Engrossments
Introduction		Posted on 01/08/2007
1st Engrossment		Posted on 04/12/2007
2nd Engrossment		Posted on 04/13/2007
3rd Engrossment		Posted on 04/17/2007
4th Engrossment		Posted on 04/19/2007
5th Engrossment		Posted on 05/13/2008

Committee Engrossments
1st Committee Engrossment		Posted on 03/28/2007
2nd Committee Engrossment		Posted on 04/10/2007

Conference Committee Reports
CCR-HF0006		Posted on 05/12/2008

Section 1.

Minnesota Statutes 2006, section 121A.19, is amended to read:

121A.19 DEVELOPMENTAL SCREENING AID.

Each school year, the state must pay a district for each child or student screened by
the district according to the requirements of section 121A.17. The amount of state aid
for each child or student screened shall be: (1) deleted text begin $50deleted text end new text begin $75new text end for a child screened at age three;
(2) deleted text begin $40deleted text end new text begin $50new text end for a child screened at age four; (3) deleted text begin $30deleted text end new text begin $40new text end for a child screened at age five
or six prior to kindergarten; and (4) $30 for a student screened within 30 days after first
enrolling in a public school kindergarten if the student has not previously been screened
according to the requirements of section 121A.17. If this amount of aid is insufficient,
the district may permanently transfer from the general fund an amount that, when added
to the aid, is sufficient. Developmental screening aid shall not be paid for any student
who is screened more than 30 days after the first day of attendance at a public school
kindergarten, except if a student transfers to another public school kindergarten within
30 days after first enrolling in a Minnesota public school kindergarten program. In this
case, if the student has not been screened, the district to which the student transfers may
receive developmental screening aid for screening that student when the screening is
performed within 30 days of the transfer date.

Sec. 2.

Minnesota Statutes 2006, section 122A.21, is amended to read:

122A.21 TEACHERS' AND ADMINISTRATORS' LICENSES; FEES.

new text begin Subdivision 1. new text end

new text begin Licensure applications. new text end

Each application for the issuance, renewal,
or extension of a license to teachnew text begin , including applications for licensure via portfolio under
subdivision 2,new text end must be accompanied by a processing fee of $57. Each application for
issuing, renewing, or extending the license of a school administrator or supervisor must
be accompanied by a processing fee in the amount set by the Board of Teaching. The
processing fee for a teacher's license and for the licenses of supervisory personnel must
be paid to the executive secretary of the appropriate board. The executive secretary of
the board shall deposit the fees with the commissioner of finance. The fees as set by the
board are nonrefundable for applicants not qualifying for a license. However, a fee must
be refunded by the commissioner of finance in any case in which the applicant already
holds a valid unexpired license. The board may waive or reduce fees for applicants who
apply at the same time for more than one license.

new text begin Subd. 2. new text end

new text begin Licensure via portfolio. new text end

new text begin (a) An eligible candidate may use licensure
via portfolio to obtain an initial licensure or to add a licensure field, consistent with the
applicable Board of Teaching licensure rules.
new text end

new text begin (b) A candidate for initial licensure must submit to the Educator Licensing Division
at the department one portfolio demonstrating pedagogical competence and one portfolio
demonstrating content competence.
new text end

new text begin (c) A candidate seeking to add a licensure field must submit to the Educator
Licensing Division at the department one portfolio demonstrating content competence.
new text end

new text begin (d) A candidate must pay to the executive secretary of the Board of Teaching a
$300 fee for the first portfolio submitted for review and a $200 fee for any portfolio
submitted subsequently. The fees must be paid to the executive secretary of the Board of
Teaching. The revenue generated from the fee must be deposited in an education licensure
portfolio account in the special revenue fund. The fees set by the Board of Teaching are
nonrefundable for applicants not qualifying for a license. The Board of Teaching may
waive or reduce fees for candidates based on financial need.
new text end

Sec. 3.

Minnesota Statutes 2006, section 122A.415, is amended by adding a
subdivision to read:

new text begin Subd. 4. new text end

new text begin Basic alternative teacher compensation aid. new text end

new text begin (a) For fiscal year 2010
and later, the basic alternative teacher compensation aid for a school district with a plan
approved under section 122A.414, subdivision 2b, equals 65 percent of the alternative
teacher compensation revenue under subdivision 1. The basic alternative teacher
compensation aid for an intermediate school district or charter school with a plan approved
under section 122A.414, subdivisions 2a and 2b, if the recipient is a charter school, equals
$260 times the number of pupils enrolled in the school on October 1 of the previous
fiscal year, or on October 1 of the current fiscal year for a charter school in the first year
of operation, times the ratio of the sum of the alternative teacher compensation aid and
alternative teacher compensation levy for all participating school districts to the maximum
alternative teacher compensation revenue for those districts under subdivision 1.
new text end

new text begin (b) Notwithstanding paragraph (a) and subdivision 1, the state total basic alternative
teacher compensation aid entitlement must not exceed $47,485,000 for fiscal year 2010
and $76,067,000 for fiscal year 2011 and later. The commissioner must limit the amount
of alternative teacher compensation aid approved under this section so as not to exceed
these limits.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for revenue for fiscal year 2010
and later.
new text end

Sec. 4.

Minnesota Statutes 2006, section 122A.415, is amended by adding a
subdivision to read:

new text begin Subd. 5. new text end

new text begin Alternative teacher compensation levy. new text end

new text begin For fiscal year 2010 and later,
the alternative teacher compensation levy for a district receiving basic alternative teacher
compensation aid equals the product of: (1) the difference between the district's alternative
teacher compensation revenue, under subdivision 1, and the district's basic alternative
teacher compensation aid, under subdivision 4; times (2) the lesser of one or the ratio of
the district's adjusted net tax capacity per adjusted pupil unit to $5,913.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for revenue for fiscal year 2010
and later.
new text end

Sec. 5.

Minnesota Statutes 2006, section 122A.415, is amended by adding a
subdivision to read:

new text begin Subd. 6. new text end

new text begin Alternative teacher compensation aid. new text end

new text begin (a) For fiscal year 2010 and
later, a district's alternative teacher compensation equalization aid equals the district's
alternative teacher compensation revenue, minus the district's basic alternative teacher
compensation aid, minus the district's alternative teacher compensation levy. If a district
does not levy the entire amount permitted under subdivision 5, the alternative teacher
compensation equalization aid must be reduced in proportion to the actual amount levied.
new text end

new text begin (b) A district's alternative teacher compensation aid equals the sum of the
district's basic alternative teacher compensation aid and the district's alternative teacher
compensation equalization aid.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for revenue for fiscal year 2010
and later.
new text end

Sec. 6.

Minnesota Statutes 2007 Supplement, section 123B.54, is amended to read:

123B.54 DEBT SERVICE APPROPRIATION.

(a) deleted text begin $14,813,000deleted text end new text begin $14,814,000new text end in fiscal year 2008, deleted text begin $11,124,000deleted text end new text begin $9,109,000new text end in fiscal
year 2009, deleted text begin $8,866,000deleted text end new text begin $7,286,000new text end in fiscal year 2010, and deleted text begin $6,631,000deleted text end new text begin $6,878,000new text end in
fiscal year 2011 and later are appropriated from the general fund to the commissioner of
education for payment of debt service equalization aid under section 123B.53.

