SF 1278

1st Engrossment - 84th Legislature (2005 - 2006) Posted on 12/15/2009 12:00am

A bill for an act
relating to education; providing for kindergarten
through grade 12 education and early childhood and
family education including general education, other
general programs, education excellence, special
programs, facilities and technology, nutrition,
libraries, early childhood family support, community
education and prevention, self-sufficiency and
lifelong learning, and state agencies; authorizing
rulemaking; appropriating money; amending Minnesota
Statutes 2004, sections 119A.46, subdivisions 1, 2, 3,
8; 120A.05, by adding a subdivision; 121A.17,
subdivision 1; 121A.19; 122A.12, subdivision 2;
123A.05, subdivision 2; 123A.27; 123A.485, subdivision
2; 123B.143, subdivision 1; 123B.42, subdivision 3;
123B.49, subdivision 4; 123B.53, subdivision 5;
123B.54; 123B.57, subdivision 4; 123B.59, subdivisions
3, 3a; 123B.63, subdivision 2; 123B.71, subdivisions
8, 12; 123B.75, by adding a subdivision; 123B.76,
subdivision 3; 123B.79, subdivision 6; 123B.81,
subdivision 1; 123B.82; 123B.83, subdivision 2;
123B.92, subdivision 9; 124D.081, subdivision 6;
124D.09, subdivision 13; 124D.11, subdivisions 1, 2,
4, 5, 8; 124D.135, subdivision 5; 124D.15,
subdivisions 1, 3, 5, 10, 12, by adding subdivisions;
124D.16, subdivisions 2, 3; 124D.22, subdivision 3;
124D.531, subdivisions 1, 4; 124D.65, subdivision 5;
124D.68, subdivision 9; 124D.69, subdivision 1;
124D.83, subdivision 2; 124D.86, subdivision 3;
124D.88, subdivision 4; 125A.11, subdivision 1;
125A.76, subdivisions 1, 4, by adding subdivisions;
125A.79, subdivisions 1, 5, 7, by adding subdivisions;
126C.01, subdivisions 7, 11; 126C.05, subdivisions 1,
5, 6, by adding a subdivision; 126C.10, subdivisions
1, 2, 2a, 3, 5, 6, 7, 8, 13, 13a, 17, 18, 24, 25, 26,
27, 28, 29, 31, 32, by adding subdivisions; 126C.13,
subdivision 4; 126C.15, subdivisions 1, 2, by adding a
subdivision; 126C.17, subdivisions 1, 2, 4, 5, 6, 7,
9, 13; 126C.21, subdivision 4; 126C.40, subdivision 1;
126C.48, subdivisions 2, 8, by adding a subdivision;
126C.63, subdivisions 5, 8; 127A.45, subdivision 11;
127A.47, subdivisions 7, 8; 127A.49, subdivisions 2,
3; 275.14; 275.16; 469.177, subdivision 9; proposing
coding for new law in Minnesota Statutes, chapters
123B; 127A; repealing Minnesota Statutes 2004,
sections 123A.39, subdivision 3; 123B.05; 123B.83,
subdivision 1; 124D.15, subdivisions 2, 4, 6, 7, 8, 9,
11, 13; 124D.16, subdivisions 1, 4; 126C.12; 126C.41,
subdivision 5; 126C.42, subdivisions 1, 4; 126C.43,
subdivisions 2, 3; 126C.44; 126C.445; 126C.45;
126C.455; 127A.50; Laws 1996 chapter 412, article 5,
section 28; Laws 1997, First Special Session chapter
4, article 4, section 31; Laws 2001, First Special
Session chapter 5, article 3, section 87; Laws 2001,
First Special Session chapter 6, article 1, section
53, as amended.

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

ARTICLE 1

GENERAL EDUCATION

Section 1.

Minnesota Statutes 2004, section 120A.05, is
amended by adding a subdivision to read:

new text begin Subd. 18. new text end

new text begin Kindergarten. new text end

new text begin "Kindergarten" means a program
designed for pupils five years of age on September 1 of the
calendar year in which the school year commences that prepares
pupils to enter first grade the following school year. A
program designed for pupils younger than five years of age on
September 1 of the calendar year in which the school year
commences that prepares pupils to enter kindergarten the
following school year is a prekindergarten program.
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. 2.

Minnesota Statutes 2004, section 124D.09,
subdivision 13, is amended to read:

Subd. 13.

Financial arrangements.

For a pupil enrolled
in a course under this section, the department must make
payments according to this subdivision for courses that were
taken for secondary credit.

The department must not make payments to a school district
or postsecondary institution for a course taken for
postsecondary credit only. The department must not make
payments to a postsecondary institution for a course from which
a student officially withdraws during the first 14 days of the
quarter or semester or who has been absent from the
postsecondary institution for the first 15 consecutive school
days of the quarter or semester and is not receiving instruction
in the home or hospital.

A postsecondary institution shall receive the following:

(1) for an institution granting quarter credit, the
reimbursement per credit hour shall be deleted text begin an amount equal to 88
percent of the product of the formula allowance minus $415,
multiplied by 1.3, and divided by 45 deleted text end new text begin $109 for fiscal year 2006
and $111 for fiscal year 2007 and later new text end ; or

(2) for an institution granting semester credit, the
reimbursement per credit hour shall be deleted text begin an amount equal to 88
percent of the product of the general revenue formula allowance
minus $415, multiplied by 1.3, and divided by 30 deleted text end new text begin $163 for fiscal
year 2006 and $166 for fiscal year 2007 and later new text end .

The department must pay to each postsecondary institution
100 percent of the amount in clause (1) or (2) within 30 days of
receiving initial enrollment information each quarter or
semester. If changes in enrollment occur during a quarter or
semester, the change shall be reported by the postsecondary
institution at the time the enrollment information for the
succeeding quarter or semester is submitted. At any time the
department notifies a postsecondary institution that an
overpayment has been made, the institution shall promptly remit
the amount due.

Sec. 3.

Minnesota Statutes 2004, section 124D.65,
subdivision 5, is amended to read:

Subd. 5.

School district lep revenue.

(a) new text begin For fiscal
year 2006, new text end a district's limited English proficiency programs
revenue equals the product of (1) $700 deleted text begin in fiscal year 2004 and
later deleted text end times (2) the greater of 20 or the adjusted marginal cost
average daily membership of eligible pupils of limited English
proficiency enrolled in the district during the current fiscal
year. new text begin For fiscal year 2007 and later, a district's limited
English proficiency programs revenue equals the product of (1)
$704 times (2) the greater of 20 or the adjusted average daily
membership of eligible pupils of limited English proficiency
enrolled in the district during the current fiscal year.
new text end

(b) A pupil ceases to generate state limited English
proficiency aid in the school year following the school year in
which the pupil attains the state cutoff score on a
commissioner-provided assessment that measures the pupil's
emerging academic English.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for revenue for
fiscal year 2007.
new text end

Sec. 4.

Minnesota Statutes 2004, section 126C.01,
subdivision 7, is amended to read:

Subd. 7.

Shared time aid.

new text begin For fiscal year 2006, new text end aid for
shared time pupils must equal the formula allowance times the
full-time equivalent resident pupil units for shared time
pupils. new text begin For fiscal year 2007 and later, aid for shared time
pupils equals the sum of the formula allowance times the
full-time equivalent resident pupil units for shared time pupils
and the secondary education allowance times the full-time
equivalent resident pupil units for shared time pupils in grades
7 through 12. new text end Aid for shared time pupils is in addition to any
other aid to which the district is otherwise entitled. Shared
time average daily membership may not be used in the computation
of pupil units under section 126C.05, subdivision 1, for any
purpose other than the computation of shared time aid pursuant
to subdivisions 6 to 8 and section 126C.19, subdivisions 1 to 3.

Sec. 5.

Minnesota Statutes 2004, section 126C.05,
subdivision 1, is amended to read:

Subdivision 1.

Pupil unit.

Pupil units for each
Minnesota resident pupil in average daily membership enrolled in
the district of residence, in another district under sections
123A.05 to 123A.08, 124D.03, 124D.06, 124D.07, 124D.08, or
124D.68; in a charter school under section 124D.10; or for whom
the resident district pays tuition under section 123A.18,
123A.22, 123A.30, 123A.32, 123A.44, 123A.488, 123B.88,
subdivision 4, 124D.04, 124D.05, 125A.03 to 125A.24, 125A.51, or
125A.65, shall be counted according to this subdivision.

(a) new text begin For fiscal year 2006, new text end a prekindergarten pupil with a
disability who is enrolled in a program approved by the
commissioner and has an individual education plan is counted as
the ratio of the number of hours of assessment and education
service to 825 times 1.25 with a minimum average daily
membership of 0.28, but not more than 1.25 pupil units. new text begin For
fiscal year 2007 and later, a prekindergarten pupil with a
disability who is enrolled in a program approved by the
commissioner and has an individual education plan is counted as
the ratio of the number of hours of assessment and education
service to 825 with a minimum average daily membership of 0.28,
but not more than one pupil unit.
new text end

(b) new text begin For fiscal year 2006, new text end a prekindergarten pupil who is
assessed but determined not to be handicapped is counted as the
ratio of the number of hours of assessment service to 825 times
1.25. new text begin For fiscal year 2007 and later, a prekindergarten pupil
who is assessed but determined not to be handicapped is counted
as the ratio of the number of hours of assessment service to 825.
new text end

(c) A kindergarten pupil with a disability who is enrolled
in a program approved by the commissioner is counted as the
ratio of the number of hours of assessment and education
services required in the fiscal year by the pupil's individual
education program plan to 875, but not more than one.

(d) A kindergarten pupil who is not included in paragraph
(c) is counted as .557 of a pupil unit for fiscal year deleted text begin 2000 deleted text end new text begin 2006
and .5 of a pupil unit for fiscal year 2007 new text end and thereafter.

(e) A pupil who is in any of grades 1 to 3 is counted as
1.115 pupil units for fiscal year deleted text begin 2000 deleted text end new text begin 2006 and one pupil unit
for fiscal year 2007 new text end and thereafter.

(f) A pupil who is any of grades 4 to 6 is counted as 1.06
pupil units for fiscal year deleted text begin 1995 deleted text end new text begin 2006 and one pupil unit for
fiscal year 2007 new text end and thereafter.

(g) A pupil who is in any of grades 7 to 12 is counted as
1.3 pupil units new text begin for fiscal year 2006 and one pupil unit for
fiscal year 2007 and thereafter new text end .

(h) A pupil who is in the postsecondary enrollment options
program is counted as 1.3 pupil units new text begin for fiscal year 2006 and
one pupil unit for fiscal year 2007 and thereafter new text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for revenue for
fiscal year 2007.
new text end

Sec. 6.

Minnesota Statutes 2004, section 126C.05,
subdivision 5, is amended to read:

Subd. 5.

Adjusted pupil units.

(a) Adjusted pupil units
for a district or charter school means the sum of:

(1) the number of pupil units served, according to
subdivision 7, plus

(2) pupil units according to subdivision 1 for whom the
district or charter school pays tuition under section 123A.18,
123A.22, 123A.30, 123A.32, 123A.44, 123A.488, 123B.88,
subdivision 4, 124D.04, 124D.05, 125A.03 to 125A.24, 125A.51, or
125A.65, minus

(3) pupil units according to subdivision 1 for whom the
district or charter school receives tuition under section
123A.18, 123A.22, 123A.30, 123A.32, 123A.44, 123A.488, 123B.88,
subdivision 4, 124D.04, 124D.05, 125A.03 to 125A.24, 125A.51, or
125A.65.

(b) new text begin For fiscal year 2006, new text end adjusted marginal cost pupil
units means the greater of:

(1) the sum of .77 times the pupil units defined in
paragraph (a) for the current school year and .23 times the
pupil units defined in paragraph (a) for the previous school
year; or

(2) the number of adjusted pupil units defined in paragraph
(a) for the current school year.

Sec. 7.

Minnesota Statutes 2004, section 126C.05,
subdivision 6, is amended to read:

Subd. 6.

Resident pupil units.

(a) Resident pupil units
for a district means the number of pupil units according to
subdivision 1 residing in the district.

(b) new text begin For fiscal year 2006, new text end resident marginal cost pupil
units means the greater of:

(1) the sum of .77 times the pupil units defined in
paragraph (a) for the current year and .23 times the pupil units
defined in paragraph (a) for the previous school year; or

(2) the number of resident pupil units defined in paragraph
(a) for the current school year.

Sec. 8.

Minnesota Statutes 2004, section 126C.10,
subdivision 1, is amended to read:

Subdivision 1.

General education revenue.

(a) deleted text begin For fiscal
year 2003, the general education revenue for each district
equals the sum of the district's basic revenue, basic skills
revenue, training and experience revenue, secondary sparsity
revenue, elementary sparsity revenue, transportation sparsity
revenue, total operating capital revenue, and equity revenue.
deleted text end

deleted text begin (b) deleted text end For fiscal year deleted text begin 2004 and later deleted text end new text begin 2006 new text end , the general
education revenue for each district equals the sum of the
district's basic revenue, extended time revenue, basic skills
revenue, training and experience revenue, secondary sparsity
revenue, elementary sparsity revenue, transportation sparsity
revenue, total operating capital revenue, equity
revenue, new text begin alternative compensation revenue, new text end and transition
revenue.

new text begin (b) For fiscal year 2007 and later, the general education
revenue for each district equals the sum of the district's basic
revenue, secondary education revenue, declining enrollment
revenue, extended time revenue, basic skills revenue, secondary
sparsity revenue, elementary sparsity revenue, transportation
sparsity revenue, total operating capital revenue, equity
revenue, alternative compensation revenue, discretionary
revenue, and transition revenue.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for revenue for
fiscal year 2007.
new text end

Sec. 9.

Minnesota Statutes 2004, section 126C.10,
subdivision 2, is amended to read:

Subd. 2.

Basic revenue.

new text begin For fiscal year 2006, new text end the basic
revenue for each district equals the formula allowance times the
adjusted marginal cost pupil units for the school year. The
formula allowance for fiscal year deleted text begin 2001 deleted text end new text begin 2006 new text end is deleted text begin $3,964. The
formula allowance for fiscal year 2002 is $4,068. The formula
allowance for fiscal year 2003 and subsequent years is
$4,601 deleted text end new text begin $4,693 new text end . new text begin For fiscal year 2007 and later, the basic
revenue for each district equals the formula allowance times the
adjusted pupil units for the school year. The formula allowance
for fiscal year 2007 and later is $5,188.
new text end

Sec. 10.

Minnesota Statutes 2004, section 126C.10,
subdivision 2a, is amended to read:

Subd. 2a.

Extended time revenue.

(a) new text begin For fiscal year
2006, new text end a school district's extended time revenue is equal to the
product of deleted text begin $4,601 deleted text end new text begin $4,693 new text end and the sum of the adjusted marginal
cost pupil units of the district for each pupil in average daily
membership in excess of 1.0 and less than 1.2 according to
section 126C.05, subdivision 8.

(b) new text begin For fiscal year 2007 and later, a school district's
extended time revenue equals $5,801 times the sum of the
adjusted pupil units of the district for each pupil in average
daily membership in excess of 1.0 and less than 1.2 according to
section 126C.05, subdivision 8.
new text end

new text begin (c) new text end A school district's extended time revenue may be used
for extended day programs, extended week programs, summer
school, and other programming authorized under the learning year
program.

Sec. 11.

Minnesota Statutes 2004, section 126C.10, is
amended by adding a subdivision to read:

new text begin Subd. 2b. new text end

new text begin Secondary education revenue. new text end

new text begin For fiscal year
2007 and later, the secondary education revenue for each
district equals the secondary education allowance times the
adjusted pupil units for the school year in grades 7 through
12. The secondary education allowance for fiscal year 2007 and
later is $936.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for revenue for
fiscal year 2007.
new text end

Sec. 12.

Minnesota Statutes 2004, section 126C.10, is
amended by adding a subdivision to read:

new text begin Subd. 2c. new text end

new text begin Declining enrollment revenue. new text end

new text begin For fiscal year
2007 and later, the declining enrollment revenue for each
district with a decline in the number of adjusted pupil units
between the previous school year and the current school year
equals $1,297 times the decline in adjusted pupil units between
the previous school year and the current school year.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for revenue for
fiscal year 2007.
new text end

Sec. 13.

Minnesota Statutes 2004, section 126C.10,
subdivision 3, is amended to read:

Subd. 3.

Compensatory education revenue.

(a) new text begin For fiscal
year 2006, new text end the compensatory education revenue for each building
in the district equals deleted text begin the formula allowance minus $415 deleted text end new text begin $4,278
new text end times the compensation revenue pupil units computed according to
section 126C.05, subdivision 3. new text begin For fiscal year 2007 and later,
the compensatory education revenue for each building in the
district equals $4,388 times the compensation revenue pupil
units computed according to section 126C.05, subdivision 3.
new text end Revenue shall be paid to the district and must be allocated
according to section 126C.15, subdivision 2.

(b) When the district contracting with an alternative
program under section 124D.69 changes prior to the start of a
school year, the compensatory revenue generated by pupils
attending the program shall be paid to the district contracting
with the alternative program for the current school year, and
shall not be paid to the district contracting with the
alternative program for the prior school year.

(c) When the fiscal agent district for an area learning
center changes prior to the start of a school year, the
compensatory revenue shall be paid to the fiscal agent district
for the current school year, and shall not be paid to the fiscal
agent district for the prior school year.

Sec. 14.

Minnesota Statutes 2004, section 126C.10,
subdivision 5, is amended to read:

Subd. 5.

Training and experience revenue.

new text begin (a) For fiscal
year 2006, new text end the training and experience revenue for each district
equals the greater of zero or the result of the following
computation:

(1) subtract .8 from the training and experience index;

(2) multiply the result in clause (1) by the product of
$660 times the adjusted marginal cost pupil units for the school
year.

new text begin (b) For fiscal year 2007 and later, the training and
experience allowance for each district equals the greater of
zero or the result of the following computation:
new text end

new text begin (1) subtract .8 from the training and experience index;
new text end

new text begin (2) multiply the result in clause (1) by $800.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for revenue for
fiscal year 2007.
new text end

Sec. 15.

Minnesota Statutes 2004, section 126C.10,
subdivision 6, is amended to read:

Subd. 6.

Definitions.

The definitions in this
subdivision apply only to subdivisions 7 and 8.

(a) "High school" means a secondary school that has pupils
enrolled in at least the 10th, 11th, and 12th grades. If there
is no secondary school in the district that has pupils enrolled
in at least the 10th, 11th, and 12th grades, and the school is
at least 19 miles from the next nearest school, the commissioner
must designate one school in the district as a high school for
the purposes of this section.

(b) "Secondary average daily membership" means, for a
district that has only one high school, the average daily
membership of pupils served in grades 7 through 12. For a
district that has more than one high school, "secondary average
daily membership" for each high school means the product of the
average daily membership of pupils served in grades 7 through 12
in the high school, times the ratio of six to the number of
grades in the high school.

(c) "Attendance area" means the total surface area of the
district, in square miles, divided by the number of high schools
in the district. For a district that does not operate a high
school and is less than 19 miles from the nearest operating high
school, the attendance area equals zero.

(d) "Isolation index" for a high school means the square
root of 55 percent of the attendance area plus the distance in
miles, according to the usually traveled routes, between the
high school and the nearest high school. For a district in
which there is located land defined in section 84A.01, 84A.20,
or 84A.31, the distance in miles is the sum of:

(1) the square root of one-half of the attendance area; and

(2) the distance from the border of the district to the
nearest high school.

(e) "Qualifying high school" means a high school that has
an isolation index greater than 23 and that has secondary
average daily membership of less than 400.

(f) "Qualifying elementary school" means an elementary
school that is located 19 miles or more from the nearest
elementary school or from the nearest elementary school within
the district and, in either case, has an elementary average
daily membership of an average of 20 or fewer per grade.

(g) "Elementary average daily membership" means, for a
district that has only one elementary school, the average daily
membership of pupils served in kindergarten through grade 6.
For a district that has more than one elementary school,
"average daily membership" for each school means the average
daily membership of pupils served in kindergarten through grade
6 multiplied by the ratio of seven to the number of grades in
the elementary school.

new text begin (h) "Sparsity allowance" means $4,693 for fiscal year 2006
and $4,787 for fiscal year 2007 and later.
new text end

Sec. 16.

Minnesota Statutes 2004, section 126C.10,
subdivision 7, is amended to read:

Subd. 7.

Secondary sparsity revenue.

(a) A district's
secondary sparsity revenue for a school year equals the sum of
the results of the following calculation for each qualifying
high school in the district:

(1) the deleted text begin formula deleted text end new text begin sparsity new text end allowance for the school year,
multiplied by

(2) the secondary average daily membership of pupils served
in the high school, multiplied by

(3) the quotient obtained by dividing 400 minus the
secondary average daily membership by 400 plus the secondary
daily membership, multiplied by

(4) the lesser of 1.5 or the quotient obtained by dividing
the isolation index minus 23 by ten.

(b) A newly formed district that is the result of districts
combining under the cooperation and combination program or
consolidating under section 123A.48 must receive secondary
sparsity revenue equal to the greater of: (1) the amount
calculated under paragraph (a) for the combined district; or (2)
the sum of the amounts of secondary sparsity revenue the former
districts had in the year prior to consolidation, increased for
any subsequent changes in the secondary sparsity formula.

Sec. 17.

Minnesota Statutes 2004, section 126C.10,
subdivision 8, is amended to read:

Subd. 8.

Elementary sparsity revenue.

A district's
elementary sparsity revenue equals the sum of the following
amounts for each qualifying elementary school in the district:

(1) the deleted text begin formula deleted text end new text begin sparsity new text end allowance for the year, multiplied
by

(2) the elementary average daily membership of pupils
served in the school, multiplied by

(3) the quotient obtained by dividing 140 minus the
elementary average daily membership by 140 plus the average
daily membership.

Sec. 18.

Minnesota Statutes 2004, section 126C.10,
subdivision 13, is amended to read:

Subd. 13.

Total operating capital revenue.

(a) For
fiscal year deleted text begin 2000 and thereafter deleted text end new text begin 2006 new text end , total operating capital
revenue for a district equals the amount determined under
paragraph (b) or (c), plus $73 times the adjusted marginal cost
pupil units for the school year. new text begin For fiscal year 2007 and
later, total operating capital revenue for a district equals the
amount determined under paragraph (b) or (c), plus $88 times the
adjusted pupil units for the school year. new text end The revenue must be
placed in a reserved account in the general fund and may only be
used according to deleted text begin paragraph (d) or deleted text end subdivision 14.

(b) For fiscal deleted text begin years 2000 and later deleted text end new text begin year 2006 new text end , capital
revenue for a district equals $100 times the district's
maintenance cost index times its adjusted marginal cost pupil
units for the school year. new text begin For fiscal year 2007 and later,
capital revenue for a district equals $120 times the district's
maintenance cost index times its adjusted pupil units for the
school year.
new text end

(c) For fiscal deleted text begin years 2000 and later deleted text end new text begin year 2006 new text end , the revenue
for a district that operates a program under section 124D.128,
is increased by an amount equal to $30 times the number of
marginal cost pupil units served at the site where the program
is implemented. new text begin For fiscal year 2007 and later, the revenue for
a district that operates a program under section 124D.128, is
increased by an amount equal to $43 times the number of pupil
units served at the site where the program is implemented.
new text end

deleted text begin (d) For fiscal years 2001, 2002, and 2003, the district
must reserve an amount equal to $5 per adjusted marginal cost
pupil unit for telecommunication access costs. Reserve revenue
under this paragraph must first be used to pay for ongoing or
recurring telecommunication access costs, including access to
data and video connections, including Internet access. Any
revenue remaining after covering all ongoing or recurring access
costs may be used for computer hardware or equipment.
deleted text end

Sec. 19.

Minnesota Statutes 2004, section 126C.10,
subdivision 13a, is amended to read:

Subd. 13a.

Operating capital levy.

