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Minnesota Legislature

Office of the Revisor of Statutes

SF 2714

as introduced - 91st Legislature (2019 - 2020) Posted on 03/27/2019 03:28pm

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; increasing local optional revenue; linking future
increases in local optional revenue to the growth in the general education basic
formula allowance; amending Minnesota Statutes 2018, sections 124E.20,
subdivision 1; 126C.10, subdivisions 2e, 24; 126C.17, subdivisions 1, 2, 5, 6, 7,
7a.

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

Section 1.

Minnesota Statutes 2018, section 124E.20, subdivision 1, is amended to read:


Subdivision 1.

Revenue calculation.

(a) General education revenue must be paid to a
charter school as though it were a district. 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 new text beginand first tier local optional aid allowance new text endin 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 .0466, calculated without declining enrollment revenue,
local optional revenue, basic skills revenue, extended time revenue, pension adjustment
revenue, transition revenue, and transportation sparsity revenue, plus declining enrollment
revenue, basic skills revenue, pension adjustment revenue, and transition revenue as though
the school were a school district.

(b) For a charter school operating an extended day, extended week, or summer program,
the general education revenue in paragraph (a) is increased by an amount equal to 25 percent
of the statewide average extended time revenue per adjusted pupil unit.

(c) Notwithstanding paragraph (a), the general education revenue for an eligible special
education charter school as defined in section 124E.21, subdivision 2, equals the sum of
the amount determined under paragraph (a) and the school's unreimbursed cost as defined
in section 124E.21, subdivision 2, for educating students not eligible for special education
services.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for revenue in fiscal year 2021 and later.
new text end

Sec. 2.

Minnesota Statutes 2018, section 126C.10, subdivision 2e, is amended to read:


Subd. 2e.

Local optional revenue.

(a) new text beginFor fiscal years 2019 and 2020, new text endlocal optional
revenue for a school district equals $424 times the adjusted pupil units of the district for
that school year.new text begin For fiscal year 2021 and later, local optional revenue for a school district
equals the sum of the district's first tier local optional revenue and second tier local optional
revenue. A district's first tier local optional revenue equals $300 times the adjusted pupil
units of the district for that school year. A district's second tier local optional revenue equals
the product of $460, the ratio of the formula allowance for the current fiscal year to the
formula allowance for fiscal year 2020, and the adjusted pupil units of the district for that
school year.
new text end

(b) new text beginFor fiscal year 2019, new text enda district's local optional levy equals its local optional revenue
times the lesser of one or the ratio of its referendum market value per resident pupil unit to
$510,000. new text beginFor fiscal year 2020 and later, a district's local optional levy equals the sum of
the first tier local optional levy and the second tier local optional levy. A district's first tier
local optional levy equals the district's first tier local optional revenue times the lesser of
one or the ratio of the district's referendum market value per resident pupil unit to $880,000.
A district's second tier local optional levy equals the district's second tier local optional
revenue times the lesser of one or the ratio of the district's referendum market value per
resident pupil unit to $510,000.
new text endThe local optional deleted text beginrevenuedeleted text end levy must be spread on referendum
market value. A district may levy less than the permitted amount.

(c) A district's local optional aid equals its local optional revenue deleted text beginlessdeleted text endnew text begin minusnew text end its local
optional levydeleted text begin, times the ratio of the actual amount levied to the permitted levydeleted text end.new text begin If a district's
actual levy for first or second tier local optional revenue is less than its maximum levy limit
for that tier, its aid must be proportionately reduced.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for revenue for fiscal year 2021 and later.
new text end

Sec. 3.

Minnesota Statutes 2018, section 126C.10, subdivision 24, is amended to read:


Subd. 24.

Equity revenue.

(a) A school district qualifies for equity revenue if:

(1) the school district's adjusted pupil unit amount of basic revenue, transition revenue,
new text begin first tier local optional revenue, new text endand 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.