(b) The appropriations in paragraph (a) must be reduced by the amount of any
money specifically appropriated for the same purpose in any year from any state fund.

Sec. 7.

Minnesota Statutes 2006, section 123B.59, subdivision 1, is amended to read:

Subdivision 1.

To qualify.

(a) An independent or special school district qualifies to
participate in the alternative facilities bonding and levy program if the district has:

(1) more than 66 students per grade;

(2) over 1,850,000 square feet of space and the average age of building space is 15
years or older or over 1,500,000 square feet and the average age of building space is
35 years or older;

(3) insufficient funds from projected health and safety revenue and capital facilities
revenue to meet the requirements for deferred maintenance, to make accessibility
improvements, or to make fire, safety, or health repairs; and

(4) a ten-year facility plan approved by the commissioner according to subdivision 2.

(b) An independent or special school district not eligible to participate in the
alternative facilities bonding and levy program under paragraph (a) qualifies for limited
participation in the program if the district has:

(1) one or more health and safety projects with an estimated cost of $500,000 or
more per site that would qualify for health and safety revenue except for the project size
limitation in section 123B.57, subdivision 1, paragraph (b); and

(2) insufficient funds from capital facilities revenue to fund those projects.

new text begin (c) Notwithstanding the square footage limitation in paragraph (a), clause (2),
a school district that qualified for eligibility under paragraph (a) as of July 1, 2007,
remains eligible for funding under this section as long as the district continues to meet
the requirements of paragraph (a), clauses (1), (3), and (4).
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. 8.

Minnesota Statutes 2006, section 123B.62, is amended to read:

123B.62 BONDS FOR CERTAIN CAPITAL FACILITIES.

(a) In addition to other bonding authority, with approval of the commissioner, a
district may issue general obligation bonds for certain capital projects under this section.
The bonds must be used only to make capital improvements including:

(1) under section 126C.10, subdivision 14, total operating capital revenue uses
specified in clauses (4), (6), (7), (8), (9), and (10);

(2) the cost of energy modifications;

(3) improving disability accessibility to school buildings; deleted text begin and
deleted text end

(4) bringing school buildings into compliance with life and safety codes and fire
codesnew text begin ; andnew text end

new text begin (5) modifying buildings and equipment for securitynew text end .

(b) Before a district issues bonds under this subdivision, it must publish notice
of the intended projects, the amount of the bond issue, and the total amount of district
indebtedness.

(c) A bond issue tentatively authorized by the board under this subdivision becomes
finally authorized unless a petition signed by more than 15 percent of the registered voters
of the district is filed with the school board within 30 days of the board's adoption of a
resolution stating the board's intention to issue bonds. The percentage is to be determined
with reference to the number of registered voters in the district on the last day before the
petition is filed with the board. The petition must call for a referendum on the question of
whether to issue the bonds for the projects under this section. The approval of 50 percent
plus one of those voting on the question is required to pass a referendum authorized
by this section.

(d) The bonds must be paid off within deleted text begin tendeleted text end new text begin 15 new text end years of issuance. The bonds must be
issued in compliance with chapter 475, except as otherwise provided in this section. A tax
levy must be made for the payment of principal and interest on the bonds in accordance
with section 475.61. The sum of the tax levies under this section and section 123B.61 for
each year must not exceed the limit specified in section 123B.61. The levy for each year
must be reduced as provided in section 123B.61. A district using an excess amount in the
debt redemption fund to retire the bonds shall report the amount used for this purpose to
the commissioner by July 15 of the following fiscal year. A district having an outstanding
capital loan under section 126C.69 or an outstanding debt service loan under section
126C.68 must not use an excess amount in the debt redemption fund to retire the bonds.

(e) Notwithstanding paragraph (d), bonds issued by a district within the first
five years following voter approval of a combination according to section 123A.37,
subdivision 2, must be paid off within 20 years of issuance. All the other provisions and
limitation of paragraph (d) apply.

Sec. 9.

Minnesota Statutes 2006, section 124D.04, subdivision 3, is amended to read:

Subd. 3.

Pupils in adjoining states.

new text begin Except as provided under an agreement with
an adjoining state under section 124D.041, new text end a non-Minnesota pupil who resides in an
adjoining state in a district that borders Minnesota may enroll in a Minnesota district if
either the board of the district in which the pupil resides or state in which the pupil resides
pays tuition to the district in which the pupil is enrolled.

Sec. 10.

Minnesota Statutes 2006, section 124D.04, subdivision 6, is amended to read:

Subd. 6.

Tuition payments.

new text begin (a) new text end In each odd-numbered year, before March 1, the
commissioner must agree to rates of tuition for Minnesota elementary and secondary
pupils attending in other states for the next two fiscal years when the other state agrees to
negotiate tuition rates. The commissioner must negotiate equal, reciprocal rates with the
designated authority in each state for pupils who reside in an adjoining state and enroll in
a Minnesota district. The rates must be at least equal to the tuition specified in section
124D.05, subdivision 1. If the other state does not agree to negotiate a general tuition rate,
a Minnesota school district may negotiate a tuition rate with the school district in the other
state that sends a pupil to or receives a pupil from the Minnesota school district. The
tuition rate for a pupil with a disability must be equal to the actual cost of instruction and
services provided. The resident district of a Minnesota pupil attending in another state
under this section must pay the amount of tuition agreed upon in this section to the district
of attendance, prorated on the basis of the proportion of the school year attended.

new text begin (b) Notwithstanding paragraph (a) and subdivision 9, if an agreement is reached
between the state of Minnesota and an adjoining state pursuant to section 124D.041,
the provisions of section 124D.041 and the agreement shall apply to all enrollment
transfers between Minnesota and the adjoining state, and provisions of paragraph (a)
and subdivision 9 shall not apply.
new text end

Sec. 11.

Minnesota Statutes 2006, section 124D.04, subdivision 8, is amended to read:

Subd. 8.

Effective if reciprocal.

This section is effective with respect to deleted text begin South
Dakota upon enactment of provisions by South Dakota that the commissioner determines
are essentially similar to the provisions for Minnesota pupils in this section. This section
is effective with respect todeleted text end any deleted text begin otherdeleted text end bordering state upon enactment of provisions by the
bordering state that the commissioner determines are essentially similar to the provisions
for Minnesota pupils in this section.

Sec. 12.

Minnesota Statutes 2006, section 124D.04, subdivision 9, is amended to read:

Subd. 9.

Appeal to the commissioner.

If a Minnesota school district cannot agree
with an adjoining state on a tuition rate for a Minnesota student attending school in that
state and that state has met the requirements in subdivision 8, then the student's parent or
guardian may request that the commissioner deleted text begin agree ondeleted text end new text begin setnew text end a tuition rate for the student. The
Minnesota district must pay the amount of tuition the commissioner deleted text begin agrees upondeleted text end new text begin setsnew text end .