To obtain operating
capital revenue for fiscal year deleted text begin 2005 deleted text end new text begin 2007 new text end and later, a district
may levy an amount not more than the product of its operating
capital revenue for the fiscal year times the lesser of one or
the ratio of its adjusted net tax capacity per adjusted deleted text begin marginal
cost deleted text end pupil unit to deleted text begin $22,222 deleted text end new text begin $26,640 new text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for revenue for
fiscal year 2007.
new text end

Sec. 20.

Minnesota Statutes 2004, section 126C.10,
subdivision 17, is amended to read:

Subd. 17.

Transportation sparsity definitions.

The
definitions in this subdivision apply to subdivisions 18 and 19.

(a) "Sparsity index" for a district means the greater of .2
or the ratio of the square mile area of the district to the
resident pupil units of the district.

(b) "Density index" for a district means the ratio of the
square mile area of the district to the resident pupil units of
the district. However, the density index for a district cannot
be greater than .2 or less than .005.

new text begin (c) "Transportation allowance" means $4,693 for fiscal year
2006 and $5,188 for fiscal year 2007 and later.
new text end

Sec. 21.

Minnesota Statutes 2004, section 126C.10,
subdivision 18, is amended to read:

Subd. 18.

Transportation sparsity revenue allowance.

(a)
new text begin For fiscal year 2006, new text end a district's transportation sparsity
allowance equals the greater of zero or the result of the
following computation:

deleted text begin (i) deleted text end new text begin (1) new text end Multiply the deleted text begin formula deleted text end new text begin transportation new text end allowance
deleted text begin according to subdivision 2, deleted text end by .1469.

deleted text begin (ii) deleted text end new text begin (2) new text end Multiply the result in clause deleted text begin (i) deleted text end new text begin (1) new text end by the
district's sparsity index raised to the 26/100 power.

deleted text begin (iii) deleted text end new text begin (3) new text end Multiply the result in clause deleted text begin (ii) deleted text end new text begin (2) new text end by the
district's density index raised to the 13/100 power.

deleted text begin (iv) deleted text end new text begin (4) new text end Multiply the deleted text begin formula deleted text end new text begin transportation new text end allowance
deleted text begin according to subdivision 2, deleted text end by .0485.

deleted text begin (v) deleted text end new text begin (5) new text end Subtract the result in clause deleted text begin (iv) deleted text end new text begin (4) new text end from the
result in clause deleted text begin (iii) deleted text end new text begin (3) new text end .

new text begin (b) For fiscal year 2007 and later, a district's
transportation sparsity allowance equals the greater of zero or
the result of the following computation:
new text end

new text begin (1) Multiply the transportation allowance by .1432.
new text end

new text begin (2) Multiply the result in clause (1) by the district's
sparsity index raised to the 28/100 power.
new text end

new text begin (3) Multiply the result in clause (2) by the district's
density index raised to the 13/100 power.
new text end

new text begin (4) Multiply the transportation allowance by .0458.
new text end

new text begin (5) Subtract the result in clause (4) from the result in
clause (3).
new text end

deleted text begin (b) deleted text end new text begin (c) For fiscal year 2006, new text end transportation sparsity
revenue is equal to the transportation sparsity allowance times
the adjusted marginal cost pupil units. new text begin For fiscal year 2007
and later, transportation sparsity revenue is equal to the
transportation sparsity allowance times the adjusted pupil units.
new text end

Sec. 22.

Minnesota Statutes 2004, section 126C.10,
subdivision 24, is amended to read:

Subd. 24.

Equity revenue.

(a) new text begin For fiscal years 2004
through 2006, new text end a school district qualifies for equity revenue if:

(1) the school district's adjusted marginal cost pupil unit
amount of basic revenue deleted text begin , supplemental revenue, transition
revenue, deleted text end and referendum revenue is less than the value of the
school district at or immediately above the 95th percentile of
school districts in its equity region for those revenue
categories; and

(2) the school district's administrative offices are not
located in a city of the first class on July 1, 1999.

new text begin For fiscal year 2007 and later, a school district qualifies for
equity revenue if the school district's referendum revenue per
adjusted pupil unit is less than 28 percent of the formula
allowance.
new text end

(b) new text begin For fiscal year 2006, new text end equity revenue for a qualifying
district that receives referendum revenue under section 126C.17,
subdivision 4, equals the product of (1) the district's adjusted
marginal cost pupil units for that year; times (2) the sum of
(i) $13, plus (ii) $75, times the school district's equity index
computed under subdivision 27.

(c) new text begin For fiscal year 2006, new text end equity revenue for a qualifying
district that does not receive referendum revenue under section
126C.17, subdivision 4, equals the product of the district's
adjusted marginal cost pupil units for that year times $13.

new text begin (d) For fiscal year 2007 and later, equity revenue for a
qualifying district equals the product of (1) the district's
adjusted pupil units for that year; times (2) $101 times the
school district's equity index computed under subdivision 27.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day
following final enactment and applies to revenue for fiscal year
2004 and later.
new text end

Sec. 23.

Minnesota Statutes 2004, section 126C.10,
subdivision 25, is amended to read:

Subd. 25.

Regional equity gap.

new text begin For fiscal year 2006, new text end the
regional equity gap equals the difference between the value of
the school district at or immediately above the fifth percentile
of deleted text begin adjusted general deleted text end new text begin referendum new text end revenue per adjusted marginal
cost pupil unit and the value of the school district at or
immediately above the 95th percentile of deleted text begin adjusted general
deleted text end new text begin referendum new text end revenue per adjusted marginal cost pupil unit.

Sec. 24.

Minnesota Statutes 2004, section 126C.10,
subdivision 26, is amended to read:

Subd. 26.

District equity gap.

new text begin For fiscal year 2006, new text end a
district's equity gap equals the greater of zero or the
difference between the deleted text begin district's adjusted general deleted text end new text begin referendum
new text end revenue deleted text begin and the value deleted text end new text begin per adjusted marginal cost pupil unit new text end of
the school district at or immediately above the regional 95th
percentile deleted text begin of adjusted general deleted text end new text begin and the district's referendum
new text end revenue per adjusted marginal cost pupil unit. new text begin For fiscal year
2007 and later, a district's equity gap equals the greater of
zero or the difference between 28 percent of the formula
allowance and the district's referendum revenue per adjusted
pupil unit.
new text end

Sec. 25.

Minnesota Statutes 2004, section 126C.10,
subdivision 27, is amended to read:

Subd. 27.

District equity index.

new text begin For fiscal year 2006, new text end a
district's equity index equals the ratio of the deleted text begin sum of the
deleted text end district equity gap amount to the regional equity gap
amount. new text begin For fiscal year 2007 and later, a district's equity
index equals the ratio of the district equity gap amount to 28
percent of the formula allowance.
new text end

Sec. 26.

Minnesota Statutes 2004, section 126C.10,
subdivision 28, is amended to read:

Subd. 28.

Equity region.

For the purposes of computing
equity revenue under subdivision 24 new text begin for fiscal year 2006 new text end , a
district whose administrative offices on July 1, 1999, is
located in Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, or
Washington County is part of the metro equity region. Districts
whose administrative offices on July 1, 1999, are not located in
Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, or Washington
County are part of the rural equity region.

Sec. 27.

Minnesota Statutes 2004, section 126C.10,
subdivision 29, is amended to read:

Subd. 29.

Equity levy.

To obtain equity revenue for
fiscal year deleted text begin 2005 and later deleted text end new text begin 2006 new text end , a district may levy an amount
not more than the product of its equity revenue for the fiscal
year times the lesser of one or the ratio of its referendum
market value per resident marginal cost pupil unit to $476,000.
new text begin To obtain equity revenue for fiscal year 2007 and later, a
district may levy an amount not more than the product of its
equity revenue for the fiscal year times the lesser of one or
the ratio of its referendum market value per resident pupil unit
to $572,000.
new text end

Sec. 28.

Minnesota Statutes 2004, section 126C.10,
subdivision 31, is amended to read:

Subd. 31.

Transition revenue.

(a) A district's
transition allowance for fiscal years 2004 through deleted text begin 2008 deleted text end new text begin 2006
new text end 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.

new text begin (b) A district's transition allowance for fiscal years 2007
through 2010 equals the greater of zero or the difference
between:
new text end

new text begin (1) the sum of:
new text end

new text begin (i) the amount of general education revenue the district
would have received for fiscal year 2007 under the formulas in
effect for fiscal year 2006, plus
new text end

new text begin (ii) $199 times the district's adjusted pupil units for
fiscal year 2007, plus
new text end

new text begin (iii) the amount of the district's levy limitations for
taxes payable in 2005 for:
new text end

new text begin (A) building leases, according to Minnesota Statutes 2004,
section 126C.40, subdivision 1, excluding the portion of the
levy limitation attributable to leases eligible for levy for
taxes payable in 2006 and later under section 126C.40,
subdivision 1, paragraph (j);
new text end

new text begin (B) unemployment insurance, according to Minnesota Statutes
2004, section 126C.43, subdivision 2;
new text end

new text begin (C) judgments, according to Minnesota Statutes 2004,
section 126C.43, subdivision 3;
new text end

new text begin (D) safe schools, according to Minnesota Statutes 2004,
section 126C.44;
new text end

new text begin (E) tree growth replacement, according to Minnesota
Statutes 2004, section 126C.445;
new text end

new text begin (F) ice arenas, according to Minnesota Statutes 2004,
section 126C.45;
new text end

new text begin (G) swimming pools, according to Minnesota Statutes 2004,
section 126C.455;
new text end

new text begin (H) lost interest earnings, according to Laws 2002, chapter
377, article 5, section 53;
new text end

new text begin (I) severance, according to Minnesota Statutes 2004,
sections 123A.39, subdivision 3 and 126C.41, subdivision 5;
new text end

new text begin (J) extended hours and school days according to Laws 1997,
First Special Session chapter 4, article 4, section 31; and
new text end

new text begin (K) other miscellaneous levies according to Laws 1996,
chapter 412, article 5, section 28 and Laws 2001, First Special
Session chapter 5, article 3, section 87; and
new text end

new text begin (2) the district's general education revenue for fiscal
year 2007 excluding transition revenue, divided by the
district's adjusted pupil units for fiscal year 2007.
new text end

new text begin (c) new text end A district's transition allowance for fiscal year deleted text begin 2009
deleted text end new text begin 2011 new text end and later is zero.

deleted text begin (b) deleted text end new text begin (d) new text end A district's transition revenue for fiscal year
deleted text begin 2004 and later deleted text end new text begin 2006 new text end equals new text begin the sum of (1) new text end the product of the
district's transition allowance times the district's adjusted
marginal cost pupil units deleted text begin . deleted text end new text begin plus (2) the amount of referendum
revenue under section 126C.17 and general education revenue,
excluding transition revenue, for fiscal year 2004 attributable
to pupils four or five years of age on September 1, 2003,
enrolled in a prekindergarten program implemented by the
district before July 1, 2003, and reported as kindergarten
pupils under section 126C.05, subdivision 1, for fiscal year
2004, plus (3) the amount of compensatory education revenue
under subdivision 3 for fiscal year 2005 attributable to pupils
four years of age on September 1, 2003, enrolled in a
prekindergarten program implemented by the district before July
1, 2003, and reported as kindergarten pupils under section
126C.05, subdivision 1, for fiscal year 2004.
new text end

new text begin (e) A district's transition revenue for fiscal year 2007
through fiscal year 2010 equals the product of the district's
transition allowance times the district's adjusted pupil units.
new text end

Sec. 29.

Minnesota Statutes 2004, section 126C.10,
subdivision 32, is amended to read:

Subd. 32.

Transition levy.

To obtain transition revenue
for fiscal year deleted text begin 2005 deleted text end new text begin 2007 new text end and later, a district may levy an
amount not more than the product of its transition revenue for
the fiscal year times the lesser of one or the ratio of its
referendum market value per resident deleted text begin marginal cost deleted text end pupil unit to
deleted text begin $476,000 deleted text end new text begin $572,000 new text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for revenue for
fiscal year 2007.
new text end

Sec. 30.

Minnesota Statutes 2004, section 126C.10, is
amended by adding a subdivision to read:

new text begin Subd. 34. new text end

new text begin Discretionary revenue. new text end

new text begin (a) For fiscal year
2007 and later, a district's discretionary revenue equals the
product of (1) the sum of $150 plus the district's training and
experience allowance according to subdivision 5, times (2) the
adjusted pupil units for the school year.
new text end

new text begin (b) Discretionary revenue is subject to reverse referendum
according to section 126C.48, subdivision 9.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for revenue for
fiscal year 2007.
new text end

Sec. 31.

Minnesota Statutes 2004, section 126C.10, is
amended by adding a subdivision to read:

new text begin Subd. 35. new text end

new text begin Discretionary levy. new text end

new text begin To obtain discretionary
revenue for fiscal year 2007 and later, a district may levy an
amount not more than the product of its discretionary revenue
for the fiscal year times the lesser of one or the ratio of its
adjusted net tax capacity per adjusted pupil unit to $6,900.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for revenue for
fiscal year 2007.
new text end

Sec. 32.

Minnesota Statutes 2004, section 126C.10, is
amended by adding a subdivision to read:

new text begin Subd. 36. new text end

new text begin Discretionary aid. new text end

new text begin For fiscal year 2007 and
later, a district's discretionary aid equals its discretionary
revenue minus its discretionary levy times the ratio of the
actual amount levied to the permitted levy.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for revenue for
fiscal year 2007.
new text end

Sec. 33.

Minnesota Statutes 2004, section 126C.13,
subdivision 4, is amended to read:

Subd. 4.

General education aid.

(a) deleted text begin For fiscal year
2004, a district's general education aid is the sum of the
following amounts:
deleted text end

deleted text begin (1) general education revenue;
deleted text end

deleted text begin (2) shared time aid according to section 126C.01,
subdivision 7;
deleted text end

deleted text begin (3) referendum aid according to section 126C.17; and
deleted text end

deleted text begin (4) online learning aid according to section 126C.24.
deleted text end

deleted text begin (b) deleted text end For fiscal year deleted text begin 2005 and later deleted text end new text begin 2006 new text end , a district's
general education aid is the sum of the following amounts:

(1) general education revenue, excluding equity revenue,
total operating capital, and transition revenue;

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

(3) equity aid according to section 126C.10, subdivision
30;

(4) transition aid according to section 126C.10,
subdivision 33;

(5) shared time aid according to section 126C.01,
subdivision 7;

(6) referendum aid according to section 126C.17; and

(7) online learning aid according to section 126C.24.

new text begin (b) For fiscal year 2007 and later, a district's general
education aid is the sum of the following amounts:
new text end

new text begin (1) general education revenue, excluding equity revenue,
total operating capital revenue, alternative compensation
revenue, transition revenue, and discretionary revenue;
new text end

new text begin (2) operating capital aid according to section 126C.10,
subdivision 13b;
new text end

new text begin (3) equity aid according to section 126C.10, subdivision
30;
new text end

new text begin (4) alternative compensation aid according to section
126C.10, subdivision 36;
new text end

new text begin (5) transition aid according to section 126C.10,
subdivision 33;
new text end

new text begin (6) discretionary aid according to section 126C.10,
subdivision 39;
new text end

new text begin (7) shared time aid according to section 126C.01,
subdivision 7;
new text end

new text begin (8) referendum aid according to section 126C.17; and
new text end

new text begin (9) online learning aid according to section 126C.24.
new text end

Sec. 34.

Minnesota Statutes 2004, section 126C.17,
subdivision 1, is amended to read:

Subdivision 1.

Referendum allowance.

(a) For fiscal year
deleted text begin 2003 and later deleted text end new text begin 2006 new text end , a district's initial referendum revenue
allowance equals the sum of the allowance under section 126C.16,
subdivision 2, plus any additional allowance per resident
marginal cost pupil unit authorized under subdivision 9 before
May 1, 2001, for fiscal year 2002 and later, plus the referendum
conversion allowance approved under subdivision 13, minus $415.
For districts with more than one referendum authority, the
reduction must be computed separately for each authority. The
reduction must be applied first to the referendum conversion
allowance and next to the authority with the earliest expiration
date. A district's initial referendum revenue allowance may not
be less than zero.

(b) deleted text begin For fiscal year 2003, a district's referendum revenue
allowance equals the initial referendum allowance plus any
additional allowance per resident marginal cost pupil unit
authorized under subdivision 9 between April 30, 2001, and
December 30, 2001, for fiscal year 2003 and later.
deleted text end

deleted text begin (c) deleted text end For fiscal year deleted text begin 2004 and later deleted text end new text begin 2006 new text end , a district's
referendum revenue allowance equals the sum of:

(1) the product of (i) the ratio of the resident marginal
cost pupil units the district would have counted for fiscal year
2004 under Minnesota Statutes 2002, section 126C.05, to the
district's resident marginal cost pupil units for fiscal year
2004, times (ii) the initial referendum allowance plus any
additional allowance per resident marginal cost pupil unit
authorized under subdivision 9 between April 30, 2001, and May
30, 2003, for fiscal year 2003 and later, plus

(2) any additional allowance per resident marginal cost
pupil unit authorized under subdivision 9 after May 30, 2003,
for fiscal year 2005 and later.

new text begin (c) For fiscal year 2007 and later, a district's referendum
revenue allowance equals the sum of:
new text end

new text begin (1) the product of (i) the ratio of the resident marginal
cost pupil units the district would have counted for fiscal year
2007 under Minnesota Statutes 2004, section 126C.05, to the
district's resident pupil units for fiscal year 2007, times (ii)
the referendum revenue allowance the district would have
received for fiscal year 2007 and later under Minnesota Statutes
2004, section 126C.17, subdivision 1, paragraph (c), based on
elections held under subdivision 9, before May 30, 2005, plus
new text end

new text begin (2) any additional allowance per resident pupil unit
authorized under subdivision 9 after May 30, 2005.
new text end

Sec. 35.

Minnesota Statutes 2004, section 126C.17,
subdivision 2, is amended to read:

Subd. 2.

Referendum allowance limit.

(a) deleted text begin Notwithstanding
subdivision 1, for fiscal year 2003, a district's referendum
allowance must not exceed the greater of:
deleted text end

deleted text begin (1) the sum of a district's referendum allowance for fiscal
year 1994 times 1.162 plus its referendum conversion allowance
for fiscal year 2003, minus $415;
deleted text end

deleted text begin (2) 18.2 percent of the formula allowance;
deleted text end

deleted text begin (3) for a newly reorganized district created on July 1,
2002, the referendum revenue authority for each reorganizing
district in the year preceding reorganization divided by its
resident marginal cost pupil units for the year preceding
reorganization, minus $415; or
deleted text end

deleted text begin (4) for a newly reorganized district created after July 1,
2002, the referendum revenue authority for each reorganizing
district in the year preceding reorganization divided by its
resident marginal cost pupil units for the year preceding
reorganization.
deleted text end

deleted text begin (b) deleted text end Notwithstanding subdivision 1, for fiscal year deleted text begin 2004
deleted text end new text begin 2007 new text end and later, a district's referendum allowance must not
exceed the greater of:

(1) the sum of: (i) a district's referendum allowance for
fiscal year 1994 times 1.177 times the annual inflationary
increase as calculated under paragraph (c) plus (ii) its
referendum conversion allowance for fiscal year 2003, minus
(iii) $415;

(2) the greater of (i) deleted text begin 18.6 deleted text end new text begin 28 new text end percent of the formula
allowance or (ii) deleted text begin $855.79 deleted text end new text begin $1,396 new text end times the annual inflationary
increase as calculated under paragraph (c); or

(3) for a newly reorganized district created after July 1,
deleted text begin 2002 deleted text end new text begin 2006 new text end , the referendum revenue authority for each
reorganizing district in the year preceding reorganization
divided by its resident deleted text begin marginal cost deleted text end pupil units for the year
preceding reorganization.

deleted text begin (c) deleted text end new text begin (b) new text end For purposes of this subdivision, for fiscal year
2005 and later, "inflationary increase" means one plus the
percentage change in the Consumer Price Index for urban
consumers, as prepared by the United States Bureau of Labor
Standards, for the current fiscal year to fiscal year 2004. deleted text begin For
fiscal years 2009 and later, for purposes of paragraph (b),
clause (1), the inflationary increase equals the inflationary
increase for fiscal year 2008 plus one-fourth of the percentage
increase in the formula allowance for that year compared with
the formula allowance for fiscal year 2008.
deleted text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for revenue for
fiscal year 2007.
new text end

Sec. 36.

Minnesota Statutes 2004, section 126C.17,
subdivision 4, is amended to read:

Subd. 4.

Total referendum revenue.

new text begin For fiscal year 2006,
new text end the total referendum revenue for each district equals the
district's referendum allowance times the resident marginal cost
pupil units for the school year. new text begin For fiscal year 2007 and
later, the total referendum revenue for each district equals the
district's referendum allowance times the resident pupil units
for the school year.
new text end

Sec. 37.

Minnesota Statutes 2004, section 126C.17,
subdivision 5, is amended to read:

Subd. 5.

Referendum equalization revenue.

(a) For fiscal
year 2003 and later, a district's referendum equalization
revenue equals the sum of the first tier referendum equalization
revenue and the second tier referendum equalization revenue.

(b) A district's first tier referendum equalization revenue
equals the district's first tier referendum equalization
allowance times the district's resident marginal cost pupil
units for that year.

(c) deleted text begin For fiscal years 2003 and 2004, a district's first tier
referendum equalization allowance equals the lesser of the
district's referendum allowance under subdivision 1 or $126.
For fiscal year 2005, a district's first tier referendum
equalization allowance equals the lesser of the district's
referendum allowance under subdivision 1 or $405. deleted text end For fiscal
year 2006 deleted text begin and later deleted text end , a district's first tier referendum
equalization allowance equals the lesser of the district's
referendum allowance under subdivision 1 or $500. new text begin For fiscal
year 2007 and later, a district's first tier referendum
equalization allowance equals the lesser of the district's
referendum allowance under subdivision 1 or $601.
new text end

(d) new text begin For fiscal year 2006, new text end a district's second tier
referendum equalization revenue equals the district's second
tier referendum equalization allowance times the district's
resident marginal cost pupil units for that year. new text begin For fiscal
year 2007 and later, a district's second tier referendum
equalization revenue equals the district's second tier
referendum equalization allowance times the district's resident
pupil units for that year.
new text end

(e) new text begin For fiscal year 2006, new text end a district's second tier
referendum equalization allowance equals the lesser of the
district's referendum allowance under subdivision 1 or 18.6
percent of the formula allowance, minus the district's first
tier referendum equalization allowance. new text begin For fiscal year 2007
and later, a district's second tier referendum equalization
allowance equals the lesser of the district's referendum
allowance under subdivision 1 or 28 percent of the formula
allowance, minus the district's first tier referendum
equalization allowance.
new text end

(f) Notwithstanding paragraph (e), the second tier
referendum allowance for a district qualifying for secondary
sparsity revenue under section 126C.10, subdivision 7, or
elementary sparsity revenue under section 126C.10, subdivision
8, equals the district's referendum allowance under subdivision
1 minus the district's first tier referendum equalization
allowance.

Sec. 38.

Minnesota Statutes 2004, section 126C.17,
subdivision 6, is amended to read:

Subd. 6.

Referendum equalization levy.

(a) For fiscal
year 2003 and later, a district's referendum equalization levy
equals the sum of the first tier referendum equalization levy
and the second tier referendum equalization levy.

(b) new text begin For fiscal year 2006, new text end a district's first tier
referendum equalization levy equals the district's first tier
referendum equalization revenue times the lesser of one or the
ratio of the district's referendum market value per resident
marginal cost pupil unit to $476,000. new text begin For fiscal year 2007 and
later, a district's first tier referendum equalization levy
equals the district's first tier referendum equalization revenue
times the lesser of one or the ratio of the district's
referendum market value per resident pupil unit to $572,000.
new text end

(c) new text begin For fiscal year 2006, new text end a district's second tier
referendum equalization levy equals the district's second tier
referendum equalization revenue times the lesser of one or the
ratio of the district's referendum market value per resident
marginal cost pupil unit to $270,000. new text begin For fiscal year 2007 and
later, a district's second tier referendum equalization levy
equals the district's second tier referendum equalization
revenue times the lesser of one or the ratio of the district's
referendum market value per resident pupil unit to $331,500.
new text end

Sec. 39.