(b) Equity revenue deleted text beginfor a qualifying district that receives referendum revenue under
section 126C.17, subdivision 4,
deleted text end equals the product of (1) the district's adjusted pupil units
for that year; times (2) the sum of (i) $14, plus (ii) $80, times the school district's equity
index computed under subdivision 27.

deleted text begin (c) 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 pupil units
for that year times $14.
deleted text end

deleted text begin (d)deleted text endnew text begin (c)new text end A school district's equity revenue is increased by the greater of zero or an amount
equal to the district's adjusted pupil units times the difference between ten percent of the
statewide average amount of referendum revenue new text beginand first tier local optional revenue new text endper
adjusted pupil unit for that year and new text beginthe sum of new text endthe district's referendum revenue new text beginand first
tier local optional revenue
new text endper adjusted pupil unit. A school district's revenue under this
paragraph must not exceed $100,000 for that year.

deleted text begin (e)deleted text endnew text begin (d)new text end A school district's equity revenue for a school district located in the metro equity
region equals the amount computed in paragraphs (b)deleted text begin,deleted text end new text beginand new text end(c)deleted text begin, and (d)deleted text end multiplied by 1.25.

deleted text begin (f) For fiscal years 2017, 2018, and 2019 for a school district not included in paragraph
(e), a district's equity revenue equals the amount computed in paragraphs (b), (c), and (d)
multiplied by 1.16.
deleted text endnew text begin (e)new text end For fiscal year deleted text begin2020deleted text endnew text begin 2021new text end and later for a school district not included
in paragraph deleted text begin(e)deleted text endnew text begin (d)new text end, a district's equity revenue equals the amount computed in paragraphs
(b)deleted text begin,deleted text endnew text begin andnew text end (c)deleted text begin, and (d)deleted text end multiplied by 1.25.

deleted text begin (g)deleted text endnew text begin (f)new text end A school district's additional equity revenue equals $50 times its adjusted pupil
units.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for revenue for fiscal year 2021 and later.
new text end

Sec. 4.

Minnesota Statutes 2018, section 126C.17, subdivision 1, is amended to read:


Subdivision 1.

Referendum allowance.

(a) A district's initial referendum allowance new text beginfor
fiscal year 2021 and later
new text endequals the result of the following calculations:

deleted text begin (1) multiply the referendum allowance the district would have received for fiscal year
2015 under Minnesota Statutes 2012, section 126C.17, subdivision 1, based on elections
held before July 1, 2013, by the resident marginal cost pupil units the district would have
counted for fiscal year 2015 under Minnesota Statutes 2012, section 126C.05;
deleted text end

deleted text begin (2) add to the result of clause (1) the adjustment the district would have received under
Minnesota Statutes 2012, section 127A.47, subdivision 7, paragraphs (a), (b), and (c), based
on elections held before July 1, 2013;
deleted text end

deleted text begin (3) divide the result of clause (2) by the district's adjusted pupil units for fiscal year
2015;
deleted text end

deleted text begin (4) add to the result of clause (3) any additional referendum allowance per adjusted pupil
unit authorized by elections held between July 1, 2013, and December 31, 2013;
deleted text end

deleted text begin (5) add to the result in clause (4) any additional referendum allowance resulting from
inflation adjustments approved by the voters prior to January 1, 2014;
deleted text end

deleted text begin (6) subtract from the result of clause (5), the sum of a district's actual local optional levy
and local optional aid under section 126C.10, subdivision 2e, divided by the adjusted pupil
units of the district for that school year; and
deleted text end

new text begin (1) subtract the local optional revenue amount from the district's allowance under
Minnesota Statutes 2016, section 126C.17, subdivision 1, paragraph (a), clause (5);
new text end

new text begin (2) if the result of clause (1) is less than zero, set the allowance to zero;
new text end

new text begin (3) add to the result in clause (2) any new referendum allowance authorized between
July 1, 2013, and December 31, 2013, under Minnesota Statutes 2013, section 126C.17,
subdivision 9a;
new text end

new text begin (4) add to the result in clause (3) any additional referendum allowance per adjusted pupil
unit authorized between January 1, 2014, and June 30, 2019;
new text end

new text begin (5) subtract from the result in clause (4) any allowances expiring in fiscal year 2016,
2017, 2018, or 2019;
new text end

new text begin (6) subtract $300 from the result in clause (5); and
new text end

(7) if the result of clause (6) is less than zero, set the allowance to zero.