Sec. 13.

new text begin [124D.041] RECIPROCITY WITH ADJOINING STATES.
new text end

new text begin Subdivision 1. new text end

new text begin Agreements. new text end

new text begin (a) The commissioner may enter into an agreement
with the designated authority from an adjoining state to establish an enrollment options
program between Minnesota and the adjoining state. Any agreement entered into pursuant
to this section must specify the following:
new text end

new text begin (1) for students who are not residents of Minnesota, the enrollment options program
applies only to a student whose resident school district borders Minnesota;
new text end

new text begin (2) the commissioner must negotiate equal, reciprocal rates with the designated
authority from the adjoining state;
new text end

new text begin (3) if the adjoining state sends more students to Minnesota than Minnesota sends to
the adjoining state, the adjoining state must pay the state of Minnesota the rate agreed
upon under clause (2) for the excess number of students sent to Minnesota;
new text end

new text begin (4) if Minnesota sends more students to the adjoining state than the adjoining state
sends to Minnesota, the state of Minnesota will pay the adjoining state the rate agreed
upon under clause (2) for the excess number of students sent to the adjoining state;
new text end

new text begin (5) the application procedures for the enrollment options program between
Minnesota and the adjoining state;
new text end

new text begin (6) the reasons for which an application for the enrollment options program between
Minnesota and the adjoining may be denied; and
new text end

new text begin (7) that a Minnesota school district is not responsible for transportation for any
resident student attending school in an adjoining state under the provisions of this section.
A Minnesota school district may, at its discretion, provide transportation services for
such a student.
new text end

new text begin (b) Any agreement entered into pursuant to this section may specify additional terms
relating to any student in need of special education and related services pursuant to chapter
125A. Any additional terms must apply equally to both states.
new text end

new text begin Subd. 2. new text end

new text begin Pupil accounting. new text end

new text begin (a) Any student from an adjoining state enrolled in
Minnesota pursuant to this section is included in the receiving school district's average
daily membership and pupil units according to section 126C.05 as if the student were
a resident of another Minnesota school district attending the receiving school district
under section 124D.03.
new text end

new text begin (b) Any Minnesota resident student enrolled in an adjoining state pursuant to this
section is included in the resident school district's average daily membership and pupil
units according to section 126C.05 as if the student were a resident of the district attending
another Minnesota school district under section 124D.03.
new text end

new text begin Subd. 3. new text end

new text begin Procedures. new text end

new text begin (a) The Department of Education must establish procedures
relating to the application process, the collection or payment of funds under the provisions
of any agreement established pursuant to this section, and the collection of data necessary
to implement any agreement established pursuant to this section.
new text end

new text begin (b) Notwithstanding sections 124A.04 and 124A.05, if an agreement is established
between Minnesota and an adjoining state pursuant to this section, the provisions of this
section and the agreement shall apply to all enrollment transfers between Minnesota and
the adjoining state, and provisions of sections 124D.04 and 124D.05 to the contrary,
including provisions relating to tuition payments, shall not apply.
new text end

new text begin (c) Notwithstanding paragraph (a), any payments to adjoining states under this
section shall be made according to section 127A.45, subdivision 16.
new text end

new text begin (d) Notwithstanding paragraph (b), sections 124D.04, subdivision 6, paragraph (b),
and 124D.05, subdivision 2a, the provisions of this section and the agreement shall not
apply to: (i) enrollment transfers between Minnesota and a school district in an adjoining
state enrolling fewer than 150 pupils that is exempted from participation in the program
under the laws of the adjoining state; or (ii) enrollment transfers between Minnesota and a
school district in an adjoining state under a board agreement initiated in fiscal year 2009 to
serve students in grade levels discontinued by the resident district.
new text end

Sec. 14.

Minnesota Statutes 2006, section 124D.05, is amended by adding a
subdivision to read:

new text begin Subd. 2a. new text end

new text begin Exception. new text end

new text begin Notwithstanding subdivisions 1 and 2, if an agreement
is reached between the state of Minnesota and an adjoining state pursuant to section
124D.041, the provisions of section 124D.041 and the agreement shall apply to all
enrollment transfers between Minnesota and the adjoining state, and provisions of
subdivisions 1 and 2 to the contrary, including provisions relating to tuition payments,
shall not apply.
new text end

Sec. 15.

Minnesota Statutes 2006, section 124D.118, subdivision 4, is amended to read:

Subd. 4.

Reimbursement.

In accordance with program guidelines, the
commissioner shall reimburse each participating public or nonpublic school deleted text begin 14deleted text end new text begin 20 new text end cents
for each half-pint of milk that is served to kindergarten students and is not part of a school
lunch or breakfast reimbursed under section 124D.111 or 124D.1158.

Sec. 16.

new text begin [124D.141] STATE ADVISORY COUNCIL ON EARLY CHILDHOOD
EDUCATION AND CARE.
new text end

new text begin Subdivision 1. new text end

new text begin Membership; Duties. new text end

new text begin Two members of the house of representatives,
one appointed by the speaker and one appointed by the minority leader; and two members
of the senate appointed by the Subcommittee on Committees of the Committee on Rules
and Administration, including one member of the minority; and two parents with a
child under age six, shall be added to the membership of the State Advisory Council on
Early Education and Care. The council must fulfill the duties required under the federal
Improving Head Start for School Readiness Act of 2007 as provided in Public Law
110-134.
new text end

new text begin Subd. 2. new text end

new text begin Additional duties. new text end

new text begin The following duties are added to those assigned
to the council under federal law:
new text end

new text begin (1) make recommendations on the most efficient and effective way to leverage state
and federal funding streams for early childhood and child care programs;
new text end

new text begin (2) make recommendations on how to coordinate or colocate early childhood and
child care programs in one state Office of Early Learning;
new text end

new text begin (3) review program evaluations regarding high-quality early childhood programs;
and
new text end

new text begin (4) make recommendations to the governor and legislature, including proposed
legislation on how to most effectively create a high quality early childhood system in
Minnesota in order to improve the educational outcomes of children so that all children
are school-ready by 2020.
new text end

new text begin Subd. 3. new text end

new text begin Administration. new text end

new text begin An amount up to $12,500 from federal child care
and development fund administrative funds and up to $12,500 from prekindergarten
exploratory project funds appropriated under Laws 2007, chapter 147, article 19, section
3, may be used to reimburse the parents on the council and for technical assistance and
administrative support of the State Advisory Council on Early Childhood Education and
Care. This funding stream is for fiscal year 2009. The council may pursue additional
funds from state, federal, and private sources. If additional operational funds are received,
the council must reduce the amount of prekindergarten exploratory project funds used
in an equal amount.
new text end

Sec. 17.

Minnesota Statutes 2007 Supplement, section 124D.531, subdivision 1,
is amended to read:

Subdivision 1.

State total adult basic education aid.

(a) The state total adult basic
education aid for fiscal year 2005 is $36,509,000. The state total adult basic education
aid for fiscal year 2006 equals $36,587,000 plus any amount that is not paid for during
the previous fiscal year, as a result of adjustments under subdivision 4, paragraph (a), or
section 124D.52, subdivision 3. The state total adult basic education aid for fiscal year
2007 equals $37,673,000 plus any amount that is not paid for during the previous fiscal
year, as a result of adjustments under subdivision 4, paragraph (a), or section 124D.52,
subdivision 3. The state total adult basic education aid for fiscal year 2008 equals
$40,650,000, plus any amount that is not paid during the previous fiscal year as a result of
adjustments under subdivision 4, paragraph (a), or section 124D.52, subdivision 3. The
state total adult basic education aid for later fiscal years equals:

(1) the state total adult basic education aid for the preceding fiscal year plus any
amount that is not paid for during the previous fiscal year, as a result of adjustments under
subdivision 4, paragraph (a), or section 124D.52, subdivision 3; times

(2) the lesser of:

(i) 1.03; or

(ii) deleted text begin the greater of 1.00 or the ratio of the state total contact hours in the first prior
program year to the state total contact hours in the second prior program yeardeleted text end new text begin the average
growth in state total contact hours over the prior 10 program yearsnew text end .

