HF 4306

as introduced - 90th Legislature (2017 - 2018) Posted on 04/12/2018 04:46pm

A bill for an act
relating to education finance; increasing funding for special education programs;
eliminating literacy aid; amending Minnesota Statutes 2016, sections 124D.98,
subdivision 1; 125A.76, subdivisions 1, 2a; 125A.79, subdivisions 1, 5; Minnesota
Statutes 2017 Supplement, section 125A.76, subdivision 2c; Laws 2017, First
Special Session chapter 5, article 2, section 57, subdivision 3; article 4, section
12, subdivision 2, as amended; repealing Minnesota Statutes 2016, section 124D.98,
subdivisions 2, 3.

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

Section 1.

Minnesota Statutes 2016, section 124D.98, subdivision 1, is amended to read:

Subdivision 1.

Literacy deleted text begin incentive aid deleted text end new text begin activities new text end .

A deleted text begin district's literacy incentive aid equals
the sum of the proficiency aid under subdivision 2, and the growth aid under subdivision 3 deleted text end new text begin
district may spend its general fund money for the purposes of its local literacy plan under
section 120B.12, subdivision 4a new text end .

Sec. 2.

Minnesota Statutes 2016, 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 deleted text begin 1.046 for fiscal years 2012 through 2015, 1.0 for
fiscal year 2016, 1.046 for fiscal year 2017, and deleted text end the product of 1.046 and the program growth
factor for the previous year deleted text begin for fiscal year 2018 and later deleted text end .

(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.

deleted text begin (i) "Cross subsidy reduction aid percentage" means 1.0 percent for fiscal year 2014 and
2.27 percent for fiscal year 2015.
deleted text end

deleted text begin (j) "Cross subsidy reduction aid limit" means $20 for fiscal year 2014 and $48 for fiscal
year 2015.
deleted text end

deleted text begin (k) deleted text end new text begin (i) new text end "Special education aid increase limit" means deleted text begin $80 for fiscal year 2016, $100 for
fiscal year 2017, and, deleted text end new text begin $180 new text end for fiscal year 2018 new text begin , $258 for fiscal year 2019, and for fiscal
year 2020 new text end and later, the sum of the special education aid increase limit for the previous
fiscal year and deleted text begin $40 deleted text end new text begin $78 new text end .

deleted text begin (l) deleted text end new text begin (j) new text end "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.

Sec. 3.

Minnesota Statutes 2016, section 125A.76, subdivision 2a, is amended to read:

Subd. 2a.

Special education initial aid.

deleted text begin For fiscal year 2016 and later, deleted text end A district's special
education initial aid equals the sum of:

(1) the least of 62 percent of the district's old formula special education expenditures
for the prior fiscal year, excluding pupil transportation expenditures, 50 percent of the
district's nonfederal special education expenditures for the prior year, excluding pupil
transportation expenditures, or 56 percent of the product of the sum of the following amounts,
computed using prior fiscal year data, and the program growth factor:

(i) the product of the district's average daily membership served and the sum of:

(A) $450; plus

(B) $400 times the ratio of the sum of the number of pupils enrolled on October 1 who
are eligible to receive free lunch plus one-half of the pupils enrolled on October 1 who are
eligible to receive reduced-price lunch to the total October 1 enrollment; plus

(C) .008 times the district's average daily membership served; plus

(ii) $10,400 times the December 1 child count for the primary disability areas of autism
spectrum disorders, developmental delay, and severely multiply impaired; plus

(iii) $18,000 times the December 1 child count for the primary disability areas of deaf
and hard-of-hearing and emotional or behavioral disorders; plus

(iv) $27,000 times the December 1 child count for the primary disability areas of
developmentally cognitive mild-moderate, developmentally cognitive severe-profound,
physically impaired, visually impaired, and deafblind; plus

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

Sec. 4.

Minnesota Statutes 2017 Supplement, section 125A.76, subdivision 2c, is amended
to read:

Subd. 2c.

Special education aid.

(a) deleted text begin For fiscal year 2016 and later, deleted text end A district's special
education aid equals the sum of the district's special education initial aid under subdivision
2a and the district's excess cost aid under section 125A.79, subdivision 5.

deleted text begin (b) Notwithstanding paragraph (a), for fiscal year 2016, the special education aid for a
school district must not exceed the sum of the special education aid the district would have
received for fiscal year 2016 under Minnesota Statutes 2012, sections 125A.76 and 125A.79,
as adjusted according to Minnesota Statutes 2012, sections 125A.11 and 127A.47, subdivision
7, and the product of the district's average daily membership served and the special education
aid increase limit.
deleted text end

deleted text begin (c) deleted text end new text begin (b) new text end Notwithstanding paragraph (a), deleted text begin for fiscal year 2017 and later, deleted text end the special education
aid for a school district must not exceed the sum of: (i) the product of the district's average
daily membership served and the special education aid increase limit and (ii) the product
of the sum of the special education aid the district would have received for fiscal year 2016
under Minnesota Statutes 2012, sections 125A.76 and 125A.79, as adjusted according to
Minnesota Statutes 2012, sections 125A.11 and 127A.47, subdivision 7, the ratio of the
district's average daily membership served for the current fiscal year to the district's average
daily membership served for fiscal year 2016, and the program growth factor.

