HF 1694

as introduced - 93rd Legislature (2023 - 2024) Posted on 02/13/2023 01:07pm

A bill for an act
relating to education finance; replacing local optional aid and levy with basic
supplemental aid; appropriating money; amending Minnesota Statutes 2022,
sections 123A.05, subdivision 2; 124E.20, subdivision 1; 125A.11, subdivision 1;
125A.76, subdivision 1; 125A.79, subdivision 1; 126C.05, subdivision 15; 126C.10,
subdivision 1, by adding a subdivision; 126C.13, subdivision 4; 126C.17,
subdivisions 7a, 7b; 127A.47, subdivision 7; 127A.49, subdivision 2; 127A.51;
repealing Minnesota Statutes 2022, section 126C.10, subdivision 2e.

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

Section 1.

Minnesota Statutes 2022, section 123A.05, subdivision 2, is amended to read:

Subd. 2.

Reserve revenue.

Each district that is a member of an area learning center or
alternative learning program must reserve revenue in an amount equal to the sum of (1) at
least 90 and no more than 100 percent of the district average general education revenue per
adjusted pupil unit minus an amount equal to the product of the formula allowance according
to section 126C.10, subdivision 2, times .0466, calculated without basic skills revenue, deleted text begin local
optional revenue, deleted text end and transportation sparsity revenue, times the number of pupil units
attending an area learning center or alternative learning program under this section, plus
(2) the amount of basic skills revenue generated by pupils attending the area learning center
or alternative learning program. The amount of reserved revenue under this subdivision
may only be spent on program costs associated with the area learning center or alternative
learning program.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for revenue for fiscal year 2025 and later.
new text end

Sec. 2.

Minnesota Statutes 2022, section 124E.20, subdivision 1, is amended to read:

Subdivision 1.

Revenue calculation.

(a) General education revenue must be paid to a
charter school as though it were a district. The general education revenue for each adjusted
pupil unit is the state average general education revenue per pupil unit, plus the referendum
equalization aid allowance deleted text begin and first tier local optional aid allowance deleted text end in the pupil's district
of residence, minus an amount equal to the product of the formula allowance according to
section 126C.10, subdivision 2, times .0466, calculated without declining enrollment revenue,
deleted text begin local optional revenue, deleted text end basic skills revenue, extended time revenue, pension adjustment
revenue, transition revenue, and transportation sparsity revenue, plus declining enrollment
revenue, basic skills revenue, pension adjustment revenue, and transition revenue as though
the school were a school district.

(b) For a charter school operating an extended day, extended week, or summer program,
the general education revenue in paragraph (a) is increased by an amount equal to 25 percent
of the statewide average extended time revenue per adjusted pupil unit.

(c) Notwithstanding paragraph (a), the general education revenue for an eligible special
education charter school as defined in section 124E.21, subdivision 2, equals the sum of
the amount determined under paragraph (a) and the school's unreimbursed cost as defined
in section 124E.21, subdivision 2, for educating students not eligible for special education
services.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for revenue for fiscal year 2025 and later.
new text end

Sec. 3.

Minnesota Statutes 2022, section 125A.11, subdivision 1, is amended to read:

Subdivision 1.

Nonresident tuition rate; other costs.