Minnesota Statutes 2004, section 126C.17,
subdivision 7, is amended to read:

Subd. 7.

Referendum equalization aid.

(a) A district's
referendum equalization aid equals the difference between its
referendum equalization revenue and levy.

(b) If a district's actual levy for first or second tier
referendum equalization revenue is less than its maximum levy
limit for that tier, aid shall be proportionately reduced.

(c) Notwithstanding paragraph (a), the referendum
equalization aid for a district, where the referendum
equalization aid under paragraph (a) exceeds 90 percent of the
referendum revenue, must not exceed deleted text begin 18.6 deleted text end new text begin 28 new text end percent of the
formula allowance times the district's resident deleted text begin marginal cost
deleted text end pupil units. A district's referendum levy is increased by the
amount of any reduction in referendum aid under this paragraph.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for revenue for
fiscal year 2007.
new text end

Sec. 40.

Minnesota Statutes 2004, 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 deleted text begin marginal cost deleted text end pupil unit, the
estimated referendum tax rate as a percentage of referendum
market value in the first year it is to be levied, and that the
revenue must be used to finance school operations. The ballot
may state a schedule, determined by the board, of increased
revenue per resident deleted text begin marginal cost deleted text end pupil unit that differs from
year to year over the number of years for which the increased
revenue is authorized. deleted text begin If the ballot contains a schedule
showing different amounts, it must also indicate the estimated
referendum tax rate as a percent of referendum market value for
the amount specified for the first year and for the maximum
amount specified in the schedule. deleted text end 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. new text begin 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 pupil
unit" as "per pupil." new text end The notice required under section 275.60
may be modified to read, in cases of renewing existing levies:

"BY VOTING "YES" ON THIS BALLOT QUESTION, YOU MAY BE VOTING
FOR A PROPERTY TAX INCREASE."

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 deleted text begin marginal
cost deleted text end 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 and
annual percentage 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 and annual percentage 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 may result in an increase in your property taxes."

(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.

Sec. 41.

Minnesota Statutes 2004, section 126C.17,
subdivision 13, is amended to read:

Subd. 13.

Referendum conversion allowance.

(a) A school
district that received supplemental or transition revenue in
fiscal year 2002 may convert its supplemental revenue conversion
allowance and transition revenue conversion allowance to
additional referendum allowance under subdivision 1 for fiscal
year 2003 and thereafter. A majority of the school board must
approve the conversion at a public meeting before November 1,
2001. For a district with other referendum authority, the
referendum conversion allowance approved by the board continues
until the portion of the district's other referendum authority
with the earliest expiration date after June 30, 2006, expires.
For a district with no other referendum authority, the
referendum conversion allowance approved by the board continues
until June 30, 2012.

(b) A school district that received transition revenue in
fiscal year deleted text begin 2004 deleted text end new text begin 2007 new text end may convert all or part of its transition
revenue to referendum revenue with voter approval in a
referendum called for the purpose. The referendum must be held
in accordance with subdivision 9, except that the ballot may
state that existing transition revenue authority is being
canceled or is expiring. In this case, the ballot shall compare
the proposed referendum allowance to the canceled or expiring
transition revenue allowance. For purposes of this comparison,
the canceled or expiring transition revenue allowance per
adjusted deleted text begin marginal cost deleted text end pupil unit shall be converted to an
allowance per resident deleted text begin marginal cost deleted text end pupil unit based on the
district's ratio of adjusted deleted text begin marginal cost deleted text end pupil units to
resident deleted text begin marginal cost deleted text end pupil units for the preceding fiscal
year. The referendum must be held on the first Tuesday after
the first Monday in November new text begin of 2006, 2007, 2008, or 2009 new text end . The
notice required under section 275.60 may be modified to read:
"BY VOTING 'YES' ON THIS BALLOT QUESTION, YOU MAY BE VOTING FOR
A PROPERTY TAX INCREASE." deleted text begin Elections under this paragraph must
be held in 2007 or earlier.
deleted text end

Sec. 42.

Minnesota Statutes 2004, section 127A.45,
subdivision 11, is amended to read:

Subd. 11.

Payment percentage for reimbursement aids.

One
hundred percent of the aid for the previous fiscal year must be
paid in the current year for the following aids:
new text begin telecommunications/Internet access equity and according to
section 125B.26, new text end special education special pupil aid according
to section 125A.75, subdivision 3, aid for litigation costs
according to section 125A.75, subdivision 8, aid for
court-placed special education expenses according to section
125A.79, subdivision 4, and aid for special education
out-of-state tuition according to section 125A.79, subdivision 8
new text begin and shared time aid according to section 126C.01, subdivision 7 new text end .

Sec. 43. new text begin KINDERGARTEN REPORTING.
new text end

new text begin Notwithstanding Minnesota Statutes, sections 120A.05,
subdivision 18; 120A.20, subdivision 1; and 124D.02, subdivision
1, pupils four or five years of age on September 1 of the
calendar year in which the school year commences and enrolled in
a prekindergarten program implemented by the district before
July 1, 2003, may be reported as kindergarten pupils under
Minnesota Statutes, section 126C.05, subdivision 1, for fiscal
years 2004 and earlier.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day
following final enactment and applies to fiscal years 2004 and
earlier.
new text end

Sec. 44. new text begin TRANSITION REVENUE ADJUSTMENTS.
new text end

new text begin For taxes payable in 2006, a district may levy an amount
equal to the increase in the district's transition levy for
fiscal year 2006 under Minnesota Statutes, section 126C.10,
subdivision 31, paragraphs (c) and (d).
new text end

Sec. 45. new text begin FISCAL YEAR 2006 COMPENSATORY REVENUE FOR
REFUGEES.
new text end

new text begin Notwithstanding Minnesota Statutes, section 126C.05,
subdivisions 3 and 16, refugees from the Wat Krabok Refugee Camp
in Thailand who were not enrolled in a Minnesota public school
on October 1, 2004, but who were enrolled in a Minnesota public
school on March 15, 2005, must be included in the calculation of
compensatory revenue pupil units for fiscal year 2006.
new text end

Sec. 46. new text begin APPROPRIATIONS.
new text end

new text begin Subdivision 1. new text end

new text begin Department of education. new text end

new text begin The sums
indicated in this section are appropriated from the general fund
to the Department of Education for the fiscal years designated.
new text end

new text begin Subd. 2. new text end

new text begin General education aid. new text end

new text begin For general education
aid under Minnesota Statutes, section 126C.13, subdivision 4:
new text end

new text begin $ 5,022,250,000 new text end new text begin ..... new text end new text begin 2006
new text end

new text begin $ 5,194,663,400 new text end new text begin ..... new text end new text begin 2007
new text end

new text begin The 2006 appropriation includes $906,039,000 for 2005 and
$4,116,211,000 for 2006.
new text end

new text begin The 2007 appropriation includes $920,521,000 for 2006 and
$4,274,142,600 for 2007.
new text end

new text begin Subd. 3. new text end

new text begin Referendum tax base replacement aid. new text end

new text begin For
referendum tax base replacement aid under Minnesota Statutes,
section 126C.17, subdivision 7a:
new text end

new text begin $ 8,704,000 new text end new text begin ..... new text end new text begin 2006
new text end

new text begin $ 8,704,000 new text end new text begin ..... new text end new text begin 2007
new text end

new text begin The 2006 appropriation includes $1,575,000 for 2005 and
$7,129,000 for 2006.
new text end

new text begin The 2007 appropriation includes $1,575,000 for 2006 and
$7,129,000 for 2007.
new text end

Sec. 47. new text begin REPEALER.
new text end

new text begin (a) Minnesota Statutes 2004, section 123B.05, is repealed.
new text end

new text begin (b) Minnesota Statutes 2004, sections 126C.12 and 127A.50,
are repealed for revenue for fiscal year 2007.
new text end

ARTICLE 2

OTHER GENERAL PROGRAMS

Section 1.

Minnesota Statutes 2004, section 123A.05,
subdivision 2, is amended to read:

Subd. 2.

Reserve revenue.

Each district that is a member
of an area learning center must reserve revenue in an amount
equal to at least 90 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 .0485 new text begin for fiscal year 2006 and .0458 for
fiscal year 2007 and later new text end , calculated without basic skills
revenue, transportation sparsity revenue, and the transportation
portion of the transition revenue adjustment, times the number
of pupil units attending an area learning center program under
this section. The amount of reserved revenue under this
subdivision may only be spent on program costs associated with
the area learning center. Compensatory revenue must be
allocated according to section 126C.15, subdivision 2.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for revenue for
fiscal year 2007.
new text end

Sec. 2.

Minnesota Statutes 2004, section 123A.27, is
amended to read:

123A.27 RESERVED REVENUE FOR DISTRICT COOPERATION.

new text begin (a) new text end A district that was a member of an intermediate school
district organized pursuant to chapter 136D on July 1, 1996,
must place a portion of its general education revenue in a
reserved account for instructional services from entities formed
for cooperative services for special education programs and
secondary vocational programs. The amount reserved is equal to
the levy made according to Minnesota Statutes 1993 Supplement,
section 124.2727, subdivision 6, for taxes payable in 1994
divided by the actual pupil units in the intermediate school
district for fiscal year 1995 times the number of actual pupil
units in the school district in 1995. The district must use
5/11 of the revenue for special education and 6/11 of the
revenue for secondary vocational education. The district must
demonstrate that the revenue is being used to provide the full
range of special education and secondary vocational programs and
services available to each child served by the intermediate.
The secondary vocational programs and services must meet the
requirements established in an articulation agreement developed
between the commissioner of education and the Board of Trustees
of the Minnesota State Colleges and Universities.

new text begin (b) A school district that is a member of an intermediate
school district must place a portion of its discretionary
revenue under section 126C.10, subdivision 37, in a reserve
account for leases of administrative and classroom space for
intermediate school district programs. The amount reserved is
equal to the district's share of intermediate school district
lease costs for administrative and classroom space for the
fiscal year in which the levy is certified not to exceed $27 per
adjusted pupil unit.
new text end

new text begin (c) new text end A district that was a member of an education district
organized pursuant to section 123A.15 on July 1, 1999, must
place a portion of its general education revenue in a reserve
account for instructional services from entities formed for
cooperative services. Services may include secondary vocational
programs, special education programs, staff development, and
gifted and talented instruction. The amount reserved is equal
to $50 per pupil unit times the actual number of pupil units in
the district.

Sec. 3.

Minnesota Statutes 2004, section 123A.485,
subdivision 2, is amended to read:

Subd. 2.

Aid.

(a) Consolidation transition aid is equal
to deleted text begin $200 deleted text end new text begin $240 new text end times the number of resident pupil units in the
newly created district in the year of consolidation and deleted text begin $100
deleted text end new text begin $120 new text end times the number of resident pupil units in the first year
following the year of consolidation. The number of pupil units
used to calculate aid in either year shall not exceed deleted text begin 1,000 for
districts consolidating July 1, 1994, and 1,500 deleted text end new text begin 1,250 new text end for
districts consolidating July 1, deleted text begin 1995 deleted text end new text begin 2005 new text end , and thereafter.

(b) If the total appropriation for consolidation transition
aid for any fiscal year, plus any amount transferred under
section 127A.41, subdivision 8, is insufficient to pay all
districts the full amount of aid earned, the department must
first pay the districts in the first year following the year of
consolidation the full amount of aid earned and distribute any
remaining funds to the newly created districts in the first year
of consolidation.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for revenue for
fiscal year 2007.
new text end

Sec. 4.

Minnesota Statutes 2004, section 123B.42,
subdivision 3, is amended to read:

Subd. 3.

Cost; limitation.

(a) The cost per pupil of the
textbooks, individualized instructional or cooperative learning
materials, and standardized tests provided for in this section
for each school year must not exceed the statewide average
expenditure per pupil, adjusted deleted text begin pursuant deleted text end new text begin according new text end to deleted text begin clause
deleted text end new text begin paragraph new text end (b), by the Minnesota public elementary and secondary
schools for textbooks, individualized instructional materials
and standardized tests as computed and established by the
department by February 1 of the preceding school year from the
most recent public school year data then available.

(b) The cost computed in deleted text begin clause deleted text end new text begin paragraph new text end (a) shall be
increased by an inflation adjustment equal to deleted text begin the percent of
increase in the formula allowance, pursuant to section 126C.10,
subdivision 2, from the second preceding school year to the
current school year deleted text end new text begin two percent for fiscal year 2006, 4.04
percent for fiscal year 2007, and two percent for fiscal year
2008 new text end .

(c) The commissioner shall allot to the districts or
intermediary service areas the total cost for each school year
of providing or loaning the textbooks, individualized
instructional or cooperative learning materials, and
standardized tests for the pupils in each nonpublic school. The
allotment shall not exceed the product of the statewide average
expenditure per pupil, according to clause (a), adjusted
pursuant to clause (b), multiplied by the number of nonpublic
school pupils who make requests pursuant to this section and who
are enrolled as of September 15 of the current school year.

Sec. 5.

Minnesota Statutes 2004, section 123B.92,
subdivision 9, is amended to read:

Subd. 9.

Nonpublic pupil transportation aid.

(a) A
district's nonpublic pupil transportation aid for deleted text begin the 1996-1997
and later school years deleted text end new text begin fiscal year 2006 and later new text end for
transportation services for nonpublic school pupils according to
sections 123B.88, 123B.84 to 123B.86, and this section, equals
the sum of the amounts computed in paragraphs (b) and (c). This
aid does not limit the obligation to transport pupils under
sections 123B.84 to 123B.87.

(b) For regular and excess transportation according to
subdivision 1, paragraph (b), clauses (1) and (2), an amount
equal to the product of:

(1) the district's actual expenditure per pupil transported
in the regular and excess transportation categories during the
second preceding school year; times

(2) the number of nonpublic school pupils residing in the
district who receive regular or excess transportation service or
reimbursement for the current school year; times

(3) deleted text begin the ratio of the formula allowance pursuant to section
126C.10, subdivision 2, for the current school year to the
formula allowance pursuant to section 126C.10, subdivision 2,
for the second preceding school year deleted text end new text begin 1.02 for fiscal year 2006,
1.0404 for fiscal year 2007, 1.02 for fiscal year 2008, and 1.0
for fiscal year 2009 and later new text end .

(c) For nonpublic nonregular transportation according to
subdivision 1, paragraph (b), clause (5), an amount equal to the
product of:

(1) the district's actual expenditure for nonpublic
nonregular transportation during the second preceding school
year; times

(2) deleted text begin the ratio of the formula allowance pursuant to section
126C.10, subdivision 2, for the current school year to the
formula allowance pursuant to section 126C.10, subdivision 2,
for the second preceding school year deleted text end new text begin 1.02 for fiscal year 2006,
1.0404 for fiscal year 2007, 1.02 for fiscal year 2008, and 1.0
for fiscal year 2009 and later new text end .

deleted text begin (d) Notwithstanding the amount of the formula allowance for
fiscal year 2004 in section 126C.10, subdivision 2, the
commissioner shall use the amount of the formula allowance for
the current year minus $415 in determining the nonpublic pupil
transportation revenue in paragraphs (b) and (c) for fiscal year
2004.
deleted text end

Sec. 6.

Minnesota Statutes 2004, section 124D.081,
subdivision 6, is amended to read:

Subd. 6.

Preparedness revenue.

(a) A qualifying school
district is eligible for first-grade preparedness revenue equal
to deleted text begin the basic formula allowance for that year deleted text end new text begin $2,537 new text end times the
number of children five years of age or older enrolled in a
kindergarten program at the site on October 1 of the previous
year deleted text begin times .53 deleted text end .

(b) This revenue must supplement and not replace
compensatory revenue that the district uses for the same or
similar purposes under chapters 120B, 123A, 123B, 124D, 126C,
and 127A.

(c) A pupil enrolled in the first grade preparedness
program at a qualifying school site is eligible for
transportation under section 123B.88, subdivision 1.

(d) First grade preparedness revenue paid to a charter
school for which a school district is providing transportation
according to section 124D.10, subdivision 16, shall be decreased
by an amount equal to the product of the formula allowance
according to section 126C.10, subdivision 2, times deleted text begin .0485 deleted text end new text begin .0458
new text end times the pupil units calculated according to paragraph (a).
This amount shall be paid to the school district for
transportation costs.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for revenue for
fiscal year 2007.
new text end

Sec. 7.

Minnesota Statutes 2004, 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 90 percent of 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 $90 deleted text end new text begin $108 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
90 percent of the costs associated with leases of administrative
and classroom space for intermediate school district programs.
This authority must not exceed deleted text begin $22.50 deleted text end new text begin $27 new text end times the adjusted
deleted text begin marginal cost deleted text end 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).

new text begin (j) For taxes payable in 2006 and later, no lease levy
shall be authorized under this subdivision unless the amount is
needed by the district to make payments required by a lease
purchase agreement, installment purchase agreement, or other
deferred payment agreement where ownership of the leased
property is being acquired by the lessee at the end of the lease
term, and the agreement was entered into prior to January 1,
2005.
new text end

Sec. 8.

Minnesota Statutes 2004, section 126C.48, is
amended by adding a subdivision to read:

new text begin Subd. 9. new text end

new text begin Reverse referendum. new text end

new text begin (a) At the time a district
certifies its proposed levy to the county auditor according to
section 275.065, subdivision 1, the school board must certify
the amount of discretionary revenue, special education levy
revenue, and deferred maintenance revenue per pupil unit that
the board intends to raise. If the board certifies an amount
for fiscal year 2007 greater than the sum of the district's
training and experience revenue for fiscal year 2006 plus the
district's levy limitation for taxes payable in 2005 for the
levies specified in subdivision 31, paragraph (b), clause
(1)(iii), plus $76 times the district's fiscal year 2007
adjusted pupil units, the excess amount certified is subject to
reverse referendum under paragraphs (b) and (c). If the amount
certified for fiscal year 2008 and later exceeds the amount
certified for the previous fiscal year, the increase over the
amount certified for the previous fiscal year is subject to
reverse referendum under paragraphs (b) and (c).
new text end

new text begin (b) If a district certifies revenue under paragraph (a)
that is subject to reverse referendum, the district must publish
notice of the intended increase subject to reverse referendum by
September 30. The notice must include the amount of the revenue
increase per adjusted pupil unit and the property tax increase
in annual dollars for typical residential homesteads,
agricultural homesteads, apartments, and commercial-industrial
property within the district.
new text end

new text begin (c) Revenue tentatively authorized by the board under this
subdivision becomes 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 publication of
notice. 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 increase the
revenue. The approval of 50 percent plus one of those voting on
the question is required to pass a referendum authorized by this
section. The referendum must be held on the last Tuesday in
January.
new text end

Sec. 9.

Minnesota Statutes 2004, section 127A.49,
subdivision 2, is amended to read:

Subd. 2.

Abatements.

Whenever by virtue of chapter 278,
sections 270.07, 375.192, or otherwise, the net tax capacity 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 new text begin third new text end 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; and

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

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

Sec. 10. new text begin SCHOOL BUS LEVY; CARPENTER SCHOOL BUSES.
new text end

new text begin For taxes payable in 2006 through 2010, a school district
may levy an amount, not to exceed in the aggregate, $30,000
times the number of Carpenter school buses in its fleet as of
January 1, 2004, that have been determined to have potentially
defective welds and are subject to limitations imposed by the
Minnesota Department of Public Safety.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxes
payable in 2006.
new text end

Sec. 11. new text begin APPROPRIATIONS.
new text end

new text begin Subdivision 1. new text end

new text begin Department of education. new text end

new text begin The sums
indicated in this section are appropriated from the general fund
to the Department of Education for the fiscal years designated.
new text end

new text begin Subd. 2. new text end

new text begin Enrollment options transportation. new text end

new text begin For
transportation of pupils attending postsecondary institutions
under Minnesota Statutes, section 124D.09, or for transportation
of pupils attending nonresident districts under Minnesota
Statutes, section 124D.03:
new text end

new text begin $55,000 new text end new text begin ..... new text end new text begin 2006
new text end

new text begin $55,000 new text end new text begin ..... new text end new text begin 2007
new text end

new text begin Subd. 3. new text end

new text begin Abatement revenue. new text end

new text begin For abatement aid under
Minnesota Statutes, section 127A.49:
new text end

new text begin $820,000 new text end new text begin ..... new text end new text begin 2006
new text end

new text begin $870,000 new text end new text begin ..... new text end new text begin 2007
new text end

new text begin The 2006 appropriation includes $216,000 for 2005 and
$604,000 for 2006.
new text end

new text begin The 2007 appropriation includes $133,000 for 2006 and
$737,000 for 2007.
new text end

new text begin Subd. 4. new text end

new text begin Consolidation transition. new text end

new text begin For districts
consolidating under Minnesota Statutes, section 123A.485:
new text end

new text begin $246,000 new text end new text begin ..... new text end new text begin 2007
new text end

new text begin The 2007 appropriation includes $-0- for 2006 and $246,000
for 2007.
new text end

new text begin Subd. 5. new text end

new text begin Nonpublic pupil aid. new text end

new text begin For nonpublic pupil
education aid under Minnesota Statutes, sections 123B.87 and
123B.40 to 123B.43:
new text end

new text begin $15,797,000 new text end new text begin ..... new text end new text begin 2006
new text end

new text begin $16,770,000 new text end new text begin ..... new text end new text begin 2007
new text end

new text begin The 2006 appropriation includes $2,718,000 for 2005 and
$13,079,000 for 2006.
new text end

new text begin The 2007 appropriation includes $2,890,000 for 2006 and
$13,880,000 for 2007.
new text end

new text begin Subd. 6. new text end

new text begin Nonpublic pupil transportation. new text end

new text begin For nonpublic
pupil transportation aid under Minnesota Statutes, section
123B.92, subdivision 9:
new text end

new text begin $22,098,000 new text end new text begin ..... new text end new text begin 2006
new text end

new text begin $23,249,000 new text end new text begin ..... new text end new text begin 2007
new text end

new text begin The 2006 appropriation includes $3,788,000 for 2005 and
$18,310,000 for 2006.
new text end

new text begin The 2007 appropriation includes $4,046,000 for 2006 and
$19,203,000 for 2007.
new text end

new text begin Subd. 7. new text end

new text begin First grade preparedness. new text end

new text begin For first grade
preparedness grants under Minnesota Statutes, section 124D.081:
new text end

new text begin $7,250,000 new text end new text begin ..... new text end new text begin 2006
new text end

new text begin $7,250,000 new text end new text begin ..... new text end new text begin 2007
new text end

new text begin Subd. 8. new text end

new text begin One room schoolhouse. new text end

new text begin For a grant to
Independent School District No. 690, Warroad, to operate the
Angle Inlet School:
new text end

new text begin $50,000 new text end new text begin ..... new text end new text begin 2006
new text end

new text begin $50,000 new text end new text begin ..... new text end new text begin 2007
new text end

new text begin Subd. 9. new text end

new text begin Declining pupil aid; albert lea. new text end

new text begin For declining
pupil aid to Independent School District No. 241, Albert Lea:
new text end

new text begin $75,000 new text end new text begin ..... new text end new text begin 2006
new text end

new text begin Subd. 10. new text end

new text begin Declining pupil aid; mesabi east. new text end

new text begin For
declining pupil aid to Independent School District No. 2711,
Mesabi East:
new text end

new text begin $50,000 new text end new text begin ..... new text end new text begin 2006
new text end

new text begin Subd. 11. new text end

new text begin Declining pupil aid; roseau. new text end

new text begin For declining
pupil aid to Independent School District No. 682, Roseau:
new text end

new text begin $10,000 new text end new text begin ..... new text end new text begin 2006
new text end

Sec. 12. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2004, sections 123A.39, subdivision 3;
126C.41, subdivision 5; 126C.43, subdivisions 2 and 3; 126C.44;
126C.445; 126C.45; and 126C.455, are repealed effective for
taxes payable in 2006.
new text end

new text begin Laws 1996, chapter 412, article 5, section 28; Laws 1997,
First Special Session chapter 4, article 4, section 31; Laws
2001, First Special Session chapter 5, article 3, section 87;
and Laws 2001, First Special Session chapter 6, article 1,
section 53, as amended by Laws 2002, chapter 377, article 5,
section 5, are repealed effective for taxes payable in 2006.
new text end

ARTICLE 3

EDUCATION EXCELLENCE

Section 1.

