HF 3601

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

A bill for an act
relating to education finance; increasing general education and special education
funding for school districts; increasing funding for early education programs;
modifying individual income tax rates; depositing revenues in a K-12 education
account; appropriating money; amending Minnesota Statutes 2006, sections
124D.13, by adding a subdivision; 124D.15, by adding a subdivision; 290.06,
subdivision 2c; 290.62; Minnesota Statutes 2007 Supplement, sections 124D.135,
subdivisions 1, 5; 124D.15, subdivision 3; 125A.76, subdivisions 1, 2; 125A.79,
subdivisions 1, 5; 126C.10, subdivision 2; repealing Minnesota Statutes 2007
Supplement, sections 125A.76, subdivisions 4, 5; 125A.79, subdivision 6.

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

Section 1.

Minnesota Statutes 2006, section 124D.13, is amended by adding a
subdivision to read:

new text begin Subd. 4a. new text end

new text begin At-risk program. new text end

new text begin (a) Each district operating an early childhood family
education program under this section must use $30 times the greater of 150 or the number
of people under five years of age residing in the district on October 1 of the previous
school year to serve at-risk families. These funds must be used to provide parental
education on child development and support parents in enhancing verbal stimulation and
literacy in their children. Programs must collaborate with community agencies with the
ability to reach at-risk families and must contract for services as necessary to ensure
culturally appropriate practices and diverse staffing.
new text end

new text begin (b) For purposes of this section, "at-risk family" is defined as a family with low
education levels, a family whose income is at or below 200 percent of the federal poverty
level, or a family where English is not the primary language.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2008.
new text end

Sec. 2.

Minnesota Statutes 2007 Supplement, section 124D.135, subdivision 1, is
amended to read:

Subdivision 1.

Revenue.

The revenue for early childhood family education
programs for a school district equals $112 for fiscal year 2007 deleted text begin and deleted text end new text begin , new text end $120 for fiscal year
2008 new text begin , new text end and deleted text begin later deleted text end new text begin $150 for fiscal year 2009 and later new text end , times the greater of:

(1) 150; or

(2) the number of people under five years of age residing in the district on October 1
of the previous school year.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2008.
new text end

Sec. 3.

Minnesota Statutes 2007 Supplement, section 124D.135, subdivision 5, is
amended to read:

Subd. 5.

Use of revenue restricted.

(a) Early childhood family education revenue
may be used only for early childhood family education programs.

(b) Not more than five percent of early childhood family education revenue, as
defined in subdivision 7, may be used to administer early childhood family education
programs.

(c) An early childhood family education program may use up to ten percent of its
early childhood family education revenue as defined in subdivision 1, including revenue
from participant fees, for equipment that is used in the early childhood family education
program. This revenue may only be used for the following purposes:

(1) to purchase or lease computers and related materials; and

(2) to purchase or lease equipment for instruction for participating children and
their families.

If a district anticipates an unusual circumstance requiring its early childhood family
education program capital expenditures to exceed the ten percent limitation, prior approval
to exceed the limit must be obtained in writing from the commissioner.

new text begin (d) An early childhood family education program must use $30 times the greater of
150 or the number of people under five years of age residing in the district on October 1 of
the previous school year for the at-risk program under section 124D.13, subdivision 4a.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2008.
new text end

Sec. 4.

Minnesota Statutes 2007 Supplement, section 124D.15, subdivision 3, is
amended to read:

Subd. 3.

Program requirements.

