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Minnesota Legislature

Office of the Revisor of Statutes

SF 2395

as introduced - 89th Legislature (2015 - 2016) Posted on 03/09/2016 09:11am

KEY: stricken = removed, old language.
underscored = added, new language.

Current Version - as introduced

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A bill for an act
relating to education finance; creating a state fund to pay for unreimbursed
special education costs; eliminating tuition bill-backs to the resident school
district; increasing special education excess cost aid; appropriating money;
amending Minnesota Statutes 2015 Supplement, sections 125A.11, subdivision
1; 125A.76, subdivision 1; 125A.79, subdivision 5; 127A.47, subdivision 7;
Laws 2015, First Special Session chapter 3, article 5, section 30, subdivision 2;
proposing coding for new law in Minnesota Statutes, chapter 125A.

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

Section 1.

Minnesota Statutes 2015 Supplement, section 125A.11, subdivision 1,
is amended to read:


Subdivision 1.

Nonresident tuition rate; other costs.

(a) deleted text beginFor fiscal year 2015 and
later,
deleted text end 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, paragraphs (b) to (d), 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 to the pupil, including a proportionate amount for special
transportation and unreimbursed building lease and debt service costs for facilities used
primarily for special education, plus (2) the amount of general education revenue and
referendum equalization aid attributable to that pupil, calculated using the resident district's
average general education revenue and referendum equalization aid per adjusted pupil
unit excluding basic skills revenue, elementary sparsity revenue and secondary sparsity
revenue, minus (3) the amount of special education aid for children with a disability under
deleted text beginsectiondeleted text endnew text begin sectionsnew text end 125A.76 new text beginand 125A.81 new text endreceived on behalf of that child, minus (4) if the
pupil receives special instruction and services outside the regular classroom for more than
60 percent of the school day, the amount of general education revenue and referendum
equalization 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 special
instruction and services outside of the regular classroom, calculated using the resident
district's average general education revenue and referendum equalization aid per adjusted
pupil unit excluding basic skills revenue, elementary sparsity revenue and secondary
sparsity revenue and the serving district's basic skills revenue, elementary sparsity revenue
and secondary sparsity revenue per adjusted pupil unit. Notwithstanding clauses (1) and
(4), for pupils served by a cooperative unit without a fiscal agent school district, the
general education revenue and referendum equalization aid attributable to a pupil must be
calculated using the resident district's average general education revenue and referendum
equalization aid excluding compensatory revenue, elementary sparsity revenue, and
secondary sparsity revenue. Special education aid paid to the district or cooperative
providing special instruction and services for the pupil must be increased by the amount of
the reduction in the aid paid to the resident districtnew text begin and the amount of payments received
under section 125A.81
new text end. Amounts paid to cooperatives under this subdivision and section
127A.47, subdivision 7, shall be recognized and reported as revenues and expenditures on
the resident school district's books of account under sections 123B.75 and 123B.76. 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.

(b) Notwithstanding paragraph (a), when a charter school receiving special education
aid under section 124E.21, subdivision 3, provides special instruction and services for
a pupil with a disability as defined in section 125A.02, excluding a pupil for whom an
adjustment to special education aid is calculated according to section deleted text begin127A.46deleted text endnew text begin 127A.47new text end,
subdivision
7, paragraphs (b) to (e), special education aid paid to the resident district must
be reduced by an amount equal to that calculated under paragraph (a) as if the charter
school received aid under section 124E.21, subdivision 1. Notwithstanding paragraph (a),
special education aid paid to the charter school providing special instruction and services
for the pupil must not be increased by the amount of the reduction in the aid paid to
the resident district.

(c) Notwithstanding paragraph (a) and section 127A.47, subdivision 7, paragraphs
(b) to (d), a charter school where more than 30 percent of enrolled students receive special
education and related services, a site approved under section 125A.515, an intermediate
district, a special education cooperative, or a school district that served as the applicant
agency for a group of school districts for federal special education aids for fiscal year
2006 may apply to the commissioner for authority to charge the resident district an
additional amount to recover any remaining unreimbursed costs of serving pupils with
a disability. The application must include a description of the costs and the calculations
used to determine the unreimbursed portion to be charged to the resident district. Amounts
approved by the commissioner under this paragraph must be included in the tuition billings
or aid adjustments under paragraph (a), or section 127A.47, subdivision 7, paragraphs
(b) to (d), as applicable.

(d) For purposes of this subdivision and section 127A.47, subdivision 7, paragraph
(b), "general education revenue and referendum equalization aid" means the sum of the
general education revenue according to section 126C.10, subdivision 1, excluding the
local optional levy according to section 126C.10, subdivision 2e, paragraph (c), plus the
referendum equalization aid according to section 126C.17, subdivision 7.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for revenue for fiscal year 2017
and later.
new text end

Sec. 2.