Minnesota Statutes 2004, section 122A.12,
subdivision 2, is amended to read:

Subd. 2.

Terms; compensation; removal; administration new text begin ;
reimbursement new text end .

new text begin (a) new text end Membership terms, removal of members, and
the filling of membership vacancies are as provided in section
214.09. The terms of the initial board members must be
determined by lot as follows:

(1) three members must be appointed for terms that expire
August 1, 2002;

(2) three members must be appointed for terms that expire
August 1, 2003; and

(3) four members must be appointed for terms that expire
August 1, 2004.

Members shall not receive the daily payment under section
214.09, subdivision 3. The public employer of a member shall
not reduce the member's compensation or benefits for the
member's absence from employment when engaging in the business
of the board. The provision of staff, administrative services,
and office space; the review and processing of complaints; the
setting of fees; the selection and duties of an executive
secretary to serve the board; and other provisions relating to
board operations are as provided in chapter 214. Fiscal year
and reporting requirements are as provided in sections 214.07
and 214.08.

new text begin (b) The board may reimburse local school districts for the
cost of a substitute teacher employed when a regular teacher is
providing professional assistance to the state by serving on the
board or on a committee or task force appointed by the board.
new text end

Sec. 2.

Minnesota Statutes 2004, section 124D.11,
subdivision 1, is amended to read:

Subdivision 1.

General education revenue.

(a) General
education revenue must be paid to a charter school as though it
were a district. new text begin For fiscal years 2004 and 2005, new text end the general
education revenue for each adjusted marginal cost pupil unit is
the state average general education revenue per pupil unit, plus
the referendum equalization aid allowance in the pupil's
district of residence, minus an amount equal to the product of
the formula allowance according to section 126C.10, subdivision
2, times deleted text begin .0485 deleted text end new text begin 0.0485 new text end , calculated without basic skills
revenue, new text begin extended time revenue, transition revenue, new text end and
transportation sparsity revenue, plus basic skills revenue and
transition revenue as though the school were a school district.
new text begin For fiscal year 2006, the general education revenue for each
adjusted marginal cost pupil unit is the state average general
education revenue per pupil unit, plus the referendum
equalization aid allowance in the pupil's district of residence,
minus an amount equal to the product of the formula allowance
according to section 126C.10, subdivision 2, times 0.0485,
calculated without basic skills revenue, extended time revenue,
alternative compensation revenue, transition revenue, and
transportation sparsity revenue, plus basic skills revenue and
transition revenue as though the school were a school district,
plus the basic alternative compensation aid according to section
126C.10, subdivision 34. For fiscal year 2007 and later, the
general education revenue for each adjusted pupil unit is the
state average general education revenue per pupil unit, plus the
referendum equalization aid allowance in the pupil's district of
residence, minus an amount equal to the product of the formula
allowance according to section 126C.10, subdivision 2, times
0.0458, calculated without basic skills revenue, extended time
revenue, secondary education revenue, declining enrollment
revenue, alternative compensation revenue, transition revenue,
and transportation sparsity revenue, plus secondary education
revenue, declining enrollment revenue, basic skills revenue, and
transition revenue as though the school were a school district
plus the basic alternative compensation aid according to section
126C.10, subdivision 34. For fiscal year 2006, the general
education revenue for each extended time marginal cost pupil
unit equals $4,465. For fiscal year 2007 and later, the general
education revenue for each extended time pupil unit equals
$5,535. Notwithstanding section 126C.10, the general education
aid for a charter school for general education revenue
categories that require a levy equals the school's revenue for
those categories.
new text end

(b) Notwithstanding paragraph (a), for charter schools in
the first year of operation, general education revenue new text begin for
fiscal year 2006 new text end shall be computed using the number of adjusted
pupil units in the current fiscal year.

Sec. 3.

Minnesota Statutes 2004, section 124D.11,
subdivision 2, is amended to read:

Subd. 2.

Transportation revenue.

Transportation revenue
must be paid to a charter school that provides transportation
services according to section 124D.10, subdivision 16, according
to this subdivision. Transportation aid shall equal
transportation revenue.

In addition to the revenue under subdivision 1, new text begin for fiscal
year 2006, new text end a charter school providing transportation services
must receive general education aid deleted text begin for each pupil unit deleted text end equal to
the sum of new text begin the product of (i) new text end an amount equal to the product of
the formula allowance according to section 126C.10, subdivision
2, times deleted text begin .0485 deleted text end new text begin 0.0485 new text end , plus the transportation sparsity
allowance for the school district in which the charter school is
located new text begin times (ii) the adjusted marginal cost pupil units, plus
the product of $228 times the extended time marginal cost pupil
units new text end .

new text begin In addition to the revenue under subdivision 1, for fiscal
year 2007 and later, a charter school providing transportation
services must receive general education aid equal to the sum of
the product of (i) the formula allowance according to section
126C.10, subdivision 2, times 0.0458, plus the transportation
sparsity allowance for the school district in which the charter
school is located times (ii) the adjusted pupil units, plus the
product of $266 times the extended time pupil units.
new text end

Sec. 4.

Minnesota Statutes 2004, section 124D.11,
subdivision 4, is amended to read:

Subd. 4.

Building lease aid.

new text begin (a) new text end When a charter school
finds it economically advantageous to rent or lease a building
or land for any instructional purposes and it determines that
the total operating capital revenue under section 126C.10,
subdivision 13, is insufficient for this purpose, it may apply
to the commissioner for building lease aid for this purpose.
The commissioner must review and either approve or deny a lease
aid application using the following criteria:

(1) the reasonableness of the price based on current market
values;

(2) the extent to which the lease conforms to applicable
state laws and rules; and

(3) the appropriateness of the proposed lease in the
context of the space needs and financial circumstances of the
charter school.

A charter school must not use the building lease aid it receives
for custodial, maintenance service, utility, or other operating
costs.

new text begin (b) For fiscal year 2006, new text end the amount of building lease aid
per pupil unit served for a charter school deleted text begin for any year deleted text end shall
not exceed the lesser of (a) 90 percent of the approved cost or
(b) the product of the pupil units served for the current school
year times the greater of the charter school's building lease
aid per pupil unit served for fiscal year 2003, excluding the
adjustment under Laws 2002, chapter 392, article 6, section 4,
or $1,200. new text begin For fiscal year 2007 and later, the amount of
building lease aid for a charter school shall not exceed the
lesser of (1) 90 percent of the approved cost or (2) the greater
of (i) the sum of the elementary pupil units served for the
current school year times $1,316 plus the secondary pupil units
served for the current school year times $1,552 or (ii) the
product of the charter school's building lease aid per pupil
unit served for fiscal year 2003 as adjusted according to
section 126C.05, subdivision 14, excluding the adjustment under
Laws 2002, chapter 392, article 6, section 4, times the pupil
units served for the current school year.
new text end

Sec. 5.

Minnesota Statutes 2004, section 124D.11,
subdivision 8, is amended to read:

Subd. 8.

Start-up costs.

new text begin (a) new text end During the first two years
of a charter school's operation, the charter school is eligible
for aid to pay for start-up costs and additional operating costs.
new text begin For fiscal year 2006, new text end start-up cost aid equals the greater of:

(1) $50,000 per charter school; or

(2) $500 times the charter school's pupil units served for
that year.

new text begin (b) For fiscal year 2007 and later, start-up cost aid
equals the greater of:
new text end

new text begin (1) $50,000 per charter school; or
new text end

new text begin (2) the sum of $550 times the charter school's pupil units
served in prekindergarten through grade 6 for that year plus
$648 times the charter school's pupil units served in grades 7
through 12.
new text end

Sec. 6.

Minnesota Statutes 2004, section 124D.83,
subdivision 2, is amended to read:

Subd. 2.

Revenue amount.

An American Indian-controlled
tribal contract or grant school that is located on a reservation
within the state and that complies with the requirements in
subdivision 1 is eligible to receive tribal contract or grant
school aid. The amount of aid is derived by:

(1) multiplying deleted text begin the formula allowance under section
126C.10, subdivision 2, less $170, deleted text end new text begin $5,425 new text end times the difference
between (i) the resident pupil units as defined in section
126C.05, subdivision 6, in average daily membership, excluding
section 126C.05, subdivision 13, and (ii) the number of pupils
for the current school year, weighted according to section
126C.05, subdivision 1, receiving benefits under section 123B.42
or 123B.44 or for which the school is receiving reimbursement
under section 124D.69;

(2) adding to the result in clause (1) an amount equal to
the product of deleted text begin the formula allowance under section 126C.10,
subdivision 2, less $300 deleted text end new text begin $4,475 new text end times the tribal contract
compensation revenue pupil units;

(3) subtracting from the result in clause (2) the amount of
money allotted to the school by the federal government through
Indian School Equalization Program of the Bureau of Indian
Affairs, according to Code of Federal Regulations, title 25,
part 39, subparts A to E, for the basic program as defined by
section 39.11, paragraph (b), for the base rate as applied to
kindergarten through twelfth grade, excluding small school
adjustments and additional weighting, but not money allotted
through subparts F to L for contingency funds, school board
training, student training, interim maintenance and minor
repair, interim administration cost, prekindergarten, and
operation and maintenance, and the amount of money that is
received according to section 124D.69;

(4) dividing the result in clause (3) by the sum of the
resident pupil units in average daily membership, excluding
section 126C.05, subdivision 13, plus the tribal contract
compensation revenue pupil units; and

(5) multiplying the sum of the resident pupil units,
including section 126C.05, subdivision 13, in average daily
membership plus the tribal contract compensation revenue pupil
units by the lesser of deleted text begin $1,500 deleted text end new text begin $1,676 new text end or the result in clause (4).

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for revenue for
fiscal year 2007.
new text end

Sec. 7.

Minnesota Statutes 2004, section 124D.86,
subdivision 3, is amended to read:

Subd. 3.

Integration revenue.

Integration revenue equals
the following amounts:

(1) for Independent School District No. 709, Duluth, $206
times the adjusted pupil units for deleted text begin the school year deleted text end new text begin fiscal year
2006 and $249 times the adjusted pupil units for fiscal year
2007 and later new text end ;

(2) for Independent School District No. 625, St. Paul, $445
times the adjusted pupil units for deleted text begin the school year deleted text end new text begin fiscal year
2006 and $534 times the adjusted pupil units for fiscal year
2007 and later new text end ;

(3) for Special School District No. 1, Minneapolis, the sum
of $445 times the adjusted pupil units deleted text begin for the school year deleted text end and
an additional $35 times the adjusted pupil units deleted text begin for the school
year deleted text end that is provided entirely through a local levy new text begin for fiscal
year 2006, and the sum of $534 times the adjusted pupil units
and an additional $43 times the adjusted pupil units that is
provided entirely through a local levy for fiscal year 2007 and
later new text end ;

(4) for a district not listed in clause (1), (2), or (3),
that must implement a plan under Minnesota Rules, parts
3535.0100 to 3535.0180, where the district's enrollment of
protected students, as defined under Minnesota Rules, part
3535.0110, exceeds 15 percent, the lesser of (i) the actual cost
of implementing the plan during the fiscal year minus the aid
received under subdivision 6, or (ii) $129 times the adjusted
pupil units for deleted text begin the school year deleted text end new text begin fiscal year 2006 and $156 times
the adjusted pupil units for fiscal year 2007 and later new text end ;

(5) for a district not listed in clause (1), (2), (3), or
(4), that is required to implement a plan according to the
requirements of Minnesota Rules, parts 3535.0100 to 3535.0180,
the lesser of

(i) the actual cost of implementing the plan during the
fiscal year minus the aid received under subdivision 6, or

(ii) $92 times the adjusted pupil units for deleted text begin the school year
deleted text end new text begin fiscal year 2006 and $111 times the adjusted pupil units for
fiscal year 2007 and later new text end .

Any money received by districts in clauses (1) to (3) which
exceeds the amount received in fiscal year 2000 shall be subject
to the budget requirements in subdivision 1a; and

(6) for a member district of a multidistrict integration
collaborative that files a plan with the commissioner, but is
not contiguous to a racially isolated district, integration
revenue equals the amount defined in clause (5).

Sec. 8.

Minnesota Statutes 2004, section 124D.88,
subdivision 4, is amended to read:

Subd. 4.

Start-up costs.

During the first two years of a
metropolitan magnet school's operation, the school is eligible
for aid to pay for start-up costs and additional operating
costs. new text begin For fiscal year 2006, new text end start-up cost aid equals $500
times the magnet school's pupil units served for that year. new text begin For
fiscal year 2007 and later, start-up cost aid equals $569 times
the magnet school's pupil units served for that year.
new text end

Sec. 9.

Minnesota Statutes 2004, section 127A.47,
subdivision 8, is amended to read:

Subd. 8.

Charter schools.

(a) The general education aid
for districts must be adjusted for each pupil attending a
charter school under section 124D.10. The adjustments must be
made according to this subdivision.

(b) new text begin For fiscal year 2006, new text end general education aid paid to a
district in which a charter school not providing transportation
according to section 124D.10, subdivision 16, is located must be
increased by an amount equal to the new text begin sum of:
new text end

new text begin (1) the new text end product of: deleted text begin (1) deleted text end new text begin (i) new text end the sum of an amount equal to
the product of the formula allowance according to section
126C.10, subdivision 2, times .0485, plus the transportation
sparsity allowance for the district; times deleted text begin (2) deleted text end new text begin (ii) new text end the new text begin adjusted
marginal cost new text end pupil units attributable to the pupil new text begin ; plus
new text end

new text begin (2) the product of $228 times the extended time marginal
cost pupil units attributable to the pupil new text end .

new text begin (c) For fiscal year 2007 and later, general education aid
paid to a district in which a charter school not providing
transportation according to section 124D.10, subdivision 16, is
located must be increased by an amount equal to the sum of:
new text end

new text begin (1) the product of: (i) the sum of an amount equal to the
product of the transportation allowance according to section
126C.10, subdivision 17, times .0458, plus the transportation
sparsity allowance for the district; times (ii) the adjusted
pupil units attributable to the pupil; plus
new text end

new text begin (2) the product of $266 times the extended time pupil units
attributable to the pupil.
new text end

Sec. 10. new text begin BOARD OF SCHOOL ADMINISTRATORS; RULEMAKING
AUTHORITY.
new text end

new text begin On or before June 30, 2007, the Board of School
Administrators may adopt rules to revise and clarify Minnesota
Rules, chapter 3512.
new text end

Sec. 11. new text begin APPROPRIATIONS.
new text end

new text begin Subdivision 1. new text end

new text begin Department. new text end

new text begin The sums indicated in this
section are appropriated from the general fund to the Department
of Education for the fiscal years designated.
new text end

new text begin Subd. 2. new text end

new text begin Examination fees; teacher training and support
programs; teacher stipends. new text end

new text begin For student examination fees,
training and related costs for teachers and other interested
educators, and teacher stipends under Minnesota Statutes,
section 120B.13:
new text end

new text begin $2,000,000 new text end new text begin ..... new text end new text begin 2006
new text end

new text begin $2,000,000 new text end new text begin ..... new text end new text begin 2007
new text end

new text begin The advanced placement program shall receive 75 percent of
the appropriation each year and the international baccalaureate
program shall receive 25 percent of the appropriation each
year. The department, in consultation with representatives of
the advanced placement and international baccalaureate programs
selected by the Advanced Placement Advisory Council and IBMN,
respectively, shall determine the amounts of the expenditures
each year for examination fees, training and support programs,
and teacher stipends for each program.
new text end

new text begin Any balance in the first year does not cancel but is
available in the second year.
new text end

new text begin Subd. 3. new text end

new text begin Charter school building lease aid. new text end

new text begin For building
lease aid under Minnesota Statutes, section 124D.11, subdivision
4:
new text end

new text begin $25,401,000 new text end new text begin ..... new text end new text begin 2006
new text end

new text begin $30,791,000 new text end new text begin ..... new text end new text begin 2007
new text end

new text begin The 2006 appropriation includes $3,894,000 for 2005 and
$21,507,000 for 2006.
new text end

new text begin The 2007 appropriation includes $4,752,000 for 2006 and
$26,039,000 for 2007.
new text end

new text begin Subd. 4. new text end

new text begin Charter school startup aid. new text end

new text begin For charter school
startup cost aid under Minnesota Statutes, section 124D.11:
new text end

new text begin $1,353,000 new text end new text begin ..... new text end new text begin 2006
new text end

new text begin $3,141,000 new text end new text begin ..... new text end new text begin 2007
new text end

new text begin The 2006 appropriation includes $-0- for 2005 and
$1,353,000 for 2006.
new text end

new text begin The 2007 appropriation includes $299,000 for 2006 and
$2,842,000 for 2007.
new text end

new text begin Subd. 5. new text end

new text begin Integration aid. new text end

new text begin For integration aid under
Minnesota Statutes, section 124D.86, subdivision 5:
new text end

new text begin $57,513,000 new text end new text begin ..... new text end new text begin 2006
new text end

new text begin $57,310,000 new text end new text begin ..... new text end new text begin 2007
new text end

new text begin The 2006 appropriation includes $9,820,000 for 2005 and
$47,693,000 for 2006.
new text end

new text begin The 2007 appropriation includes $10,539,000 for 2006 and
$46,771,000 for 2007.
new text end

new text begin Subd. 6. new text end

new text begin Magnet school grants. new text end

new text begin For magnet school and
program grants:
new text end

new text begin $ 750,000 new text end new text begin ..... new text end new text begin 2006
new text end

new text begin $ 750,000 new text end new text begin ..... new text end new text begin 2007
new text end

new text begin These amounts may be used for magnet school programs under
Minnesota Statutes, section 124D.88.
new text end

new text begin Subd. 7. new text end

new text begin Magnet school startup aid. new text end

new text begin For magnet school
startup aid under Minnesota Statutes, section 124D.88:
new text end

new text begin $ 221,000 new text end new text begin ..... new text end new text begin 2007
new text end

new text begin The 2007 appropriation includes $-0- for 2006 and $221,000
for 2007.
new text end

new text begin Subd. 8. new text end

new text begin Interdistrict desegregation or integration
transportation grants. new text end

new text begin For interdistrict desegregation or
integration transportation grants under Minnesota Statutes,
section 124D.87:
new text end

new text begin $7,714,000 new text end new text begin ..... new text end new text begin 2006
new text end

new text begin $9,851,000 new text end new text begin ..... new text end new text begin 2007
new text end

new text begin Subd. 9. new text end

new text begin Success for the future. new text end

new text begin For American Indian
success for the future grants under Minnesota Statutes, section
124D.81:
new text end

new text begin $2,137,000 new text end new text begin ..... new text end new text begin 2006
new text end

new text begin $2,137,000 new text end new text begin ..... new text end new text begin 2007
new text end

new text begin The 2006 appropriation includes $386,000 for 2005 and
$1,751,000 for 2006.
new text end

new text begin The 2007 appropriation includes $386,000 for 2006 and
$1,751,000 for 2007.
new text end

new text begin Subd. 10. new text end

new text begin American indian scholarships. new text end

new text begin For American
Indian scholarships under Minnesota Statutes, section 124D.84:
new text end

new text begin $1,875,000 new text end new text begin ..... new text end new text begin 2006
new text end

new text begin $1,875,000 new text end new text begin ..... new text end new text begin 2007
new text end

new text begin Subd. 11. new text end

new text begin American indian teacher preparation
grants. new text end

new text begin For joint grants to assist American Indian people to
become teachers under Minnesota Statutes, section 122A.63:
new text end

new text begin $ 190,000 new text end new text begin ..... new text end new text begin 2006
new text end

new text begin $ 190,000 new text end new text begin ..... new text end new text begin 2007
new text end

new text begin Subd. 12. new text end

new text begin Tribal contract schools. new text end

new text begin For tribal contract
school aid under Minnesota Statutes, section 124D.83:
new text end

new text begin $2,169,000 new text end new text begin ..... new text end new text begin 2006
new text end

new text begin $2,362,000 new text end new text begin ..... new text end new text begin 2007
new text end

new text begin The 2006 appropriation includes $363,000 for 2005 and
$1,806,000 for 2006.
new text end

new text begin The 2007 appropriation includes $398,000 for 2006 and
$1,964,000 for 2007.
new text end

new text begin Subd. 13. new text end

new text begin Early childhood programs at tribal
schools. new text end

new text begin For early childhood family education programs at
tribal contract schools under Minnesota Statutes, section
124D.83, subdivision 4:
new text end

new text begin $ 68,000 new text end new text begin ..... new text end new text begin 2006
new text end

new text begin $ 68,000 new text end new text begin ..... new text end new text begin 2007
new text end

new text begin Subd. 14. new text end

new text begin Youthworks program. new text end

new text begin For funding youthworks
programs under Minnesota Statutes, sections 124D.37 to 124D.45:
new text end

new text begin $ 900,000 new text end new text begin ..... new text end new text begin 2006
new text end

new text begin $ 900,000 new text end new text begin ..... new text end new text begin 2007
new text end

new text begin A grantee organization may provide health and child care
coverage to the dependents of each participant enrolled in a
full-time youth works program to the extent such coverage is not
otherwise available.
new text end

new text begin Subd. 15. new text end

new text begin Student organizations. new text end

new text begin For student
organizations:
new text end

new text begin $ 625,000 new text end new text begin ..... new text end new text begin 2006
new text end

new text begin $ 625,000 new text end new text begin ..... new text end new text begin 2007
new text end

new text begin Subd. 16. new text end

new text begin Online learning aid. new text end

new text begin For online learning aid
under Minnesota Statutes, section 124D.096:
new text end

new text begin $2,250,000 new text end new text begin ..... new text end new text begin 2006
new text end

new text begin $3,250,000 new text end new text begin ..... new text end new text begin 2007
new text end

new text begin Subd. 17. new text end

new text begin Education planning and assessment program. new text end

new text begin For
the Educational Planning and Assessment (EPAS) program under
Minnesota Statutes, section 120B.128:
new text end

new text begin $ 829,000 new text end new text begin ..... new text end new text begin 2006
new text end

new text begin $ 829,000 new text end new text begin ..... new text end new text begin 2007
new text end

new text begin Subd. 18. new text end [COLLEGE LEVEL EXAMINATION PROGRAM (CLEP).] new text begin For
the College Level Examination program (CLEP) under Minnesota
Statutes, section 120B.131:
new text end

new text begin $ 825,000 new text end new text begin ..... new text end new text begin 2006
new text end

new text begin $1,650,000 new text end new text begin ..... new text end new text begin 2007
new text end

new text begin This is a onetime appropriation.
new text end

new text begin Subd. 19. new text end

new text begin Collaborative urban educator. new text end

new text begin For the
collaborative urban educator program:
new text end

new text begin $ 528,000 new text end new text begin ..... new text end new text begin 2006
new text end

new text begin $ 528,000 new text end new text begin ..... new text end new text begin 2007
new text end

new text begin Subd. 20. new text end

new text begin Career and technical education grants. new text end

new text begin For
career and technical education grants:
new text end

new text begin $1,000,000 new text end new text begin ..... new text end new text begin 2006
new text end

new text begin $1,000,000 new text end new text begin ..... new text end new text begin 2007
new text end

ARTICLE 4

SPECIAL PROGRAMS

Section 1.

Minnesota Statutes 2004, section 124D.11,
subdivision 5, is amended to read:

Subd. 5.

Special education aid.

new text begin (a) new text end Except as provided
in subdivision 2, special education aid must be paid to a
charter school according to section 125A.76, as though it were a
school district.

new text begin (b) For fiscal year 2006, new text end the charter school may charge
tuition to the district of residence as new text begin follows:
new text end

new text begin (1) if the charter school does not receive general
education revenue on behalf of the student according to
subdivision 1, tuition shall be charged as new text end provided in section
125A.11 new text begin ; or
new text end

new text begin (2) if the charter school receives general education
revenue on behalf of the student according to subdivision 1,
tuition shall be charged as provided in section 127A.47,
subdivision 7, paragraph (d) new text end .

new text begin (c) For fiscal year 2007 and later, the special education
aid paid to the charter school shall be adjusted as follows:
new text end

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

new text begin (2) if the charter school receives general education
revenue on behalf of the student according to subdivision 1, the
aid shall be adjusted as provided in section 127A.47,
subdivision 7, paragraph (d).
new text end

Sec. 2.