A school readiness program provider must:

(1) assess each child's deleted text begin cognitive deleted text end new text begin kindergarten readiness new text end skills when the child enters
and again before the child leaves the program to inform program planning and promote
kindergarten readiness;

(2) deleted text begin provide comprehensive program content based on early childhood research and
professional practice that is focused on children's cognitive skills and development and
prepares deleted text end new text begin align program curriculum and learning standards with kindergarten curriculum
and learning standards to prepare new text end children for the transition to kindergarten deleted text begin , including
early literacy skills deleted text end ;

(3) arrange for early childhood screening and appropriate referral;

(4) involve parents in program planning and decision making;

(5) deleted text begin coordinate with relevant community-based services; and deleted text end new text begin have a total class size of
no more than 18 students and a child to adult ratio of no more than nine to one;
new text end

(6) new text begin meet a minimum of 2.5 hours per day, four days per week;
new text end

new text begin (7) have a strong accountability system with documented learning standards and be
highly rated by the Quality Rating System;
new text end

new text begin (8) provide compensatory services in language, literacy, and mathematical thinking
in a developmentally appropriate manner;
new text end

new text begin (9) new text end cooperate with adult basic education programs and other adult literacy programs new text begin ;
and
new text end

new text begin (10) provide children's mental health consultation as needed new text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2008.
new text end

Sec. 5.

Minnesota Statutes 2006, section 124D.15, is amended by adding a subdivision
to read:

new text begin Subd. 3b. new text end

new text begin Program alignment. new text end

new text begin Each school district operating a school readiness
program must ensure that the school readiness program curriculum and learning standards
are aligned with kindergarten curriculum and learning standards.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2008.
new text end

Sec. 6.

Minnesota Statutes 2007 Supplement, section 125A.76, subdivision 1, is
amended to read:

Subdivision 1.

Definitions.

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

(a) "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.

(b) "Essential personnel" means teachers, cultural liaisons, related services, and
support services staff providing direct 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 individual education plans.

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

deleted text begin (d) "Program growth factor" means 1.046 for fiscal year 2012 and later. deleted text end

Sec. 7.

Minnesota Statutes 2007 Supplement, section 125A.76, subdivision 2, is
amended to read:

Subd. 2.

Special education deleted text begin initial deleted text end aid.

deleted text begin The deleted text end new text begin A school district's new text end special education
deleted text begin initial deleted text end aid equals the sum of the following amounts computed using current year data:

(1) 68 percent of the salary of each essential person employed in the district's
program for children with a disability during the fiscal year, whether the person is
employed by one or more districts or a Minnesota correctional facility operating on a
fee-for-service basis;

(2) for the Minnesota State Academy for the Deaf or the Minnesota State Academy
for the Blind, 68 percent of the salary of each instructional aide assigned to a child
attending the academy, if that aide is required by the child's individual education plan;

(3) for special instruction and services provided to any pupil by contracting with
public, private, or voluntary agencies other than school districts, in place of special
instruction and services provided by the district, 52 percent of the difference between
the amount of the contract and the general education revenue, excluding basic skills
revenue and alternative teacher compensation revenue, and referendum equalization aid
attributable to a pupil, calculated using the resident district's average general education
revenue and referendum equalization aid per adjusted pupil unit for the fraction of the
school day the pupil receives services under the contract. This includes children who
are residents of the state, receive services under this subdivision and subdivision 1, and
are placed in a care and treatment facility by court action in a state that does not have a
reciprocity agreement with the commissioner under section 125A.155 as provided for in
section 125A.79, subdivision 8;

(4) for special instruction and services provided to any pupil by contracting for
services with public, private, or voluntary agencies other than school districts, that are
supplementary to a full educational program provided by the school district, 52 percent of
the amount of the contract for that pupil;

(5) for supplies and equipment purchased or rented for use in the instruction of
children with a disability, an amount equal to 47 percent of the sum actually expended by
the district, or a Minnesota correctional facility operating on a fee-for-service basis, but
not to exceed an average of $47 in any one school year for each child with a disability
receiving instruction;

(6) for fiscal years 1997 and later, special education base revenue shall include
amounts under clauses (1) to (5) for special education summer programs provided during
the base year for that fiscal year;

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

(8) the district's transition-disabled program initial aid according to section
124D.454, subdivision 3.