Beginning in fiscal year 2002, two percent of the state total adult basic education
aid must be set aside for adult basic education supplemental service grants under section
124D.522.

(b) The state total adult basic education aid, excluding basic population aid, equals
the difference between the amount computed in paragraph (a), and the state total basic
population aid under subdivision 2.

Sec. 18.

Minnesota Statutes 2006, section 124D.55, is amended to read:

124D.55 GENERAL EDUCATION DEVELOPMENT (GED) TEST FEES.

The commissioner shall pay 60 percent of the fee that is charged to an eligible
individual for the full battery of a general education development (GED) test, but not
more than deleted text begin $20deleted text end new text begin $40 new text end for an eligible individual.

Sec. 19.

Minnesota Statutes 2006, section 125A.65, is amended by adding a
subdivision to read:

new text begin Subd. 11. new text end

new text begin Third-party reimbursement. new text end

new text begin The Minnesota State Academies must seek
reimbursement under section 125A.21 from third parties for the cost of services provided
by the Minnesota State Academies whenever the services provided are otherwise covered
by a child's public or private health plan.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment
for revenue in fiscal years 2008 and later.
new text end

Sec. 20.

Minnesota Statutes 2006, section 125A.76, is amended by adding a
subdivision to read:

new text begin Subd. 4a. new text end

new text begin Adjustments for tuition reciprocity with adjoining states. new text end

new text begin (a) If an
agreement is reached between the state of Minnesota and an adjoining state pursuant to
section 124D.041 that requires a special education tuition payment from the state of
Minnesota to the adjoining state, the tuition payment shall be made from the special
education aid appropriation for that year, and the state total special education aid under
subdivision 4 shall be reduced by the amount of the payment.
new text end

new text begin (b) If an agreement is reached between the state of Minnesota and an adjoining state
pursuant to section 124D.041 that requires a special education tuition payment from
an adjoining state to the state of Minnesota, the special education aid appropriation for
that year and the state total special education aid under subdivision 4 shall be increased
by the amount of the payment.
new text end

new text begin (c) If an agreement is reached between the state of Minnesota and an adjoining state
pursuant to section 124D.041 that requires special education tuition payments to be made
between the two states and not between districts in the two states, the special education aid
for a Minnesota school district serving a student with a disability from the adjoining state
shall be calculated according to section 127A.47, subdivision 7, except that no reduction
shall be made in the special education aid paid to the resident district.
new text end

Sec. 21.

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

Subdivision 1.

General education revenue.

new text begin (a) new text end For fiscal deleted text begin year 2006 and laterdeleted text end new text begin years
2008 and 2009new text end , the general education revenue for each district equals the sum of the
district's basic revenue, extended time revenue, gifted and talented revenue, basic skills
revenue, training and experience revenue, secondary sparsity revenue, elementary sparsity
revenue, transportation sparsity revenue, total operating capital revenue, equity revenue,
alternative teacher compensation revenuenew text begin under section 122A.415new text end , and transition revenue.

new text begin (b) For fiscal year 2010 and later, the general education revenue for each district
equals the sum of the district's basic revenue, extended time revenue, gifted and talented
revenue, basic skills revenue, training and experience revenue, secondary sparsity revenue,
elementary sparsity revenue, transportation sparsity revenue, total operating capital
revenue, equity revenue, and transition revenue.
new text end

Sec. 22.

Minnesota Statutes 2006, section 126C.10, subdivision 31, is amended to read:

Subd. 31.

Transition revenue.

(a) A district's transition allowance equals the
greater of zero or the product of the ratio of the number of adjusted marginal cost pupil
units the district would have counted for fiscal year 2004 under Minnesota Statutes 2002
to the district's adjusted marginal cost pupil units for fiscal year 2004, times the difference
between: (1) the lesser of the district's general education revenue per adjusted marginal
cost pupil unit for fiscal year 2003 or the amount of general education revenue the district
would have received per adjusted marginal cost pupil unit for fiscal year 2004 according
to Minnesota Statutes 2002, and (2) the district's general education revenue for fiscal year
2004 excluding transition revenue divided by the number of adjusted marginal cost pupil
units the district would have counted for fiscal year 2004 under Minnesota Statutes 2002.

(b) A district's transition revenue for fiscal deleted text begin yeardeleted text end new text begin yearsnew text end 2006 deleted text begin and laterdeleted text end new text begin through 2009new text end
equals the sum of the product of the district's transition allowance times the district's
adjusted marginal cost pupil units plus the district's transition for prekindergarten revenue
under subdivision 31a.

new text begin (c) A district's transition revenue for fiscal year 2010 and later equals the sum of
the product of the district's transition allowance times the district's adjusted marginal cost
pupil units plus the district's transition for prekindergarten revenue under subdivision 31a
plus the district's transition for tuition reciprocity revenue under subdivision 31c.
new text end

Sec. 23.

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

new text begin Subd. 31c. new text end

new text begin Transition for tuition reciprocity revenue. new text end

new text begin For the first year that a
tuition reciprocity agreement with an adjoining state is in effect under section 124D.041
and later, a school district's transition for tuition reciprocity revenue equals the greater of
zero or the difference between the sum of the general education revenue and net tuition
revenue the district would have received for pupils enrolled under section 124D.041 for
the first year the agreement is in effect if the agreement had not been in effect, and the
sum of the district's general education revenue and net tuition revenue for the first year
the agreement is in effect.
new text end

Sec. 24.

Minnesota Statutes 2007 Supplement, section 126C.10, subdivision 34,
is amended to read:

Subd. 34.

Basic alternative teacher compensation aid.

(a) For fiscal years
deleted text begin 2007 and laterdeleted text end new text begin 2008 and 2009new text end , the basic alternative teacher compensation aid for a
school district with a plan approved under section 122A.414, subdivision 2b, equals deleted text begin 65deleted text end
new text begin 73.1new text end percent of the alternative teacher compensation revenue under section 122A.415,
subdivision 1. The basic alternative teacher compensation aid for an intermediate school
district or charter school with a plan approved under section 122A.414, subdivisions 2a
and 2b, if the recipient is a charter school, equals $260 times the number of pupils enrolled
in the school on October 1 of the previous fiscal year, or on October 1 of the current fiscal
year for a charter school in the first year of operation, times the ratio of the sum of the
alternative teacher compensation aid and alternative teacher compensation levy for all
participating school districts to the maximum alternative teacher compensation revenue
for those districts under section 122A.415, subdivision 1.

(b) Notwithstanding paragraphs (a) and (b) and section 122A.415, subdivision 1,
the state total basic alternative teacher compensation aid entitlement must not exceed
deleted text begin $75,636,000deleted text end new text begin $48,060,000 new text end for fiscal year deleted text begin 2007deleted text end new text begin 2008,new text end and deleted text begin laterdeleted text end new text begin $53,267,000 for fiscal year
2009new text end . The commissioner must limit the amount of alternative teacher compensation aid
approved under section 122A.415 so as not to exceed these limits.

Sec. 25.

Minnesota Statutes 2006, section 126C.10, subdivision 35, is amended to read:

Subd. 35.