(a) For fiscal year 2015 and later,
when a school district provides special instruction and services for a pupil with a disability
as defined in section 125A.02 outside the district of residence, excluding a pupil for whom
an adjustment to special education aid is calculated according to section 127A.47, subdivision
7, paragraphs (b) to (d), special education aid paid to the resident district must be reduced
by an amount equal to (1) the actual cost of providing special instruction and services to
the pupil, including a proportionate amount for special transportation, plus (2) the amount
of general education revenue, deleted text begin excluding local optional revenue, deleted text end plus deleted text begin local optional aid and deleted text end
referendum equalization aid attributable to that pupil, calculated using the resident district's
average general education revenue and referendum equalization aid per adjusted pupil unit
excluding basic skills revenue, elementary sparsity revenue and secondary sparsity revenue,
minus (3) the amount of special education aid for children with a disability under section
125A.76 received on behalf of that child, excluding cross subsidy reduction aid under section
125A.76, subdivision 2e, minus (4) if the pupil receives special instruction and services
outside the regular classroom for more than 60 percent of the school day, the amount of
general education revenue and referendum equalization aid, excluding portions attributable
to district and school administration, district support services, operations and maintenance,
capital expenditures, and pupil transportation, attributable to that pupil for the portion of
time the pupil receives special instruction and services outside of the regular classroom,
calculated using the resident district's average general education revenue and referendum
equalization aid per adjusted pupil unit excluding basic skills revenue, elementary sparsity
revenue and secondary sparsity revenue and the serving district's basic skills revenue,
elementary sparsity revenue and secondary sparsity revenue per adjusted pupil unit.
Notwithstanding clauses (1) and (4), for pupils served by a cooperative unit without a fiscal
agent school district, the general education revenue and referendum equalization aid
attributable to a pupil must be calculated using the resident district's average general
education revenue and referendum equalization aid excluding compensatory revenue,
elementary sparsity revenue, and secondary sparsity revenue. Special education aid paid to
the district or cooperative providing special instruction and services for the pupil must be
increased by the amount of the reduction in the aid paid to the resident district. If the resident
district's special education aid is insufficient to make the full adjustment, the remaining
adjustment shall be made to other state aid due to the district.

(b) Notwithstanding paragraph (a), when a charter school receiving special education
aid under section 124E.21, subdivision 3, provides special instruction and services for a
pupil with a disability as defined in section 125A.02, excluding a pupil for whom an
adjustment to special education aid is calculated according to section 127A.47, subdivision
7, paragraphs (b) to (e), special education aid paid to the resident district must be reduced
by an amount equal to that calculated under paragraph (a) as if the charter school received
aid under section 124E.21, subdivision 1. Notwithstanding paragraph (a), special education
aid paid to the charter school providing special instruction and services for the pupil must
not be increased by the amount of the reduction in the aid paid to the resident district.

(c) Notwithstanding paragraph (a) and section 127A.47, subdivision 7, paragraphs (b)
to (d):

(1) an intermediate district or a special education cooperative may recover unreimbursed
costs of serving pupils with a disability, including building lease, debt service, and indirect
costs necessary for the general operation of the organization, by billing membership fees
and nonmember access fees to the resident district;

(2) a charter school where more than 30 percent of enrolled students receive special
education and related services, a site approved under section 125A.515, an intermediate
district, a site constructed according to Laws 1992, chapter 558, section 7, subdivision 7,
to meet the educational needs of court-placed adolescents, or a special education cooperative
may apply to the commissioner for authority to charge the resident district an additional
amount to recover any remaining unreimbursed costs of serving pupils with a disability;

(3) the billing under clause (1) or application under clause (2) must include a description
of the costs and the calculations used to determine the unreimbursed portion to be charged
to the resident district. Amounts approved by the commissioner under clause (2) must be
included in the aid adjustments under paragraph (a), or section 127A.47, subdivision 7,
paragraphs (b) to (d), as applicable.

(d) For purposes of this subdivision and section 127A.47, subdivision 7, paragraph (b),
"general education revenue and referendum equalization aid" means the sum of the general
education revenue according to section 126C.10, subdivision 1, deleted text begin excluding the local optional
levy according to section 126C.10, subdivision 2e, paragraph (c), deleted text end plus the referendum
equalization aid according to section 126C.17, subdivision 7.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for revenue for fiscal year 2025 and later.
new text end

Sec. 4.

Minnesota Statutes 2022, section 125A.76, subdivision 1, is amended to read:

Subdivision 1.

Definitions.

(a) For the purposes of this section and section 125A.79,
the definitions in this subdivision apply.

(b) "Basic revenue" has the meaning given it in section 126C.10, subdivision 2. For the
purposes of computing basic revenue pursuant to this section, each child with a disability
shall be counted as prescribed in section 126C.05, subdivision 1.

