year 2002, 
 83.27  and in calendar year 2004, the commissioner must audit the 
 83.28  remaining unaudited programs for aid received in fiscal year 
 83.29  2003.  Beginning with fiscal year 2005, the commissioner must, 
 83.30  at a minimum, audit each adult basic education program once 
 83.31  every five years.  The commissioner must establish procedures to 
 83.32  reconcile any discrepancies between aid payments based on 
 83.33  information reported to the commissioner and aid estimates based 
 83.34  on a program audit. 
 83.35     Sec. 7.  [ADULT BASIC EDUCATION PROGRAM APPROVAL AND AID, 
 83.36  FISCAL YEAR 2004.] 
 84.1      (a) Notwithstanding Minnesota Statutes 2002, section 
 84.2   124D.54, subdivision 2, a district or consortium of districts 
 84.3   that provided a program funded under Minnesota Statutes 2002, 
 84.4   section 124D.54 in fiscal year 2003 may request an extension of 
 84.5   the application deadline for approval of an adult basic 
 84.6   education program for fiscal year 2004. 
 84.7      (b) For purposes of computing the fiscal year 2004 adult 
 84.8   basic education aid for a program under Minnesota Statutes 2002, 
 84.9   section 124D.531, subdivision 3, clause (2), the contact hours 
 84.10  for students participating in the program during the first prior 
 84.11  program year must be increased by 60 percent of the attendance 
 84.12  hours for students participating in the adult graduation aid 
 84.13  program under Minnesota Statutes 2002, section 124D.54, during 
 84.14  fiscal year 2003. 
 84.15     Sec. 8.  [APPROPRIATIONS.] 
 84.16     Subdivision 1.  [DEPARTMENT OF EDUCATION.] The sums 
 84.17  indicated in this section are appropriated from the general fund 
 84.18  to the department of education for the fiscal years designated. 
 84.19     Subd. 2.  [MINNESOTA ECONOMIC OPPORTUNITY GRANTS.] For 
 84.20  Minnesota economic opportunity grants: 
 84.21       $4,000,000     .....     2004
 84.22       $4,000,000     .....     2005
 84.23     Subd. 3.  [TRANSITIONAL HOUSING GRANTS.] For transitional 
 84.24  housing programs under Minnesota Statutes, section 119A.43: 
 84.25       $1,988,000     .....     2004
 84.26       $1,988,000     .....     2005
 84.27     Subd. 4.  [FOODSHELF PROGRAMS.] For foodshelf programs 
 84.28  under Minnesota Statutes, section 119A.44: 
 84.29       $1,278,000     .....     2004
 84.30       $1,278,000     .....     2005
 84.31     Subd. 5.  [ADULT BASIC EDUCATION AID.] For adult basic 
 84.32  education aid under Minnesota Statutes, section 124D.52 in 
 84.33  fiscal year 2004 and Minnesota Statutes, section 124D.531, in 
 84.34  fiscal year 2005:  
 84.35       $36,116,000    .....     2004 
 84.36       $36,360,000    .....     2005 
 85.1      The 2004 appropriation includes $5,949,000 for 2003 and 
 85.2   $30,167,000 for 2004.  
 85.3      The 2005 appropriation includes $6,180,000 for 2004 and 
 85.4   $30,180,000 for 2005.  
 85.5      Subd. 6.  [ADULT GRADUATION AID.] For adult graduation aid 
 85.6   under Minnesota Statutes, section 124D.54: 
 85.7        $396,000       .....     2004
 85.8      The 2004 appropriation includes $396,000 for 2003 and $0 
 85.9   for 2004.  
 85.10     Subd. 7.  [GED TESTS.] For payment of 60 percent of the 
 85.11  costs of GED tests under Laws 1993, chapter 224, article 4, 
 85.12  section 44, subdivision 10: 
 85.13       $125,000       .....     2004
 85.14       $125,000       .....     2005
 85.15     Subd. 8.  [EMERGENCY SERVICES GRANTS.] For emergency 
 85.16  services under Minnesota Statutes, section 119A.43: 
 85.17       $350,000       .....     2004
 85.18       $350,000       .....     2005
 85.19     Subd. 9.  [FAMILY ASSETS FOR INDEPENDENCE.] For family 
 85.20  assets for independence: 
 85.21       $500,000       .....     2004
 85.22     Any balance in the first year does not cancel but is 
 85.23  available in the second year. 