Alternative teacher compensation levy.

For fiscal deleted text begin year 2007 and laterdeleted text end new text begin
years 2008 and 2009new text end , the alternative teacher compensation levy for a district receiving
basic alternative teacher compensation aid equals the product of (1) the difference between
the district's alternative teacher compensation revenue and the district's basic alternative
teacher compensation aid times (2) the lesser of one or the ratio of the district's adjusted
net tax capacity per adjusted pupil unit to $5,913.

Sec. 26.

Minnesota Statutes 2006, section 126C.10, subdivision 36, is amended to read:

Subd. 36.

Alternative teacher compensation aid.

(a) For fiscal deleted text begin year 2007 and laterdeleted text end new text begin
years 2008 and 2009new text end , a district's alternative teacher compensation equalization aid equals
the district's alternative teacher compensation revenue minus the district's basic alternative
teacher compensation aid minus the district's alternative teacher compensation levy. If a
district does not levy the entire amount permitted, the alternative teacher compensation
equalization aid must be reduced in proportion to the actual amount levied.

(b) A district's alternative teacher compensation aid equals the sum of the
district's basic alternative teacher compensation aid and the district's alternative teacher
compensation equalization aid.

Sec. 27.

Minnesota Statutes 2006, section 126C.17, subdivision 9, is amended to read:

Subd. 9.

Referendum revenue.

(a) The revenue authorized by section 126C.10,
subdivision 1, may be increased in the amount approved by the voters of the district at a
referendum called for the purpose. The referendum may be called by the board or shall be
called by the board upon written petition of qualified voters of the district. The referendum
must be conducted one or two calendar years before the increased levy authority, if
approved, first becomes payable. Only one election to approve an increase may be held
in a calendar year. Unless the referendum is conducted by mail under paragraph (g), the
referendum must be held on the first Tuesday after the first Monday in November. The
ballot must state the maximum amount of the increased revenue per resident marginal cost
pupil unit. The ballot may state a schedule, determined by the board, of increased revenue
per resident marginal cost pupil unit that differs from year to year over the number of
years for which the increased revenue is authorized or may state that the amount shall
increase annually by the rate of inflation. For this purpose, the rate of inflation shall be
the annual inflationary increase calculated under subdivision 2, paragraph (b). The ballot
may state that existing referendum levy authority is expiring. In this case, the ballot may
also compare the proposed levy authority to the existing expiring levy authority, and
express the proposed increase as the amount, if any, over the expiring referendum levy
authority. The ballot must designate the specific number of years, not to exceed ten, for
which the referendum authorization applies. The ballot, including a ballot on the question
to revoke or reduce the increased revenue amount under paragraph (c), must abbreviate
the term "per resident marginal cost pupil unit" as "per pupil." The notice required under
section 275.60 may be modified to read, in cases of renewing existing levies new text begin at the same
amount per pupil as in the previous yearnew text end :

"BY VOTING "YES" ON THIS BALLOT QUESTION, YOU deleted text begin MAY BE VOTING
FOR A PROPERTY TAX INCREASEdeleted text end new text begin ARE VOTING TO EXTEND AN EXISTING
PROPERTY TAX REFERENDUM THAT IS SCHEDULED TO EXPIREnew text end ."

The ballot may contain a textual portion with the information required in this
subdivision and a question stating substantially the following:

"Shall the increase in the revenue proposed by (petition to) the board of .........,
School District No. .., be approved?"

If approved, an amount equal to the approved revenue per resident marginal cost
pupil unit times the resident marginal cost pupil units for the school year beginning in
the year after the levy is certified shall be authorized for certification for the number of
years approved, if applicable, or until revoked or reduced by the voters of the district at a
subsequent referendum.

(b) The board must prepare and deliver by first class mail at least 15 days but no more
than 30 days before the day of the referendum to each taxpayer a notice of the referendum
and the proposed revenue increase. The board need not mail more than one notice to any
taxpayer. For the purpose of giving mailed notice under this subdivision, owners must be
those shown to be owners on the records of the county auditor or, in any county where
tax statements are mailed by the county treasurer, on the records of the county treasurer.
Every property owner whose name does not appear on the records of the county auditor
or the county treasurer is deemed to have waived this mailed notice unless the owner
has requested in writing that the county auditor or county treasurer, as the case may be,
include the name on the records for this purpose. The notice must project the anticipated
amount of tax increase in annual dollars for typical residential homesteads, agricultural
homesteads, apartments, and commercial-industrial property within the school district.

The notice for a referendum may state that an existing referendum levy is expiring
and project the anticipated amount of increase over the existing referendum levy in
the first year, if any, in annual dollars for typical residential homesteads, agricultural
homesteads, apartments, and commercial-industrial property within the district.

The notice must include the following statement: "Passage of this referendum will
result in an increase in your property taxes." However, in cases of renewing existing
levies, the notice may include the following statement: "Passage of this referendum deleted text begin may
result in an increase in your property taxesdeleted text end new text begin extends an existing operating referendum at the
same amount per pupil as in the previous yearnew text end ."

(c) A referendum on the question of revoking or reducing the increased revenue
amount authorized pursuant to paragraph (a) may be called by the board and shall be called
by the board upon the written petition of qualified voters of the district. A referendum to
revoke or reduce the revenue amount must state the amount per resident marginal cost
pupil unit by which the authority is to be reduced. Revenue authority approved by the
voters of the district pursuant to paragraph (a) must be available to the school district at
least once before it is subject to a referendum on its revocation or reduction for subsequent
years. Only one revocation or reduction referendum may be held to revoke or reduce
referendum revenue for any specific year and for years thereafter.

(d) A petition authorized by paragraph (a) or (c) is effective if signed by a number of
qualified voters in excess of 15 percent of the registered voters of the district on the day
the petition is filed with the board. A referendum invoked by petition must be held on the
date specified in paragraph (a).

(e) The approval of 50 percent plus one of those voting on the question is required to
pass a referendum authorized by this subdivision.

(f) At least 15 days before the day of the referendum, the district must submit a
copy of the notice required under paragraph (b) to the commissioner and to the county
auditor of each county in which the district is located. Within 15 days after the results
of the referendum have been certified by the board, or in the case of a recount, the
certification of the results of the recount by the canvassing board, the district must notify
the commissioner of the results of the referendum.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for elections conducted on or after
July 1, 2008.
new text end

Sec. 28.

Minnesota Statutes 2006, section 126C.40, subdivision 1, is amended to read:

Subdivision 1.

To lease building or land.

(a) When an independent or a special
school district or a group of independent or special school districts finds it economically
advantageous to rent or lease a building or land for any instructional purposes or for
school storage or furniture repair, and it determines that the operating capital revenue
authorized under section 126C.10, subdivision 13, is insufficient for this purpose, it may
apply to the commissioner for permission to make an additional capital expenditure levy
for this purpose. An application for permission to levy under this subdivision must contain
financial justification for the proposed levy, the terms and conditions of the proposed
lease, and a description of the space to be leased and its proposed use.

(b) The criteria for approval of applications to levy under this subdivision must
include: the reasonableness of the price, the appropriateness of the space to the proposed
activity, the feasibility of transporting pupils to the leased building or land, conformity
of the lease to the laws and rules of the state of Minnesota, and the appropriateness of
the proposed lease to the space needs and the financial condition of the district. The
commissioner must not authorize a levy under this subdivision in an amount greater than
the cost to the district of renting or leasing a building or land for approved purposes.
The proceeds of this levy must not be used for custodial or other maintenance services.
A district may not levy under this subdivision for the purpose of leasing or renting a
district-owned building or site to itself.