(c) "Essential personnel" means teachers, cultural liaisons, related services, and support
services staff providing services to students. Essential personnel may also include special
education paraprofessionals or clericals providing support to teachers and students by
preparing paperwork and making arrangements related to special education compliance
requirements, including parent meetings and individualized education programs. Essential
personnel does not include administrators and supervisors.

(d) "Average daily membership" has the meaning given it in section 126C.05.

(e) "Program growth factor" means 1.046 for fiscal year 2017, and the product of 1.046
and the program growth factor for the previous year for fiscal year 2018 and later.

(f) "Nonfederal special education expenditure" means all direct expenditures that are
necessary and essential to meet the district's obligation to provide special instruction and
services to children with a disability according to sections 124D.454, 125A.03 to 125A.24,
125A.259 to 125A.48, and 125A.65 as submitted by the district and approved by the
department under section 125A.75, subdivision 4, excluding expenditures:

(1) reimbursed with federal funds;

(2) reimbursed with other state aids under this chapter;

(3) for general education costs of serving students with a disability;

(4) for facilities;

(5) for pupil transportation; and

(6) for postemployment benefits.

(g) "Old formula special education expenditures" means expenditures eligible for revenue
under Minnesota Statutes 2012, section 125A.76, subdivision 2.

(h) For the Minnesota State Academy for the Deaf and the Minnesota State Academy
for the Blind, expenditures under paragraphs (f) and (g) are limited to the salary and fringe
benefits of one-to-one instructional and behavior management aides and one-to-one licensed,
certified professionals assigned to a child attending the academy, if the aides or professionals
are required by the child's individualized education program.

(i) "Special education aid increase limit" means $80 for fiscal year 2016, $100 for fiscal
year 2017, and, for fiscal years 2018 through 2020, the sum of the special education aid
increase limit for the previous fiscal year and $40.

(j) "District" means a school district, a charter school, or a cooperative unit as defined
in section 123A.24, subdivision 2. Notwithstanding section 123A.26, cooperative units as
defined in section 123A.24, subdivision 2, are eligible to receive special education aid under
this section and section 125A.79.

(k) "Initial special education cross subsidy" means the greater of zero or:

(1) the nonfederal special education expenditure under paragraph (f); plus

(2) the cost of providing transportation services for pupils with disabilities under section
123B.92, subdivision 1, paragraph (b), clause (4); minus

(3) the special education aid under subdivision 2c and sections 125A.11, subdivision 1,
and 127A.47, subdivision 7; minus

(4) the amount of general education revenue, deleted text begin excluding local optional revenue, deleted text end plus
deleted text begin local optional aid and deleted text end referendum equalization aid attributable to pupils receiving special
instruction and services outside the regular classroom for more than 60 percent of the school
day for the portion of time the pupils receive special instruction and services outside the
regular classroom, excluding portions attributable to district and school administration,
district support services, operations and maintenance, capital expenditures, and pupil
transportation.

(l) The "minimum aid adjustment multiplier" for fiscal year 2020 equals 1.046. For fiscal
year 2021 and later, the minimum aid adjustment multiplier equals the greater of 1.02 or
the minimum aid adjustment multiplier for the previous year minus 0.002.

(m) The "minimum aid adjustment factor" for fiscal year 2020 equals the program growth
factor for fiscal year 2020. For fiscal year 2021 and later, the minimum aid adjustment factor
equals the product of the minimum aid adjustment factor for the previous fiscal year and
the minimum aid adjustment multiplier.

Sec. 5.

Minnesota Statutes 2022, section 125A.79, subdivision 1, is amended to read:

Subdivision 1.

Definitions.

For the purposes of this section, the definitions in this
subdivision apply.

(a) "Unreimbursed old formula special education expenditures" means:

(1) old formula special education expenditures for the prior fiscal year; minus

(2) for fiscal year 2016 and later, the special education initial aid under section 125A.76,
subdivision 2a; minus

(3) for fiscal year 2016 and later, the amount of general education revenue, deleted text begin excluding
local optional revenue, deleted text end plus deleted text begin local optional aid and deleted text end referendum equalization aid for the prior
fiscal year attributable to pupils receiving special instruction and services outside the regular
classroom for more than 60 percent of the school day for the portion of time the pupils
receive special instruction and services outside the regular classroom, excluding portions
attributable to district and school administration, district support services, operations and
maintenance, capital expenditures, and pupil transportation.

