HF 543

as introduced - 93rd Legislature (2023 - 2024) Posted on 01/19/2023 02:56pm

A bill for an act
relating to education finance; modifying special education formulas; authorizing
a levy for certain special access costs at cooperative units; authorizing a levy for
special education facility costs; limiting special education tuition billing;
appropriating money; amending Minnesota Statutes 2022, sections 124E.21,
subdivision 1; 125A.21, subdivisions 1, 2; 125A.76, subdivision 2e; 125A.79, by
adding a subdivision; 126C.40, by adding a subdivision; 127A.47, subdivision 7.

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

Section 1.

Minnesota Statutes 2022, section 124E.21, subdivision 1, is amended to read:

Subdivision 1.

Special education aid.

(a) new text begin A charter school is eligible for special education
aid if the charter school files an annual plan with its authorizer describing the charter school's
procedure for implementing third party billing under section 125A.21. new text end Except as provided
in section 124E.23, special education aid, excluding cross subsidy reduction aid under
section 125A.76, subdivision 2e, must be paid to a charter school according to section
125A.76, as though it were a school district.

(b) deleted text begin For fiscal year 2020 and later, deleted text end The special education aid paid to the charter school
shall be adjusted as follows:

(1) if the charter school does not receive general education revenue on behalf of the
student according to section 124E.20, the aid shall be adjusted as provided in section
125A.11; or

(2) if the charter school receives general education revenue on behalf of the student
according to section 124E.20, the aid shall be adjusted as provided in section 127A.47,
subdivision 7, paragraphs (b) to (e), and if the tuition adjustment is computed under section
127A.47, subdivision 7, paragraph (c), it shall also receive an adjustment equal to deleted text begin five
percent for fiscal year 2020 or deleted text end ten percent for fiscal year 2021 and later of the unreimbursed
cost of providing special education and services for the student new text begin and the amount in paragraph
(c) new text end .

new text begin (c) A charter school must receive special education tuition adjustment aid equal to the
difference between the charter school's unreimbursed costs without a rate cap and the
district's unreimbursed costs with the rate cap, times the adjustment factor for that year. For
fiscal year 2024, the adjustment factor equals 75 percent. For fiscal year 2025, the adjustment
factor equals 50 percent. For fiscal year 2026 and later, the adjustment factor equals 25
percent.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2023.
new text end

Sec. 2.

Minnesota Statutes 2022, section 125A.21, subdivision 1, is amended to read:

Subdivision 1.

Obligation to pay.

new text begin (a) new text end Nothing in sections 125A.03 to 125A.24 and
125A.65 relieves an insurer or similar third party from an otherwise valid obligation to pay,
or changes the validity of an obligation to pay, for services rendered to a child with a
disability, and the child's family.

new text begin (b) For purposes of this section, "school district" and "district" mean a school district,
charter school, or cooperative unit defined under section 123A.24, subdivision 2, providing
direct special education services to students.
new text end

new text begin (c) new text end A school district shall pay the nonfederal share of medical assistance services provided
according to section 256B.0625, subdivision 26. Eligible expenditures must not be made
from federal funds or funds used to match other federal funds. Any federal disallowances
are the responsibility of the school district. A school district may pay or reimburse
co-payments, coinsurance, deductibles, and other enrollee cost-sharing amounts, on behalf
of the student or family, in connection with health and related services provided under an
individual educational plan or individualized family service plan.

Sec. 3.

Minnesota Statutes 2022, section 125A.21, subdivision 2, is amended to read:

Subd. 2.

Third-party reimbursement.

(a) deleted text begin Beginning July 1, 2000, deleted text end Districts shall seek
reimbursement from insurers and similar third parties for the cost of services provided by
the district whenever the services provided by the district are otherwise covered by the
child's health coverage. Districts shall request, but may not require, the child's family to
provide information about the child's health coverage when a child with a disability begins
to receive services from the district of a type that may be reimbursable, and shall request,
but may not require, updated information after that as needed.