(c) For agreements finalized after July 1, 1997, a district may not levy under this
subdivision for the purpose of leasing: (1) a newly constructed building used primarily
for regular kindergarten, elementary, or secondary instruction; or (2) a newly constructed
building addition or additions used primarily for regular kindergarten, elementary, or
secondary instruction that contains more than 20 percent of the square footage of the
previously existing building.

(d) Notwithstanding paragraph (b), a district may levy under this subdivision for the
purpose of leasing or renting a district-owned building or site to itself only if the amount
is needed by the district to make payments required by a lease purchase agreement,
installment purchase agreement, or other deferred payments agreement authorized by law,
and the levy meets the requirements of paragraph (c). A levy authorized for a district by
the commissioner under this paragraph may be in the amount needed by the district to
make payments required by a lease purchase agreement, installment purchase agreement,
or other deferred payments agreement authorized by law, provided that any agreement
include a provision giving the school districts the right to terminate the agreement
annually without penalty.

(e) The total levy under this subdivision for a district for any year must not exceed
deleted text begin $100deleted text end new text begin $150 new text end times the resident pupil units for the fiscal year to which the levy is attributable.

(f) For agreements for which a review and comment have been submitted to the
Department of Education after April 1, 1998, the term "instructional purpose" as used in
this subdivision excludes expenditures on stadiums.

(g) The commissioner of education may authorize a school district to exceed the
limit in paragraph (e) if the school district petitions the commissioner for approval. The
commissioner shall grant approval to a school district to exceed the limit in paragraph (e)
for not more than five years if the district meets the following criteria:

(1) the school district has been experiencing pupil enrollment growth in the
preceding five years;

(2) the purpose of the increased levy is in the long-term public interest;

(3) the purpose of the increased levy promotes colocation of government services;
and

(4) the purpose of the increased levy is in the long-term interest of the district by
avoiding over construction of school facilities.

(h) A school district that is a member of an intermediate school district may include
in its authority under this section the costs associated with leases of administrative and
classroom space for intermediate school district programs. This authority must not
exceed deleted text begin $25deleted text end new text begin $43new text end times the adjusted marginal cost pupil units of the member districts. This
authority is in addition to any other authority authorized under this section.

(i) In addition to the allowable capital levies in paragraph (a), a district that is a
member of the "Technology and Information Education Systems" data processing joint
board, that finds it economically advantageous to enter into a lease purchase agreement for
a building for a group of school districts or special school districts for staff development
purposes, may levy for its portion of lease costs attributed to the district within the total
levy limit in paragraph (e).

Sec. 29.

Minnesota Statutes 2007 Supplement, section 126C.44, is amended to read:

126C.44 SAFE SCHOOLS LEVY.

(a) Each district may make a levy on all taxable property located within the district
for the purposes specified in this section. The maximum amount which may be levied
for all costs under this section shall be equal to $30 multiplied by the district's adjusted
marginal cost pupil units for the school year. The proceeds of the levy must be reserved and
used for directly funding the following purposes or for reimbursing the cities and counties
who contract with the district for the following purposes: (1) to pay the costs incurred for
the salaries, benefits, and transportation costs of peace officers and sheriffs for liaison in
services in the district's schools; (2) to pay the costs for a drug abuse prevention program
as defined in section 609.101, subdivision 3, paragraph (e), in the elementary schools;
(3) to pay the costs for a gang resistance education training curriculum in the district's
schools; (4) to pay the costs for security in the district's schools and on school property; (5)
to pay the costs for other crime prevention, drug abuse, student and staff safety, voluntary
opt-in suicide prevention tools, and violence prevention measures taken by the school
district; or (6) to pay costs for licensed school counselors, licensed school nurses, licensed
school social workers, licensed school psychologists, and licensed alcohol and chemical
dependency counselors to help provide early responses to problems. For expenditures
under clause (1), the district must initially attempt to contract for services to be provided
by peace officers or sheriffs with the police department of each city or the sheriff's
department of the county within the district containing the school receiving the services. If
a local police department or a county sheriff's department does not wish to provide the
necessary services, the district may contract for these services with any other police or
sheriff's department located entirely or partially within the school district's boundaries.

(b) A school district that is a member of an intermediate school district may
include in its authority under this section the costs associated with safe schools activities
authorized under paragraph (a) for intermediate school district programs. This authority
must not exceed $10 times the adjusted marginal cost pupil units of the member districts.
This authority is in addition to any other authority authorized under this section. Revenue
raised under this paragraph must be transferred to the intermediate school district.

(c) deleted text begin Ifdeleted text end A school district deleted text begin spendsdeleted text end new text begin must set aside at least $3 per adjusted marginal cost
pupil unit of the new text end safe schools levy proceeds new text begin for the purposes authorized new text end under paragraph
(a), clause (6)deleted text begin ,deleted text end new text begin .new text end The district must annually certify that its total spending on services
provided by the employees listed in paragraph (a), clause (6), is not less than the sum of
its expenditures for these purposes, excluding amounts spent under this section, in the
previous year plus the amount spent under this section.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for revenue for fiscal year 2010.
new text end

Sec. 30.

Minnesota Statutes 2006, section 126C.45, is amended to read:

126C.45 ICE ARENA LEVY.

(a) Each year, an independent school district operating and maintaining an ice arena,
may levy for the net operational costs of the ice arena. The levy may not exceed deleted text begin 90
percent ofdeleted text end the net actual costs of operation of the arena for the previous year. Net actual
costs are defined as operating costs less any operating revenues.

(b) Any district operating and maintaining an ice arena must demonstrate to the
satisfaction of the Office of Monitoring in the department that the district will offer equal
sports opportunities for male and female students to use its ice arena, particularly in areas
of access to prime practice time, team support, and providing junior varsity and younger
level teams for girls' ice sports and ice sports offerings.

Sec. 31.

Minnesota Statutes 2006, section 126C.51, is amended to read:

126C.51 APPLICATION OF LIMITING TAX LEGISLATION.

Notwithstanding the provisions of section 471.69 or 471.75, or of any other
provision of law which by per capita limitation, local tax rate limitation, or otherwise,
limits the power of a district to incur any debt or to issue any warrant or order, a new text begin school
new text end district new text begin or intermediate school district new text end has the powers in sections 126C.50 to 126C.56
specifically conferred upon it and all powers incident and necessary to carrying out the
purposes of sections 126C.50 to 126C.56.

new text begin EFFECTIVE DATE. new text end

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

Sec. 32.

Minnesota Statutes 2006, section 126C.52, subdivision 2, is amended to read:

Subd. 2.

Limitations.

The board new text begin of any school district new text end may also borrow money
in the manner and subject to the limitations set forth in sections 126C.50 to 126C.56 in
anticipation of receipt of state aids for schools as defined in Minnesota Statutes and of
federal school aids to be distributed by or through the department. The aggregate of such
borrowings under this subdivision shall never exceed 75 percent of such aids which are
receivable by said school district in the deleted text begin schooldeleted text end new text begin fiscal new text end year deleted text begin (from July 1 to June 30)deleted text end in which
the money is borrowed, as estimated and certified by the commissioner.

new text begin EFFECTIVE DATE. new text end

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

Sec. 33.