(b) "Unreimbursed nonfederal special education expenditures" means:

(1) nonfederal special education expenditures for the prior fiscal year; minus

(2) special education initial aid under section 125A.76, subdivision 2a; minus

(3) the amount of general education revenue, deleted text begin excluding local optional revenue, deleted text end plus
deleted text begin local optional aid, and deleted text end referendum equalization aid for the prior fiscal year attributable to
pupils receiving special instruction and services outside the regular classroom for more than
60 percent of the school day for the portion of time the pupils receive special instruction
and services outside of the regular classroom, excluding portions attributable to district and
school administration, district support services, operations and maintenance, capital
expenditures, and pupil transportation.

(c) "General revenue" for a school district means the sum of the general education
revenue according to section 126C.10, subdivision 1, excluding transportation sparsity
revenue, deleted text begin local optional revenue, deleted text end and total operating capital revenue. "General revenue" for
a charter school means the sum of the general education revenue according to section
124E.20, subdivision 1, and transportation revenue according to section 124E.23, excluding
referendum equalization aid, transportation sparsity revenue, and operating capital revenue.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for revenue for fiscal year 2025 and later.
new text end

Sec. 6.

Minnesota Statutes 2022, section 126C.05, subdivision 15, is amended to read:

Subd. 15.

Learning year pupil units.

(a) When a pupil is enrolled in a learning year
program under section 124D.128, an area learning center or an alternative learning program
approved by the commissioner under sections 123A.05 and 123A.06, or a contract alternative
program under section 124D.68, subdivision 3, paragraph (d), or subdivision 4, for more
than 1,020 hours in a school year for a secondary student, more than 935 hours in a school
year for an elementary student, more than 850 hours in a school year for a kindergarten
student without a disability in an all-day kindergarten program, or more than 425 hours in
a school year for a half-day kindergarten student without a disability, that pupil may be
counted as more than one pupil in average daily membership for purposes of section 126C.10,
subdivision 2a. The amount in excess of one pupil must be determined by the ratio of the
number of hours of instruction provided to that pupil in excess of: (i) the greater of 1,020
hours or the number of hours required for a full-time secondary pupil in the district to 1,020
for a secondary pupil; (ii) the greater of 935 hours or the number of hours required for a
full-time elementary pupil in the district to 935 for an elementary pupil in grades 1 through
6; and (iii) the greater of 850 hours or the number of hours required for a full-time
kindergarten student without a disability in the district to 850 for a kindergarten student
without a disability. Hours that occur after the close of the instructional year in June shall
be attributable to the following fiscal year. A student in kindergarten or grades 1 through
12 must not be counted as more than 1.2 pupils in average daily membership under this
subdivision.

(b)(i) To receive general education revenue for a pupil in an area learning center or
alternative learning program that has an independent study component, a district must meet
the requirements in this paragraph. The district must develop, for the pupil, a continual
learning plan consistent with section 124D.128, subdivision 3. Each school district that has
an area learning center or alternative learning program must reserve revenue in an amount
equal to at least 90 and not more than 100 percent of the district average general education
revenue per pupil unit, minus an amount equal to the product of the formula allowance
according to section 126C.10, subdivision 2, times .0466, calculated without basic skills
revenue, deleted text begin local optional revenue, deleted text end and transportation sparsity revenue, times the number of
pupil units generated by students attending an area learning center or alternative learning
program. The amount of reserved revenue available under this subdivision may only be
spent for program costs associated with the area learning center or alternative learning
program. Basic skills revenue generated according to section 126C.10, subdivision 4, by
pupils attending the eligible program must be allocated to the program.