Minnesota Statutes 2004, section 125A.11,
subdivision 1, is amended to read:

Subdivision 1.

Nonresident tuition rate; other costs.

new text begin (a) For fiscal year 2006, new text end when a school district provides
instruction and services outside the district of residence,
board and lodging, and any tuition to be paid, shall be paid by
the district of residence. The tuition rate to be charged for
any child with a disability new text begin , excluding a pupil for whom tuition
is calculated according to section 127A.47, subdivision 7,
paragraph (d), new text end must be the new text begin sum of (1) the new text end actual cost of
providing special instruction and services to the child
including deleted text begin a proportionate amount for capital outlay and debt
service but not including any amount for deleted text end new text begin special new text end transportation,
new text begin plus (2) the amount of general education revenue and referendum
aid excluding portions attributable to district and school
administration, district support services, operations and
maintenance, capital expenditures, and pupil transportation
attributable to that pupil for the portion of time the pupil
receives instruction in the regular classroom, plus (3) the
portion of general education revenue and referendum aid
attributable to district and school administration, district
support services, operations and maintenance, capital
expenditures, and pupil transportation attributable to that
pupil, new text end minus new text begin (4) new text end the amount of special new text begin education new text end aid for
children with a disability received on behalf of that child. If
the boards involved do not agree upon the tuition rate, either
board may apply to the commissioner to fix the rate. new text begin Without
regard to chapter 14, new text end the commissioner must then set a date for
a hearing new text begin or request a written statement from each board new text end , giving
each board at least ten days' notice, and after the hearing new text begin or
review of the written statements new text end the commissioner must make an
order fixing the tuition rate, which is binding on both school
districts. new text begin General education revenue and referendum aid
attributable to a pupil must be calculated using the resident
district's average general education and referendum revenue per
adjusted average daily membership.
new text end

new text begin (b) For fiscal year 2007 and later, when a school district
provides special instruction and services for a pupil with a
disability as defined in section 125A.02 outside the district of
residence, excluding a pupil for whom an adjustment to special
education aid is calculated according to section 127A.47,
subdivision 7, paragraph (e), special education aid paid to the
resident district must be reduced by an amount equal to (1) the
actual cost of providing special instruction and services
including special transportation to the pupil, plus (2) the
amount of general education revenue and referendum aid excluding
portions attributable to district and school administration,
district support services, operations and maintenance, capital
expenditures, and pupil transportation attributable to that
pupil for the portion of time the pupil receives instruction in
the regular classroom, plus (3) the portion of general education
revenue and referendum aid attributable to district and school
administration, district support services, operations and
maintenance, capital expenditures, and pupil transportation
attributable to that pupil, minus (4) the amount of special
education aid received on behalf of that child. General
education revenue and referendum aid attributable to a pupil
must be calculated using the resident district's average general
education and referendum revenue per adjusted average daily
membership. If the resident district's special education aid is
insufficient to make the full adjustment, the remaining
adjustment shall be made to other state aid due to the district.
new text end

Sec. 3.

Minnesota Statutes 2004, section 125A.76,
subdivision 1, is amended to read:

Subdivision 1.

Definitions.

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

(a) "Base year" for fiscal year 1998 and later fiscal years
means the second fiscal year preceding the fiscal year for which
aid will be paid.

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

(c) "Essential personnel" means teachers, cultural
liaisons, related services, and support services staff providing
direct services to students. Essential personnel may also
include special education paraprofessionals or clericals
providing support to teachers and students by preparing
paperwork and making arrangements related to special education
compliance requirements, including parent meetings and
individual education plans.

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

(e) "Program growth factor" means deleted text begin 1.046 deleted text end new text begin 1.04 new text end for fiscal
deleted text begin year 2003 deleted text end new text begin years 2007 and 2008 new text end , and 1.0 for fiscal year deleted text begin 2004 deleted text end new text begin 2009
new text end and later.

Sec. 4.

Minnesota Statutes 2004, section 125A.76,
subdivision 4, is amended to read:

Subd. 4.

State total special education aid.

deleted text begin The state
total special education aid for fiscal year 2004 equals
$530,642,000. deleted text end The state total special education aid for fiscal
year 2005 equals $529,164,000. The state total special
education aid for later fiscal years equals:

(1) the state total special education aid for the preceding
fiscal year; times

(2) deleted text begin the program growth factor; times
deleted text end

deleted text begin (3) deleted text end the ratio of the state total average daily membership
for the current fiscal year to the state total average daily
membership for the preceding fiscal year.

Sec. 5.

Minnesota Statutes 2004, section 125A.76, is
amended by adding a subdivision to read:

new text begin Subd. 5a. new text end

new text begin Special education levy revenue. new text end

new text begin (a) For fiscal
year 2007, the state total special education revenue equals the
state total special education aid times the program growth
factor. For fiscal year 2008 and later, the state total special
education revenue equals:
new text end

new text begin (1) the state total special education revenue for the
preceding fiscal year, times
new text end

new text begin (2) the program growth factor, times
new text end

new text begin (3) the ratio of the state total average daily membership
for the current fiscal year to the state total average daily
membership for the preceding fiscal year.
new text end

new text begin (b) For fiscal year 2007 and later, the state total special
education levy revenue equals the difference between the state
total special education revenue and the state total special
education aid.
new text end

new text begin (c) For fiscal year 2007 and later, the special education
levy revenue for a school district, charter school, or state
academy equals the product of the state total special education
levy revenue times the ratio of the school district, charter
school, or state academy's special education aid to the state
total special education aid.
new text end

new text begin (d) Special education levy equalization revenue is subject
to reverse referendum according to section 126C.48, subdivision
9.
new text end

Sec. 6.

Minnesota Statutes 2004, section 125A.76, is
amended by adding a subdivision to read:

new text begin Subd. 5b. new text end

new text begin Special education levy. new text end

new text begin To obtain special
education levy revenue for fiscal year 2007 and later, a
district may levy an amount not more than the product of its
special education levy revenue for the fiscal year times the
lesser of one or the ratio of its adjusted net tax capacity per
adjusted pupil unit to $6,900.
new text end

Sec. 7.

Minnesota Statutes 2004, section 125A.76, is
amended by adding a subdivision to read:

new text begin Subd. 5c. new text end

new text begin Special education levy equalization aid. new text end

new text begin (a)
For fiscal year 2007 and later, a school district's special
education levy equalization aid equals its special education
levy equalization revenue minus its special education levy times
the ratio of the actual amount levied to the permitted levy.
new text end

new text begin (b) The special education levy equalization aid for a
charter school or a state academy equals the charter school or
state academy's special education levy revenue.
new text end

Sec. 8.

Minnesota Statutes 2004, section 125A.79,
subdivision 1, is amended to read:

Subdivision 1.

Definitions.

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

(a) "Unreimbursed special education cost" means the sum of
the following:

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

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

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

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

(b) deleted text begin "General revenue" means for fiscal year 1996, the sum
of the general education revenue according to section 126C.10,
subdivision 1, as adjusted according to section 127A.47,
subdivision 7, plus the total referendum revenue according to
section 126C.17, subdivision 4. For fiscal years 1997 and
later, deleted text end "General revenue" means the sum of the general education
revenue according to section 126C.10, subdivision 1, as adjusted
according to section 127A.47, subdivisions 7 and 8, plus the
total referendum revenue minus transportation sparsity revenue
minus total operating capital revenue.

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

(d) "Program growth factor" means 1.02 for fiscal year
2003, and 1.0 for fiscal year 2004 and later.

Sec. 9.

Minnesota Statutes 2004, section 125A.79,
subdivision 5, is amended to read:

Subd. 5.

Initial excess cost aid new text begin ; fiscal years 2004 and
2005 new text end .

For fiscal years deleted text begin 2002 deleted text end new text begin 2004 new text end and deleted text begin later deleted text end new text begin 2005 new text end , a district's
initial excess cost aid equals the greatest of:

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

(2) 70 percent of the difference between (i) the increase
in the district's unreimbursed special education cost between
the base year as defined in section 125A.76, subdivision 1, and
the current year and (ii) 1.6 percent of the district's general
revenue; or

(3) zero.

Sec. 10.

Minnesota Statutes 2004, section 125A.79, is
amended by adding a subdivision to read:

new text begin Subd. 5a. new text end

new text begin Initial excess cost aid. new text end

new text begin For fiscal years 2006
and later, a district's initial excess cost aid equals the
greater of:
new text end

new text begin (1) 75 percent of the difference between (i) the district's
unreimbursed special education cost for the previous fiscal
year, and (ii) 4.36 percent of the district's general revenue
for the previous fiscal year; or
new text end

new text begin (2) zero.
new text end

Sec. 11.

Minnesota Statutes 2004, section 125A.79, is
amended by adding a subdivision to read:

new text begin Subd. 5b. new text end

new text begin Supplemental excess cost aid. new text end

new text begin (a) For fiscal
years 2006 and later, a district's supplemental excess cost aid
equals the greater of:
new text end

new text begin (1) 75 percent of the difference between (i) the increase
in the district's unreimbursed special education excess cost
between the previous fiscal year and the current fiscal year,
and (ii) $80 times the district's adjusted marginal cost pupil
units for the current fiscal year; or
new text end

new text begin (2) zero.
new text end

new text begin (b) The state total supplemental excess cost aid for any
fiscal year must not exceed $2,000,000. If the state total
supplemental excess cost aid according to paragraph (a) exceeds
$2,000,000, the supplemental excess cost aid for each district
shall be reduced proportionately so that the state total equals
$2,000,000.
new text end

Sec. 12.

Minnesota Statutes 2004, section 125A.79,
subdivision 7, is amended to read:

Subd. 7.

District special education excess cost aid.

new text begin (a)
new text end A district's special education excess cost aid for fiscal deleted text begin year
2002 and later deleted text end new text begin years 2004 and 2005 new text end equals the state total
special education excess cost aid times the ratio of the
district's initial excess cost aid to the state total initial
excess cost aid.

new text begin (b) A district's special education excess cost aid for
fiscal year 2006 and later equals the sum of:
new text end

new text begin (1) the product of the difference between the state total
special education excess cost aid and the state total
supplemental excess cost aid times the ratio of the district's
initial excess cost aid to the state total initial excess cost
aid; and
new text end

new text begin (2) the district's supplemental excess cost aid according
to subdivision 5b.
new text end

Sec. 13.

Minnesota Statutes 2004, section 127A.47,
subdivision 7, is amended to read:

Subd. 7.

Alternative attendance programs.

The general
education aid new text begin and special education aid new text end for districts must be
adjusted for each pupil attending a nonresident district under
sections 123A.05 to 123A.08, 124D.03, 124D.06, 124D.08, and
124D.68. The adjustments must be made according to this
subdivision.

(a) General education aid paid to a resident district must
be reduced by an amount equal to the referendum equalization aid
attributable to the pupil in the resident district.

(b) General education aid paid to a district serving a
pupil in programs listed in this subdivision must be increased
by an amount equal to the referendum equalization aid
attributable to the pupil in the nonresident district.

(c) If the amount of the reduction to be made from the
general education aid of the resident district is greater than
the amount of general education aid otherwise due the district,
the excess reduction must be made from other state aids due the
district.

(d) new text begin For fiscal year 2006, new text end the district of residence must
pay tuition to a district or an area learning center, operated
according to paragraph deleted text begin (e) deleted text end new text begin (f) new text end , providing special instruction
and services to 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. The tuition
must be equal to (1) the actual cost of providing special
instruction and services to the pupil, including deleted text begin a proportionate
amount for debt service and for capital expenditure facilities
and equipment, and debt service but not including any amount for
deleted text end new text begin special new text end transportation, minus (2) the amount of general
education revenue and new text begin referendum aid 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) new text end special
education aid deleted text begin but not including any amount for transportation,
deleted text end attributable to that pupil, that is received by the district
providing special instruction and services. new text begin For purposes of
this paragraph, general education revenue and referendum aid
attributable to a pupil must be calculated using the serving
district's average general education revenue and referendum aid
per adjusted average daily membership.
new text end

(e) new text begin For fiscal year 2007 and later, special education aid
paid to a resident district must be reduced by an amount equal
to (1) the actual cost of providing special instruction and
services, including special transportation, for a pupil with a
disability, as defined in section 125A.02, or a pupil, as
defined in section 125A.51, who is enrolled in a program listed
in this subdivision, minus (2) the amount of general education
revenue and referendum aid 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 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 aid attributable to a pupil must be calculated using
the serving district's average general education revenue and
referendum aid per adjusted average daily membership. Special
education aid paid to the district 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. If the resident
district's special education aid is insufficient to make the
full adjustment, the remaining adjustment shall be made to other
state aids due to the district.
new text end

new text begin (f) new text end 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
(d) new text begin or (e) new text end , the district of residence must pay tuition equal to
at least 90 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 .0485 new text begin for fiscal year 2006, and .0458 for fiscal year
2007 and later fiscal years new text end , calculated without basic skills
revenue and transportation sparsity revenue, times the number of
pupil units for pupils attending the area learning center, plus
the amount of compensatory revenue generated by pupils attending
the area learning center.

Sec. 14. new text begin APPROPRIATIONS.
new text end

new text begin Subdivision 1. new text end

new text begin Department of education. new text end

new text begin The sums
indicated in this section are appropriated from the general fund
to the Department of Education for the fiscal years designated.
new text end

new text begin Subd. 2. new text end

new text begin Special education; regular. new text end

new text begin For special
education aid under Minnesota Statutes, section 125A.75:
new text end

new text begin $527,768,000 new text end new text begin ..... new text end new text begin 2006
new text end

new text begin $526,102,000 new text end new text begin ..... new text end new text begin 2007
new text end

new text begin The 2006 appropriation includes $95,778,000 for 2005 and
$431,990,000 for 2006.
new text end

new text begin The 2007 appropriation includes $95,471,000 for 2006 and
$430,631,000 for 2007.
new text end

new text begin Subd. 3. new text end

new text begin Special education regular equalization aid. new text end

new text begin For
special education regular equalization aid:
new text end

new text begin $2,030,000 new text end new text begin ..... new text end new text begin 2007
new text end

new text begin Subd. 4. new text end

new text begin Aid for children with disabilities. new text end

new text begin For aid
under Minnesota Statutes, section 125A.75, subdivision 3, for
children with disabilities placed in residential facilities
within the district boundaries for whom no district of residence
can be determined:
new text end

new text begin $3,351,000 new text end new text begin ..... new text end new text begin 2006
new text end

new text begin $3,942,000 new text end new text begin ..... new text end new text begin 2007
new text end

new text begin If the appropriation for either year is insufficient, the
appropriation for the other year is available.
new text end

new text begin Subd. 5. new text end

new text begin Travel for home-based services. new text end

new text begin For aid for
teacher travel for home-based services under Minnesota Statutes,
section 125A.75, subdivision 1:
new text end

new text begin $ 186,000 new text end new text begin ..... new text end new text begin 2006
new text end

new text begin $ 192,000 new text end new text begin ..... new text end new text begin 2007
new text end

new text begin The 2006 appropriation includes $32,000 for 2005 and
$154,000 for 2006.
new text end

new text begin The 2007 appropriation includes $33,000 for 2006 and
$159,000 for 2007.
new text end

new text begin Subd. 6. new text end

new text begin Special education; excess costs. new text end

new text begin For excess
cost aid under Minnesota Statutes, section 125A.79, subdivision
7:
new text end

new text begin $91,786,000 new text end new text begin ..... new text end new text begin 2006
new text end

new text begin $91,360,000 new text end new text begin ..... new text end new text begin 2007
new text end

new text begin The 2006 appropriation includes $39,003,000 for 2005 and
$52,783,000 for 2006.
new text end

new text begin The 2007 appropriation includes $38,724,000 for 2006 and
$52,636,000 for 2007.
new text end

new text begin Subd. 7. new text end

new text begin Litigation costs for special education. new text end

new text begin For
paying the costs a district incurs under Minnesota Statutes,
section 125A.75, subdivision 8:
new text end

new text begin $ 17,000 new text end new text begin ..... new text end new text begin 2006
new text end

new text begin $ 17,000 new text end new text begin ..... new text end new text begin 2007
new text end

new text begin Subd. 8. new text end

new text begin Transition for disabled students. new text end

new text begin For aid for
transition programs for children with disabilities under
Minnesota Statutes, section 124D.454:
new text end

new text begin $8,774,000 new text end new text begin ..... new text end new text begin 2006
new text end

new text begin $8,748,000 new text end new text begin ..... new text end new text begin 2007
new text end

new text begin The 2006 appropriation includes $1,591,000 for 2005 and
$7,183,000 for 2006.
new text end

new text begin The 2007 appropriation includes $1,587,000 for 2006 and
$7,161,000 for 2007.
new text end

new text begin Subd. 9. new text end

new text begin Court-placed special education revenue. new text end

new text begin For
reimbursing serving school districts for unreimbursed eligible
expenditures attributable to children placed in the serving
school district by court action under Minnesota Statutes,
section 125A.79, subdivision 4:
new text end

new text begin $ 65,000 new text end new text begin ..... new text end new text begin 2006
new text end

new text begin $ 70,000 new text end new text begin ..... new text end new text begin 2007
new text end

new text begin Subd. 10. new text end

new text begin Out-of-state tuition special education. new text end

new text begin For
special education out-of-state tuition according to Minnesota
Statutes, section 125A.79, subdivision 8:
new text end

new text begin $ 250,000 new text end new text begin ..... new text end new text begin 2006
new text end

new text begin $ 250,000 new text end new text begin ..... new text end new text begin 2007
new text end

ARTICLE 5

FACILITIES AND TECHNOLOGY

Section 1.

Minnesota Statutes 2004, section 123B.53,
subdivision 5, is amended to read:

Subd. 5.

Equalized debt service levy.

(a) The equalized
debt service levy of a district equals the sum of the first tier
equalized debt service levy and the second tier equalized debt
service levy.

(b) A district's first tier equalized debt service levy
equals the district's first tier debt service equalization
revenue times the lesser of one or the ratio of:

(1) the quotient derived by dividing the adjusted net tax
capacity of the district for the year before the year the levy
is certified by the adjusted pupil units in the district for the
school year ending in the year prior to the year the levy is
certified; to

(2) deleted text begin $3,200 deleted text end new text begin $3,832 new text end .

(c) A district's second tier equalized debt service levy
equals the district's second tier debt service equalization
revenue times the lesser of one or the ratio of:

(1) the quotient derived by dividing the adjusted net tax
capacity of the district for the year before the year the levy
is certified by the adjusted pupil units in the district for the
school year ending in the year prior to the year the levy is
certified; to

(2) deleted text begin $8,000 deleted text end new text begin $9,546 new text end .

Sec. 2.

Minnesota Statutes 2004, section 123B.54, is
amended to read:

123B.54 DEBT SERVICE APPROPRIATION.

(a) deleted text begin $28,367,000 deleted text end new text begin $19,167,000 new text end in fiscal year deleted text begin 2006 deleted text end new text begin 2008 new text end and
deleted text begin $25,560,000 deleted text end new text begin $16,403,000 new text end in fiscal year deleted text begin 2007 deleted text end new text begin 2009 new text end 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. 3.

Minnesota Statutes 2004, section 123B.57,
subdivision 4, is amended to read:

Subd. 4.

Health and safety levy.

To receive health and
safety revenue, a district may levy an amount equal to the
district's health and safety revenue as defined in subdivision 3
multiplied by the lesser of one, or the ratio of the quotient
derived by dividing the adjusted net tax capacity of the
district for the year preceding the year the levy is certified
by the adjusted marginal cost pupil units in the district for
the school year to which the levy is attributable,
to deleted text begin $2,935 deleted text end new text begin $3,535 new text end .

Sec. 4.

new text begin [123B.591] DEFERRED MAINTENANCE REVENUE.
new text end

new text begin Subdivision 1. new text end

new text begin Eligibility. new text end

new text begin (a) An independent or
special school district that does not qualify to participate in
the alternative facilities bonding and levy under section
123B.59, subdivision 1, paragraph (a), is eligible to receive
deferred maintenance revenue.
new text end

new text begin (b) Deferred maintenance revenue is subject to reverse
referendum according to section 126C.48, subdivision 9.
new text end

new text begin Subd. 2. new text end

new text begin Deferred maintenance revenue. new text end

new text begin The deferred
maintenance revenue for an eligible school district equals the
product of $50 times the adjusted pupil units for the school
year times the lesser of one or the ratio of the district's
average age of building space to 35 years.
new text end

new text begin Subd. 3. new text end

new text begin Deferred maintenance levy. new text end

new text begin To obtain deferred
maintenance revenue for fiscal year 2007 and later, a district
may levy an amount not more than the product of its deferred
maintenance revenue for the fiscal year times the lesser of one
or the ratio of its adjusted net tax capacity per adjusted pupil
unit to $6,900.
new text end

new text begin Subd. 4. new text end

new text begin Deferred maintenance aid. new text end

new text begin For fiscal year 2007
and later, a district's deferred maintenance aid equals its
deferred maintenance revenue minus its deferred maintenance levy
times the ratio of the actual amount levied to the permitted
levy.
new text end

new text begin Subd. 5. new text end

new text begin Reserve account. new text end

new text begin Deferred maintenance revenue
must be maintained in a reserve account within the general fund.
Deferred maintenance revenue may be used only for expenditures
that would be eligible for alternative facilities bonding and
levy revenue under section 123B.59, subdivision 2, paragraph
(a), if the district qualified for that revenue under section
123B.59, subdivision 1, paragraph (a).
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for revenue for
fiscal year 2007.
new text end

Sec. 5.

Minnesota Statutes 2004, section 126C.63,
subdivision 5, is amended to read:

Subd. 5.

Levy.

"Levy" means a district's net debt
service levy after the reduction of debt service equalization
aid under section 123B.53, subdivision 6. For taxes payable in
2003 and later, each district's maximum effort debt service levy
for purposes of subdivision 8, must be reduced by an equal
number of percentage points if the commissioner of finance
determines that the levy reduction will not result in a payment
from the general fund in the state treasury according to section
16A.641, as would be required under section 126C.72, subdivision
3. A district's levy that is adjusted under this section must
not be reduced below deleted text begin 30.1 deleted text end new text begin 25 new text end percent of the district's adjusted
net tax capacity.

Sec. 6.

Minnesota Statutes 2004, section 126C.63,
subdivision 8, is amended to read:

Subd. 8.

Maximum effort debt service levy.

(a) "Maximum
effort debt service levy" means the lesser of:

(1) a levy in whichever of the following amounts is
applicable:

(i) in any district receiving a debt service loan for a
debt service levy payable in 2002 and thereafter, or granted a
capital loan after January 1, 2002, a levy in total dollar
amount computed at a rate of deleted text begin 40 deleted text end new text begin 32 new text end percent of adjusted net tax
capacity for taxes payable in 2002 and thereafter;

(ii) in any district receiving a debt service loan for a
debt service levy payable in 2001 or earlier, or granted a
capital loan before January 2, deleted text begin 2001 deleted text end new text begin 2002 new text end , a levy in a total
dollar amount computed at a rate of deleted text begin 32 deleted text end new text begin 28 new text end percent of adjusted
net tax capacity for taxes payable in 2002 and thereafter; or

(2) a levy in any district for which a capital loan was
approved prior to August 1, 1981, a levy in a total dollar
amount equal to the sum of the amount of the required debt
service levy and an amount which when levied annually will in
the opinion of the commissioner be sufficient to retire the
remaining interest and principal on any outstanding loans from
the state within 30 years of the original date when the capital
loan was granted.