Minnesota Statutes 2006, section 126C.52, is amended by adding a
subdivision to read:

new text begin Subd. 3. new text end

new text begin Intermediate school districts. new text end

new text begin (a) The board of an intermediate school
district may borrow money in the manner and subject to the limitations set forth in
sections 126C.50 to 126C.56 in anticipation of the receipt of:
new text end

new text begin (1) state aids for schools as defined in Minnesota Statutes;
new text end

new text begin (2) federal school aids to be distributed by or through the department; and
new text end

new text begin (3) membership fees and tuition payments from its member school districts.
new text end

new text begin The aggregate of such borrowings under this subdivision shall never exceed 75
percent of such aids, fees, and tuition payments which are receivable by the intermediate
school district in the fiscal year in which the money is borrowed, as estimated and certified
by the commissioner.
new text end

new text begin (b) The board of an intermediate school district may, upon receipt of a written
resolution by each of its member school districts, pledge the member district's full faith
and credit and unlimited taxing powers to repay each member district's pro rata share of
any certificates issued or the amount paid by the state under section 126C.55, subdivision
2, plus interest, if the revenues specified in paragraph (a) and any other revenues of the
intermediate school district are insufficient to do so.
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. 34.

Minnesota Statutes 2006, section 126C.53, is amended to read:

126C.53 ENABLING RESOLUTION; FORM OF CERTIFICATES OF
INDEBTEDNESS.

The board new text begin of a school district or intermediate school district new text end may authorize and
effect such borrowing, and may issue such certificates of indebtedness upon passage of
a resolution specifying the amount and purposes for which it deems such borrowing is
necessary. The resolution must be adopted by a vote of at least two-thirds of its members.
The board must fix the amount, date, maturity, form, denomination, and other details of
the certificates of indebtedness, not inconsistent with this chapter. The board must fix the
date and place for receipt of bids for the purchase of the certificates when bids are required
and direct the clerk to give notice of the date and place for bidding.

new text begin EFFECTIVE DATE. new text end

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

Sec. 35.

Minnesota Statutes 2006, section 126C.55, is amended to read:

126C.55 STATE PAYMENT OF DEBT OBLIGATION UPON POTENTIAL
DEFAULT; REPAYMENT; STATE OBLIGATION NOT DEBT.

Subdivision 1.

Definitions.

For the purposes of this section, the term "debt
obligation" means:

(1) a deleted text begin tax or aid anticipationdeleted text end certificate of indebtedness new text begin issued under section 126C.52new text end ;

(2) a certificate of participation issued under section 126C.40, subdivision 6; or

(3) a general obligation bond.

Subd. 2.

Notifications; payment; appropriation.

(a) If a new text begin school new text end district new text begin or
intermediate school district new text end believes that it may be unable to make a principal or interest
payment on any outstanding debt obligation on the date that payment is due, it must
notify the commissioner as soon as possible, but not less than 15 working days before the
date that principal or interest payment is due. The notice must include the name of the
new text begin school new text end districtnew text begin or intermediate school districtnew text end , an identification of the debt obligation issue
in question, the date the payment is due, the amount of principal and interest due on the
payment date, the amount of principal or interest that the new text begin school new text end district new text begin or intermediate
school district new text end will be unable to repay on that date, the paying agent for the debt obligation,
the wire transfer instructions to transfer funds to that paying agent, and an indication as to
whether a payment is being requested by the new text begin school new text end district new text begin or intermediate school district
new text end under this section. If a paying agent becomes aware of a potential default, it shall inform
the commissioner of that fact. After receipt of a notice which requests a payment under
this section, after consultation with the new text begin school new text end district new text begin or intermediate school district new text end and
the paying agent, and after verification of the accuracy of the information provided, the
commissioner shall notify the commissioner of finance of the potential default. The notice
must include a final figure as to the amount due that the new text begin school new text end district new text begin or intermediate
school district new text end will be unable to repay on the date due.

(b) Except as provided in subdivision 9, upon receipt of this notice from the
commissioner, the commissioner of finance shall issue a warrant and authorize the
commissioner of education to pay to the paying agent for the debt obligation the specified
amount on or before the date due. The amounts needed for the purposes of this subdivision
are annually appropriated to the department from the state general fund.

(c) The Departments of Education and Finance must jointly develop detailed
procedures for new text begin school new text end districts new text begin and intermediate school districts new text end to notify the state that
they have obligated themselves to be bound by the provisions of this section, procedures
for new text begin school new text end districts new text begin or intermediate school districts new text end and paying agents to notify the state
of potential defaults and to request state payment under this section, and procedures
for the state to expedite payments to prevent defaults. The procedures are not subject
to chapter 14.

Subd. 3.

School district bound; interest rate on state paid amount.

If, at the
request of a new text begin school new text end districtnew text begin or intermediate school districtnew text end , the state has paid part or all of
the principal or interest due on a district's debt obligation on a specific date, the new text begin school
district or intermediate schoolnew text end district is bound by all provisions of this section and the
amount paid shall bear taxable interest from the date paid until the date of repayment at
the invested cash rate as it is certified by the commissioner of finance. Interest shall only
accrue on the amounts paid and outstanding less the reduction in aid under subdivision 4
and other payments received from the district.

Subd. 4.

Pledge of district's full faith and credit.

If, at the request of a new text begin school
new text end districtnew text begin or intermediate school districtnew text end , the state has paid part or all of the principal or
interest due on a district's debt obligation on a specific date, the pledge of the full faith
and credit and unlimited taxing powers of the new text begin schoolnew text end district new text begin or the member districts of
the intermediate districtnew text end to repay the principal and interest due on those debt obligations
shall also, without an election or the requirement of a further authorization, become a
pledge of the full faith and credit and unlimited taxing powers of the new text begin schoolnew text end district new text begin or
the member districts of the intermediate districtnew text end to repay to the state the amount paid,
with interest. Amounts paid by the state must be repaid in the order in which the state
payments were made.

new text begin Subd. 4a. new text end

new text begin Aid reduction for repayment. new text end

new text begin (a) Except as provided in this subdivision,
the state must reduce the state aid payable to the school district or intermediate school
district under this chapter and chapters 122A, 123A, 123B, 124D, 125A, 126C, and 273
by the amount paid by the state under this section on behalf of the district, plus the interest
due on it, and the amount reduced must revert from the appropriate account to the state
general fund. Payments from the school district endowment fund or any federal aid
payments shall not be reduced.
new text end

new text begin (b) For an intermediate school district, the state aid payable to the intermediate
school district must first be reduced, before any reduction is made to the state aids payable
to the member districts. If the state aid payable to the intermediate school district is
not sufficient to repay the state, state aid payable to member districts may be reduced
proportionately based on the ratio of each member district's adjusted net tax capacity to
the total adjusted net tax capacity of all member districts.
new text end

new text begin (c) If, after review of the financial situation of the school district or intermediate
school district, the commissioner advises the commissioner of finance that a total reduction
of aids would cause an undue hardship on or an undue disruption of the educational
program of the district, the commissioner, with the approval of the commissioner of
finance, may establish a different schedule for reduction of aids to repay the state. The
amount of aids to be reduced is decreased by any amounts repaid to the state by the district
from other revenue sources.
new text end

Subd. 6.