(b) A district's referendum allowance equals the sum of the district's initial referendum
allowancenew text begin calculated in paragraph (a)new text end, plus any new referendum allowance authorized
deleted text begin between July 1, 2013, and December 31, 2013, under subdivision 9a, plus any additional
referendum allowance per adjusted pupil unit authorized after December 31, 2013,
deleted text endnew text begin after
July 1, 2019,
new text end minus any allowances expiring in fiscal year deleted text begin2016deleted text endnew text begin 2021new text end or later, new text beginplus any
inflation adjustments for fiscal year 2021 and later approved by the voters prior to July 1,
2019,
new text endprovided that the allowance may not be less than zero. deleted text beginFor a district with more than
one referendum allowance for fiscal year 2015 under Minnesota Statutes 2012, section
126C.17, the allowance calculated under paragraph (a), clause (3), must be divided into
components such that the same percentage of the district's allowance expires at the same
time as the old allowances would have expired under Minnesota Statutes 2012, section
126C.17.
deleted text end For a district with more than one allowance for fiscal year 2015 that expires in
the same year, the reduction under paragraph (a), deleted text beginclausedeleted text endnew text begin clauses (1) andnew text end (6), deleted text beginto offset local
optional revenue
deleted text end shall be made first from any allowances that do not have an inflation
adjustment approved by the voters.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for revenue for fiscal year 2021 and later.
new text end

Sec. 5.

Minnesota Statutes 2018, section 126C.17, subdivision 2, is amended to read:


Subd. 2.

Referendum allowance limit.

(a) Notwithstanding subdivision 1, for fiscal
year deleted text begin2015deleted text endnew text begin 2021new text end and later, a district's referendum allowance must not exceed deleted text beginthe annual
inflationary increase as calculated under paragraph (b) times
deleted text end the greatest of:

(1) deleted text begin$1,845deleted text endnew text begin the product of the annual inflationary increase as calculated under paragraph
(b), and $2,012.53, minus $300
new text end;

(2) new text beginthe product of the annual inflationary increase as calculated under paragraph (b),
and
new text endthe sum of the referendum revenue the district would have received for fiscal year 2015
under Minnesota Statutes 2012, section 126C.17, subdivision 4, based on elections held
before July 1, 2013, and the adjustment the district would have received under Minnesota
Statutes 2012, section 127A.47, subdivision 7, paragraphs (a), (b), and (c), based on elections
held before July 1, 2013, divided by the district's adjusted pupil units for fiscal year 2015new text begin,
minus $300
new text end;

(3) deleted text beginthe product of the referendum allowance limit the district would have received for
fiscal year 2015 under Minnesota Statutes 2012, section 126C.17, subdivision 2, and the
resident marginal cost pupil units the district would have received for fiscal year 2015 under
Minnesota Statutes 2012, section 126C.05, subdivision 6, plus the adjustment the district
would have received under Minnesota Statutes 2012, section 127A.47, subdivision 7,
paragraphs (a), (b), and (c), based on elections held before July 1, 2013, divided by the
district's adjusted pupil units for fiscal year 2015; minus $424
deleted text endnew text begin for a newly reorganized
district created on July 1, 2019, the referendum revenue authority for each reorganizing
district in the year preceding reorganization divided by its adjusted pupil units for the year
preceding reorganization, minus $300
new text end; or

(4) for a newly reorganized district created after July 1, deleted text begin2013deleted text endnew text begin 2021new text end, the referendum
revenue authority for each reorganizing district in the year preceding reorganization divided
by its adjusted pupil units for the year preceding reorganization.

(b) For purposes of this subdivision, for fiscal year deleted text begin2016deleted text endnew text begin 2022new text end 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 deleted text beginStandardsdeleted text endnew text begin Statisticsnew text end, for the
current fiscal year to fiscal year deleted text begin2015deleted text endnew text begin 2021new text end. deleted text beginFor fiscal year 2016 and later, for purposes of
paragraph (a), clause (3), the inflationary increase equals one-fourth of the percentage
increase in the formula allowance for that year compared with the formula allowance for
fiscal year 2015.
deleted text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for revenue for fiscal year 2021 and later.
new text end

Sec. 6.

Minnesota Statutes 2018, section 126C.17, subdivision 5, is amended to read:


Subd. 5.