 85.24     Sec. 9.  [REPEALER.] 
 85.25     Minnesota Statutes 2002, sections 119A.46; 124D.09, 
 85.26  subdivision 15; 124D.54; and 126C.05, subdivision 12, are 
 85.27  repealed. 
 85.28                             ARTICLE 17 
 85.29                           STATE AGENCIES 
 85.30     Section 1.  Minnesota Statutes 2002, section 15.01, is 
 85.31  amended to read: 
 85.32     15.01 [DEPARTMENTS OF THE STATE.] 
 85.33     The following agencies are designated as the departments of 
 85.34  the state government:  the department of administration; the 
 85.35  department of agriculture; the department of commerce; the 
 85.36  department of corrections; the department of children, families, 
 86.1   and learning education; the department of economic security; the 
 86.2   department of trade and economic development; the department of 
 86.3   finance; the department of health; the department of human 
 86.4   rights; the department of labor and industry; the department of 
 86.5   military affairs; the department of natural resources; the 
 86.6   department of employee relations; the department of public 
 86.7   safety; the department of human services; the department of 
 86.8   revenue; the department of transportation; the department of 
 86.9   veterans affairs; and their successor departments. 
 86.10     Sec. 2.  Minnesota Statutes 2002, section 119A.01, 
 86.11  subdivision 2, is amended to read: 
 86.12     Subd. 2.  [ESTABLISHMENT.] The department of children, 
 86.13  families, and learning education is established. 
 86.14     Sec. 3.  Minnesota Statutes 2002, section 119A.02, 
 86.15  subdivision 2, is amended to read: 
 86.16     Subd. 2.  [COMMISSIONER.] "Commissioner" means the 
 86.17  commissioner of children, families, and learning education. 
 86.18     Sec. 4.  Minnesota Statutes 2002, section 119A.02, 
 86.19  subdivision 3, is amended to read: 
 86.20     Subd. 3.  [DEPARTMENT.] "Department" means the department 
 86.21  of children, families, and learning education. 
 86.22     Sec. 5.  Minnesota Statutes 2002, section 119B.011, 
 86.23  subdivision 8, is amended to read: 
 86.24     Subd. 8.  [COMMISSIONER.] "Commissioner" means the 
 86.25  commissioner of children, families, and learning education. 
 86.26     Sec. 6.  Minnesota Statutes 2002, section 119B.011, 
 86.27  subdivision 10, is amended to read: 
 86.28     Subd. 10.  [DEPARTMENT.] "Department" means the department 
 86.29  of children, families, and learning education. 
 86.30     Sec. 7.  Minnesota Statutes 2002, section 120A.02, is 
 86.31  amended to read: 
 86.32     120A.02 [DEPARTMENT OF CHILDREN, FAMILIES, AND LEARNING 
 86.33  EDUCATION.] 
 86.34     The department of children, families, and learning 
 86.35  education shall carry out the provisions of chapters 120A to 
 86.36  129C and other related education provisions under law. 
 87.1      Sec. 8.  Minnesota Statutes 2002, section 120A.05, 
 87.2   subdivision 4, is amended to read: 
 87.3      Subd. 4.  [COMMISSIONER.] "Commissioner" means the 
 87.4   commissioner of children, families, and learning education. 
 87.5      Sec. 9.  Minnesota Statutes 2002, section 120A.05, 
 87.6   subdivision 7, is amended to read: 
 87.7      Subd. 7.  [DEPARTMENT.] "Department" means the department 
 87.8   of children, families, and learning education. 
 87.9      Sec. 10.  Minnesota Statutes 2002, section 127A.05, 
 87.10  subdivision 1, is amended to read: 
 87.11     Subdivision 1.  [APPOINTMENT AND DUTIES.] The department 
 87.12  shall be under the administrative control of the commissioner of 
 87.13  children, families, and learning education which office is 
 87.14  established.  The governor shall appoint the commissioner under 
 87.15  the provisions of section 15.06.  