Tax levy for repayment.

(a) With the approval of the commissioner, a
district may levy in the year the state makes a payment under this section an amount up to
the amount necessary to provide funds for the repayment of the amount paid by the state
plus interest through the date of estimated repayment by the district. The proceeds of this
levy may be used only for this purpose unless they are in excess of the amount actually
due, in which case the excess shall be used to repay other state payments made under this
section or shall be deposited in the debt redemption fund of the school district. This levy
shall be an increase in the levy limits of the district for purposes of section 275.065,
subdivision 6. The amount of aids to be reduced to repay the state shall be decreased by
the amount levied. This levy by the district is not eligible for debt service equalization
under section 123B.53.

(b) If the state is not repaid in full for a payment made under this section by
November 30 of the calendar year following the year in which the state makes the
payment, the commissioner shall require the district to certify a property tax levy in an
amount up to the amount necessary to provide funds for repayment of the amount paid by
the state plus interest through the date of estimated repayment by the school district. To
prevent undue hardship, the commissioner may allow the district to certify the levy over a
five-year period. The proceeds of the levy may be used only for this purpose unless they
are in excess of the amount actually due, in which case the excess shall be used to repay
other state payments made under this section or shall be deposited in the debt redemption
fund of the district. This levy shall be an increase in the levy limits of the school district
for purposes of section 275.065, subdivision 6. If the commissioner orders the district
to levy, the amount of aids reduced to repay the state shall be decreased by the amount
levied. This levy by the district is not eligible for debt service equalization under section
123B.53 or any successor provision. A levy under this subdivision must be explained as a
specific increase at the meeting required under section 275.065, subdivision 6.

new text begin (c) For an intermediate district, a levy made by a member district under paragraph (a)
or (b) to pay its pro rata share must be spread by the commissioner as a tax rate based on
the total adjusted net tax capacity of the member school districts. The proceeds of the levy
must be remitted by the member school district to the intermediate school district and must
be used by the intermediate district only to repay the state amounts owed. Any amount in
excess of the amount owed to the state must be repaid to the member school districts and
the commissioner shall adjust each member district's property tax levy in the next year.
new text end

Subd. 7.

Election as to mandatory application.

A new text begin school new text end district new text begin or intermediate
school district new text end may covenant and obligate itself, prior to the issuance of an issue of debt
obligations, to notify the commissioner of a potential default and to use the provisions of
this section to guarantee payment of the principal and interest on those debt obligations
when due. If the district obligates itself to be bound by this section, it must covenant in the
resolution that authorizes the issuance of the debt obligations to deposit with the paying
agent three business days prior to the date on which a payment is due an amount sufficient
to make that payment or to notify the commissioner under subdivision 1 that it will be
unable to make all or a portion of that payment. A district that has obligated itself must
include a provision in its agreement with the paying agent for that issue that requires
the paying agent to inform the commissioner if it becomes aware of a potential default
in the payment of principal or interest on that issue or if, on the day two business days
prior to the date a payment is due on that issue, there are insufficient funds to make the
payment on deposit with the paying agent. Funds invested in a refunding escrow account
established under section 475.67 that are to become available to the paying agent on a
principal or interest payment date are deemed to be on deposit with the paying agent three
business days before the payment date. If a district either covenants to be bound by this
section or accepts state payments under this section to prevent a default of a particular
issue of debt obligations, the provisions of this section shall be binding as to that issue
as long as any debt obligation of that issue remain outstanding. If the provisions of this
section are or become binding for more than one issue of debt obligations and a district is
unable to make payments on one or more of those issues, the district must continue to
make payments on the remaining issues.

Subd. 8.

Mandatory plan; technical assistance.

If the state makes payments on
behalf of a new text begin school new text end district new text begin or intermediate school district new text end under this section or the district
defaults in the payment of principal or interest on an outstanding debt obligation, it must
submit a plan to the commissioner for approval specifying the measures it intends to
implement to resolve the issues which led to its inability to make the payment and to
prevent further defaults. The department must provide technical assistance to the district
in preparing its plan. If the commissioner determines that a district's plan is not adequate,
the commissioner shall notify the district that the plan has been disapproved, the reasons
for the disapproval, and that the state shall not make future payments under this section for
debt obligations issued after the date specified in that notice until its plan is approved. The
commissioner may also notify the district that until its plan is approved, other aids due the
district will be withheld after a date specified in the notice.

Subd. 9.

State bond rating.

If the commissioner of finance determines that the
credit rating of the state would be adversely affected thereby, the commissioner of finance
shall not issue warrants under subdivision 2 for the payment of principal or interest on any
debt obligations for which a district did not, prior to their issuance, obligate itself to be
bound by the provisions of this section.

Subd. 10.

Continuing disclosure agreements.

The commissioner of finance
may enter into written agreements or contracts relating to the continuing disclosure of
information needed to facilitate the ability of school districts new text begin or intermediate school
districts new text end to issue debt obligations according to federal securities laws, rules, and
regulations, including securities and exchange commission rules and regulations, section
240.15c2-12. Such agreements or contracts may be in any form the commissioner of
finance deems reasonable and in the state's best interests.

new text begin EFFECTIVE DATE. new text end

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

Sec. 36.

Minnesota Statutes 2006, section 127A.45, subdivision 16, is amended to read:

Subd. 16.

Payments to third parties.

Notwithstanding subdivision 3, the current
year aid payment percentage of the amounts under section 123A.26, subdivision 3new text begin and
section 124D.041new text end , shall be paid in equal installments on August 30, December 30, and
March 30, with a final adjustment payment on October 30 of the next fiscal year of the
remaining amount.

Sec. 37.

Minnesota Statutes 2007 Supplement, 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 shall,
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 shall pay an abatement adjustment to the district in an amount
calculated according to the provisions of this subdivision. This amount shall 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.57, if the district received health and safety 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;

deleted text begin (E) section 126C.13, if the district received general education aid according to
section 126C.13, subdivision 4, paragraph (b), clause (1), of that section in the second
preceding year;
deleted text end

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

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

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

deleted text begin (I)deleted text end new text begin (H) new text end 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;

deleted text begin (J)deleted text end new text begin (I) new text end 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;

deleted text begin (K)deleted text end new text begin (J) new text end section 123B.591, subdivision 3, if the district received deferred maintenance
aid according to section 123B.591, subdivision 4, in the second preceding year; and

deleted text begin (L)deleted text end new text begin (K) new text end section 126C.10, subdivision 35, if the district received alternative teacher
compensation equalization aid according to section 126C.10, subdivision 36, 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.

Sec. 38.

Minnesota Statutes 2007 Supplement, section 127A.49, subdivision 3, is
amended to read:

Subd. 3.

Excess tax increment.

(a) If a return of excess tax increment is made to a
district pursuant to sections 469.176, subdivision 2, and 469.177, subdivision 9, or upon
decertification of a tax increment district, the school district's aid and levy limitations
must be adjusted for the fiscal year in which the excess tax increment is paid under the
provisions of this subdivision.

(b) An amount must be subtracted from the district's aid for the current fiscal year
equal to the product of:

(1) the amount of the payment of excess tax increment to the district, times

(2) the ratio of:

(i) the sum of the amounts of the district's certified levy for the fiscal year in which
the excess tax increment is paid according to the following: