HF 526

as introduced - 85th Legislature (2007 - 2008) Posted on 12/15/2009 12:00am

A bill for an act
relating to education; providing cost-of-living revenue; requiring a study
to examine the operating cost differential of school districts in the state;
appropriating money; amending Minnesota Statutes 2006, section 126C.10,
subdivisions 1, 24, by adding a subdivision.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2006, section 126C.10, subdivision 1, is amended to read:

Subdivision 1.

General education revenue.

For fiscal year 2006 and later,
the general education revenue for each district equals the sum of the district's basic
revenue, extended time revenue, gifted and talented revenue, basic skills revenue, training
and experience revenue, secondary sparsity revenue, elementary sparsity revenue,
transportation sparsity revenue, total operating capital revenue, equity revenue, alternative
teacher compensation revenue new text begin under section 122A.415 new text end , deleted text begin and deleted text end transition revenue new text begin , and
cost-of-living revenue new text end .

Sec. 2.

Minnesota Statutes 2006, section 126C.10, subdivision 24, is amended to read:

Subd. 24.

Equity revenue.

(a) A school district qualifies for equity revenue if:

(1) the school district's adjusted marginal cost pupil unit amount of basic revenue,
supplemental revenue, transition revenue, and referendum revenue is less than the value of
the school district at or immediately above the 95th percentile of school districts in its
equity region for those revenue categories; and

(2) the school district's administrative offices are not located in a city of the first
class on July 1, 1999.

(b) Equity revenue for a qualifying district that receives referendum revenue under
section 126C.17, subdivision 4, equals the product of (1) the district's adjusted marginal
cost pupil units for that year; times (2) the sum of (i) $13, plus (ii) $75, times the school
district's equity index computed under subdivision 27.

(c) Equity revenue for a qualifying district that does not receive referendum revenue
under section 126C.17, subdivision 4, equals the product of the district's adjusted marginal
cost pupil units for that year times $13.

(d) A school district's equity revenue is increased by the greater of zero or an amount
equal to the district's resident marginal cost pupil units times the difference between ten
percent of the statewide average amount of referendum revenue per resident marginal cost
pupil unit for that year and the district's referendum revenue per resident marginal cost
pupil unit. A school district's revenue under this paragraph must not exceed $100,000 for
that year.

(e) A school district's equity revenue for a school district located in the metro equity
region equals the amount computed in paragraphs (b), (c), and (d) multiplied by 1.25.

(f) For fiscal year 2007 and later, notwithstanding paragraph (a), clause (2), a school
district that has per pupil referendum revenue below the 95th percentile qualifies for
additional equity revenue equal to $46 times its adjusted marginal cost pupil unit.

(g) A district that does not qualify for revenue under paragraph (f) qualifies for
equity revenue equal to deleted text begin one-half of the per pupil allowance in paragraph (f) deleted text end new text begin $46 new text end times its
adjusted marginal cost pupil units.

Sec. 3.

Minnesota Statutes 2006, section 126C.10, is amended by adding a subdivision
to read:

new text begin Subd. 37. new text end

new text begin Cost-of-living revenue. new text end

new text begin For fiscal year 2008 and later, a school district
that is located in the metro equity region under subdivision 28 is eligible for cost-of-living
revenue equal to the formula allowance multiplied by .02 times the district's adjusted
marginal cost pupil units for that year.
new text end

Sec. 4. new text begin OPERATING COST DIFFERENTIAL STUDY; REQUEST FOR
PROPOSAL.
new text end

new text begin (a) The commissioner of education must request a proposal for a study to determine
the differential cost of operating a school district in Minnesota using sound economic
and statistical reasoning.
new text end

new text begin (b) The commissioner shall award the contract to an independent firm that has
extensive experience working with econometric models in various sectors and markets.
new text end

new text begin (c) The commissioner shall award the contract by September 15, 2007.
new text end

Sec. 5. new text begin OPERATING COST DIFFERENTIAL STUDY.
new text end

new text begin (a) The contractor shall identify the true cost of operating a school district in
different regions across the state. As part of the study, the contractor shall:
new text end

new text begin (1) consider all districts in the state individually and regionally based on
demography, economic region, geography, and any other region as determined by the
contractor to better illustrate the cost differential observed;
new text end

new text begin (2) examine the economic factors that contribute to the costs underlying the basic
operation of a school district, including land costs, salaries, hourly wages, health care
costs, transportation costs, energy costs, telecommunication costs, sparsity, housing prices,
administrative costs, and any other factor that the contractor believes, through sound
economic reasoning, contributes to the underlying cost of operating a school district; and
new text end

new text begin (3) construct a study that controls for factors that vary across school districts
in the state, including class size, teacher credentials and education, limited English
proficiency, poverty, mobility, athletic opportunities available to each student, Advanced
Placement course offerings, postsecondary education options, International Baccalaureate
opportunities, College in the Schools offerings, foreign language options, academic clubs,
extracurricular opportunities, and any other criteria for which the contractor believes,
through sound economic reasoning, differentially alters the quality or the operating cost
of a school district.
new text end

new text begin (b) The contractor must report on the findings to the legislative committees having
jurisdiction over kindergarten through grade 12 education before December 15, 2008.
new text end

Sec. 6. new text begin APPROPRIATIONS.
new text end

new text begin Subdivision 1. new text end

new text begin Department of Education. new text end

new text begin The sum indicated in this section is
appropriated from the general fund to the Department of Education for the fiscal year
designated.
new text end

new text begin Subd. 2. new text end

new text begin General education. new text end

new text begin For a cost-of-living increase on the formula allowance:
new text end

new text begin $ new text end

new text begin ....... new text end

new text begin ..... new text end

new text begin 2008 new text end

new text begin Subd. 3. new text end

new text begin Operating cost differential contract. new text end

new text begin For a contract to determine the
differential cost of operating a school district through different regions in the state:
new text end

new text begin $ new text end

new text begin 250,000 new text end

new text begin ..... new text end

new text begin 2008 new text end