deleted text begin (d) deleted text end new text begin (c) new text end Notwithstanding paragraph (a), deleted text begin for fiscal year 2016 and later deleted text end the special education
aid for a school district, not including a charter school or cooperative unit as defined in
section 123A.24, must not be less than the lesser of (1) the district's nonfederal special
education expenditures for that fiscal year or (2) the product of the sum of the special
education aid the district would have received for fiscal year 2016 under Minnesota Statutes
2012, sections 125A.76 and 125A.79, as adjusted according to Minnesota Statutes 2012,
sections 125A.11 and 127A.47, subdivision 7, the ratio of the district's adjusted daily
membership for the current fiscal year to the district's average daily membership for fiscal
year 2016, and the program growth factor.

deleted text begin (e) deleted text end new text begin (d) new text end Notwithstanding subdivision 2a and section 125A.79, a charter school in its first
year of operation shall generate special education aid based on current year data. A newly
formed cooperative unit as defined in section 123A.24 may apply to the commissioner for
approval to generate special education aid for its first year of operation based on current
year data, with an offsetting adjustment to the prior year data used to calculate aid for
programs at participating school districts or previous cooperatives that were replaced by
the new cooperative. The department shall establish procedures to adjust the prior year data
and fiscal year 2016 old formula aid used in calculating special education aid to exclude
costs that have been eliminated for districts where programs have closed or where a
substantial portion of the program has been transferred to a cooperative unit.

deleted text begin (f) deleted text end new text begin (e) new text end 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.

Sec. 5.

Minnesota Statutes 2016, 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) deleted text begin for fiscal year 2016 and later, deleted text end the special education initial aid under section 125A.76,
subdivision 2a; minus

(3) deleted text begin for fiscal year 2016 and later, deleted text end the amount of general education revenue, excluding
local optional revenue, plus local optional aid and 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, excluding local optional revenue, plus
local optional aid, and 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, local optional revenue, 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.

Sec. 6.

Minnesota Statutes 2016, section 125A.79, subdivision 5, is amended to read:

Subd. 5.

Excess cost aid.

deleted text begin For fiscal year 2016 and later, deleted text end A district's excess cost aid
equals the greater of:

(1) deleted text begin 56 deleted text end new text begin 61 new text end percent of the difference between (i) the district's unreimbursed nonfederal
special education expenditures and (ii) deleted text begin 7.0 deleted text end new text begin 6.5 new text end percent of the product of the ratio of $5,831
to the formula allowance for the prior year and the district's general revenue;

(2) deleted text begin 62 deleted text end new text begin 61 new text end percent of the difference between (i) the district's unreimbursed old formula
special education expenditures and (ii) deleted text begin 2.5 deleted text end new text begin 2.0 new text end percent of the product of the ratio of $5,831
to the formula allowance for the prior year and the district's general revenue; or

(3) zero.

Sec. 7.

Laws 2017, First Special Session chapter 5, article 2, section 57, subdivision 3, is
amended to read:

Subd. 3.

Literacy incentive aid.

For literacy incentive aid under Minnesota Statutes,
section 124D.98:

	$	47,264,000	.....	2018
	$	deleted text begin 47,763,000 deleted text end new text begin 4,740,000 new text end	.....	2019

The 2018 appropriation includes $4,597,000 for 2017 and $42,667,000 for 2018.

The 2019 appropriation includes $4,740,000 for 2018 and deleted text begin $43,023,000 deleted text end new text begin $0 new text end for 2019.

Sec. 8.

Laws 2017, First Special Session chapter 5, article 4, section 12, subdivision 2, as
amended by Laws 2017, First Special Session chapter 7, section 12, is amended to read:

Subd. 2.

Special education; regular.

For special education aid under Minnesota Statutes,
section 125A.75:

	$	1,341,161,000	.....	2018
	$	deleted text begin 1,426,827,000 deleted text end new text begin 1,469,827,000 new text end	.....	2019

The 2018 appropriation includes $156,403,000 for 2017 and $1,184,758,000 for 2018.

The 2019 appropriation includes $166,667,000 for 2018 and deleted text begin $1,260,160,000 deleted text end new text begin
$1,303,160,000 new text end for 2019.

Sec. 9. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2016, section 124D.98, subdivisions 2 and 3, new text end new text begin are repealed.
new text end

APPENDIX

Repealed Minnesota Statutes: 18-7485

124D.98 LITERACY INCENTIVE AID.

Subd. 2.

Proficiency aid.

The proficiency aid for each school in a district that has submitted to the commissioner its local literacy plan under section 120B.12, subdivision 4a, is equal to the product of the school's proficiency allowance times the number of third grade pupils at the school on October 1 of the previous fiscal year. A school's proficiency allowance is equal to the percentage of students in each building that meet or exceed proficiency on the third grade reading Minnesota Comprehensive Assessment, averaged across the previous three test administrations, times $530.

Subd. 3.

Growth aid.

The growth aid for each school in a district that has submitted to the commissioner its local literacy plan under section 120B.12, subdivision 4a, is equal to the product of the school's growth allowance times the number of fourth grade pupils enrolled at the school on October 1 of the previous fiscal year. A school's growth allowance is equal to the percentage of students at that school making medium or high growth, under section 120B.299, on the fourth grade reading Minnesota Comprehensive Assessment, averaged across the previous three test administrations, times $530.