Referendum equalization revenue.

(a) A district's referendum equalization
revenue equals the sum of the first tier referendum equalization revenue and the second tier
referendum equalization revenuedeleted text begin, and the third tier referendum equalization revenuedeleted text end.

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

(c) A district's first tier referendum equalization allowance equals the lesser of the
district's referendum allowance under subdivision 1 or deleted text begin$300deleted text endnew text begin $460new text end.

(d) A district's second tier referendum equalization revenue equals the district's second
tier referendum equalization allowance times the district's adjusted pupil units for that year.

(e) A district's second tier referendum equalization allowance equals the lesser of the
district's referendum allowance under subdivision 1 or deleted text begin$760, minus the district's first tier
referendum equalization allowance.
deleted text end

deleted text begin (f) A district's third tier referendum equalization revenue equals the district's third tier
referendum equalization allowance times the district's adjusted pupil units for that year.
deleted text end

deleted text begin (g) A district's third tier referendum equalization allowance equals the lesser of the
district's referendum allowance under subdivision 1 or
deleted text end 25 percent of the formula allowance,
minus the sum of new text begin$300 and new text endthe district's first tier referendum equalization allowance deleted text beginand
second tier referendum equalization allowance
deleted text end.

deleted text begin (h)deleted text endnew text begin (f)new text end Notwithstanding paragraph deleted text begin(g)deleted text endnew text begin (e)new text end, the deleted text beginthirddeleted text endnew text begin secondnew text end 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 deleted text beginsum of thedeleted text end district's first tier referendum
equalization allowance deleted text beginand second tier referendum equalization allowancedeleted text end.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for revenue for fiscal year 2020 and later.
new text end

Sec. 7.

Minnesota Statutes 2018, section 126C.17, subdivision 6, is amended to read:


Subd. 6.

Referendum equalization levy.

(a) A district's referendum equalization levy
equals the sum of the first tier referendum equalization levydeleted text begin,deleted text endnew text begin andnew text end the second tier referendum
equalization levydeleted text begin, and the third tier referendum equalization levydeleted text end.

(b) 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 deleted text begin$880,000deleted text endnew text begin $510,000new text end.

(c) 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 deleted text begin$510,000deleted text endnew text begin $290,000new text end.

deleted text begin (d) A district's third tier referendum equalization levy equals the district's third tier
referendum equalization revenue times the lesser of one or the ratio of the district's
referendum market value per resident pupil unit to $290,000.
deleted text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for revenue for fiscal year 2021 and later.
new text end

Sec. 8.

Minnesota Statutes 2018, 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 firstdeleted text begin,deleted text endnew text begin ornew text end seconddeleted text begin, or thirddeleted text end 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 districtdeleted text begin, where
the referendum equalization aid under paragraph (a) exceeds 90 percent of the referendum
revenue,
deleted text end must not exceednew text begin: (1) the difference betweennew text end 25 percent of the formula allowance
new text begin and $300; new text endtimes new text begin(2) new text endthe district's adjusted 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 2021 and later.
new text end

Sec. 9.

Minnesota Statutes 2018, section 126C.17, subdivision 7a, is amended to read:


Subd. 7a.

Referendum tax base replacement aid.

For each school district that had a
referendum allowance for fiscal year 2002 exceeding $415, for each separately authorized
referendum levy, the commissioner of revenue, in consultation with the commissioner of
education, shall certify the amount of the referendum levy in taxes payable year 2001
attributable to the portion of the referendum allowance exceeding $415 levied against
property classified as class 2, noncommercial 4c(1), or 4c(4), under section 273.13, excluding
the portion of the tax paid by the portion of class 2a property consisting of the house, garage,
and surrounding one acre of land. The resulting amount must be used to reduce the district's
referendum levy new text beginor first tier local optional levy new text endamount otherwise determined, and must be
paid to the district each year that the referendum new text beginor first tier local optional new text endauthority remains
in effect, is renewed, or new referendum authority is approved. The aid payable under this
subdivision must be subtracted from the district's referendum equalization aid under
subdivision 7. The referendum equalization aid new text beginand the first tier local optional aid new text endafter the
subtraction must not be less than zero.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for revenue for fiscal year 2021 and later.
new text end