The department shall establish procedures through the uniform financial accounting
and reporting system to identify and track all revenues generated from third-party billings
as special education revenue at the school district level; include revenue generated from
third-party billings as special education revenue in the annual cross-subsidy report; and
exclude third-party revenue from calculation of excess cost aid to the districts.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for revenue for fiscal year 2009.
new text end

Sec. 8.

Minnesota Statutes 2007 Supplement, 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 special education cost" means the sum of the following:

(1) expenditures for teachers' salaries, contracted services, supplies, equipment, and
transportation services eligible for revenue under section 125A.76; plus

(2) expenditures for tuition bills received under sections 125A.03 to 125A.24 and
125A.65 for services eligible for revenue under section 125A.76, subdivision 2; minus

(3) revenue for teachers' salaries, contracted services, supplies, equipment, and
transportation services under section 125A.76; minus

(4) tuition receipts under sections 125A.03 to 125A.24 and 125A.65 for services
eligible for revenue under section 125A.76, subdivision 2.

(b) "General revenue" means the sum of the general education revenue according to
section 126C.10, subdivision 1, excluding alternative teacher compensation revenue, plus
the total qualifying referendum revenue specified in paragraph (e) minus transportation
sparsity revenue minus total operating capital revenue.

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

(d) deleted text begin "Program growth factor" means 1.02 for fiscal year 2012 and later.
deleted text end

deleted text begin (e) deleted text end "Total qualifying referendum revenue" means two-thirds of the district's total
referendum revenue as adjusted according to section 127A.47, subdivision 7, paragraphs
(a) to (c), for fiscal year 2006, one-third of the district's total referendum revenue for fiscal
year 2007, and none of the district's total referendum revenue for fiscal year 2008 and later.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for revenue for fiscal year 2009.
new text end

Sec. 9.

Minnesota Statutes 2007 Supplement, section 125A.79, subdivision 5, is
amended to read:

Subd. 5.

deleted text begin Initial deleted text end Excess cost aid.

deleted text begin For fiscal years 2008 and later, deleted text end A new text begin school new text end district's
deleted text begin initial deleted text end excess cost aid equals the greater of:

(1) 75 percent of the difference between (i) the district's unreimbursed special
education cost and (ii) 4.36 percent of the district's general revenue; or

(2) zero.

Sec. 10.

Minnesota Statutes 2007 Supplement, section 126C.10, subdivision 2, is
amended to read:

Subd. 2.

Basic revenue.

The basic revenue for each district equals the formula
allowance times the adjusted marginal cost pupil units for the school year. The formula
allowance for fiscal year 2007 is $4,974. The formula allowance for fiscal year 2008 is
$5,074 and the formula allowance for fiscal year 2009 and subsequent years is deleted text begin $5,124 deleted text end new text begin
$5,227 new text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for revenue for fiscal year 2009.
new text end

Sec. 11.

Minnesota Statutes 2006, section 290.06, subdivision 2c, is amended to read:

Subd. 2c.

Schedules of rates for individuals, estates, and trusts.

(a) The income
taxes imposed by this chapter upon married individuals filing joint returns and surviving
spouses as defined in section 2(a) of the Internal Revenue Code must be computed by
applying to their taxable net income the following schedule of rates:

(1) On the first $25,680, 5.35 percent;

(2) On all over $25,680, but not over $102,030, 7.05 percent;

(3) On all over $102,030, new text begin 8.5 new text end percent.

Married individuals filing separate returns, estates, and trusts must compute their
income tax by applying the above rates to their taxable income, except that the income
brackets will be one-half of the above amounts.

(b) The income taxes imposed by this chapter upon unmarried individuals must be
computed by applying to taxable net income the following schedule of rates:

(1) On the first $17,570, 5.35 percent;

(2) On all over $17,570, but not over $57,710, 7.05 percent;

(3) On all over $57,710, deleted text begin 7.85 deleted text end new text begin 8.5 new text end percent.