(ii) General education revenue for a pupil in a state-approved alternative program without
an independent study component must be prorated for a pupil participating for less than a
full year, or its equivalent. The district must develop a continual learning plan for the pupil,
consistent with section 124D.128, subdivision 3. Each school district that has an area learning
center or alternative learning program must reserve revenue in an amount equal to at least
90 and not more than 100 percent of the district average general education revenue per pupil
unit, minus an amount equal to the product of the formula allowance according to section
126C.10, subdivision 2, times .0466, calculated without basic skills revenue, deleted text begin local optional
revenue, deleted text end and transportation sparsity revenue, times the number of pupil units generated by
students attending an area learning center or alternative learning program. The amount of
reserved revenue available under this subdivision may only be spent for program costs
associated with the area learning center or alternative learning program. Basic skills revenue
generated according to section 126C.10, subdivision 4, by pupils attending the eligible
program must be allocated to the program.

(iii) General education revenue for a pupil in a state-approved alternative program that
has an independent study component must be paid for each hour of teacher contact time
and each hour of independent study time completed toward a credit or graduation standards
necessary for graduation. Average daily membership for a pupil shall equal the number of
hours of teacher contact time and independent study time divided by 1,020.

(iv) For a state-approved alternative program having an independent study component,
the commissioner shall require a description of the courses in the program, the kinds of
independent study involved, the expected learning outcomes of the courses, and the means
of measuring student performance against the expected outcomes.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for revenue for fiscal year 2025 and later.
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Sec. 7.

Minnesota Statutes 2022, section 126C.10, subdivision 1, is amended to read:

Subdivision 1.

General education revenue.

The general education revenue for each
district equals the sum of the district's basic revenue, extended time revenue, gifted and
talented revenue, declining enrollment revenue, deleted text begin local optional deleted text end new text begin basic supplemental new text end revenue,
small schools revenue, basic skills revenue, secondary sparsity revenue, elementary sparsity
revenue, transportation sparsity revenue, total operating capital revenue, equity revenue,
pension adjustment revenue, and transition revenue.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for revenue for fiscal year 2025 and later.
new text end

Sec. 8.

Minnesota Statutes 2022, section 126C.10, is amended by adding a subdivision to
read:

new text begin Subd. 2f. new text end

new text begin Basic supplemental revenue. new text end

new text begin A district's basic supplemental revenue equals
$724 times the district's adjusted pupil units for that year.
new text end

Sec. 9.

Minnesota Statutes 2022, section 126C.13, subdivision 4, is amended to read:

Subd. 4.

General education aid.

For fiscal year 2015 and later, a district's general
education aid equals:

(1) general education revenue, excluding operating capital revenue, equity revenue, deleted text begin local
optional revenue, deleted text end and transition revenue deleted text begin , minus the student achievement levy, multiplied
times the ratio of the actual amount of student achievement levy levied to the permitted
student achievement levy deleted text end ; plus

(2) operating capital aid under section 126C.10, subdivision 13b;

(3) equity aid under section 126C.10, subdivision 30; plus

(4) transition aid under section 126C.10, subdivision 33; plus

(5) shared time aid under section 126C.01, subdivision 7; plus

(6) referendum aid under section 126C.17, subdivisions 7 and 7a; plus

(7) online learning aid under section 124D.096 deleted text begin ; plus deleted text end new text begin .
new text end

deleted text begin (8) local optional aid according to section 126C.10, subdivision 2e, paragraph (c).
deleted text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for revenue for fiscal year 2025 and later.
new text end

Sec. 10.

Minnesota Statutes 2022, section 126C.17, subdivision 7a, is amended to read:

Subd. 7a.

Referendum tax base replacement aid.

For each school district that had a
referendum allowance for fiscal year 2002 exceeding $415, for each separately authorized
referendum levy, the commissioner of revenue, in consultation with the commissioner of
education, shall certify the amount of the referendum levy in taxes payable year 2001
attributable to the portion of the referendum allowance exceeding $415 levied against
property classified as class 2, noncommercial 4c(1), or 4c(4), under section 273.13, excluding
the portion of the tax paid by the portion of class 2a property consisting of the house, garage,
and surrounding one acre of land. The resulting amount must be used to reduce the district's
referendum levy deleted text begin or first tier local optional levy deleted text end amount otherwise determined, and must be
paid to the district each year that the referendum deleted text begin or first tier local optional deleted text end authority remains
in effect, is renewed, or new referendum authority is approved. The aid payable under this
subdivision must be subtracted from the district's referendum equalization aid under
subdivision 7. The referendum equalization aid deleted text begin and the first tier local optional aid deleted text end after the
subtraction must not be less than zero.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for revenue for fiscal year 2025 and later.
new text end

Sec. 11.