Minnesota Statutes 2015 Supplement, section 125A.76, subdivision 1, is
amended to read:


Subdivision 1.

Definitions.

(a) For the purposes of this section and section 125A.79,
the definitions in this subdivision apply.

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

(c) "Essential personnel" means teachers, cultural liaisons, related services, and
support services staff providing services to students. Essential personnel may also include
special education paraprofessionals or clericals providing support to teachers and students
by preparing paperwork and making arrangements related to special education compliance
requirements, including parent meetings and individualized education programs. Essential
personnel does not include administrators and supervisors.

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

(e) "Program growth factor" means deleted text begin1.046 for fiscal years 2012 through 2015, 1.0
for fiscal year 2016,
deleted text end 1.046 for fiscal year 2017, and the product of 1.046 and the program
growth factor for the previous year for fiscal year 2018 and later.

(f) "Nonfederal special education expenditure" means all direct expenditures that
are necessary and essential to meet the district's obligation to provide special instruction
and services to children with a disability according to sections 124D.454, 125A.03 to
125A.24, 125A.259 to 125A.48, and 125A.65 as submitted by the district and approved by
the department under section 125A.75, subdivision 4, excluding expenditures:

(1) reimbursed with federal funds;

(2) reimbursed with other state aids under this chapter;

(3) for general education costs of serving students with a disability;

(4) for facilities;

(5) for pupil transportation; and

(6) for postemployment benefits.

(g) "Old formula special education expenditures" means expenditures eligible for
revenue under Minnesota Statutes 2012, section 125A.76, subdivision 2.

(h) For the Minnesota State Academy for the Deaf and the Minnesota State Academy
for the Blind, expenditures under paragraphs (f) and (g) are limited to the salary and
fringe benefits of one-to-one instructional and behavior management aides and one-to-one
licensed, certified professionals assigned to a child attending the academy, if the aides or
professionals are required by the child's individualized education program.

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

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

(k) "Special education aid increase limit" means deleted text begin$80 for fiscal year 2016, $100deleted text endnew text begin $350
new text endfor fiscal year 2017deleted text begin,deleted text end and, for fiscal year 2018 and later, the sum of the special education
aid increase limit for the previous fiscal year and deleted text begin$40deleted text endnew text begin $100new text end.

(l) "District" means a school district, a charter school, or a cooperative unit as
defined in section 123A.24, subdivision 2. Notwithstanding section 123A.26, cooperative
units as defined in section 123A.24, subdivision 2, are eligible to receive special education
aid under this section and section 125A.79.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for aid for fiscal year 2017 and later.
new text end

Sec. 3.

Minnesota Statutes 2015 Supplement, section 125A.79, subdivision 5, is
amended to read:


Subd. 5.

Excess cost aid.

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

(1) deleted text begin56deleted text endnew text begin 63new text end percent of the difference between (i) the district's unreimbursed nonfederal
special education expenditures and (ii) deleted text begin7.0deleted text endnew text begin 3.0new text end percent of the product of the ratio of $5,831
to the formula allowance for the prior year and the district's general revenue;

(2) deleted text begin62deleted text endnew text begin 70new text end percent of the difference between (i) the district's unreimbursed old
formula special education expenditures and (ii) deleted text begin2.5deleted text endnew text begin 0.0new text end percent of the product of the ratio
of $5,831 to the formula allowance for the prior year and the district's general revenue; or

(3) zero.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for aid for fiscal year 2017 and later.
new text end

Sec. 4.

new text begin [125A.81] SPECIAL EDUCATION TUITION REIMBURSEMENT
ACCOUNT.
new text end

new text begin (a) A special education tuition reimbursement account is created in the special
revenue fund.
new text end

new text begin (b) The amounts necessary to reimburse serving school districts under section
127A.47, subdivision 7, for the unreimbursed cost of providing special education and
services to nonresident pupils is annually appropriated from the general fund to the special
education tuition reimbursement account.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2016.
new text end

Sec. 5.

Minnesota Statutes 2015 Supplement, section 127A.47, subdivision 7, is
amended to read:


Subd. 7.

Alternative attendance programs.