(b) For children enrolled in medical assistance under chapter 256B or MinnesotaCare
under chapter 256L who have no other health coverage, a district shall provide an initial
and annual written notice to the enrolled child's parent or legal representative of its intent
to seek reimbursement from medical assistance or MinnesotaCare for:

(1) the evaluations required as part of the individualized education program process or
individualized family service plan process; and

(2) health-related services provided by the district according to the individualized
education program or individualized family service plan.

The initial notice must give the child's parent or legal representative the right to request a
copy of the child's education records on the health-related services that the district provided
to the child and disclosed to a third-party payer.

(c) The district shall give the parent or legal representative annual written notice of:

(1) the district's intent to seek reimbursement from medical assistance or MinnesotaCare
for evaluations required as part of the individualized education program process or
individualized family service plan process, and for health-related services provided by the
district according to the individualized education program or individualized family service
plan;

(2) the right of the parent or legal representative to request a copy of all records
concerning individualized education program or individualized family service plan
health-related services disclosed by the district to any third party; and

(3) the right of the parent or legal representative to withdraw consent for disclosure of
a child's records at any time without consequence.

The written notice shall be provided as part of the written notice required by Code of Federal
Regulations, title 34, section 300.504 or 303.520. The district must ensure that the parent
of a child with a disability is given notice, in understandable language, of federal and state
procedural safeguards available to the parent under this paragraph and paragraph (b).

(d) In order to access the private health care coverage of a child who is covered by private
health care coverage in whole or in part, a district must:

(1) obtain annual written informed consent from the parent or legal representative, in
compliance with subdivision 5; and

(2) inform the parent or legal representative that a refusal to permit the district or state
Medicaid agency to access their private health care coverage does not relieve the district of
its responsibility to provide all services necessary to provide free and appropriate public
education at no cost to the parent or legal representative.

(e) If the commissioner of human services obtains federal approval to exempt covered
individualized education program or individualized family service plan health-related
services from the requirement that private health care coverage refuse payment before
medical assistance may be billed, paragraphs (b), (c), and (d) shall also apply to students
with a combination of private health care coverage and health care coverage through medical
assistance or MinnesotaCare.

(f) In the event that Congress or any federal agency or the Minnesota legislature or any
state agency establishes lifetime limits, limits for any health care services, cost-sharing
provisions, or otherwise provides that individualized education program or individualized
family service plan health-related services impact benefits for persons enrolled in medical
assistance or MinnesotaCare, the amendments to this subdivision adopted in 2002 are
repealed on the effective date of any federal or state law or regulation that imposes the
limits. In that event, districts must obtain informed consent consistent with this subdivision
as it existed prior to the 2002 amendments and subdivision 5, before seeking reimbursement
for children enrolled in medical assistance under chapter 256B or MinnesotaCare under
chapter 256L who have no other health care coverage.

Sec. 4.

Minnesota Statutes 2022, section 125A.76, subdivision 2e, is amended to read:

Subd. 2e.

Cross subsidy reduction aid.

(a) A school district's annual cross subsidy
reduction aid equals the school district's initial special education cross subsidy for the
previous fiscal year times the cross subsidy aid factor for that fiscal year.

(b) The cross subsidy aid factor equals 2.6 percent for fiscal year 2020 deleted text begin and deleted text end new text begin , new text end 6.43 percent
for fiscal year 2021 deleted text begin and deleted text end new text begin , 9.33 percent for fiscal year 2024, 12.11 percent for fiscal year
2025, and increases by three percentage points per year for fiscal year 2026 and new text end later. new text begin The
cross subsidy aid factor must not exceed 30 percent.
new text end

Sec. 5.

Minnesota Statutes 2022, section 125A.79, is amended by adding a subdivision to
read:

new text begin Subd. 9. new text end

new text begin Access fee levy. new text end

new text begin A school district may annually levy for the cost of any access
fees charged by an intermediate school district or other school cooperative unit under section
123A.24, subdivision 2, providing direct special education services to students.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxes payable in 2024 and later.
new text end

Sec. 6.