Minnesota Statutes 2022, section 126C.17, subdivision 7b, is amended to read:

Subd. 7b.

Referendum aid guarantee.

(a) Notwithstanding subdivision 7, deleted text begin the sum of deleted text end
a district's referendum equalization aid deleted text begin and local optional aid under section 126C.10,
subdivision 2e, deleted text end for fiscal year 2015 must not be less than the sum of the referendum
equalization aid the district would have received for fiscal year 2015 under Minnesota
Statutes 2012, section 126C.17, subdivision 7, and the adjustment the district would have
received under Minnesota Statutes 2012, section 127A.47, subdivision 7, paragraphs (a),
(b), and (c).

(b) Notwithstanding subdivision 7, the deleted text begin sum of deleted text end referendum equalization aid deleted text begin and local
optional aid under section 126C.10, subdivision 2e, deleted text end for fiscal year 2016 and later, for a
district qualifying for additional aid under paragraph (a) for fiscal year 2015, must not be
less than the product of (1) deleted text begin the sum of deleted text end the district's referendum equalization aid deleted text begin and local
optional aid under section 126C.10, subdivision 2e, deleted text end for fiscal year 2015, times (2) the lesser
of one or the ratio of the deleted text begin sum of the deleted text end district's referendum revenue deleted text begin and local optional revenue deleted text end
for that school year to the deleted text begin sum of the deleted text end district's referendum revenue deleted text begin and local optional revenue deleted text end
for fiscal year 2015, times (3) the lesser of one or the ratio of the district's referendum market
value used for fiscal year 2015 referendum equalization calculations to the district's
referendum market value used for that year's referendum equalization calculations.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for revenue for fiscal year 2025 and later.
new text end

Sec. 12.

Minnesota Statutes 2022, section 127A.47, subdivision 7, is amended to read:

Subd. 7.

Alternative attendance programs.

(a) The general education aid and special
education aid for districts must be adjusted for each pupil attending a nonresident district
under sections 123A.05 to 123A.08, 124D.03, 124D.08, and 124D.68. The adjustments
must be made according to this subdivision.

(b) For purposes of this subdivision, the "unreimbursed cost of providing special
education and services" means the difference between: (1) the actual cost of providing
special instruction and services, including special transportation and unreimbursed building
lease and debt service costs for facilities used primarily for special education, for a pupil
with a disability, as defined in section 125A.02, or a pupil, as defined in section 125A.51,
who is enrolled in a program listed in this subdivision, minus (2) if the pupil receives special
instruction and services outside the regular classroom for more than 60 percent of the school
day, the amount of general education revenue, excluding local optional revenue, plus local
optional aid and referendum equalization aid as defined in section 125A.11, subdivision 1,
paragraph (d), attributable to that pupil for the portion of time the pupil receives special
instruction and services outside of the regular classroom, excluding portions attributable to
district and school administration, district support services, operations and maintenance,
capital expenditures, and pupil transportation, minus (3) special education aid under section
125A.76, excluding cross subsidy reduction aid under section 125A.76, subdivision 2e,
attributable to that pupil, that is received by the district providing special instruction and
services. For purposes of this paragraph, general education revenue and referendum
equalization aid attributable to a pupil must be calculated using the serving district's average
general education revenue and referendum equalization aid per adjusted pupil unit.

(c) For fiscal year 2020, special education aid paid to a resident district must be reduced
by an amount equal to 85 percent of the unreimbursed cost of providing special education
and services. For fiscal year 2021 and later, special education aid paid to a resident district
must be reduced by an amount equal to 80 percent of the unreimbursed cost of providing
special education and services.

(d) Notwithstanding paragraph (c), special education aid paid to a resident district must
be reduced by an amount equal to 100 percent of the unreimbursed cost of special education
and services provided to students at an intermediate district, cooperative, or charter school
where the percent of students eligible for special education services is at least 70 percent
of the charter school's total enrollment.