(c) The income taxes imposed by this chapter upon unmarried individuals qualifying
as a head of household as defined in section 2(b) of the Internal Revenue Code must be
computed by applying to taxable net income the following schedule of rates:

(1) On the first $21,630, 5.35 percent;

(2) On all over $21,630, but not over $86,910, 7.05 percent;

(3) On all over $86,910, new text begin 8.5 new text end percent.

(d) In lieu of a tax computed according to the rates set forth in this subdivision, the
tax of any individual taxpayer whose taxable net income for the taxable year is less than
an amount determined by the commissioner must be computed in accordance with tables
prepared and issued by the commissioner of revenue based on income brackets of not
more than $100. The amount of tax for each bracket shall be computed at the rates set
forth in this subdivision, provided that the commissioner may disregard a fractional part of
a dollar unless it amounts to 50 cents or more, in which case it may be increased to $1.

(e) An individual who is not a Minnesota resident for the entire year must compute
the individual's Minnesota income tax as provided in this subdivision. After the
application of the nonrefundable credits provided in this chapter, the tax liability must
then be multiplied by a fraction in which:

(1) the numerator is the individual's Minnesota source federal adjusted gross income
as defined in section 62 of the Internal Revenue Code and increased by the additions
required under section 290.01, subdivision 19a, clauses (1), (5), (6), (7), (8), and (9),
and reduced by the Minnesota assignable portion of the subtraction for United States
government interest under section 290.01, subdivision 19b, clause (1), and the subtractions
under section 290.01, subdivision 19b, clauses (9), (10), (14), (15), and (16), after applying
the allocation and assignability provisions of section 290.081, clause (a), or 290.17; and

(2) the denominator is the individual's federal adjusted gross income as defined in
section 62 of the Internal Revenue Code of 1986, increased by the amounts specified in
section 290.01, subdivision 19a, clauses (1), (5), (6), (7), (8), and (9), and reduced by the
amounts specified in section 290.01, subdivision 19b, clauses (1), (9), (10), (14), (15),
and (16).

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after
December 31, 2007.
new text end

Sec. 12.

Minnesota Statutes 2006, section 290.62, is amended to read:

290.62 DISTRIBUTION OF REVENUES.

new text begin Subdivision 1. new text end

new text begin General fund. new text end

All revenues derived from the taxes, interest, penalties
and charges under this chapter shall, notwithstanding any other provisions of law, be paid
into the state treasury and credited to the general fund, and be distributed as follows:

(1) There shall, notwithstanding any other provision of the law, be paid from this
general fund all refunds of taxes erroneously collected from taxpayers under this chapter
as provided herein;

(2) There is hereby appropriated to the persons entitled to payment herein, from
the fund or account in the state treasury to which the money was credited, an amount
sufficient to make the refund and payment.

new text begin Subd. 2. new text end

new text begin K-12 education account. new text end

new text begin By July 15 of each odd-numbered year, the
commissioner of finance, in consultation with the commissioner of revenue, shall estimate
the amount of revenue anticipated for the biennium resulting from enactment of the rate
changes in section 11. The estimated amounts must be deposited in the K-12 education
account in the special revenue fund. Amounts in the account, along with its investment
earnings, are credited to the account and are available for appropriation to fund K-12
education.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 13. new text begin SCHOOL READINESS ASSESSMENTS AND KINDERGARTEN
TRANSITION STRATEGIES.
new text end

new text begin Subdivision 1. new text end

new text begin Establishment. new text end

new text begin In order to increase the capacity of school districts to
improve the performance of children at risk for not being fully prepared for kindergarten,
school readiness assessment and kindergarten transition strategy grants are established.
new text end

new text begin Subd. 2. new text end

new text begin Technical assistance. new text end

new text begin (a) The commissioner of education must provide
resources and technical assistance to enable a participating school district to offer
comprehensive and developmentally appropriate assessments to entering kindergartners,
or where applicable, children in prekindergarten programs and to develop and implement
kindergarten transition strategies.
new text end

new text begin (b) A district's assessment tool must be research-based and must assist with
identifying risk and informing instructional improvement. A participating school district
must coordinate with community and school-based early childhood programs.
new text end