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

(b) For purposes of this subdivision, the "unreimbursed cost of providing special
education and services" means the difference between: (1) the actual cost of providing
special instruction and services, including special transportation and unreimbursed
building lease and debt service costs for facilities used primarily for special education, 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) if the pupil
receives special instruction and services outside the regular classroom for more than
60 percent of the school day, the amount of general education revenue and referendum
equalization aid as defined in section 125A.11, subdivision 1, paragraph (d), attributable
to that pupil for the portion of time the pupil receives special instruction and services
outside of the regular classroom, excluding portions attributable to district and school
administration, district support services, operations and maintenance, capital expenditures,
and pupil transportation, minus (3) special education aid under section 125A.76
attributable to that pupil, that is received by the district providing special instruction and
services. For purposes of this paragraph, general education revenue and referendum
equalization aid attributable to a pupil must be calculated using the serving district's
average general education revenue and referendum equalization aid per adjusted pupil unit.

(c) For fiscal year deleted text begin2015deleted text endnew text begin 2017new text end and later, special education aid paid to a resident
district must be reduced by an amount equal to deleted text begin90deleted text endnew text begin tennew text end percent of the unreimbursed cost
of providing special education and servicesnew text begin and an amount equal to 80 percent of the
serving school district's unreimbursed cost of providing special education and services
to a nonresident pupil must be assigned to the special education tuition reimbursement
account under section 125A.81
new text end.

(d) Notwithstanding paragraph (c), special education aid paid to a resident district
must new text beginnot new text endbe reduced bynew text begin any amount of the unreimbursed cost of special education and
services for a student attending at an intermediate school district or cooperative, or at a
charter school where the percent of students eligible for special education services is at least
70 percent of the charter school's total enrollment.
new text end An amount equal to 100 percent of the
unreimbursed cost of special education and services provided to students at an intermediate
districtdeleted text begin,deleted text endnew text begin ornew text end cooperative, or new text beginat a new text endcharter school where the percent of students eligible for
special education services is at least 70 percent of the charter school's total enrollmentnew text begin must
be assigned to the special education tuition reimbursement account under section 125A.81
new text end.

(e) Notwithstanding paragraph (c), special education aid paid to a resident district
must new text beginnot new text endbe reduced under paragraph (d) for students at a charter school receiving special
education aid under section 124E.21, subdivision 3, calculated as if the charter school
received special education aid under section 124E.21, subdivision 1new text begin. Instead, this amount
must be assigned to the special education tuition reimbursement account under section
125A.81
new text end.

(f) Special education aid paid to the district or cooperative providing special
instruction and services for the pupil, or to the fiscal agent district for a cooperative,
must be increased by new text beginthe sum of:
new text end

new text begin (1) new text endthe amount of the reduction in the aid paid to the resident districtnew text begin; and
new text end

new text begin (2) the amount assignednew text end under paragraphs (c) and (d)new text begin to the special education tuition
reimbursement account under section 125A.81
new text end.

If the resident district's special education aid is insufficient to make the full adjustment
under deleted text beginparagraphsdeleted text endnew text begin paragraphnew text end (c), deleted text begin(d), and (e),deleted text end the remaining adjustment shall be made to
other state aids due to the district.

(g) Notwithstanding paragraph (a), general education aid paid to the resident district
of a nonspecial education student for whom an eligible special education charter school
receives general education aid under section 124E.20, subdivision 1, paragraph (c), must
be reduced by an amount equal to the difference between the general education aid
attributable to the student under section 124E.20, subdivision 1, paragraph (c), and the
general education aid that the student would have generated for the charter school under
section 124E.20, subdivision 1, paragraph (a). For purposes of this paragraph, "nonspecial
education student" means a student who does not meet the definition of pupil with a
disability as defined in section 125A.02 or the definition of a pupil in section 125A.51.

(h) An area learning center operated by a service cooperative, intermediate district,
education district, or a joint powers cooperative may elect through the action of the
constituent boards to charge the resident district tuition for pupils rather than to have the
general education revenue paid to a fiscal agent school district. Except as provided in
paragraph (f), the district of residence must pay tuition equal to at least 90 and no more
than 100 percent of the district average general education revenue per pupil unit minus
an amount equal to the product of the formula allowance according to section 126C.10,
subdivision 2
, times .0466, calculated without compensatory revenue, local optional
revenue, and transportation sparsity revenue, times the number of pupil units for pupils
attending the area learning center.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for revenue for fiscal year 2017
and later.
new text end

Sec. 6.

Laws 2015, First Special Session chapter 3, article 5, section 30, subdivision 2,
is amended to read:


Subd. 2.

Special education; regular.

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

$
1,170,929,000
.....
2016
$
deleted text begin 1,229,706,000
deleted text end new text begin .......
new text end
.....
2017

The 2016 appropriation includes $137,932,000 for 2015 and $1,032,997,000 for
2016.

The 2017 appropriation includes $145,355,000 for 2016 and deleted text begin$1,084,351,000deleted text endnew text begin $.......
new text endfor 2017.