Minnesota Statutes 2022, section 126C.40, is amended by adding a subdivision to
read:

new text begin Subd. 3a. new text end

new text begin Lease and other facility costs for cooperative units serving special education
pupils. new text end

new text begin (a) For purposes of this subdivision, "cooperative unit" means a cooperative under
section 123A.24, subdivision 2, and "facility costs" means the annual costs of a lease or
bond payments for a facility used primarily for special education students.
new text end

new text begin (b) The board of a cooperative unit may adopt a resolution authorizing the cooperative
to assess facilities costs to its member districts.
new text end

new text begin (c) A district that is a member of a cooperative unit providing special education services
may levy for its proportional share of facility costs assessed by the cooperative unit of which
it is a member.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxes payable in 2024 and later.
new text end

Sec. 7.

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, deleted text begin the deleted text end "unreimbursed cost of providing special
education and services" means the difference between: (1) the actual cost of providing
special instruction and services deleted text begin , including special transportation and unreimbursed building
lease and debt service costs for facilities used primarily for special education, deleted text end 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, new text begin including special transportation and
unreimbursed building lease and debt service costs for facilities used primarily for special
education, new text end minus (2) deleted text begin if the pupil receives special instruction and services outside the regular
classroom for more than 60 percent of the school day, deleted text end the amount of general education
revenue, new text begin if the pupil receives special instruction and services outside the regular classroom
for more than 60 percent of the school day, new text end 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) deleted text begin 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, deleted text end 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 new text begin providing new text end special
education and services deleted text begin provided deleted text end 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, local optional revenue, and
transportation sparsity revenue, times the number of pupil units for pupils attending the area
learning center.

new text begin (i) Notwithstanding paragraph (b), unreimbursed tuition reimbursement amounts for a
charter school, not including a charter school for which the tuition adjustment is calculated
under paragraph (d) or (e), must be computed according to this paragraph. For purposes of
this paragraph:
new text end

new text begin (1) "regular school year statewide district cap rate" means the unreimbursed regular
school year cost per service hour, calculated statewide for all districts and averaged across
the current year;
new text end

new text begin (2) "extended school year statewide district cap rate" means the unreimbursed extended
school year cost per service hour, calculated statewide for all districts and averaged across
the current year;
new text end

new text begin (3) "special education transportation statewide district cap rate" means the unreimbursed
special education transportation cost per membership hour, calculated statewide for all
districts and averaged across the current year;
new text end

new text begin (4) "special education one-to-one paraprofessional statewide district cap rate" means
the unreimbursed special education one-to-one paraprofessional cost per hour, calculated
statewide for all districts and averaged across the current year; and
new text end

new text begin (5) "unreimbursed cost of providing special education and services" means the lesser of
(i) the amount calculated under paragraph (b), or (ii) the "regular school year statewide
district cap rate" multiplied by the regular school year service hours, plus the "extended
school year statewide district cap rate" multiplied by the extended school year service hours,
plus the "special education transportation statewide district cap rate" multiplied by the
membership hours, plus the "special education one-to-one paraprofessional statewide district
cap rate" times instructional hours.
new text end

new text begin (j) For purposes of paragraph (i), for each capped rate, the unreimbursed cap rate must
not exceed 200 percent of the capped rate for fiscal year 2025, 175 percent of the capped
rate for fiscal year 2026, 150 percent of the capped rate for fiscal year 2027, and 125 percent
of the capped rate for fiscal year 2028 and later.
new text end

new text begin (k) Notwithstanding paragraph (b), the department may disallow tuition expenses for a
charter school if the department determines that the charter school failed to pursue third-party
billing for qualifying special education services.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 8. new text begin APPROPRIATION; SPECIAL 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 sums indicated in this section are
appropriated from the general fund to the Department of Education in the fiscal years
designated.
new text end

new text begin Subd. 2. new text end

new text begin Special education aid. new text end

new text begin For special education aid under Minnesota Statutes,
section 125A.76:
new text end

	new text begin $ new text end	new text begin ....... new text end	new text begin ..... new text end	new text begin 2024 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