(b) The board in any district affected by the provisions of
paragraph (a), clause (2), may elect instead to determine the
amount of its levy according to the provisions of paragraph (a),
clause (1). If a district's capital loan is not paid within 30
years because it elects to determine the amount of its levy
according to the provisions of paragraph (a), clause (2), the
liability of the district for the amount of the difference
between the amount it levied under paragraph (a), clause (2),
and the amount it would have levied under paragraph (a), clause
(1), and for interest on the amount of that difference, must not
be satisfied and discharged pursuant to Minnesota Statutes 1988,
or an earlier edition of Minnesota Statutes if applicable,
section 124.43, subdivision 4.

Sec. 7. new text begin APPROPRIATIONS.
new text end

new text begin Subdivision 1. new text end

new text begin Department of education. new text end

new text begin The sums
indicated in this section are appropriated from the general fund
to the Department of Education for the fiscal years designated.
new text end

new text begin Subd. 2. new text end

new text begin Health and safety revenue. new text end

new text begin For health and
safety aid according to Minnesota Statutes, section 123B.57,
subdivision 5:
new text end

new text begin $ 818,000 new text end new text begin ..... new text end new text begin 2006
new text end

new text begin $ 575,000 new text end new text begin ..... new text end new text begin 2007
new text end

new text begin The 2006 appropriation includes $244,000 for 2005 and
$574,000 for 2006.
new text end

new text begin The 2007 appropriation includes $126,000 for 2006 and
$449,000 for 2007.
new text end

new text begin Subd. 3. new text end

new text begin Debt service equalization. new text end

new text begin For debt service aid
according to Minnesota Statutes, section 123B.53, subdivision 6:
new text end

new text begin $25,882,000 new text end new text begin ..... new text end new text begin 2006
new text end

new text begin $21,769,000 new text end new text begin ..... new text end new text begin 2007
new text end

new text begin The 2006 appropriation includes $5,365,000 for 2005 and
$20,517,000 for 2006.
new text end

new text begin The 2007 appropriation includes $4,534,000 for 2006 and
$17,235,000 for 2007.
new text end

new text begin Subd. 4. new text end

new text begin Alternative facilities bonding aid. new text end

new text begin For
alternative facilities bonding aid, according to Minnesota
Statutes, section 123B.59, subdivision 1:
new text end

new text begin $19,287,000 new text end new text begin ..... new text end new text begin 2006
new text end

new text begin $19,287,000 new text end new text begin ..... new text end new text begin 2007
new text end

new text begin The 2006 appropriation includes $3,490,000 for 2005 and
$15,797,000 for 2006.
new text end

new text begin The 2007 appropriation includes $3,490,000 for 2006 and
$15,797,000 for 2007.
new text end

new text begin Subd. 5. new text end

new text begin Equity in telecommunications access. new text end

new text begin For equity
in telecommunications access:
new text end

new text begin $4,500,000 new text end new text begin ..... new text end new text begin 2006
new text end

new text begin $4,600,000 new text end new text begin ..... new text end new text begin 2007
new text end

new text begin Subd. 6. new text end

new text begin Deferred maintenance aid. new text end

new text begin For deferred
maintenance aid under Minnesota Statutes, section 123B.591:
new text end

new text begin $2,383,000 new text end new text begin ..... new text end new text begin 2007
new text end

ARTICLE 6

NUTRITION

Section 1. new text begin APPROPRIATIONS.
new text end

new text begin Subdivision 1. new text end

new text begin Department of education. new text end

new text begin The sums
indicated in this section are appropriated from the general fund
to the Department of Education for the fiscal years designated.
new text end

new text begin Subd. 2. new text end

new text begin School lunch. new text end

new text begin For school lunch aid according to
Minnesota Statutes, section 124D.111, and Code of Federal
Regulations, title 7, section 210.17:
new text end

new text begin $7,765,000 new text end new text begin ..... new text end new text begin 2006
new text end

new text begin $7,880,000 new text end new text begin ..... new text end new text begin 2007
new text end

new text begin Subd. 3. new text end

new text begin Traditional school breakfast. new text end

new text begin For traditional
school breakfast aid under Minnesota Statutes, section 124D.116:
new text end

new text begin $4,655,000 new text end new text begin ..... new text end new text begin 2006
new text end

new text begin $4,745,000 new text end new text begin ..... new text end new text begin 2007
new text end

new text begin Subd. 4. new text end

new text begin Summer school service replacement aid. new text end

new text begin For
summer food service replacement aid under Minnesota Statutes,
section 124D.119:
new text end

new text begin $ 150,000 new text end new text begin ..... new text end new text begin 2006
new text end

new text begin $ 150,000 new text end new text begin ..... new text end new text begin 2007
new text end

ARTICLE 7

LIBRARIES

Section 1. new text begin APPROPRIATIONS.
new text end

new text begin Subdivision 1. new text end

new text begin Department of education. new text end

new text begin The sums
indicated in this section are appropriated from the general fund
to the Department of Education for the fiscal years designated.
new text end

new text begin Subd. 2. new text end

new text begin Basic support. new text end

new text begin For basic support grants
according to Minnesota Statutes, sections 134.32 to 134.35:
new text end

new text begin $8,570,000 new text end new text begin ..... new text end new text begin 2006
new text end

new text begin $8,570,000 new text end new text begin ..... new text end new text begin 2007
new text end

new text begin The 2006 appropriation includes $1,551,000 for 2005 and
$7,019,000 for 2006.
new text end

new text begin The 2007 appropriation includes $1,551,000 for 2006 and
$7,019,000 for 2007.
new text end

new text begin Subd. 3. new text end

new text begin Multicounty, multitype library systems. new text end

new text begin For
grants according to Minnesota Statutes, sections 134.353 and
134.354, to multicounty, multitype library systems:
new text end

new text begin $ 903,000 new text end new text begin ..... new text end new text begin 2006
new text end

new text begin $ 903,000 new text end new text begin ..... new text end new text begin 2007
new text end

new text begin The 2006 appropriation includes $163,000 for 2005 and
$740,000 for 2006.
new text end

new text begin The 2007 appropriation includes $163,000 for 2006 and
$740,000 for 2007.
new text end

new text begin Subd. 4. new text end

new text begin Electronic library for minnesota. new text end

new text begin For statewide
licenses to on-line databases selected in cooperation with the
Higher Education Services Office for school media centers,
public libraries, and state government agency libraries, and
public, private, or university libraries:
new text end

new text begin $1,039,000 new text end new text begin ..... new text end new text begin 2006
new text end

new text begin $1,091,000 new text end new text begin ..... new text end new text begin 2007
new text end

new text begin Subd. 5. new text end

new text begin Regional library telecommunications aid. new text end

new text begin For
regional library telecommunications aid under Minnesota
Statutes, section 134.355:
new text end

new text begin $1,200,000 new text end new text begin ..... new text end new text begin 2006
new text end

new text begin $1,200,000 new text end new text begin ..... new text end new text begin 2007
new text end

new text begin Of the 2006 appropriation, $217,000 is for 2005 and
$983,000 is for 2006.
new text end

new text begin Of the 2007 appropriation, $217,000 is for 2006 and
$983,000 is for 2007.
new text end

ARTICLE 8

EARLY CHILDHOOD FAMILY SUPPORT

Section 1.

Minnesota Statutes 2004, section 121A.17,
subdivision 1, is amended to read:

Subdivision 1.

Early childhood developmental screening.

Every school board must provide for a mandatory program of early
childhood developmental screening for children once before
school entrance, targeting children who are between deleted text begin 3-1/2 deleted text end new text begin three
new text end and four years old. This screening program must be established
either by one board, by two or more boards acting in
cooperation, by service cooperatives, by early childhood family
education programs, or by other existing programs. This
screening examination is a mandatory requirement for a student
to continue attending kindergarten or first grade in a public
school. A child need not submit to developmental screening
provided by a board if the child's health records indicate to
the board that the child has received comparable developmental
screening from a public or private health care organization or
individual health care provider. new text begin A student identification
number, as defined by the commissioner of education, shall be
assigned at the time of early childhood developmental screening
or at the time of the provision of health records indicating a
comparable screening. Each school district must provide the
essential data in accordance with section 125B.07, subdivision
6, to the Department of Education. new text end Districts are encouraged to
reduce the costs of preschool developmental screening programs
by utilizing volunteers in implementing the program.

Sec. 2.

Minnesota Statutes 2004, section 121A.19, is
amended to read:

121A.19 DEVELOPMENTAL SCREENING AID.

Each school year, the state must pay a district deleted text begin $40 deleted text end new text begin $50 new text end for
each new text begin three-year-old new text end child screened new text begin ; $40 for each four-year-old
child screened; and $30 for each five-year-old child screened
prior to kindergarten new text end 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.

Sec. 3.

Minnesota Statutes 2004, section 124D.15,
subdivision 1, is amended to read:

Subdivision 1.

Establishment; purpose.

A district or a
group of districts may establish a school readiness program
for deleted text begin eligible deleted text end children new text begin age three to kindergarten entrance new text end . The
purpose of a school readiness program is to deleted text begin provide all eligible
children adequate opportunities to participate in child
development programs that enable the children to enter school
with the necessary skills and behavior and family stability and
support to progress and flourish deleted text end new text begin prepare children to enter
kindergarten new text end .

Sec. 4.

Minnesota Statutes 2004, section 124D.15,
subdivision 3, is amended to read:

Subd. 3.

Program deleted text begin eligibility deleted text end new text begin requirements new text end .

A school
readiness program must deleted text begin include the following deleted text end :

(1) deleted text begin a comprehensive plan to anticipate and meet the needs
of participating families by coordinating existing social
services programs and by fostering collaboration among agencies
or other community-based organizations and programs that provide
a full range of flexible, family-focused services to families
with young children deleted text end new text begin Conduct a child development assessment on
each child to guide intentional curriculum planning and promote
kindergarten readiness. This assessment must be conducted on
each child at entrance into the program and once prior to exit
of the program and be maintained as part of a child's cumulative
record new text end ;

(2) deleted text begin a development and learning component to help children
develop appropriate social, cognitive, and physical skills, and
emotional well-being deleted text end new text begin adopt and implement department early
learning standards new text end ;

(3) deleted text begin health referral services to address children's medical,
dental, mental health, and nutritional needs deleted text end new text begin demonstrate use of
comprehensive curriculum based on early childhood research and
professional practice that prepares children for kindergarten new text end ;

(4) deleted text begin a nutrition component to meet children's daily
nutritional needs deleted text end new text begin arrange for early childhood screening and
appropriate referral new text end ;

(5) deleted text begin parents' involvement in meeting children's educational,
health, social service, and other needs deleted text end new text begin involve parents in
program planning and decision making new text end ;

(6) deleted text begin community outreach to ensure participation by families
who represent the racial, cultural, and economic diversity of
the community; deleted text end new text begin coordinate with relevant community-based
services; and
new text end

(7) deleted text begin community-based staff and program resources, including
interpreters, that reflect the racial and ethnic characteristics
of the children participating in the program; and
deleted text end

deleted text begin (8) a literacy component to ensure that the literacy needs
of parents are addressed through referral to and cooperation
deleted text end new text begin cooperate new text end with adult basic education programs and other adult
literacy programs.

Sec. 5.

Minnesota Statutes 2004, section 124D.15, is
amended by adding a subdivision to read:

new text begin Subd. 3a. new text end

new text begin Application and reporting requirements. new text end

new text begin (a) A
school readiness program must submit a biennial plan to the
commissioner for approval to receive aid under section 124D.16.
The plan must document that the program will meet the program
requirements under subdivision 3. A school district shall
submit the biennial plan by April 1 to the commissioner on a
form prescribed by the commissioner. One-half of the districts
shall first submit the plan by April 1, 2006, and one-half of
the districts by April 1, 2007.
new text end

new text begin (b) Programs receiving school readiness funds must submit
an annual report to the department.
new text end

Sec. 6.

Minnesota Statutes 2004, section 124D.15,
subdivision 5, is amended to read:

Subd. 5.

Services with new or existing providers.

A
district deleted text begin is encouraged to deleted text end new text begin may new text end contract with a deleted text begin public deleted text end new text begin charter
school new text end or deleted text begin nonprofit deleted text end new text begin community-based new text end organization to provide
eligible children developmentally appropriate services that meet
the program requirements in subdivision 3. In the alternative,
a district may pay tuition or fees to place an eligible child in
an existing program. A district may establish a new program
where no existing, reasonably accessible program meets the
program requirements in subdivision 3. new text begin A copy of each contract
must be submitted to the commissioner with the biennial plan.
new text end Services may be provided in a site-based program or in the home
of the child or a combination of both. The district may not
restrict participation to district residents.

Sec. 7.

Minnesota Statutes 2004, section 124D.15,
subdivision 10, is amended to read:

Subd. 10.

Supervision.

A program provided by a board
must be supervised by a licensed early childhood teacher, a
certified early childhood educator, or a licensed parent
educator. deleted text begin A program provided according to a contract between a
district and a nonprofit organization or another private
organization must be supervised and staffed according to the
terms of the contract.
deleted text end

Sec. 8.

Minnesota Statutes 2004, section 124D.15,
subdivision 12, is amended to read:

Subd. 12.

Program fees.

A district deleted text begin may deleted text end new text begin must new text end adopt a
sliding fee schedule based on a family's income but must waive a
fee for a participant unable to pay. deleted text begin The fees charged must be
designed to enable eligible children of all socioeconomic levels
to participate in the program.
deleted text end

Sec. 9.

Minnesota Statutes 2004, section 124D.15, is
amended by adding a subdivision to read:

new text begin Subd. 14. new text end

new text begin Assistance. new text end

new text begin The department must provide
assistance to districts with programs described in this section.
new text end

Sec. 10.

Minnesota Statutes 2004, section 124D.16,
subdivision 2, is amended to read:

Subd. 2.

Amount of aid.

(a) A district is eligible to
receive school readiness aid new text begin for eligible prekindergarten pupils
enrolled in a school readiness program under section 124D.15 new text end if
the deleted text begin program deleted text end new text begin biennial new text end plan required by deleted text begin subdivision 1 deleted text end new text begin section
124D.15, subdivision 3a, new text end has been approved by the commissioner.

(b) For fiscal year 2002 and thereafter, a district must
receive school readiness aid equal to:

(1) the number of deleted text begin eligible deleted text end four-year-old children in the
district on October 1 for the previous school year times the
ratio of 50 percent of the total school readiness aid for that
year to the total number of deleted text begin eligible deleted text end four-year-old children
reported to the commissioner for the previous school year; plus

(2) the number of pupils enrolled in the school district
from families eligible for the free or reduced school lunch
program for the deleted text begin second deleted text end previous school year times the ratio of
50 percent of the total school readiness aid for that year to
the total number of pupils in the state from families eligible
for the free or reduced school lunch program for the deleted text begin second
deleted text end previous school year.

Sec. 11.

Minnesota Statutes 2004, section 124D.16,
subdivision 3, is amended to read:

Subd. 3.

Use of aid.

School readiness aid shall be used
only to provide a school readiness program and may be used to
provide transportation. Not more than five percent of deleted text begin the
aid deleted text end new text begin program revenue, as defined in subdivision 5, new text end may be used
for the cost of administering the program. Aid must be used to
supplement and not supplant local, state, and federal funding.
Aid may not be used for instruction and services required under
sections 125A.03 to 125A.24 and 125A.65. Aid may not be used to
purchase land or construct buildings, but may be used to lease
or renovate existing buildings.

Sec. 12. new text begin APPROPRIATIONS.
new text end

new text begin Subdivision 1. new text end

new text begin Department of education. new text end

new text begin The sums
indicated in this section are appropriated from the general fund
to the Department of Education for the fiscal years designated.
new text end

new text begin Subd. 2. new text end

new text begin School readiness. new text end

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

new text begin $8,893,000 new text end new text begin ..... new text end new text begin 2006
new text end

new text begin $8,888,000 new text end new text begin ..... new text end new text begin 2007
new text end

new text begin The 2006 appropriation includes $1,638,000 for 2005 and
$7,255,000 for 2006.
new text end

new text begin The 2007 appropriation includes $1,603,000 for 2006 and
$7,285,000 for 2007.
new text end

new text begin Subd. 3. new text end

new text begin Early childhood family education aid. new text end

new text begin For early
childhood family education aid under Minnesota Statutes, section
124D.135:
new text end

new text begin $12,187,000 new text end new text begin ..... new text end new text begin 2006
new text end

new text begin $12,558,000 new text end new text begin ..... new text end new text begin 2007
new text end

new text begin The 2006 appropriation includes $2,150,000 for 2005 and
$10,037,000 for 2006.
new text end

new text begin The 2007 appropriation includes $2,217,000 for 2006 and
$10,341,000 for 2007.
new text end

new text begin Subd. 4. new text end

new text begin Health and developmental screening aid. new text end

new text begin For
health and developmental screening aid under Minnesota Statutes,
sections 121A.17 and 121A.19:
new text end

new text begin $2,984,000 new text end new text begin ..... new text end new text begin 2006
new text end

new text begin $3,413,000 new text end new text begin ..... new text end new text begin 2007
new text end

new text begin The 2006 appropriation includes $481,000 for 2005 and
$2,503,000 for 2006.
new text end

new text begin The 2007 appropriation includes $552,000 for 2006 and
$2,861,000 for 2007.
new text end

new text begin Subd. 5. new text end

new text begin Head start program. new text end

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

new text begin $17,100,000 new text end new text begin ..... new text end new text begin 2006
new text end

new text begin $17,100,000 new text end new text begin ..... new text end new text begin 2007
new text end

Sec. 13. new text begin REPEALER.
new text end

new text begin (a) Minnesota Statutes 2004, sections 124D.15, subdivisions
2, 4, 6, 7, 8, 9, 11, and 13; and 124D.16, subdivision 4, are
repealed.
new text end

new text begin (b) Minnesota Statutes 2004, section 124D.16, subdivision
1, is repealed effective July 1, 2006.
new text end

ARTICLE 9

COMMUNITY EDUCATION AND PREVENTION

Section 1.

Minnesota Statutes 2004, section 124D.22,
subdivision 3, is amended to read:

Subd. 3.

School-age care levy.

To obtain school-age care
revenue, a school district may levy an amount equal to the
district's school-age care revenue as defined in subdivision 2
multiplied by the lesser of one, or the ratio of the quotient
derived by dividing the adjusted net tax capacity of the
district for the year before the year the levy is certified by
the resident pupil units in the district for the school year to
which the levy is attributable, to deleted text begin $2,433 deleted text end new text begin $2,925 new text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for revenue for
fiscal year 2007.
new text end

Sec. 2. new text begin APPROPRIATIONS.
new text end

new text begin Subdivision 1. new text end

new text begin Department of education. new text end

new text begin The sums
indicated in this section are appropriated from the general fund
to the Department of Education for the fiscal years designated.
new text end

new text begin Subd. 2. new text end

new text begin Community education aid. new text end

new text begin For community
education aid under Minnesota Statutes, section 124D.20:
new text end

new text begin $1,958,000 new text end new text begin ..... new text end new text begin 2006
new text end

new text begin $1,250,000 new text end new text begin ..... new text end new text begin 2007
new text end

new text begin The 2006 appropriation includes $459,000 for 2005 and
$1,499,000 for 2006.
new text end

new text begin The 2007 appropriation includes $331,000 for 2006 and
$919,000 for 2007.
new text end

new text begin Subd. 3. new text end

new text begin Adults with disabilities program aid. new text end

new text begin For
adults with disabilities programs under Minnesota Statutes,
section 124D.56:
new text end

new text begin $ 710,000 new text end new text begin ..... new text end new text begin 2006
new text end

new text begin $ 710,000 new text end new text begin ..... new text end new text begin 2007
new text end

new text begin The 2006 appropriation includes $128,000 for 2005 and
$582,000 for 2006.
new text end

new text begin The 2007 appropriation includes $128,000 for 2006 and
$582,000 for 2007.
new text end

new text begin Subd. 4. new text end

new text begin Hearing-impaired adults. new text end

new text begin For programs for
hearing-impaired adults under Minnesota Statutes, section
124D.57:
new text end

new text begin $ 70,000 new text end new text begin ..... new text end new text begin 2006
new text end

new text begin $ 70,000 new text end new text begin ..... new text end new text begin 2007
new text end

new text begin Subd. 5. new text end

new text begin School-age care revenue. new text end

new text begin For extended day aid
under Minnesota Statutes, section 124D.22:
new text end

new text begin $ 15,000 new text end new text begin ..... new text end new text begin 2006
new text end

new text begin $ 5,000 new text end new text begin ..... new text end new text begin 2007
new text end

new text begin The 2006 appropriation includes $4,000 for 2005 and $11,000
for 2006.
new text end

new text begin The 2007 appropriation includes $2,000 for 2006 and $3,000
for 2007.
new text end

ARTICLE 10

SELF-SUFFICIENCY AND LIFELONG LEARNING

Section 1.

Minnesota Statutes 2004, 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
deleted text begin 2004 equals $34,388,000. The state total adult basic education
aid for fiscal year deleted text end 2005 deleted text begin and later deleted text end is $36,509,000. new text begin The state
total adult basic education aid for fiscal year 2006 and later
is $36,509,000 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. new 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.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day
following final enactment and applies to revenue distributions
for fiscal year 2006.
new text end

Sec. 2.

Minnesota Statutes 2004, section 124D.531,
subdivision 4, is amended to read:

Subd. 4.

Adult basic education program aid limit.

(a)
Notwithstanding subdivisions 2 and 3, the total adult basic
education aid for a program per prior year contact hour must not
exceed $21 per prior year contact hour computed under
subdivision 3, clause (2).

(b) For fiscal year 2004, the aid for a program under
subdivision 3, clause (2), adjusted for changes in program
membership, must not exceed the aid for that program under
subdivision 3, clause (2), for fiscal year 2003 by more than the
greater of eight percent or $10,000.

(c) For fiscal year 2005, the aid for a program under
subdivision 3, clause (2), adjusted for changes in program
membership, must not exceed the sum of the aid for that program
under subdivision 3, clause (2), and Laws 2003, First Special
Session chapter 9, article 9, section 8, paragraph (a), for the
preceding fiscal year by more than the greater of eight percent
or $10,000.

(d) For fiscal year 2006 and later, the aid for a program
under subdivision 3, clause (2), adjusted for changes in program
membership, must not exceed the aid for that program under
subdivision 3, clause (2), for the first preceding fiscal year
by more than the greater of eight percent or $10,000.