(e) Notwithstanding paragraph (c), special education aid paid to a resident district must
be reduced under paragraph (d) for students at a charter school receiving special education
aid under section 124E.21, subdivision 3, calculated as if the charter school received special
education aid under section 124E.21, subdivision 1.

(f) Special education aid paid to the district or cooperative providing special instruction
and services for the pupil, or to the fiscal agent district for a cooperative, must be increased
by the amount of the reduction in the aid paid to the resident district under paragraphs (c)
and (d). If the resident district's special education aid is insufficient to make the full
adjustment under paragraphs (c), (d), and (e), the remaining adjustment shall be made to
other state aids due to the district.

(g) Notwithstanding paragraph (a), general education aid paid to the resident district of
a nonspecial education student for whom an eligible special education charter school receives
general education aid under section 124E.20, subdivision 1, paragraph (c), must be reduced
by an amount equal to the difference between the general education aid attributable to the
student under section 124E.20, subdivision 1, paragraph (c), and the general education aid
that the student would have generated for the charter school under section 124E.20,
subdivision 1, paragraph (a). For purposes of this paragraph, "nonspecial education student"
means a student who does not meet the definition of pupil with a disability as defined in
section 125A.02 or the definition of a pupil in section 125A.51.

(h) An area learning center operated by a service cooperative, intermediate district,
education district, or a joint powers cooperative may elect through the action of the
constituent boards to charge the resident district tuition for pupils rather than to have the
general education revenue paid to a fiscal agent school district. Except as provided in
paragraph (f), the district of residence must pay tuition equal to at least 90 and no more than
100 percent of the district average general education revenue per pupil unit minus an amount
equal to the product of the formula allowance according to section 126C.10, subdivision 2,
times .0466, calculated without compensatory revenue, deleted text begin local optional revenue, deleted text end and
transportation sparsity revenue, times the number of pupil units for pupils attending the area
learning center.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for revenue for fiscal year 2025 and later.
new text end

Sec. 13.

Minnesota Statutes 2022, section 127A.49, subdivision 2, is amended to read:

Subd. 2.

Abatements.

Whenever by virtue of chapter 278, sections 270C.86, 375.192,
or otherwise, the net tax capacity or referendum market value of any district for any taxable
year is changed after the taxes for that year have been spread by the county auditor and the
local tax rate as determined by the county auditor based upon the original net tax capacity
is applied upon the changed net tax capacities, the county auditor must, prior to February
1 of each year, certify to the commissioner of education the amount of any resulting net
revenue loss that accrued to the district during the preceding year. Each year, the
commissioner must pay an abatement adjustment to the district in an amount calculated
according to the provisions of this subdivision. This amount must be deducted from the
amount of the levy authorized by section 126C.46. The amount of the abatement adjustment
must be the product of:

(1) the net revenue loss as certified by the county auditor, times

(2) the ratio of:

(i) the sum of the amounts of the district's certified levy in the third preceding year
according to the following:

(A) section 123B.595, if the district received long-term facilities maintenance aid
according to that section for the second preceding year;

(B) section 124D.20, if the district received aid for community education programs
according to that section for the second preceding year;

(C) section 124D.135, subdivision 3, if the district received early childhood family
education aid according to section 124D.135 for the second preceding year;

(D) section 126C.17, subdivision 6, if the district received referendum equalization aid
according to that section for the second preceding year;

(E) section 126C.10, subdivision 13a, if the district received operating capital aid
according to section 126C.10, subdivision 13b, in the second preceding year;

(F) section 126C.10, subdivision 29, if the district received equity aid according to
section 126C.10, subdivision 30, in the second preceding year;

(G) section 126C.10, subdivision 32, if the district received transition aid according to
section 126C.10, subdivision 33, in the second preceding year;

(H) section 123B.53, subdivision 5, if the district received debt service equalization aid
according to section 123B.53, subdivision 6, in the second preceding year;