 87.16     The commissioner shall be a person who possesses 
 87.17  educational attainment and breadth of experience in the 
 87.18  administration of public education and of the finances 
 87.19  pertaining thereto commensurate with the spirit and intent of 
 87.20  this code.  Notwithstanding any other law to the contrary, the 
 87.21  commissioner may appoint two deputy commissioners who shall 
 87.22  serve in the unclassified service.  The commissioner shall also 
 87.23  appoint other employees as may be necessary for the organization 
 87.24  of the department.  The commissioner shall perform such duties 
 87.25  as the law and rules may provide and be held responsible for the 
 87.26  efficient administration and discipline of the department.  The 
 87.27  commissioner is charged with the execution of powers and duties 
 87.28  to promote public education in the state and to safeguard the 
 87.29  finances pertaining thereto. 
 87.30     Sec. 11.  Minnesota Statutes 2002, section 127A.05, 
 87.31  subdivision 3, is amended to read: 
 87.32     Subd. 3.  [GENERAL SUPERVISION OVER PUBLIC SCHOOLS AND 
 87.33  EDUCATIONAL AGENCIES.] The commissioner of children, families, 
 87.34  and learning education shall adopt goals for and exercise 
 87.35  general supervision over public schools and public educational 
 87.36  agencies in the state, classify and standardize public 
 88.1   elementary and secondary schools, and prepare for them outlines 
 88.2   and suggested courses of study.  The commissioner shall develop 
 88.3   a plan to attain the adopted goals.  The commissioner may 
 88.4   recognize educational accrediting agencies for the sole purposes 
 88.5   of sections 120A.22, 120A.24, and 120A.26. 
 88.6      Sec. 12.  [APPROPRIATIONS; DEPARTMENT OF EDUCATION.] 
 88.7      Subdivision 1.  [DEPARTMENT OF EDUCATION.] Unless otherwise 
 88.8   indicated, the sums indicated in this section are appropriated 
 88.9   from the general fund to the department of education for the 
 88.10  fiscal years designated. 
 88.11     Subd. 2.  [DEPARTMENT.] (a) For the department of education:
 88.12       $22,867,000    .....     2004 
 88.13       $22,867,000    .....     2005 
 88.14     Any balance in the first year does not cancel but is 
 88.15  available in the second year. 
 88.16     (b) $260,000 each year is for the Minnesota Children's 
 88.17  Museum. 
 88.18     (c) $41,000 each year is for the Minnesota Academy of 
 88.19  Science. 
 88.20     Subd. 3.  [BOARD OF TEACHING.] For the board of teaching: 
 88.21       $621,000       .....     2004 
 88.22       $621,000       .....     2005 
 88.23     Subd. 4.  [BOARD OF SCHOOL ADMINISTRATORS.] For the board 
 88.24  of school administrators: 
 88.25       $165,000       .....     2004 
 88.26       $165,000       .....     2005 
 88.27     Subd. 5.  [FEDERAL GRANTS AND AIDS.] The expenditures of 
 88.28  federal grants and aids as shown in the biennial budget document 
 88.29  and its supplements are approved and appropriated and shall be 
 88.30  spent as indicated. 
 88.31     Sec. 13.  [APPROPRIATIONS; MINNESOTA STATE ACADEMIES.] 
 88.32     The sums indicated in this section are appropriated from 
 88.33  the general fund to the Minnesota state academies for the deaf 
 88.34  and the blind for the fiscal years designated:  
 88.35       $10,417,000    .....     2004 
 88.36       $10,418,000    .....     2005 
 89.1      Any balance in the first year does not cancel but is 
 89.2   available in the second year. 
 89.3      Sec. 14.  [APPROPRIATIONS; PERPICH CENTER FOR ARTS 
 89.4   EDUCATION.] 
 89.5      The sums indicated in this section are appropriated from 
 89.6   the general fund to the Perpich center for arts education for 
 89.7   the fiscal years designated: 
 89.8        $6,864,000     .....     2004 
 89.9        $6,423,000     .....     2005 
 89.10     Any balance in the first year does not cancel but is 
 89.11  available in the second year. 
 89.12     Sec. 15.  [REVISOR INSTRUCTION.] 
 89.13     (a) In Minnesota Statutes, the revisor shall renumber 
 89.14  section 119A.02, subdivision 2, as 120A.02, paragraph (a), and 
 89.15  section 120A.02 as 120A.02, paragraph (b). 
 89.16     (b) In Minnesota Statutes and Minnesota Rules, the revisor 
 89.17  shall change the term "children, families, and learning" to 
 89.18  "education." 
 89.19     Sec. 16.  [REPEALER.] 
 89.20     Minnesota Statutes 2002, section 119A.01, subdivision 1, is 
 89.21  repealed.