(e) Adult basic education aid is payable to a program for
unreimbursed costs new text begin occurring in the program year as defined in
section 124D.52, subdivision 3 new text end .

new text begin (f) Any adult basic education aid that is not paid to a
program because of the program aid limitation under paragraph
(a) must be added to the state total adult basic education aid
for the next fiscal year under subdivision 1. Any adult basic
education aid that is not paid to a program because of the
program aid limitations under paragraph (b), (c), or (d), must
be reallocated among programs by adjusting the rate per contact
hour under subdivision 3, clause (2).
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day
following final enactment and applies to revenue distributions
for fiscal year 2006.
new text end

Sec. 3. new text begin GRANTS FOR INTENSIVE ENGLISH INSTRUCTION FOR NEW
ADULT REFUGEES.
new text end

new text begin The commissioner of education shall establish a
reimbursement grant program to fund intensive English as a
second language (ESL) programs for adult refugees. Intensive ESL
programming must provide intensive instruction for adult
refugees who are making inadequate literacy progress as measured
by a standard assessment test. The intensive instruction must
be focused on participants gaining sufficient literacy to
achieve self-sufficiency through employment.
new text end

new text begin Organizations eligible for grants under this section
include adult basic education programs, school districts,
postsecondary institutions, and nonprofit or community-based
organizations or other private organizations with experience in
providing English language instruction to non-English speaking
immigrants and refugees. Grant applications must contain
information required by the commissioner in the form prescribed
by the commissioner. At a minimum, the application must
document experience in literacy programs serving immigrants and
refugees, describe fiscal accounting systems and reporting
capacity, ensure that administrative expenses are limited to
five percent of grant funds, and provide a description of the
proposed instructional services and training plans. Funds must
be paid to programs on a reimbursement basis. The grant program
expires on June 30, 2007.
new text end

Sec. 4. new text begin APPROPRIATIONS.
new text end

new text begin Subdivision 1. new text end

new text begin Department of education. new text end

new text begin The sums
indicated in this section are appropriated from the general fund
to the Department of Education for the fiscal years designated.
new text end

new text begin Subd. 2. new text end

new text begin Adult basic education aid. new text end

new text begin For adult basic
education aid under Minnesota Statutes, section 124D.52, in
fiscal year 2004 and Minnesota Statutes, section 124D.531, in
fiscal year 2005:
new text end

new text begin $36,514,000 new text end new text begin ..... new text end new text begin 2006
new text end

new text begin $36,541,000 new text end new text begin ..... new text end new text begin 2007
new text end

new text begin The 2006 appropriation includes $6,580,000 for 2005 and
$29,934,000 for 2006.
new text end

new text begin The 2007 appropriation includes $6,614,000 for 2006 and
$29,927,000 for 2007.
new text end

new text begin Subd. 3. new text end

new text begin Ged tests. new text end

new text begin For payment of 60 percent of the
costs of GED tests under Laws 1993, chapter 224, article 4,
section 44, subdivision 10:
new text end

new text begin $ 125,000 new text end new text begin ..... new text end new text begin 2006
new text end

new text begin $ 125,000 new text end new text begin ..... new text end new text begin 2007
new text end

new text begin Subd. 4. new text end

new text begin Intensive english instruction. new text end

new text begin For grants for
intensive English instruction for adult refugees under section 3:
new text end

new text begin $1,000,000 new text end new text begin ..... new text end new text begin 2006
new text end

new text begin $1,000,000 new text end new text begin ..... new text end new text begin 2007
new text end

new text begin Subd. 5. new text end

new text begin Lead hazard reduction. new text end

new text begin For lead hazard
reduction under Minnesota Statutes, section 119A.46:
new text end

new text begin $ 100,000 new text end new text begin ..... new text end new text begin 2006
new text end

new text begin $ 100,000 new text end new text begin ..... new text end new text begin 2007
new text end

new text begin Any balance in the first year does not cancel but is
available in the second year. The commissioner of education may
transfer this appropriation to the commissioner of health.
new text end

ARTICLE 11

STATE AGENCIES

Section 1. new text begin APPROPRIATIONS; DEPARTMENT OF EDUCATION.
new text end

new text begin Subdivision 1. new text end

new text begin Department of education. new text end

new text begin Unless otherwise
indicated, the sums indicated in this section are appropriated
from the general fund to the Department of Education for the
fiscal years designated.
new text end

new text begin Subd. 2. new text end

new text begin Department. new text end

new text begin (a) For the Department of Education:
new text end

new text begin $31,896,000 new text end new text begin ..... new text end new text begin 2006
new text end

new text begin $33,757,000 new text end new text begin ..... new text end new text begin 2007
new text end

new text begin Any balance in the first year does not cancel but is
available in the second year.
new text end

new text begin (b) $260,000 each year is for the Minnesota Children's
Museum.
new text end

new text begin (c) $41,000 each year is for the Minnesota Academy of
Science.
new text end

new text begin (d) $250,000 each year is for the administration of the
scholarship tax credit. The commissioner of education may
transfer these funds to the Department of Revenue to assist with
the administration of this program.
new text end

new text begin (e) $9,000,000 each year is for statewide testing support
under Minnesota Statutes, section 120B.30.
new text end

new text begin (f) $500,000 in fiscal year 2007 is for alternative teacher
programs.
new text end

new text begin (g) $300,000 in fiscal year 2006 and $1,600,000 in fiscal
year 2007 is for value added index assessment model.
new text end

new text begin (h) $164,000 in fiscal year 2006 and $200,000 in fiscal
year 2007 is for administration of the school readiness program
under Minnesota Statutes, sections 124D.15 and 124D.16.
new text end

new text begin (i) $1,200,000 each year is for development of interactive
science assessments.
new text end

new text begin (j) $50,000 in fiscal year 2006 and $75,000 in fiscal year
2007 is for the development and distribution to school districts
of materials addressing the dangers of methamphetamine.
new text end

new text begin Subd. 3. new text end

new text begin Board of teaching. new text end

new text begin For the Board of Teaching:
new text end

new text begin $605,000 new text end new text begin ..... new text end new text begin 2006
new text end

new text begin $605,000 new text end new text begin ..... new text end new text begin 2007
new text end

new text begin Subd. 4. new text end

new text begin Board of school administrators. new text end

new text begin For the Board
of School Administrators:
new text end

new text begin $180,000 new text end new text begin ..... new text end new text begin 2006
new text end

new text begin $160,000 new text end new text begin ..... new text end new text begin 2007
new text end

new text begin Subd. 5. new text end

new text begin Federal grants and aids. new text end

new text begin The expenditures of
federal grants and aids as shown in the biennial budget document
and its supplements are approved and appropriated and shall be
spent as indicated.
new text end

Sec. 2. new text begin APPROPRIATIONS; MINNESOTA STATE ACADEMIES.
new text end

new text begin The sums indicated in this section are appropriated from
the general fund to the Minnesota State Academies for the Deaf
and the Blind for the fiscal years designated:
new text end

new text begin $10,800,000 new text end new text begin ..... new text end new text begin 2006
new text end

new text begin $10,953,000 new text end new text begin ..... new text end new text begin 2007
new text end

new text begin Any balance in the first year does not cancel but is
available in the second year.
new text end

Sec. 3. new text begin APPROPRIATIONS; PERPICH CENTER FOR ARTS
EDUCATION.
new text end

new text begin The sums indicated in this section are appropriated from
the general fund to the Perpich Center for Arts Education for
the fiscal years designated:
new text end

new text begin $6,255,000 new text end new text begin ..... new text end new text begin 2006
new text end

new text begin $6,255,000 new text end new text begin ..... new text end new text begin 2007
new text end

new text begin Any balance in the first year does not cancel but is
available in the second year.
new text end

ARTICLE 12

OTHER GENERAL EDUCATION POLICY

Section 1.

Minnesota Statutes 2004, section 123A.05,
subdivision 2, is amended to read:

Subd. 2.

Reserve revenue.

Each district that is a member
of an area learning center must reserve revenue in an amount
equal to new text begin the sum of (1) new text end at least 90 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 .0485, calculated without
basic skills revenue deleted text begin , deleted text end new text begin and new text end transportation sparsity revenue, deleted text begin and
the transportation portion of the transition revenue adjustment,
deleted text end times the number of pupil units attending an area learning
center program under this section new text begin , plus (2) the amount of basic
skills revenue generated by pupils attending the area learning
center new text end . The amount of reserved revenue under this subdivision
may only be spent on program costs associated with the area
learning center. deleted text begin Compensatory revenue must be allocated
according to section 126C.15, subdivision 2.
deleted text end

Sec. 2.

Minnesota Statutes 2004, section 123B.49,
subdivision 4, is amended to read:

Subd. 4.

Board control of extracurricular activities.

(a) The board may take charge of and control all extracurricular
activities of the teachers and children of the public schools in
the district. Extracurricular activities means all direct and
personal services for pupils for their enjoyment that are
managed and operated under the guidance of an adult or staff
member. The board shall allow all resident pupils receiving
instruction in a home school as defined in section 123B.36,
subdivision 1, paragraph (a), to be eligible to fully
participate in extracurricular activities on the same basis as
public school students.

(b) Extracurricular activities have all of the following
characteristics:

(1) they are not offered for school credit nor required for
graduation;

(2) they are generally conducted outside school hours, or
if partly during school hours, at times agreed by the
participants, and approved by school authorities;

(3) the content of the activities is determined primarily
by the pupil participants under the guidance of a staff member
or other adult.

(c) If the board does not take charge of and control
extracurricular activities, these activities shall be
self-sustaining with all expenses, except direct salary costs
and indirect costs of the use of school facilities, met by dues,
admissions, or other student fund-raising events. The general
fund must reflect only those salaries directly related to and
readily identified with the activity and paid by public funds.
Other revenues and expenditures for extra curricular activities
must be recorded according to the deleted text begin "Manual of Instruction for
Uniform Student Activities Accounting for Minnesota School
Districts and Area Vocational-Technical Colleges." deleted text end new text begin Manual for
Activity Fund Accounting. new text end Extracurricular activities not under
board control must have an annual financial audit and must also
be audited annually for compliance with this section.

(d) If the board takes charge of and controls
extracurricular activities, any or all costs of these activities
may be provided from school revenues and all revenues and
expenditures for these activities shall be recorded in the same
manner as other revenues and expenditures of the district.

(e) If the board takes charge of and controls
extracurricular activities, the teachers or pupils in the
district must not participate in such activity, nor shall the
school name or any allied name be used in connection therewith,
except by consent and direction of the board.

Sec. 3.

Minnesota Statutes 2004, section 123B.75, is
amended by adding a subdivision to read:

new text begin Subd. 4a. new text end

new text begin Taconite revenue. new text end

new text begin Taconite revenue received in
a calendar year by a school district under section 298.28,
subdivisions 4, paragraphs (b) and (c), and 11, paragraph (d),
is fully recognized in the fiscal year in which the February
payment falls.
new text end

Sec. 4.

Minnesota Statutes 2004, section 123B.76,
subdivision 3, is amended to read:

Subd. 3.

Expenditures by building.

(a) For the purposes
of this section, "building" means education site as defined in
section 123B.04, subdivision 1.

(b) Each district shall maintain separate accounts to
identify general fund expenditures deleted text begin , excluding capital
expenditures and pupil transportation, deleted text end for each building. All
expenditures for regular instruction, secondary vocational
instruction, and school administration must be reported to the
department separately for each building. All expenditures for
special education instruction, instructional support services,
and pupil support services provided within a specific building
must be reported to the department separately for each
building. Salary expenditures reported by building must reflect
actual salaries for staff at the building and must not be based
on districtwide averages. All other general fund expenditures
may be reported new text begin by building or new text end on a districtwide basis.

(c) The department must annually report information showing
school district general fund expenditures per pupil by program
category for each building and estimated school district general
fund revenue generated by pupils attending each building on its
Web site. For purposes of this report:

(1) expenditures not deleted text begin required to be deleted text end reported by building
shall be allocated among buildings on a uniform per pupil basis;

(2) basic skills revenue shall be allocated according to
section 126C.10, subdivision 4;

(3) secondary sparsity revenue and elementary sparsity
revenue shall be allocated according to section 126C.10,
subdivisions 7 and 8;

(4) other general education revenue shall be allocated on a
uniform per pupil unit basis;

(5) first grade preparedness aid shall be allocated
according to section 124D.081;

(6) state and federal special education aid and Title I aid
shall be allocated in proportion to district expenditures for
these programs by building; and

(7) other general fund revenues shall be allocated on a
uniform per pupil basis, except that the department may allocate
other revenues attributable to specific buildings directly to
those buildings.

Sec. 5.

Minnesota Statutes 2004, section 123B.79,
subdivision 6, is amended to read:

Subd. 6.

Account transfer for statutory operating debt.

On June 30 of each year, a district may make a permanent
transfer from the general fund account entitled " deleted text begin undesignated
deleted text end new text begin net unreserved general new text end fund balance since statutory operating
debt" to the account entitled "reserved fund balance reserve
account for purposes of statutory operating debt reduction."
The amount of the transfer is limited to the lesser of (a) the
net deleted text begin undesignated operating deleted text end new text begin unreserved general new text end fund balance, or
(b) the sum of the remaining statutory operating debt levies
authorized for all future years according to section 126C.42,
subdivision 1. If the net deleted text begin undesignated operating deleted text end new text begin unreserved
general new text end fund balance is less than zero, the district may not
make a transfer.

Sec. 6.

Minnesota Statutes 2004, section 123B.81,
subdivision 1, is amended to read:

Subdivision 1.

Operating debt.

The "operating debt" of a
school district means the net negative deleted text begin undesignated deleted text end new text begin unreserved
general new text end fund balance deleted text begin in all school district funds, other than
capital expenditure, building construction, debt service, and
trust and agency, deleted text end calculated as of June 30 of each year in
accordance with the uniform financial accounting and reporting
standards for Minnesota school districts.

Sec. 7.

Minnesota Statutes 2004, section 123B.82, is
amended to read:

123B.82 REORGANIZATION OPERATING DEBT.

The "reorganization operating debt" of a school district
means the net negative deleted text begin undesignated deleted text end new text begin unreserved new text end fund deleted text begin balance
deleted text end new text begin balances new text end in all school district funds, other than building
construction, debt redemption, and trust and agency, calculated
in accordance with the uniform financial accounting and
reporting standards for Minnesota school districts as of:

(1) June 30 of the fiscal year before the first year that a
district receives revenue according to section 123A.39,
subdivision 3; or

(2) June 30 of the fiscal year before the effective date of
reorganization according to section 123A.46 or 123A.48.

Sec. 8.

Minnesota Statutes 2004, section 123B.83,
subdivision 2, is amended to read:

Subd. 2.

deleted text begin undesignated deleted text end new text begin unreserved new text end fund balances.

deleted text begin Beginning in fiscal year 1978 and each year thereafter, any deleted text end new text begin A
school new text end district deleted text begin not subject to the provisions of subdivision 1
deleted text end must limit its expenditures so that its deleted text begin undesignated deleted text end new text begin net
unreserved general new text end fund deleted text begin balances do deleted text end new text begin balance does new text end not constitute
statutory operating debt as defined in section 126C.42.

Sec. 9.

Minnesota Statutes 2004, section 124D.68,
subdivision 9, is amended to read:

Subd. 9.

Enrollment verification.

(a) For a pupil
attending an eligible program full time under subdivision 3,
paragraph (d), the department must pay 90 percent of the
district's average general education revenue less basic skills
revenue to the eligible program and ten percent of the
district's average general education revenue less basic skills
revenue to the contracting district within 30 days after the
eligible program verifies enrollment using the form provided by
the department. For a pupil attending an eligible program part
time, revenue new text begin , excluding compensatory revenue, new text end shall be reduced
proportionately, according to the amount of time the pupil
attends the program, and the payments to the eligible program
and the contracting district shall be reduced accordingly. A
pupil for whom payment is made according to this section may not
be counted by any district for any purpose other than
computation of general education revenue. If payment is made
for a pupil under this subdivision, a district shall not
reimburse a program under section 124D.69 for the same
pupil. new text begin The new text end basic skills revenue deleted text begin shall be paid deleted text end new text begin generated by
pupils attending the eligible program new text end according to section
126C.10, subdivision 4 new text begin , shall be paid to the eligible program new text end .

(b) The department must pay up to 100 percent of the
revenue to the eligible program if there is an agreement to that
effect between the school district and the eligible program.

(c) Notwithstanding paragraphs (a) and (b), for an eligible
program that provides chemical treatment services to students,
the department must pay 100 percent of the revenue to the
eligible program.

Sec. 10.

Minnesota Statutes 2004, section 124D.69,
subdivision 1, is amended to read:

Subdivision 1.

Aid.

If a pupil enrolls in an alternative
program, eligible under section 124D.68, subdivision 3,
paragraph (d), or subdivision 4, operated by a private
organization that has contracted with a school district to
provide educational services for eligible pupils under section
124D.68, subdivision 2, the district contracting with the
private organization must reimburse the provider an amount equal
to new text begin the sum of (1) new text end at least 95 percent of the district's average
general education less basic skills revenue per pupil unit times
the number of pupil units for pupils attending the program deleted text begin . deleted text end new text begin , and
(2) the amount of new text end basic skills revenue deleted text begin shall be paid deleted text end new text begin generated
by pupils attending the program new text end according to section 126C.10,
subdivision 4. deleted text begin Compensatory revenue must be allocated according
to section 126C.15, subdivision 2. deleted text end For a pupil attending the
program part time, the revenue paid to the program new text begin , excluding
compensatory revenue, new text end must be reduced proportionately, according
to the amount of time the pupil attends the program, and revenue
paid to the district shall be reduced accordingly. Pupils for
whom a district provides reimbursement may not be counted by the
district for any purpose other than computation of general
education revenue. If payment is made to a district or program
for a pupil under this section, the department must not make a
payment for the same pupil under section 124D.68, subdivision 9.
new text begin Notwithstanding sections 125A.15, 125A.51, and 125A.515, general
education revenue for a student who receives educational
services under this section shall be paid according to this
section.
new text end

Sec. 11.

Minnesota Statutes 2004, section 126C.01,
subdivision 11, is amended to read:

Subd. 11.

Net deleted text begin unappropriated operating deleted text end new text begin unreserved general
new text end fund balance.

"Net deleted text begin unappropriated operating deleted text end new text begin unreserved general
new text end fund balance" means the sum of the new text begin unreserved general new text end fund
deleted text begin balances in the general, food service, and community service
funds minus the balances reserved for statutory operating debt
reduction, bus purchase, severance pay, taconite, unemployment
benefits, maintenance levy reduction, operating capital,
disabled access, health and safety, deleted text end new text begin balance new text end and encumbrances,
computed as of June 30 each year.

Sec. 12.

Minnesota Statutes 2004, section 126C.05, is
amended by adding a subdivision to read:

new text begin Subd. 20. new text end

new text begin Project-based average daily membership. new text end

new text begin (a) To
receive general education revenue for a pupil enrolled in a
public school with a project-based program, a school must meet
the requirements in this paragraph. The school must:
new text end

new text begin (1) register with the commissioner as a project-based
program by May 30 of the preceding fiscal year;
new text end

new text begin (2) provide a minimum teacher contact of no less than one
hour per week per project-based credit for each pupil;
new text end

new text begin (3) maintain a record system that shows when each credit or
portion thereof was reported for membership for each pupil; and
new text end

new text begin (4) report pupil membership consistent with paragraph (b).
new text end

new text begin (b) The commissioner must develop a formula for reporting
pupil membership to compute average daily membership for each
registered project-based school. Average daily membership for a
pupil in a registered project-based program is the lesser of:
new text end

new text begin (1) 1.0; or
new text end

new text begin (2) the ratio of (i) the number of membership hours
generated by project-based credits completed during the school
year plus membership hours generated by credits completed in a
seat-based setting to (ii) the annual required instructional
hours at that grade level. Membership hours for a partially
completed project-based credit must be prorated.
new text end

Sec. 13.

Minnesota Statutes 2004, section 126C.21,
subdivision 4, is amended to read:

Subd. 4.

Taconite deductions.

deleted text begin (1) Notwithstanding any
provisions of any other law to the contrary, the adjusted net
tax capacity used in calculating general education aid may
include only that property that is currently taxable in the
district.
deleted text end

deleted text begin (2) deleted text end For districts that deleted text begin received payments deleted text end new text begin have revenue new text end under
sections 298.018; 298.225; new text begin 298.24 to new text end 298.28 new text begin , excluding 298.26
and 298.28, subdivision 4, paragraph (d) new text end ; 298.34 to 298.39;
298.391 to 298.396; deleted text begin and deleted text end 298.405 new text begin ; and 477A.15 new text end , any law imposing a
tax upon severed mineral values; deleted text begin or recognized revenue under
section 477A.15; deleted text end the general education aid must be reduced in
the final adjustment payment by new text begin (1) new text end the deleted text begin difference between the
dollar deleted text end amount of the deleted text begin payments received deleted text end new text begin revenue recognized
new text end pursuant to those sections deleted text begin , or revenue recognized under section
477A.15 in deleted text end new text begin for new text end the fiscal year to which the final adjustment is
attributable deleted text begin and deleted text end new text begin , less (2) new text end the amount that was calculated,
pursuant to section 126C.48, subdivision 8, as a reduction of
the levy attributable to the fiscal year to which the final
adjustment is attributable. If the final adjustment of a
district's general education aid for a fiscal year is a negative
amount because of this deleted text begin clause deleted text end new text begin subdivision new text end , the next fiscal
year's general education aid to that district must be reduced by
this negative amount in the following manner: there must be
withheld from each scheduled general education aid payment due
the district in such fiscal year, 15 percent of the total
negative amount, until the total negative amount has been
withheld. The amount reduced from general education aid
pursuant to this deleted text begin clause deleted text end new text begin subdivision new text end must deleted text begin be recognized as deleted text end new text begin reduce
new text end revenue in the fiscal year to which the final adjustment payment
is attributable.

Sec. 14.

Minnesota Statutes 2004, section 126C.48,
subdivision 2, is amended to read:

Subd. 2.

Notice to commissioner; forms.

By October 7 of
each year each district must notify the commissioner of the
proposed levies in compliance with the levy limitations of this
chapter and chapters 120B, 122A, 123A, 123B, 124D, 125A, 127A,
and 136D. By January deleted text begin 15 deleted text end new text begin 7 new text end of each year each district must
notify the commissioner of the final levies certified. The
commissioner shall prescribe the form of these notifications and
may request any additional information necessary to compute
certified levy amounts.

Sec. 15.

Minnesota Statutes 2004, section 126C.48,
subdivision 8, is amended to read:

Subd. 8.

Taconite payment and other reductions.

(1)
Reductions in levies pursuant to subdivision 1 must be made
prior to the reductions in clause (2).

(2) Notwithstanding any other law to the contrary,
districts deleted text begin which received payments deleted text end new text begin that have revenue new text end pursuant to
sections 298.018; 298.225; new text begin 298.24 to new text end 298.28, except an amount
distributed under deleted text begin section deleted text end new text begin sections 298.26; new text end 298.28, subdivision
4, deleted text begin paragraph deleted text end new text begin paragraphs new text end (c), clause (ii) new text begin , and (d) new text end ; 298.34 to
298.39; 298.391 to 298.396; 298.405; new text begin 477A.15; new text end and any law
imposing a tax upon severed mineral values deleted text begin ; or recognized
revenue under section 477A.15 must not include a portion of
these aids in their permissible levies pursuant to those
sections, but instead deleted text end must reduce the deleted text begin permissible deleted text end levies
authorized by this chapter and chapters 120B, 122A, 123A, 123B,
124A, 124D, 125A, and 127A by deleted text begin the greater of the following: deleted text end new text begin 95
percent of the previous year's revenue specified under this
clause.
new text end

deleted text begin (a) an amount equal to 50 percent of the total dollar
amount of the payments received pursuant to those sections or
revenue recognized under section 477A.15 in the previous fiscal
year; or
deleted text end

deleted text begin (b) an amount equal to the total dollar amount of the
payments received pursuant to those sections or revenue
recognized under section 477A.15 in the previous fiscal year
less the product of the same dollar amount of payments or
revenue times five percent.
deleted text end

deleted text begin For levy year 2002 only, 77 percent of the amounts
distributed under section 298.225 and 298.28, and 100 percent of
the amounts distributed under sections 298.018; 298.34 to
298.39; 298.391 to 298.396; 298.405; and any law imposing a tax
upon severed mineral values, or recognized revenue under section
477A.15, shall be used for purposes of the calculations under
this paragraph. For levy year 2003 only, the levy reductions
under this subdivision must be calculated as if section 298.28,
subdivision 4, paragraph (f), did not apply for the 2003
distribution.
deleted text end

(3) The amount of any voter approved referendum, facilities
down payment, and debt levies shall not be reduced by more than
50 percent under this subdivision. In administering this
paragraph, the commissioner shall first reduce the nonvoter
approved levies of a district; then, if any payments, severed
mineral value tax revenue or recognized revenue under paragraph
(2) remains, the commissioner shall reduce any voter approved
referendum levies authorized under section 126C.17; then, if any
payments, severed mineral value tax revenue or recognized
revenue under paragraph (2) remains, the commissioner shall
reduce any voter approved facilities down payment levies
authorized under section 123B.63 and then, if any payments,
severed mineral value tax revenue or recognized revenue under
paragraph (2) remains, the commissioner shall reduce any voter
approved debt levies.

(4) Before computing the reduction pursuant to this
subdivision of the health and safety levy authorized by sections
123B.57 and 126C.40, subdivision 5, the commissioner shall
ascertain from each affected school district the amount it
proposes to levy under each section or subdivision. The
reduction shall be computed on the basis of the amount so
ascertained.