(I) section 123B.535, subdivision 4, if the district received natural disaster debt service
equalization aid according to section 123B.535, subdivision 5, in the second preceding year;

(J) section 124D.22, subdivision 3, if the district received school-age care aid according
to section 124D.22, subdivision 4, in the second preceding year; new text begin and
new text end

deleted text begin (K) section 126C.10, subdivision 2e, paragraph (b), if the district received local optional
aid according to section 126C.10, subdivision 2e, paragraph (c), in the second preceding
year; and
deleted text end

deleted text begin (L) deleted text end new text begin (K) new text end section 122A.415, subdivision 5, if the district received alternative teacher
compensation equalization aid according to section 122A.415, subdivision 6, paragraph (a),
in the second preceding year; to

(ii) the total amount of the district's certified levy in the third preceding December, plus
or minus auditor's adjustments.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for revenue for fiscal year 2025 and later.
new text end

Sec. 14.

Minnesota Statutes 2022, section 127A.51, is amended to read:

127A.51 STATEWIDE AVERAGE REVENUE.

By December 1 of each year the commissioner must estimate the statewide average
adjusted general revenue per adjusted pupil unit and the disparity in adjusted general revenue
among pupils and districts by computing the ratio of the 95th percentile to the fifth percentile
of adjusted general revenue. The commissioner must provide that information to all districts.

If the disparity in adjusted general revenue as measured by the ratio of the 95th percentile
to the fifth percentile increases in any year, the commissioner shall recommend to the
legislature options for change in the general education formula that will limit the disparity
in adjusted general revenue to no more than the disparity for the previous school year. The
commissioner must submit the recommended options to the education committees of the
legislature by February 1.

For purposes of this section and section 126C.10, adjusted general revenue means the
sum of basic revenue under section 126C.10, subdivision 2; referendum revenue under
section 126C.17; deleted text begin local optional revenue under section 126C.10, subdivision 2e; deleted text end and equity
revenue under section 126C.10, subdivisions 24a and 24b.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for revenue for fiscal year 2025 and later.
new text end

Sec. 15. new text begin APPROPRIATION; GENERAL EDUCATION AID.
new text end

new text begin Subdivision 1. new text end

new text begin Department of Education. new text end

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

new text begin Subd. 2. new text end

new text begin Additional general education revenue. new text end

new text begin For additional general education aid
required under this act:
new text end

new text begin $ new text end

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

new text begin ..... new text end

new text begin 2025 new text end

Sec. 16. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2022, section 126C.10, subdivision 2e, new text end new text begin is repealed.
new text end

APPENDIX

Repealed Minnesota Statutes: 23-03426

126C.10 GENERAL EDUCATION REVENUE.

Subd. 2e.

Local optional revenue.

(a) For fiscal year 2021 and later, local optional revenue for a school district equals the sum of the district's first tier local optional revenue and second tier local optional revenue. A district's first tier local optional revenue equals $300 times the adjusted pupil units of the district for that school year. A district's second tier local optional revenue equals $424 times the adjusted pupil units of the district for that school year.

(b) For fiscal year 2021 and later, a district's local optional levy equals the sum of the first tier local optional levy and the second tier local optional levy.

(c) A district's first tier local optional levy equals the district's first tier local optional revenue times the lesser of one or the ratio of the district's referendum market value per resident pupil unit to $880,000.

(d) For fiscal year 2022, a district's second tier local optional levy equals the district's second tier local optional revenue times the lesser of one or the ratio of the district's referendum market value per resident pupil unit to $510,000. For fiscal year 2023, a district's second tier local optional levy equals the district's second tier local optional revenue times the lesser of one or the ratio of the district's referendum market value per resident pupil unit to $548,842. For fiscal year 2024 and later, a district's second tier local optional levy equals the district's second tier local optional revenue times the lesser of one or the ratio of the district's referendum market value per resident pupil unit to $510,000.

(e) The local optional levy must be spread on referendum market value. A district may levy less than the permitted amount.

(f) A district's local optional aid equals its local optional revenue minus its local optional levy. If a district's actual levy for first or second tier local optional revenue is less than its maximum levy limit for that tier, its aid must be proportionately reduced.