new text begin (c) An effective kindergarten transition strategy may include:
new text end

new text begin (1) transition plans for children entering kindergarten;
new text end

new text begin (2) a transition planning team composed of representatives from early care and
education providers; elementary school staff, including kindergarten teachers; parents;
and community members;
new text end

new text begin (3) information and education for parents, program providers, and educators on:
new text end

new text begin (i) comprehensive child development;
new text end

new text begin (ii) the skills and knowledge incoming kindergartners should demonstrate; and
new text end

new text begin (iii) related community resources;
new text end

new text begin (4) building community awareness about the importance of children's school
readiness; and
new text end

new text begin (5) fostering collaboration among child care, Head Start, early childhood family
education, school readiness, family, friends and neighbors, and other early childhood
programs and elementary school providers.
new text end

new text begin Subd. 3. new text end

new text begin Application. new text end

new text begin A school district must submit its application to the
commissioner in the form and manner required by the commissioner. The commissioner
must select school districts to receive grants giving priority to districts with high poverty
rates. To the extent practical, the selected districts must be located throughout the state.
new text end

new text begin Subd. 4. new text end

new text begin Annual report. new text end

new text begin A school district that receives a grant must submit an
annual report to the commissioner in the form and manner required by the commissioner.
The report must include a description of the assessment tool, process, and results.
new text end

Sec. 14. new text begin APPROPRIATION.
new text end

new text begin Subdivision 1. new text end

new text begin Department of Education. new text end

new text begin The sums indicated in this section are
appropriated from the general fund to the Department of Education for the fiscal years
designated. The appropriations in this section are in addition to any other appropriations
for these programs, including those under Laws 2007, chapter 146.
new text end

new text begin Subd. 2. new text end

new text begin Early childhood and family education revenue. new text end

new text begin For revenue for early
childhood and family education programs under Minnesota Statutes, section 124D.135:
new text end

new text begin $ new text end

new text begin 9,388,000 new text end

new text begin ..... new text end

new text begin 2009 new text end

new text begin The 2009 appropriation includes $0 for 2008 and $9,388,000 for 2009.
new text end

new text begin Subd. 2. new text end

new text begin School readiness. new text end

new text begin For revenue for school readiness programs under
Minnesota Statutes, sections 124D.15 and 124D.16:
new text end

new text begin $ new text end

new text begin 9,000,000 new text end

new text begin ..... new text end

new text begin 2009 new text end

new text begin The 2009 appropriation includes $0 for 2008 and $9,000,000 for 2009.
new text end

new text begin Subd. 3. new text end

new text begin School readiness and kindergarten transition strategies. new text end

new text begin For school
readiness and kindergarten transition strategies:
new text end

new text begin $ new text end

new text begin 1,500,000 new text end

new text begin ..... new text end

new text begin 2009 new text end

new text begin Subd. 4. new text end

new text begin Head Start. new text end

new text begin For Head Start programs under Minnesota Statutes, section
119A.52:
new text end

new text begin $ new text end

new text begin 10,100,000 new text end

new text begin ..... new text end

new text begin 2009 new text end

new text begin Subd. 5. new text end

new text begin Special education revenue. new text end

new text begin For special education revenue under
Minnesota Statutes, sections 125A.76 and 125A.79:
new text end

new text begin $ new text end

new text begin 74,300,000 new text end

new text begin ..... new text end

new text begin 2009 new text end

new text begin Any excess in the 2009 appropriation for special education excess cost aid must be
applied to the 2009 appropriation for regular special education aid.
new text end

new text begin Subd. 6. new text end

new text begin General education revenue. new text end

new text begin For general education aid:
new text end

new text begin $ new text end

new text begin 97,156,000 new text end

new text begin ..... new text end

new text begin 2009 new text end

Sec. 15. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2007 Supplement, sections 125A.76, subdivisions 4 and 5;
and 125A.79, subdivision 6, new text end new text begin are repealed.
new text end