(5) To the extent the levy reduction calculated under
paragraph (2) exceeds the limitation in paragraph (3), an amount
equal to the excess must be distributed from the school
district's distribution under sections 298.225, 298.28, and
477A.15 in the following year to the cities and townships within
the school district in the proportion that their taxable net tax
capacity within the school district bears to the taxable net tax
capacity of the school district for property taxes payable in
the year prior to distribution. No city or township shall
receive a distribution greater than its levy for taxes payable
in the year prior to distribution. The commissioner of revenue
shall certify the distributions of cities and towns under this
paragraph to the county auditor by September 30 of the year
preceding distribution. The county auditor shall reduce the
proposed and final levies of cities and towns receiving
distributions by the amount of their distribution.
Distributions to the cities and towns shall be made at the times
provided under section 298.27.

Sec. 16.

Minnesota Statutes 2004, 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 deleted text begin section deleted text end new text begin sections
new text end 469.176, subdivision 2, new text begin and 469.177, subdivision 9, new text end 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:

(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; and

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

(ii) the total amount of the district's certified levy for
the fiscal year, plus or minus auditor's adjustments.

(c) An amount must be subtracted from the school district's
levy limitation for the next levy certified equal to the
difference between:

(1) the amount of the distribution of excess increment; and

(2) the amount subtracted from aid pursuant to clause (a).

If the aid and levy reductions required by this subdivision
cannot be made to the aid for the fiscal year specified or to
the levy specified, the reductions must be made from aid for
subsequent fiscal years, and from subsequent levies. The school
district must use the payment of excess tax increment to replace
the aid and levy revenue reduced under this subdivision.

(d) This subdivision applies only to the total amount of
excess increments received by a district for a calendar year
that exceeds $25,000.

Sec. 17.

Minnesota Statutes 2004, section 275.14, is
amended to read:

275.14 CENSUS.

deleted text begin For the purposes of sections 275.124 to 275.16, the
population of a city shall be that established by the last
federal census, by a special census taken by the United States
Bureau of the Census, by an estimate made by the Metropolitan
Council, or by the state demographer made according to section
4A.02, whichever has the latest stated date of count or
estimate, before July 2 of the current levy year. deleted text end The
population of a school district must be as certified by the
Department of Education from the most recent federal census. In
any year in which no federal census is taken pursuant to law in
any school district affected by sections deleted text begin 275.124 to
275.16 deleted text end new text begin 124D.20 and 124D.531 new text end a population estimate may be made
and submitted to the state demographer for approval as
hereinafter provided. The school board of a school district, in
case it desires a population estimate, shall pass a resolution
by July 1 containing a current estimate of the population of the
school district and shall submit the resolution to the state
demographer. The resolution shall describe the criteria on
which the estimate is based and shall be in a form and
accompanied by the data prescribed by the state demographer.
The state demographer shall determine whether or not the
criteria and process described in the resolution provide a
reasonable basis for the population estimate and shall inform
the school district of that determination within 30 days of
receipt of the resolution. If the state demographer determines
that the criteria and process described in the resolution do not
provide a reasonable basis for the population estimate, the
resolution shall be of no effect. If the state demographer
determines that the criteria and process do provide a reasonable
basis for the population estimate, the estimate shall be treated
as the population of the school district for the purposes of
sections deleted text begin 275.124 to 275.16 deleted text end new text begin 124D.20 and 124D.531 new text end until the
population of the school district has been established by the
next federal census or until a more current population estimate
is prepared and approved as provided herein, whichever occurs
first. The state demographer shall establish guidelines for
acceptable population estimation criteria and processes. The
state demographer shall issue advisory opinions upon request in
writing to cities or school districts as to proposed criteria
and processes prior to their implementation in an estimation.
The advisory opinion shall be final and binding upon the
demographer unless the demographer can show cause why it should
not be final and binding.

In the event that a census tract employed in taking a
federal or local census overlaps two or more school districts,
the county auditor shall, on the basis of the best information
available, allocate the population of said census tract to the
school districts involved.

deleted text begin The term "council," as used in sections 275.124 to 275.16,
means any board or body, whether composed of one or more
branches, authorized to make ordinances for the government of a
city within this state.
deleted text end

Sec. 18.

Minnesota Statutes 2004, section 275.16, is
amended to read:

275.16 COUNTY AUDITOR TO FIX AMOUNT OF LEVY.

If any such municipality shall return to the county auditor
a levy greater than permitted by chapters 123A, 123B, new text begin 124D,
new text end 126C, new text begin and new text end 136C, deleted text begin and 136D, deleted text end sections 275.124 to 275.16, and 275.70
to 275.74, such county auditor shall extend only such amount of
taxes as the limitations herein prescribed will permit;
provided, if such levy shall include any levy for the payment of
bonded indebtedness or judgments, such levies for bonded
indebtedness or judgments shall be extended in full, and the
remainder of the levies shall be reduced so that the total
thereof, including levies for bonds and judgments, shall not
exceed such amount as the limitations herein prescribed will
permit.

Sec. 19.

Minnesota Statutes 2004, section 469.177,
subdivision 9, is amended to read:

Subd. 9.

Distributions of excess taxes on captured net
tax capacity.

(a) If the amount of tax paid on captured net tax
capacity exceeds the amount of tax increment, the county auditor
shall distribute the excess to the municipality, county, and
school district as follows: each governmental unit's share of
the excess equals

(1) the total amount of the excess for the tax increment
financing district, multiplied by

(2) a fraction, the numerator of which is the current local
tax rate of the governmental unit less the governmental unit's
local tax rate for the year the original local tax rate for the
district was certified (in no case may this amount be less than
zero) and the denominator of which is the sum of the numerators
for the municipality, county, and school district.

If the entire increase in the local tax rate is attributable to
a taxing district, other than the municipality, county, or
school district, then the excess must be distributed to the
municipality, county, and school district in proportion to their
respective local tax rates.

(b) The amounts distributed shall be deducted in computing
the levy limits of the taxing district for the succeeding
taxable year. deleted text begin In the case of a school district, only the
proportion of the excess taxes attributable to unequalized
levies that are subject to a fixed dollar amount levy limit
shall be deducted from the levy limit.
deleted text end

(c) In the case of distributions to a school district deleted text begin that
are attributable to state equalized levies deleted text end , the county auditor
shall report amounts distributed to the commissioner of
education in the same manner as provided for excess increments
under section 469.176, subdivision 2, and the distribution shall
be deducted from the school district's state aid payments new text begin and
levy limitation according to section 127A.49, subdivision 3 new text end .

Sec. 20. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2004, sections 123B.83, subdivision 1,
and 126C.42, subdivisions 1 and 4, are repealed.
new text end

ARTICLE 13

OTHER EDUCATION EXCELLENCE POLICY

Section 1.

Minnesota Statutes 2004, section 123B.143,
subdivision 1, is amended to read:

Subdivision 1.

Contract; duties.

All districts
maintaining a classified secondary school must employ a
superintendent who shall be an ex officio nonvoting member of
the school board. The authority for selection and employment of
a superintendent must be vested in the board in all cases. An
individual employed by a board as a superintendent shall have an
initial employment contract for a period of time no longer than
three years from the date of employment. Any subsequent
employment contract must not exceed a period of three years. A
board, at its discretion, may or may not renew an employment
contract. A board must not, by action or inaction, extend the
duration of an existing employment contract. Beginning 365 days
prior to the expiration date of an existing employment contract,
a board may negotiate and enter into a subsequent employment
contract to take effect upon the expiration of the existing
contract. A subsequent contract must be contingent upon the
employee completing the terms of an existing contract. If a
contract between a board and a superintendent is terminated
prior to the date specified in the contract, the board may not
enter into another superintendent contract with that same
individual that has a term that extends beyond the date
specified in the terminated contract. A board may terminate a
superintendent during the term of an employment contract for any
of the grounds specified in section 122A.40, subdivision 9 or 13.
A superintendent shall not rely upon an employment contract with
a board to assert any other continuing contract rights in the
position of superintendent under section 122A.40.
Notwithstanding the provisions of sections 122A.40, subdivision
10 or 11, 123A.32, 123A.75, or any other law to the contrary, no
individual shall have a right to employment as a superintendent
based on order of employment in any district. If two or more
districts enter into an agreement for the purchase or sharing of
the services of a superintendent, the contracting districts have
the absolute right to select one of the individuals employed to
serve as superintendent in one of the contracting districts and
no individual has a right to employment as the superintendent to
provide all or part of the services based on order of employment
in a contracting district. The superintendent of a district
shall perform the following:

(1) visit and supervise the schools in the district, report
and make recommendations about their condition when advisable or
on request by the board;

(2) recommend to the board employment and dismissal of
teachers;

(3) superintend school grading practices and examinations
for promotions;

(4) make reports required by the commissioner; new text begin and
new text end

(5) deleted text begin by January 10, submit an annual report to the
commissioner in a manner prescribed by the commissioner, in
consultation with school districts, identifying the expenditures
that the district requires to ensure an 80 percent student
passage rate on the basic standards test taken in the eighth
grade, identifying the highest student passage rate the district
expects it will be able to attain on the basic standards test by
grade 12, the amount of expenditures that the district requires
to attain the targeted student passage rate, and how much the
district is cross-subsidizing programs with special education,
basic skills, and general education revenue; and
deleted text end

deleted text begin (6) deleted text end perform other duties prescribed by the board.

Sec. 2.

new text begin [127A.52] CROSS-SUBSIDY REPORTS.
new text end

new text begin By January 30 of each year, the commissioner must estimate
how much each district cross-subsidized the cost of special
education and basic skills programs with general education
revenue during the fiscal year ending on June 30 of the previous
year. The commissioner must make the cross-subsidy estimates
available to all districts and the public by posting the
cross-subsidy reports on the department's Web site.
new text end

ARTICLE 14

OTHER FACILITIES AND TECHNOLOGY POLICY

Section 1.

Minnesota Statutes 2004, section 123B.59,
subdivision 3, is amended to read:

Subd. 3.

Bond authorization.

(a) A school district may
issue general obligation bonds under this section to finance
facilities plans approved by its board and the commissioner.
Chapter 475, except sections 475.58 and 475.59, must be complied
with. The district may levy under subdivision 5 for the debt
service revenue. The authority to issue bonds under this
section is in addition to any bonding authority authorized by
this chapter, or other law. The amount of bonding authority
authorized under this section must be disregarded in calculating
the bonding or net debt limits of this chapter, or any other law
other than section 475.53, subdivision 4.

(b) new text begin At least 60 days new text end before deleted text begin a district issues bonds deleted text end new text begin the
earliest of solicitation of bids, the issuance of bonds, or the
final certification of levies new text end under deleted text begin this deleted text end subdivision new text begin 5 new text end , deleted text begin it deleted text end new text begin the
district new text end must publish notice of the intended projects, the
amount of the bond issue, deleted text begin and deleted text end the total amount of district
indebtedness new text begin , and the commissioner's review and comment, if
applicable new text end .

Sec. 2.

Minnesota Statutes 2004, section 123B.59,
subdivision 3a, is amended to read:

Subd. 3a.

Levy authorization.

(a) A school district may
levy under this section to finance the portion of facilities
plans approved by its board and the commissioner that are not
financed through bond issues according to subdivision 3.

(b) new text begin At least 60 days new text end before a new text begin final new text end district new text begin certification
of new text end levies under deleted text begin this deleted text end subdivision new text begin 5 new text end , deleted text begin it deleted text end new text begin the district new text end must
publish notice of the intended projects, including the total
estimated project cost new text begin , and the commissioner's review and
comment, if applicable new text end .

Sec. 3.

Minnesota Statutes 2004, section 123B.63,
subdivision 2, is amended to read:

Subd. 2.

Uses of the account.

Money in the capital
project referendum account must be used new text begin only new text end for new text begin the purposes
specified in section 126C.10, subdivision 14, for operating
capital revenue, including new text end the costs of acquisition and
betterment for a project that has been reviewed under section
123B.71 and has been approved according to subdivision 3.

Sec. 4.

Minnesota Statutes 2004, section 123B.71,
subdivision 8, is amended to read:

Subd. 8.

Review and comment.

A school district, a
special education cooperative, or a cooperative unit of
government, as defined in section 123A.24, subdivision 2, must
not initiate an installment contract for purchase or a lease
agreement, hold a referendum for bonds, nor solicit bids for new
construction, expansion, or remodeling of an educational
facility that requires an expenditure in excess of $500,000 per
school site prior to review and comment by the commissioner.
The commissioner may exempt a facility maintenance project
funded with general education aid and levy new text begin , alternative
facilities bonding and levy program, new text end or health and safety
revenue from this provision after reviewing a written request
from a school district describing the scope of work. A school
board shall not separate portions of a single project into
components to avoid the requirements of this subdivision.

Sec. 5.

Minnesota Statutes 2004, section 123B.71,
subdivision 12, is amended to read:

Subd. 12.

Publication.

new text begin (a) new text end At least 20 days but not more
than 60 days before a referendum for bonds or solicitation of
bids for a project that has received a positive or unfavorable
review and comment under section 123B.70, the school board shall
publish the commissioner's review and comment of that project in
the legal newspaper of the district. Supplementary information
shall be available to the public.

new text begin (b) The publication requirement in paragraph (a) does not
apply to alternative facilities projects approved under section
123B.59. Publication for alternative facilities projects shall
be as specified in section 123B.59, subdivisions 3 and 3a.
new text end

ARTICLE 15

OTHER EARLY CHILDHOOD FAMILY SUPPORT POLICY

Section 1.

Minnesota Statutes 2004, section 124D.135,
subdivision 5, is amended to read:

Subd. 5.

Use of revenue restricted.

Early childhood
family education revenue may be used only for early childhood
family education programs. Not more than five percent of early
childhood family education revenue new text begin , as defined in subdivision 7,
new text end may be used to administer early childhood family education
programs.

Sec. 2.

Minnesota Statutes 2004, section 124D.16,
subdivision 3, is amended to read:

Subd. 3.

Use of aid.

School readiness aid shall be used
only to provide a school readiness program and may be used to
provide transportation. Not more than five percent of deleted text begin the
aid deleted text end new text begin school readiness revenue, as defined in subdivision 5, new text end may
be used for the cost of administering the program. Aid must be
used to supplement and not supplant local, state, and federal
funding. Aid may not be used for instruction and services
required under sections 125A.03 to 125A.24 and 125A.65. Aid may
not be used to purchase land or construct buildings, but may be
used to lease or renovate existing buildings.

Sec. 3.

Minnesota Statutes 2004, section 126C.15,
subdivision 1, is amended to read:

Subdivision 1.

Use of the revenue.

new text begin Except for revenue
allocated for prekindergarten programs under subdivision 2,
paragraph (c), new text end the basic skills revenue under section 126C.10,
subdivision 4, must be reserved and used to meet the educational
needs of pupils who enroll under-prepared to learn and whose
progress toward meeting state or local content or performance
standards is below the level that is appropriate for learners of
their age. Any of the following may be provided to meet these
learners' needs:

(1) direct instructional services under the assurance of
mastery program according to section 124D.66;

(2) remedial instruction in reading, language arts,
mathematics, other content areas, or study skills to improve the
achievement level of these learners;

(3) additional teachers and teacher aides to provide more
individualized instruction to these learners through individual
tutoring, lower instructor-to-learner ratios, or team teaching;

(4) a longer school day or week during the regular school
year or through a summer program that may be offered directly by
the site or under a performance-based contract with a
community-based organization;

(5) comprehensive and ongoing staff development consistent
with district and site plans according to section 122A.60, for
teachers, teacher aides, principals, and other personnel to
improve their ability to identify the needs of these learners
and provide appropriate remediation, intervention,
accommodations, or modifications;

(6) instructional materials and technology appropriate for
meeting the individual needs of these learners;

(7) programs to reduce truancy, encourage completion of
high school, enhance self-concept, provide health services,
provide nutrition services, provide a safe and secure learning
environment, provide coordination for pupils receiving services
from other governmental agencies, provide psychological services
to determine the level of social, emotional, cognitive, and
intellectual development, and provide counseling services,
guidance services, and social work services;

(8) bilingual programs, bicultural programs, and programs
for learners of limited English proficiency;

(9) all day kindergarten;

(10) extended school day and extended school year programs;
and

(11) substantial parent involvement in developing and
implementing remedial education or intervention plans for a
learner, including learning contracts between the school, the
learner, and the parent that establish achievement goals and
responsibilities of the learner and the learner's parent or
guardian.

Sec. 4.

Minnesota Statutes 2004, section 126C.15,
subdivision 2, is amended to read:

Subd. 2.

Building allocation.

(a) A district must
allocate its compensatory revenue to each school building in the
district where the children who have generated the revenue are
served.

(b) Notwithstanding paragraph (a), a district may allocate
up to five percent of the amount of compensatory revenue that
the district deleted text begin received during the previous fiscal year deleted text end new text begin receives
new text end to school sites according to a plan adopted by the school board.

(c) new text begin Notwithstanding paragraph (a), a district may allocate
up to ten percent of the amount of compensatory revenue the
district receives to support prekindergarten programs under
subdivision 2a.
new text end

new text begin (d) new text end For the purposes of this section and section 126C.05,
subdivision 3, "building" means education site as defined in
section 123B.04, subdivision 1.

deleted text begin (d) deleted text end new text begin (e) new text end If the pupil is served at a site other than one
owned and operated by the district, the revenue shall be paid to
the district and used for services for pupils who generate the
revenue.

Sec. 5.

Minnesota Statutes 2004, section 126C.15, is
amended by adding a subdivision to read:

new text begin Subd. 2a. new text end

new text begin Prekindergarten programs. new text end

new text begin Revenue allocated
under subdivision 2, paragraph (c), must be reserved and used
for programs and activities that prepare for kindergarten
children ages 3-1/2 to kindergarten entrance from families
eligible for the free or reduced price school lunch program.
Programs may serve resident and nonresident children. Districts
may contract with private preschools and other providers of
prekindergarten programs.
new text end

ARTICLE 16

OTHER PREVENTION POLICY

Section 1.

Minnesota Statutes 2004, section 119A.46,
subdivision 1, is amended to read:

Subdivision 1.

Definitions.

(a) The definitions in
section 144.9501 and in this subdivision apply to this section.

(b) "Eligible organization" means a lead contractor, city,
board of health, community health department, community action
agency as defined in section 119A.374, or community development
corporation.

(c) "Commissioner" means the commissioner of deleted text begin education
deleted text end new text begin health new text end , or the commissioner of the Minnesota Housing Finance
Agency as authorized by section 462A.05, subdivision 15c.

Sec. 2.

Minnesota Statutes 2004, section 119A.46,
subdivision 2, is amended to read:

Subd. 2.

Grants; administration.

Within the limits of
the available appropriation, the commissioner must develop a
swab team services program which may make demonstration and
training grants to eligible organizations to train workers to
provide swab team services and swab team services for
residential property. Grants may be awarded to nonprofit
organizations to provide technical assistance and training to
ensure quality and consistency within the statewide program.
Grants must be awarded to help ensure full-time employment to
workers providing swab team services and must be awarded for a
two-year period.

Grants awarded under this section must be made in
consultation with the deleted text begin commissioners of the Department of Health
and deleted text end new text begin commissioner of new text end the Housing Finance Agency deleted text begin , deleted text end and
representatives of neighborhood groups from areas at high risk
for toxic lead exposure, a labor organization, the lead
coalition, community action agencies, and the legal aid
society. The consulting team must review grant applications and
recommend awards to eligible organizations that meet
requirements for receiving a grant under this section.

Sec. 3.

Minnesota Statutes 2004, section 119A.46,
subdivision 3, is amended to read:

Subd. 3.

Applicants.

(a) Interested eligible
organizations may apply to the commissioner for grants under
this section. Two or more eligible organizations may jointly
apply for a grant. Priority shall be given to community action
agencies in greater Minnesota and to either community action
agencies or neighborhood based nonprofit organizations in cities
of the first class. Of the total annual appropriation, 12.5
percent may be used for administrative purposes. The
commissioner may deviate from this percentage if a grantee can
justify the need for a larger administrative allowance. Of this
amount, up to five percent may be used by the commissioner for
state administrative purposes. Applications must provide
information requested by the commissioner, including at least
the information required to assess the factors listed in
paragraph (d).

(b) The commissioner must deleted text begin coordinate with the commissioner
of health who must deleted text end consult with boards of health to provide swab
team services for purposes of secondary prevention. The
priority for swab teams created by grants to eligible
organizations under this section must be work assigned by the
commissioner of health, or by a board of health if so designated
by the commissioner of health, to provide secondary prevention
swab team services to fulfill the requirements of section
144.9504, subdivision 6, in response to a lead order. Swab
teams assigned work under this section by the commissioner, that
are not engaged daily in fulfilling the requirements of section
144.9504, subdivision 6, must deliver swab team services in
response to elevated blood lead levels as defined in section
144.9501, subdivision 9, where lead orders were not issued, and
for purposes of primary prevention in census tracts known to be
in areas at high risk for toxic lead exposure as described in
section 144.9503, subdivision 2.

(c) Any additional money must be used for grants to
establish swab teams for primary prevention under section
144.9503, in census tracts in areas at high risk for toxic lead
exposure as determined under section 144.9503, subdivision 2.

(d) In evaluating grant applications, the commissioner must
consider the following criteria:

(1) the use of lead contractors and lead workers for
residential swab team services;

(2) the participation of neighborhood groups and
individuals, as swab team workers, in areas at high risk for
toxic lead exposure;

(3) plans for the provision of swab team services for
primary and secondary prevention as required under subdivision
4;

(4) plans for supervision, training, career development,
and postprogram placement of swab team members;

(5) plans for resident and property owner education on lead
safety;

(6) plans for distributing cleaning supplies to area
residents and educating residents and property owners on
cleaning techniques;

(7) sources of other funding and cost estimates for
training, lead inspections, swab team services, equipment,
monitoring, testing, and administration;

(8) measures of program effectiveness;

(9) coordination of program activities with other federal,
state, and local public health, job training, apprenticeship,
and housing renovation programs including programs under
sections 116L.86 to 116L.881; and

(10) prior experience in providing swab team services.

Sec. 4.

Minnesota Statutes 2004, section 119A.46,
subdivision 8, is amended to read:

Subd. 8.

Testing and evaluation.

(a) Testing of the
environment is not necessary by swab teams whose work is
assigned by the commissioner of health or a designated board of
health under section 144.9504. The commissioner of health or
designated board of health must share the analytical testing
data collected on each residence for purposes of secondary
prevention under section 144.9504 with the swab team workers in
order to provide constructive feedback on their work and to the
commissioner for the purposes set forth in paragraph (c).

(b) For purposes of primary prevention evaluation, the
following samples must be collected: pretesting and posttesting
of one noncarpeted floor dust lead sample and a notation of the
extent and location of bare soil and of deteriorated lead-based
paint. The analytical testing data collected on each residence
for purposes of primary prevention under section 144.9503 must
be shared with the swab team workers in order to provide
constructive feedback on their work and to the commissioner for
the purposes set forth in paragraph (c).

(c) The commissioner of health must establish a program deleted text begin in
cooperation with the commissioner deleted text end to collect appropriate data as
required under paragraphs (a) and (b), in order to conduct an
ongoing evaluation of swab team services for primary and
secondary prevention. Within the limits of available
appropriations, the commissioner of health must conduct deleted text begin or
contract with the commissioner, deleted text end on up to 1,000 residences which
have received primary or secondary prevention swab team
services, a postremediation evaluation, on at least a quarterly
basis for a period of at least two years for each residence.
The evaluation must note the condition of the paint within the
residence, the extent of bare soil on the grounds, and collect
and analyze one noncarpeted floor dust lead sample. The data
collected must be evaluated to determine the efficacy of
providing swab team services as a method of reducing lead
exposure in young children. In evaluating this data, the
commissioner of health must consider city size, community
location, historic traffic flow, soil lead level of the property
by area or census tract, distance to industrial point sources
that emit lead, season of the year, age of the housing, age and
number of children living at the residence, the presence of pets
that move in and out of the residence, and other relevant
factors as the commissioner of health may determine.

Sec. 5. new text begin REVISOR'S INSTRUCTION.
new text end

new text begin In the next edition of Minnesota Statutes, the revisor of
statutes shall renumber Minnesota Statutes, section 119A.46, as
section 144.9512.
new text end